Morgan stanley -Country Quant Model

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					                                                              MORGAN STANLEY RESEARCH
                                                              GLOBAL


                                                April 2013

Equity Research    Asia/GEMs Strategy                        Morgan Stanley Asia Limited+
Asia / Global
Emerging Markets                                             Yang Bai
                   Country Quant Model: Upgrade Hong         Yang.Bai@morganstanley.com
                                                             +852 2239 7685
                   Kong to OW and Thailand to EW;            Jonathan Garner
                   Downgrade Hungary to UW                   Jonathan.Garner@morganstanley.com
                                                             +852 2848 7288

                                                             Pankaj Mataney
                                                             Pankaj.Mataney@morganstanley.com
                                                             +852 2239 7830
 Asia/GEMs
  Strategy




                                                             Morgan Stanley does and seeks to do business with
                                                             companies covered in Morgan Stanley Research. As
                                                             a result, investors should be aware that the firm may
                                                             have a conflict of interest that could affect the
                                                             objectivity of Morgan Stanley Research. Investors
                                                             should consider Morgan Stanley Research as only a
                                                             single factor in making their investment decision.
                                                             For analyst certification and other important
                                                             disclosures, refer to the Disclosure Section,
                                                             located at the end of this report.
                                                             += Analysts employed by non-U.S. affiliates are not registered with FINRA, may
                                                             not be associated persons of the member and may not be subject to
                                                             NASD/NYSE restrictions on communications with a subject company, public
                                                             appearances and trading securities held by a research analyst account.
                                                                                                                                         MORGAN STANLEY RESEARCH
                                                                                                                                                                         April 19, 2013
                                                                                                                                                                 Asia / GEMs Strategy

Highlights: Upgrade Hong Kong to OW and Thailand to EW;
Downgrade Hungary to UW
       We upgrade Hong Kong to OW from EW. Model rank rises to #4/25, driven by its strong earnings
        estimate revisions (ranks #1/25), undemanding valuation level (ranks #6/25 in terms of trailing P/B and
        #11/25 in terms of Z-Score of trailing P/E) and relatively constructive MS macro view (ranks #10/25). MS
        economics team expects 3.8% GDP growth in 2013 and 4.5% growth in 2014 for Hong Kong, which is
        higher than most of its Asia Pacific peers. From a company perspective, we have observed strong
        earnings estimate revisions in Hong Kong, e.g., some heavily weighted stocks in MSCI Hong Kong like
        AIA (1299.HK) and Hutchison (0013.HK) have strongly beaten their consensus EPS forecasts recently.

       We also upgrade Thailand, to EW from UW. Model rank rises to #16/25, driven by its high ROE (ranks
        #5/25), still-strong earnings estimate revisions (ranks #4/25) and improved technical factors. The recent
        upgrade of Thailand’s 2013e GDP growth (to 4.7% from previous 4.0%) by MS Economics team also
        helps its rank in the MSMacroView factor in our model.

       We downgrade Hungary to UW from EW. Model rank drops to #23/25, driven by its weak trailing ROE
        (ranks #25/25) and still-negative earnings estimate revisions (ranks #20/25). We also downgrade
        Morocco, to EW from OW.

       Current rankings:
          –     Our overweight-rated countries are: Russia, China, Poland, Hong Kong, Peru, and Australia.
          –     Our underweight-rated countries are: Mexico, South Africa, Hungary, Philippines, Taiwan, and Brazil.
       Our country quant model generated a negative alpha of 19bp last month*.

   * US$ total return data as of April 15, 2013. Past performance is not a guarantee of future results. Results shown do not include transaction costs. The combined APxJ/EM universe
   consists of all the constituents stocks which are included either in MSCI Asia Pacific ex Japan Index or in MSCI Emerging Markets Index.

        We acknowledge the valuable contribution of Latika Kapoor to this Research Report.                                                                                                2
                                                                                                                                                                                                          MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                     April 19, 2013
                                                                                                                                                                                                                                             Asia / GEMs Strategy



Summary of EM/APxJ Country Rankings
 C o u n tr y ra n kin g s: t h e lo w er th e ra n kin g ,
 t h e b e tt er th e sco re in t h e m o d el
                                                                                                                                                                                                                                                      25                                25
                    C u rren t R an k ing                                                                                                                                                                                                                                24 4
                                                                                                                                                                                                                                                                           2
                                                                                                                                                                              23                                                                               23
                                                                                                                                                                                                                                      22        22
                    P ri or R an k ing                                                                                                                                                                                         21   21
                                                                                                                                                                                                                          20                                                              20
                                                                                                                                                                                                           1919
                    B ig ge s t M o ve rs                                                                                                                                                  18    18
                                                                                                                                                                                     17                                                                          17
                                     16                                                                                                                                  16
                                                                                                                                           15             15
                                                                                                                                14               14
                                                                              13                                                     13
                                                                                                                    12                                                                                12
                                                                     11                             11
                                                                                           1 01 0
                                                                                   9                                                                  9
                                                                          8                                     8
                                                                 7                     7
                                                     6 6
                                             5                                                                                                                       5
                                 4               4
                       3 3
            2 2
 1 1
                                                     Australia




                                                                                                                                                                                                 Turkey
                                                                                                                                                                          Thailand
                                                                                                                                                  Egypt
                                                                                            India


                                                                                                     Malaysia


                                                                                                                    Singapore
            China




                                                                                                                                      Colombia




                                                                                                                                                                                                                                                               Hungary


                                                                                                                                                                                                                                                                         South Africa
                                                                          Korea
                        Poland


                                 Hong Kong


                                             Peru




                                                                                   Czech




                                                                                                                                                           Morocco




                                                                                                                                                                                                                                    Taiwan




                                                                                                                                                                                                                                                                                        Mexico
                                                                                                                                                                                                                          Brazil




                                                                                                                                                                                                                                                 Philippines
                                                                 Chile
 Russia




                                                                                                                                                                                     Indonesia




                                                                                                                                                                                                            New Zealand
          O V E R W E IG H T                                                                        E Q U AL -W E I G H T                                                                                                             UND ERW EIG HT
               Source: MSCI, RIMES, IBES, EPFR, Morgan Stanley Research. Data as of April 15, 2013.

                                                                                                                                                                                                                                                                                                 3
                                                                                                                                                                                     MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                   April 19, 2013
                                                                                                                                                                                                                           Asia / GEMs Strategy

Hong Kong – Positive Economic Growth Outlook with the Highest Earnings Revision;
Upgrade to OW from EW
MS Economic Team’s 2013 & 2014 Real GDP Growth Forecasts –                                                                                FY2 Earnings Revision Breadth, 3MMA (%)
    Hong Kong Is the Highest among Asia DM Countries*                                                       25%
                                                                                                                                          MSCI Hong Kong
                                                                                                            20%
    6.0
                                                                                                                                          MSCI EM
                                                                                                            15%
                                  2013E
    5.0              4.5                                                                                    10%
                                  2014E                                4.1
               3.8                                 4.0                                    4.0
                                                                                                             5%
    4.0
                                                                 3.3
                                3.0 3.1                                             2.9
                                                                                                             0%
    3.0                                                                                                      -5%
                                             2.3
    2.0                                                                                                     -10%

                                                                                                            -15%
    1.0
                                                                                                            -20%

    0.0                                                                                                     -25%




                                                                                                                                            Jan-02
                                                                                                                   Jan-00


                                                                                                                                 Jan-01




                                                                                                                                                     Jan-03


                                                                                                                                                              Jan-04


                                                                                                                                                                            Jan-05


                                                                                                                                                                                     Jan-06


                                                                                                                                                                                                Jan-07


                                                                                                                                                                                                         Jan-08


                                                                                                                                                                                                                  Jan-09


                                                                                                                                                                                                                            Jan-10


                                                                                                                                                                                                                                     Jan-11


                                                                                                                                                                                                                                                Jan-12


                                                                                                                                                                                                                                                         Jan-13
               Hong         Australia     Singapore              Korea           Taiw an
               Kong

     We upgrade Hong Kong to OW from EW; Hong Kong now ranks #4/25 in our model. In the latest spring
     update of its global macro outlook, MS Economics team expects GDP growth of 3.8% in 2013 and 4.5% in
     2014 in Hong Kong, which is higher than most of its Asia Pacific peers. Also, from a company perspective,
     MSCI Hong Kong now exhibits the highest earnings revision breadth among all 25 APxJ/EM countries.
     Some heavily weighted stocks in MSCI Hong Kong like AIA (1299.HK) and Hutchison (0013.HK) have
     strongly beaten their consensus EPS forecasts recently.
          Our Country Quant Model Ranking of Hong Kong by Factor
                           Trail Fwd P/E Div             Trail               Revisions            Price        Relative                     Fund              Currency                        Leading Poli Risk & MS Macro View                                   Final
                           P/B (Z-Score) Yield           ROE                  Breadth            Reversal      Strength                     Flow                                              Indicator Corp Gover & Industry Skew

          Country          6%       10%     9%           7%                     5%                  7%                10%                      9%                      10%                      9%                6%                          12%                 Rank
          Hong Kong         6        11     18            23                    1                    14                     11                  12                      4                       NA                   3                        10                   4
   Source: MSCI, RIMES, IBES, Morgan Stanley Research. Data as of April 15, 2013.           * In addition, we show Korea and Taiwan, two relatively developed Asia EM countries, for reference.
                                                                                                                                                                                                                                                                          4
                                                                                                                                                                     MORGAN STANLEY RESEARCH
                                                                                                                                                                                             April 19, 2013
                                                                                                                                                                                     Asia / GEMs Strategy



MSCI Hong Kong’s YTD Performance Has Lagged Its Earnings Revision
                                                  2 0 .0 %

                                                                                                                                                           P h il i p p i n e s
                                                  1 5 .0 %
             YTD Total Return Performance (US$)


                                                                                                                                                In d o n e s i a
                                                                     C o rr e l a t i o n = .5 6
                                                  1 0 .0 %                                                                                               T h a il a n d
                                                                                                                               A u s tr a l i a T u r k e y
                                                    5 .0 %                                                                     M ex ico
                                                                                                   M alay sia
                                                                                                                                        S in g a p o r e
                                                                                                   H u ngary                                                                Hon g Kong
                                                    0 .0 %                                                                       C h ile   M S C I AP xJ
                                                                                                                                                   T aiw an
                                                                                                                                 B r az il
                                                                                                                                         M SCI EM
                                                   -5 .0 %                                                                        In d ia
                                                                                     K orea                                                             C h in a
                                                                                                       P o la n d
                                                                                      C o lo m b ia
                                                  -1 0 .0 %                                                                                E g yp t R u s sia
                                                                        P e ru                         S . A f ri c a
                                                  -1 5 .0 %                                C z ech

                                                  -2 0 .0 %
                                                         -2 0 .0 %      -1 5 .0 %              -1 0 .0 %            - 5 .0 %                0.0%                     5.0%          1 0 .0 %
                                                                                 N e x t 1 2 m E a rn in g s R e v is io n s B r e a d th , 3 M M A

 Earnings revision breadth seems to be a good indicator for Asia/EM equity performance YTD (correlation = .56).
 We believe that earnings revision will continue to be a key driver of equity performance this year, based on our view
 that EPS growth will play a more important role than P/E multiple expansion in driving Asia/EM equities in 2013.
 MSCI Hong Kong exhibits 5% earnings revision breadth (3MMA) YTD, which is the highest in the region and much
 higher than MSCI APxJ’s -1.4% so far this year. However, MSCI Hong Kong has recorded only around 1%
 outperformance vs. MSCI APxJ, much below the regression trend line in the above chart, so we see a good
 probability that MSCI Hong Kong will outperform the region.
      Source: MSCI, RIMES, IBES, Morgan Stanley Research. Performance Data as of April 16, 2013. Monthly earnings revision breadth data as of March 31, 2013.
                                                                                                                                                                                                              5
                                                                                                                                                           MORGAN STANLEY RESEARCH
                                                                                                                                                                                                April 19, 2013
                                                                                                                                                                                        Asia / GEMs Strategy



Hong Kong – Valuation is quite reasonable
             APxJ/EM Country Trailing Price to Book Ratio                                           Consensus N12m Forward P/E of MSCI Hong Kong

 4.5                                                                                    2 4 .0 x

 4.0                                                                                    2 2 .0 x                     + 2 S .D .
 3.5
                                                                                        2 0 .0 x
 3.0                                                                                                                 + 1 S .D .
                                                                                        1 8 .0 x
 2.5                                                                                                                                            A ve r a g e
 2.0                                                                                    1 6 .0 x

 1.5                                                                                                                                                                                                                         1 4. 9x
                                                                                        1 4 .0 x
                                                                                                                     -1 S .D .
 1.0
                                                                                        1 2 .0 x
 0.5                                                                                                                 -2 S .D .
                                                                                        1 0 .0 x
 0.0




              Korea
               India

       South Africa




          Australia
        Philippines




           Malaysia




            Taiwan




        Hong Kong

             Poland
            Turkey




          EM/APxJ
              China
         Singapore




           Hungary
             Russia
         Indonesia




          Colombia
           Thailand




       New Zealand




              Czech
            Mexico
               Peru
          Morocco




              Brazil


              Egypt
               Chile




                                                                                         8 .0 x

                                                                                         6 .0 x




                                                                                                                                                                                                                  Jan-12
                                                                                                                     Jan-02


                                                                                                                              Jan-03




                                                                                                                                                                              Jan-08


                                                                                                                                                                                       Jan-09
                                                                                                   Jan-00


                                                                                                            Jan-01




                                                                                                                                       Jan-04


                                                                                                                                                  Jan-05


                                                                                                                                                            Jan-06


                                                                                                                                                                     Jan-07




                                                                                                                                                                                                Jan-10


                                                                                                                                                                                                         Jan-11




                                                                                                                                                                                                                           Jan-13
       The current valuation of MSCI Hong Kong seems to be quite reasonable. Hong Kong has the sixth-
       lowest trailing Price/Book ratio among all 25 EM/APxJ countries at 1.35x, much lower than the
       EM/APxJ’s 1.63x. The I/B/E/S consensus 12-month forward P/E ratio for MSCI Hong Kong is 14.9x,
       which is around 0.5 standard deviation (S.D.) lower than its long-term average since 2000.



       Source: MSCI, IEBS, RIMES, Morgan Stanley Research. Data as of April 15, 2013.


                                                                                                                                                                                                                                       6
                                                                                                                                                                                                                                         MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                April 19, 2013
                                                                                                                                                                                                                                                                                        Asia / GEMs Strategy

Thailand – Much Less Overbought Technicals and Still-strong Earnings Revision;
Upgrade to EW from UW
                        FY2 Earnings Revision Breadth, 3MMA                                                                                                         Relative Strength Index of MSCI Thailand (price in US$)
                                                                                                                                                             100
   30%
                            MSCI Thailand                                                                                                                     90

   20%                      MSCI EM                                                                                                                           80
                                                                                                                                                                                               70
                                                                                                                                                              70
   10%
                                                                                                                                                              60
                                                                                                                                                                                                                  50
    0%                                                                                                                                                        50
                                                                                                                                                                                                                                                                                                                              47
                                                                                                                                                              40
   -10%
                                                                                                                                                              30                                                                                        30

                                                                                                                                                              20
   -20%
                                                                                                                                                              10

   -30%                                                                                                                                                        0
                            Jan-02
          Jan-00




                                       Jan-03

                                                Jan-04
                   Jan-01




                                                          Jan-05




                                                                            Jan-07

                                                                                      Jan-08

                                                                                               Jan-09
                                                                   Jan-06




                                                                                                        Jan-10




                                                                                                                                Jan-12

                                                                                                                                         Jan-13
                                                                                                                   Jan-11




                                                                                                                                                                                                         Apr-12

                                                                                                                                                                                                                   May-12




                                                                                                                                                                                                                                      Jul-12

                                                                                                                                                                                                                                               Aug-12




                                                                                                                                                                                                                                                                                                  Jan-13
                                                                                                                                                                             Jan-12




                                                                                                                                                                                                                                                                      Oct-12




                                                                                                                                                                                                                                                                                                            Feb-13

                                                                                                                                                                                                                                                                                                                     Mar-13
                                                                                                                                                                   Dec-11




                                                                                                                                                                                      Feb-12

                                                                                                                                                                                                Mar-12




                                                                                                                                                                                                                             Jun-12




                                                                                                                                                                                                                                                                                         Dec-12
                                                                                                                                                                                                                                                             Sep-12




                                                                                                                                                                                                                                                                               Nov-12
     We upgrade Thailand to EW from UW; Thailand now ranks #16/25 in our model. After the most recent
     correction, Thailand has less overbought technicals than before, though its valuation level is still not cheap.
     Also, Thailand exhibits a high trailing ROE (ranked #5/25) and strong earnings revision breadth (ranked
     #4/25) relative to the region. Our Economics team has recently upgraded Thailand’s 2013e GDP growth to
     4.7% from the previous estimate of 4.0%, which also helps its rank in the MSMacroView factor.
      Our Country Quant Model Ranking of Thailand by Factor
                                     Trail Fwd P/E Div                               Trail                       Revisions                         Price            Relative                   Fund                 Currency                   Leading Poli Risk & MS Macro View                                               Final
                                     P/B (Z-Score) Yield                             ROE                          Breadth                         Reversal          Strength                   Flow                                            Indicator Corp Gover & Industry Skew

    Country                          6%           10%              9%                7%                               5%                            7%                      10%                 9%                          10%                         9%                     6%                          12%                 Rank
    Thailand                         19              19            17                 5                                     4                       19                      15                  20                          11                          NA                     15                           5                      16

      Source: MSCI, RIMES, IBES, Morgan Stanley Research. Data as of April 15, 2013.
                                                                                                                                                                                                                                                                                                                                        7
                                                                                                                                                                                                                                                                                                                                                           MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                                                                                                                           April 19, 2013
                                                                                                                                                                                                                                                                                                                                                                                                   Asia / GEMs Strategy

Hungary – Poor Profitability with Negative Earnings Revisions;
Downgrade to UW from EW
                                   APxJ/EM Country Trailing Return on Equity                                                                                                                                                                                                                                      FY2 Earnings Revision Breadth, 3MMA
 30
                                                                                                                                                                                                                                                                                        25%
                                                                                                                                                                                                                                                                                                                  MSCI Hungary
 25                                                                                                                                                                                                                                                                                     20%
                                                                                                                                                                                                                                                                                                                  MSCI EM
                                                                                                                                                                                                                                                                                        15%
 20
                                                                                                                                                                                                                                                                                        10%
 15                                                                                                                                                                                                                                                                                      5%

 10                                                                                                                                                                                                                                                                                      0%

                                                                                                                                                                                                                                                                                        -5%
 5
                                                                                                                                                                                                                                                                                        -10%

 0                                                                                                                                                                                                                                                                                      -15%
                                                                                                                                                      EM/APxJ
             Indonesia


                                   India




                                                                                        Philippines
                                                               Russia


                                                                                China



                                                                                                                   South Africa
                                                                                                                                  Malaysia




                                                                                                                                                                            Singapore
                                                                                                                                                                                        Korea


                                                                                                                                                                                                         Colombia



                                                                                                                                                                                                                                          Chile
                                                                                                                                                                Australia




                                                                                                                                                                                                                                                                       Hungary
      Peru


                         Morocco


                                           Thailand



                                                                        Czech



                                                                                                          Mexico



                                                                                                                                             Poland




                                                                                                                                                                                                                            New Zealand


                                                                                                                                                                                                                                                  Hong Kong
                                                                                                                                                                                                                                                              Taiwan
                                                                                                                                                                                                Brazil


                                                                                                                                                                                                                    Egypt
                                                      Turkey




                                                                                                                                                                                                                                                                                        -20%

                                                                                                                                                                                                                                                                                        -25%




                                                                                                                                                                                                                                                                                                                  Jan-02
                                                                                                                                                                                                                                                                                               Jan-00

                                                                                                                                                                                                                                                                                                         Jan-01




                                                                                                                                                                                                                                                                                                                           Jan-03

                                                                                                                                                                                                                                                                                                                                    Jan-04

                                                                                                                                                                                                                                                                                                                                                  Jan-05

                                                                                                                                                                                                                                                                                                                                                            Jan-06

                                                                                                                                                                                                                                                                                                                                                                        Jan-07

                                                                                                                                                                                                                                                                                                                                                                                 Jan-08

                                                                                                                                                                                                                                                                                                                                                                                          Jan-09

                                                                                                                                                                                                                                                                                                                                                                                                      Jan-10

                                                                                                                                                                                                                                                                                                                                                                                                               Jan-11

                                                                                                                                                                                                                                                                                                                                                                                                                             Jan-12

                                                                                                                                                                                                                                                                                                                                                                                                                                      Jan-13
      We downgrade Hungary to UW from EW; Hungary now ranks #23/25 in our model. Hungary exhibits the lowest
      trailing ROE of 8.4% (ranked #25/25), much lower than EM/APxJ’s 12.5%. Also, Hungary is still facing negative
      earnings revisions, ranking #20/25. Our economics team sees -0.5% base-case GDP growth in Hungary for
      2013, which is the lowest among all EM countries we cover.

                   Our Country Quant Model Ranking of Hungary by Factor
                                                                   Trail Fwd P/E Div                                                                               Trail                                            Revisions                                                 Price        Relative               Fund              Currency                         Leading Poli Risk & MS Macro View                                         Final
                                                                   P/B (Z-Score) Yield                                                                             ROE                                               Breadth                                                 Reversal      Strength               Flow                                               Indicator Corp Gover & Industry Skew

                 Country                                                6%                 10%                                    9%                                  7%                                                    5%                                                   7%              10%               9%                        10%                       9%                 6%                       12%                         Rank
                 Hungary                                                2                             8                            11                                   25                                                  20                                                   6                  21                8                      13                         7                 22                            19                      23

                     Source: MSCI, RIMES, IBES, EPFR, Morgan Stanley Research. Data as of April 15, 2013.
                                                                                                                                                                                                                                                                                                                                                                                                                                                       8
                                                                                                                                         MORGAN STANLEY RESEARCH
                                                                                                                                                                           April 19, 2013
                                                                                                                                                                   Asia / GEMs Strategy



Australia – Still Has the Lowest Fund Flows; Maintain OW
              Relative Performance and Country Model
                                                                                                     Dedicated APxJ/EM Fund Flows as % of AUM, 5MMA
                  Recommendations since Launch
  116
  114                                                                             OW           2.50%
              Australia Relative to MSCI EM^
  112
  110         Australia Relative to MSCI APxJ^
  108                                                                                          2.00%
  106         Country Model Preference (RHS)
  104
  102                                                                                          1.50%
  100                                                                             EW                                                                                      Country Average
   98
   96                                                                                          1.00%
   94
   92
   90                                                                                          0.50%
   88
   86                                                                             UW
   84                                                                                          0.00%




                                                                                                          Thailand
                                                                                                              China
                                                                                                        Philippines




                                                                                                                      South Africa
                                                                                                                                     Malaysia




                                                                                                                                                               Chile




                                                                                                                                                                          India




                                                                                                                                                                                                   Australia
                                                                                                                                                          Indonesia


                                                                                                                                                                       Hungary
                                                                                                                             Peru




                                                                                                                                                                         Brazil
                                                                                                                                                                        Poland

                                                                                                                                                                         Czech
                                                                                                                                                              Egypt
                                                                                                         Colombia




                                                                                                                                                                                       Singapore
                                                                                                                            Korea




                                                                                                                                                Turkey




                                                                                                                                                                                                    Russia
                                                                                                                          Mexico




                                                                                                                                                Taiwan


                                                                                                                                                         Hong Kong
        16-Nov-12
        21-Nov-12
        26-Nov-12


        11-Dec-12
        16-Dec-12
        01-Dec-12
        06-Dec-12




        05-Jan-13
        10-Jan-13
        15-Jan-13
        20-Jan-13
        25-Jan-13
        30-Jan-13
        04-Feb-13
        09-Feb-13
        14-Feb-13
        19-Feb-13
        24-Feb-13




        21-Mar-13
        06-Mar-13
        11-Mar-13
        16-Mar-13

        26-Mar-13

        05-Apr-13
        10-Apr-13
        15-Apr-13
        21-Dec-12
        26-Dec-12
        31-Dec-12




        01-Mar-13




        31-Mar-13




    We maintain our OW position on Australia. In addition to a high trailing dividend yield, Australia still has the
    lowest dedicated fund flows (as % of AUM, 5-month moving average, used as contrary indicator), which
    bodes well for its future performance based on our back-test results.




        Source: MSCI, RIMES, IBES, EPFR, Morgan Stanley Research. Monthly data as of February 28, 2013. Performance data as of April 16, 2013.
                                                                                                                                                                                                               9
                                                                                                                                            MORGAN STANLEY RESEARCH
                                                                                                                                                                           April 19, 2013
                                                                                                                                                                   Asia / GEMs Strategy



The Performance of Our Country Model Recommended Weighting: -19bp

                Model                        Contribution by Country Generated by Model Positions
                Ranks
                  1-13.8                                                                                                                   Russia
                    2                                -7.3                                                                                  China
                    3                                                                           0.8                                        Poland
                    4                                                       -2.0                                                           Peru
                    5                                                                                           4.3                        Morocco
                    6                                                                                                      6.9             Australia

                    …                                                        -1.7                                                          Average Alpha
                                                                                                                                           (Per OW/UW Country)

                    20               -10.4                                                                                                 Mexico
                    21                                                                          0.9                                        Brazil
                    22                                                                          0.8                                        Taiwan
                    23                                   -6.2                                                                              Thailand
                    24                                                                                                            8.4      South Africa
                    25                                                 -3.0                                                                Philippines

                        -15                  -10                 -5             0                                5                    10
                                                              (bps, Feb 26th - Apr 15th)
 • Our model recommended weighting generated a negative alpha of 19bp from February 26 to April 15, bringing the
 cumulative alpha since launch to -42bp.
 • Six out of 12 countries have generated positive alpha in our model portfolio.
 • Australia (OW) and South Africa (UW) were the biggest contributors to the model portfolio last month, whereas
 Russia (OW), China (OW) and Mexico (UW) were the main drags on performance.
 Source: MSCI, RIMES, Morgan Stanley Research. US$ total return data as of April 15, 2013. Past performance is not a guarantee of future results. Unaudited results shown do not include
 transaction costs. Please see appendix for the performance of other comparable models and lists.
                                                                                                                                                                                            10
                                  MORGAN STANLEY RESEARCH
                                                     April 19, 2013
                                             Asia / GEMs Strategy




Monthly APxJ/EM Country Recommendations




                                                                      11
                                                                                                                                   MORGAN STANLEY RESEARCH
                                                                                                                                                              April 19, 2013
                                                                                                                                                      Asia / GEMs Strategy



Monthly APxJ/EM Country Recommendations
                   VALUATIONS          25% PROFITABILITY & EARNINGS 12% TECHNICALS & SENTIMENTS 26% CURRENCY 10% MACRO                          15%       MS View 12%          100%
                     Trail    Fwd P/E   Div        Trail           Revisions           Price     Relative   Fund      Currency      Leading Poli Risk & MS Macro View          Final
                     P/B     (Z-Score) Yield       ROE              Breadth           Reversal   Strength   Flow                    Indicator Corp Gover & Industry Skew

 Country             6%        10%      9%         7%                 5%                 7%        10%       9%         10%           9%         6%             12%            Rank
 Russia               1         4        7          7                  2                 2          6        2           12            5         24              14             1
 China                10        7       12          9                  5                 3          5        22           6            2         19               3             2
 Poland               4         13       2          14                17                 13        22        6           10            3          7              19             3
 Hong Kong            6         11      18          23                 1                 14        11        12           4           NA          3              10             4
 Peru                 22        9        4          1                 25                 9          2        19          22           NA         13               1             5
 Australia            14        23       6          15                10                 17        12        1           18           13          5              11             6
 Chile                16        12      20          22                14                 8          3        9            3           10          2               8             7
 Korea                3         2       25          17                24                 10         4        17           9            1          8              12             8
 Czech                7         1        1          8                 22                 5         14        4           16            4          9              23             9
 India                20        6       24          4                  8                 11         8        5           19           14         21               2             10
 Malaysia             17        17      16          13                19                 23        24        15          15           NA          9               7             11
 Singapore            9         18      14          16                12                 16        17        3            2           NA          1              21             12
 Colombia             12        5       13          19                23                 1          1        23           5           NA         12               4             13
 Egypt                5         3       15          20                11                 7         18        11          NA           NA         25              18             14
 Morocco              21        10       5          3                 18                 22        25        NA          NA           NA         17              15             15
 Thailand             19        19      17          5                  4                 19        15        20          11           NA         15               5             16
 Indonesia            25        21      19          2                  9                 21        16        10          21            6         23               9             17
 Turkey               15        22      21          6                  7                 25        19        13          17           11         18               6             18
 New Zealand          13        24       3          21                21                 24        23        NA           7           NA          4              16             19
 Brazil               8         15       8          18                13                 12        10        7           14            9         14              22             20
 Taiwan               11        16       9          24                 6                 15         9        14          20           NA          6              25             21
 Philippines          24        25      22          10                 3                 20        20        21           1           NA         20              13             22
 Hungary              2         8       11          25                20                 6         21        8           13            7         22              19             23
 South Africa         18        14      10          12                16                 4          7        16          23            8         16              24             24
 Mexico               23        20      23          11                15                 18        13        18           8           12         11              17             25

                                                                                                              Overweight country                             Underweight country
         Source: MSCI, RIMES, IBES, EPFR, Morgan Stanley Research. Data as of April 15, 2013.

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                                                                                                                                                           Asia / GEMs Strategy



Morgan Stanley APxJ/EM Equity Recommended Weights vs. MSCI Country Weights

                                                                                                                                    Morgan Stanley
                                                                                                                                   Allocation Relative
                                                               MSCI APxJ/EM                     Morgan Stanley                     to MSCI APxJ/EM,
     Country                             Ranking                 Weight                            Weight                                  bps
     Russia                                     1                        3.9%                              5.6%                                  175
     China                                      2                       12.4%                             14.2%                                  175
     Poland                                     3                        1.1%                              1.6%                                   50
     Hong Kong                                  4                        6.6%                              8.4%                                   175
     Peru                                       5                        0.4%                              0.9%                                   50
     Australia                                  6                       19.8%                             21.5%                                   175
     Chile                                      7                        1.3%                              1.3%                                    0
     Korea                                      8                       10.1%                             10.1%                                    0
     Czech                                      9                        0.2%                              0.2%                                    0
     India                                     10                        4.7%                              4.7%                                    0
     Malaysia                                  11                        2.6%                              2.6%                                    0
     Singapore                                 12                        3.9%                              3.9%                                    0
     Colombia                                  13                        0.8%                              0.8%                                    0
     Egypt                                     14                        0.2%                              0.2%                                    0
     Morocco                                   15                        0.1%                              0.1%                                    0
     Thailand                                  16                        2.0%                              2.0%                                    0
     Indonesia                                 17                        2.2%                              2.2%                                    0
     Turkey                                    18                        1.5%                              1.5%                                    0
     New Zealand                               19                        0.3%                              0.3%                                    0
     Brazil                                    20                        8.7%                              6.7%                                  (200)
     Taiwan                                    21                        7.6%                              5.9%                                  (175)
     Philippines                               22                        0.7%                              0.0%                                   (75)
     Hungary                                   23                        0.2%                              0.0%                                   (16)
     South Africa                              24                        4.8%                              2.8%                                  (200)
     Mexico                                    25                        3.9%                              2.5%                                  (135)


    Source: MSCI, RIMES, Morgan Stanley Research. Data as of April 17, 2013.
           The combined APxJ/EM universe consists of all the constituents stocks which are included either in MSCI Asia Pacific ex Japan Index or in MSCI Emerging Markets Index.

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                                                                                                                       Asia / GEMs Strategy



Morgan Stanley EM Equity Recommended Weights vs. MSCI EM Country Weights

                                                                                                  Morgan Stanley
                                                                                                 Allocation Relative
                                                                                Morgan Stanley       to MSCI EM
        Country                         Ranking           MSCI EM Weight           Weight         benchmark, bps
        Russia                                 1                    5.6%             8.1%               250
        China                                  2                   17.9%            20.4%               250
        Poland                                 3                    1.6%             2.6%               100
        Peru                                   4                    0.5%             1.0%                 50
        Chile                                  5                    1.9%             2.4%                50
        Korea                                  6                   14.6%            15.6%                100
        Czech                                  7                    0.2%             0.2%                  0
        India                                  8                    6.8%             6.8%                  0
        Malaysia                               9                    3.8%             3.8%                  0
        Colombia                              10                    1.2%             1.2%                  0
        Egypt                                 11                    0.3%             0.3%                  0
        Morocco                               12                    0.1%             0.1%                  0
        Thailand                              13                    2.8%             2.8%                  0
        Indonesia                             14                    3.2%             3.2%                  0
        Turkey                                15                    2.2%             2.2%                  0
        Brazil                                16                   12.6%            10.6%               (200)
        Taiwan                                17                   11.0%             9.5%               (150)
        Philippines                           18                    1.1%             0.2%                (83)
        Hungary                               19                    0.2%             0.0%                (23)
        South Africa                          20                    6.9%             4.9%               (200)
        Mexico                                21                    5.6%             4.1%               (144)


 • For investors who focus only on global EM equities, we provide an EM equity recommended weights scheme for the
 MSCI GEMs universe (which currently includes 21 countries) based on the overall EM/APxJ country model rankings
 that we have generated before.
 • We select six Overweight and six Underweight countries within EM and assign 800bp OW/UW weight on each side.
     Source: MSCI, RIMES, Morgan Stanley Research. Data as of April 17, 2013.

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                                                                                                                   Asia / GEMs Strategy



Morgan Stanley APxJ Equity Recommended Weights vs. MSCI APxJ Country Weights

                                                                                                  Morgan Stanley
                                                                                                 Allocation Relative
                                                                MSCI APxJ       Morgan Stanley      to MSCI APxJ
         Country                          Ranking                Weight            Weight         benchmark, bps
         China                                  1                    17.0%          18.5%               150
         Hong Kong                              2                     9.1%          10.6%               150
         Australia                              3                    27.1%          28.6%                150
         Korea                                  4                    13.8%          14.3%                 50
         India                                  5                     6.4%           6.4%                  0
         Malaysia                               6                     3.6%           3.6%                  0
         Singapore                              7                     5.4%           5.4%                  0
         Thailand                               8                     2.7%           2.7%                  0
         Indonesia                              9                     3.0%           1.9%               (109)
         New Zealand                           10                     0.4%           0.0%                (38)
         Taiwan                                11                    10.4%           7.9%               (250)
         Philippines                           12                     1.0%           0.0%               (102)

 • Following similar methodologies, we generate an APxJ equity recommended weights scheme for investors who
 benchmark to MSCI Asia Pacific ex Japan index (which currently includes 12 countries) based on the overall EM/APxJ
 country rankings from our quant model.
 • We select four Overweight and four Underweight countries within APxJ and assign 500bp OW/UW weight on each
 side.
     Source: MSCI, RIMES, Morgan Stanley Research. Data as of April 17, 2013.

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                                                                                                                         Asia / GEMs Strategy



Country Model Framework – Weights and Metrics of Six Main Categories

                          M SV ie w
                            12%                                                               V a lu a tio n s
                                                                                                   25%
        A gg re ga te d M S M a cro Te am s' vie w                                     Tra iling P/ B                 6%
        12 %                                                                           N1 2 M P/E Z -Sco re           10 %
                                                                                       Tra iling 1 2 M D iv Yld        9%
              M acro
               15%

            Le a din g In dica tor s 9%                                                 P ro fita b ility &
            Political R isk & C o rpo ra te                                                E a rn in g s
            Go vern a nce            6%
                                                                                               12 %
                                                                                             Tra ilin g RO E             7%
                                                                                             Ea rning s R e visio n
                                                                                             Bre a dth 3 M M A               5%
                     C u rr e n c y
                        10%                             T e c h nic a ls &
        E ff ect ive Exch an g e Ra te C h an ge 10 %    Se n tim e n ts     2 M Price R eve rsa l                      7%
                                                               26%           R e la tive S tre ng th I nd e x          10 %
                                                                             M id -te rm f un d flo w                   9%



    We refer interested clients to our note dated November 19, 2012, Asia/GEMs Equity Strategy:
    Asia Insight: Update of Asia/GEMs Country Selection Quantitative Model, for the details of
    input metrics and back-test results.
    Source: Morgan Stanley Research
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                                                                                                                                                  Asia / GEMs Strategy



Six Categories of Metrics – Summary of Inputs
                  Metrics                                                                       Description                                         Rank Condition
                 Valuations
                     PB                                                     Current Trailing Price to Book Value Ratio                                Lower is better
                   NPEZ                                   3 Yr Rolling Z-Score of Price to I/B/E/S Consensus Next 12M Earnings Ratio*                 Lower is better
                     DY                                                          Last 12M Trailing Dividend Yield                                     Higher is better

        Profitability and Earnings
                    ROE                                                            Trailing Return on Equity                                          Higher is better
               EarnRevBre                                   Breadth of Next 12M Earnings Revisions 3-month moving average (3MMA)                      Higher is better

                 Technicals
                 2M Return                                                           2 month total % return in US$                                   Lower is better ^
                    RSI                                                         Relative Strength Index of price in US$                               Lower is better
                 Fund Flow                                                    Mid-term EPFR Fund Flow as % of AUM MA                                 Lower is better ^

                  Currency
                  EERChg                                                  Mid-term Change of BIS Effective Exchange Rate#                             Lower is better

                 Macro
         Business Cycle Indicator                             Mid-term Change of OECD Country Composite Leading Indicator (CLI)                       Higher is better
               Macro Risk                                      Summary of Country Political Risk and Corporate Governance Risk                        Lower is better

               MS View
          MS Macro teams' View                   Aggregated rankings which include 1) MS Economists' view; 2) MS Country Strategists' view;           Higher is better
                                                          3) MS Asia/GEMs regional strategy team's long-term country perference;
                                                                  4) MS Asia/GEMs industry quantitative model skewness
    * Z-Score of PE = (current PE - monthly time-series average of PE over the last 3 years) / standard deviation of the same series
    ^ Use as a contrarian indicator # also considered the export vs. domestic exposure of each country's economy




    For each metric, we rank Asia/GEMs countries from most attractive (rank #1) to least attractive (rank #25).
    We then calculate a final country ranking by taking a weighted average of the rankings of the 12 metrics.
 Source: Morgan Stanley Research

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                                          Asia / GEMs Strategy




Monthly APxJ/EM Country Chartbook




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                                                                                                                               Asia / GEMs Strategy



APxJ/EM Country & Regional Scatter: Consensus 2013E P/B vs. ROE
                                                                                                                           Indonesia
  3.5x
             2013E Price/ Book

                                                                     Philippines
  3.0x
                                                                                      Mexico


  2.5x                                                                                                                  Peru
                           MSCI Europe                                             S&P 500
                                                                        Colombia                      Thailand
                                                     Chile             Australia India
  2.0x                                                                 Malaysia                South Africa

                                            Taiwan                                    Turkey
                                                           MSCI APxJ
                                   Singapore
  1.5x                                                               MSCI EM China
              Hong Kong                                   Brazil
                              Poland
                                                        Czech Republic  Egypt
              TOPIX
                                         New Zealand
  1.0x                                                         Korea
                                    Hungary

                                                                        Russia
  0.5x
                                                                                                                          2013E ROE
  0.0x
         7%                  9%                11%                 13%              15%         17%           19%        21%                 23%

   Source: RIMES, MSCI, IBES, Morgan Stanley Research. Data as of April 12, 2013.

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                                                                                                                                       Asia / GEMs Strategy




Morgan Stanley Macro Forecasts: GDP Growth & Inflation
                                                                               Real GDP                                    CPI
                                                                                                                        ( % YoY)
                                                                2011         2012        2013E 2014E               2011   2012 2013E   2014E

            Global Economy                                       3.9           3.1           3.2          3.9      4.4    3.3    3.3     3.3
            Industrial World                                     1.4           1.3           0.9          1.8      2.7    1.9    1.6     1.7
            Developing World                                     6.5           4.9           5.4          5.8      6.2    4.8    5.0     4.7

            US                                                   1.8           2.2           1.6          2.5      3.1    2.1    1.8     1.5

            Euro Area                                            1.5          -0.5          -0.7          0.9      2.7    2.5    1.5     1.6
            France                                               1.7           0.0          -0.3          0.6      2.1    2.0    1.2     1.6
            Germany                                              3.0           0.7           0.5          1.6      2.0    2.0    1.6     1.6
            Italy                                                0.6          -2.2          -1.7          0.4      2.8    3.0    1.7     2.0
            Spain                                                0.4          -1.4          -1.5          0.8      3.2    2.4    2.2     1.1
            UK                                                   1.0           0.3           0.7          1.3      4.5    2.8    3.0     2.8

            Emerging Europe                                      5.1           2.7           3.0          3.9      6.9    5.7    5.7     5.3
            Russia                                               4.3           3.4           2.9          3.4      8.5    5.1    6.7     5.4
            Turkey                                               8.5           2.2           4.4          4.8      6.5    8.9    7.0     6.2
            South Africa                                         3.1           2.5           2.5          3.3      5.0    5.7    5.7     5.4

            Japan                                                -0.6          2.0           1.6          1.3      -0.3   -0.1   0.2     1.8
            Asia ex-Japan                                        7.6           6.2           6.7          6.9      5.8    4.1    4.4     4.1
            Australia                                            2.4           3.6           3.0          3.1      3.3    1.8    2.5     2.4
            China                                                9.3           7.8           8.2          7.9      5.4    2.6    3.2     3.3
            India                                                7.3           5.1           5.9          6.8      8.9    9.3    8.9     7.1
            Indonesia                                             6.5          6.2           5.6          5.9      5.4    4.3    5.4     5.4
            Korea                                                3.6           2.0           3.3          4.1      4.0    2.2    2.7     3.0
            Taiwan                                                4.1          1.3           2.9          4.0      1.4    1.9    1.5     1.8

            Latin America                                        4.5           2.8           3.1          3.8      6.7    6.2    6.7     6.5
            Brazil                                               2.7           0.9           2.8          3.4      6.6    5.4    6.2     5.7
            Mexico                                               3.9           3.9           3.2          4.2      3.4    4.1    3.7     3.8

Source: Morgan Stanley Research. Data as of published MS report “The Global Macro Analyst” dated April 10, 2013.
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                                                                                                                                                                                                Asia / GEMs Strategy




MSCI APxJ/EM Country Valuations and ROE versus Their History
                                             Trailing P/Book                                                                                                     Trailing P/E
                0 . 0x     1 .0 x   2 .0 x     3. 0x    4. 0x     5 .0 x       6 .0 x        7. 0x         8. 0x                    0 .0 x   5. 0x   1 0 .0 x     1 5. 0x      2 0. 0x        25 .0 x      3 0 .0 x        3 5. 0 x       4 0. 0x

             EM                                                                                                                  EM
          A Px J                                                                                                             AP xJ
        C h in a                                                                                                            C h in a
        K o re a                                                                                                            Ko rea
         B r a z il                                                                                                          B r a z il
      T a iw a n                                                                                                           Ta i w a n
     S .A f ric a                                                                                                        S .A f r ic a
          In dia                                                                                                              In d ia
       R u s s ia                                                                                                          R u s s ia
      M e x ic o                                                                                                           M e x ic o
    M a l a ys ia                                                                                                       M a la y s ia
  In d on e s ia                                                                                                      In d o n e s ia
    T h a ila n d                                                                                                       T h a ila n d
          C h ile                                                                                                             C h ile
                                                                                                                           T ur k e y
       T u rkey                                                  M a x / 5 Y A vg . /M in                                  P o la n d
      P o la n d
   C o lo m bia                                                  C u rr e n t P /B o o k                              C o lo m b ia
P h ilip p in e s                                                                                                   P h ilip p in e s
                                                                                                                               P e ru                                                                          M a x / 5Y A vg . / M in
          P eru
         Eg yp t                                                                                                            E g yp t
                                                                                                                                                                                                               C u r re n t T ra il in g P /E
        Cze ch                                                                                                              C ze ch
    H un g a r y                                                                                                        H u n g a ry
   A u s t ra lia                                                                                                      A u s t r a lia
Hong Kong                                                                                                           H on g K on g
 S in g a p o re                                                                                                     S in g a p o r e


                                                Trailing ROE                                                                                          12-month Forward P/E
                      0%     5%      10%        15 %     2 0%      25%          30%           35 %         4 0%
                                                                                                                                   0 .0 x    5. 0x     1 0. 0x       1 5. 0x       2 0 .0 x         2 5. 0 x          3 0. 0x         35 .0 x
               EM
            AP xJ                                                                                                               EM
           C h in a                                                                                                         AP xJ
                                                                                                                           C h in a
           Ko rea                                                             M a x / 5 Y A v g . /M i n
                                                                                                                           Ko rea
           B r a z il
                                                                              C u rr en t R O E                             B r a z il
         T a iw a n
                                                                                                                          Ta i w a n
       S . Af r ic a
                                                                                                                        S .A f r ic a
            In d ia
                                                                                                                             In d ia
         R u s s ia
                                                                                                                          R u s s ia
         M e x ic o
                                                                                                                          M e x ic o
     M a la y s ia
                                                                                                                       M a la y s ia
    In d o n e s ia
                                                                                                                     In d o n e s ia
      Th a ila n d
                                                                                                                       T h a ila n d
            C h ile
                                                                                                                             C h ile
         T u rk e y
                                                                                                                          T u rk e y
         P ola n d
                                                                                                                          P o la n d
    C o lo m b ia
                                                                                                                     C o lo m b ia
  P h ilip p in e s
                                                                                                                   P h ilip p in e s
             P e ru
                                                                                                                              P e ru
           E g y pt
                                                                                                                           E g yp t                                                                     M ax / 5Y A vg . /M in
          C ze c h
                                                                                                                           C ze ch
      H u n g a ry                                                                                                                                                                                      C u r re n t F w d P / E
                                                                                                                       H u n g a ry
     A u s t r a lia
                                                                                                                      A u s t r a lia
  H o ng K o n g
                                                                                                                   H on g K on g
   S in g a p o r e
                                                                                                                    S in g a p o r e



                  Source: RIMES, MSCI, IBES, Morgan Stanley Research. Data as of April 12, 2013.
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                                                                                                                                         Asia / GEMs Strategy



Past Performance: APxJ/EM Country & Regional Index USD Returns
 MSCI EM/APxJ                                                         Total US$ Return                                                 Rank
 Regional Indices                                            1W            1M     3M          6M         12M     YTD    1W   1M         3M      6M       12M      YTD
 MSCI EM                                                    -2%            -3%    -7%         0%          1%     -5%
 MSCI APxJ                                                  -1%            -1%    -2%         5%          9%     0%
 MSCI EM Asia                                                0%            -1%    -6%         1%          3%     -4%
 MSCI EMEA                                                  -5%            -5%    -10%       -5%         -2%     -10%
 MSCI Latin America                                         -5%            -3%    -6%        -1%         -5%     -3%
 Country Indices                            Weight           1W            1M     3M          6M         12M     YTD    1W   1M         3M      6M       12M      YTD
 Australia                                  19.8%           -1%            -1%    5%         12%         22%     9%     15   13         5        6         5       5
 Brazil                                      8.7%           -5%            -5%    -7%        -3%         -12%    -4%    22   22         13       17       24      16
 Chile                                       1.3%           -4%            -4%    -7%        -3%         -5%     -1%    20   19         14       16       19      13
 China                                      12.4%           -3%            -3%    -12%       -2%          0%     -8%    18   17         22       14       15      18
 Colombia                                    0.8%           -3%            -4%    -11%       -5%          0%     -10%   19   21         21       19       16      20
 Czech                                       0.2%           -1%            -4%    -13%       -22%        -17%    -16%   16   18         23       25       25      24
 Egypt                                       0.2%            2%            2%     -11%       -19%         0%     -10%    5   10         20       24       17      19
 Hong Kong                                   6.6%           -1%            1%     -3%         7%         15%     2%     13   11         12       8         8      11
 Hungary                                     0.2%            0%            4%     -9%        -8%          9%     0%     11    4         17       21       12      12
 India                                       4.7%            2%            -3%    -7%        -1%          4%     -3%     4   16         15       13       14      15
 Indonesia                                   2.2%            3%            4%     10%        12%         17%     15%     1    5         2        5         7       2
 Korea                                      10.1%            0%            -3%    -8%        -2%         -3%     -8%     8   15         16       15       18      17
 Malaysia                                    2.6%            1%            9%     3%          5%         10%     4%      7    1         7        10       11       7
 Mexico                                      3.9%           -5%            2%     -2%         5%         19%     3%     21    9         9        11        6       8
 Morocco                                     0.1%            0%            5%     3%         10%         -7%     2%      9    3         6        7        21      10
 New Zealand                                 0.3%           -1%            6%     6%         13%         26%     13%    14    2         4        4         4       3
 Peru                                        0.4%          -10%            -11%   -21%       -9%         -11%    -16%   25   25         25       22       23      25
 Philippines                                 0.7%           -1%            3%     10%        27%         40%     17%    12    7         1        1         2       1
 Poland                                      1.1%           -3%            -4%    -10%       -3%         11%     -11%   17   20         19       18       10      22
 Russia                                      3.9%           -8%            -9%    -15%       -10%        -10%    -11%   24   24         24       23       22      21
 Singapore                                   3.9%            0%            2%     2%          6%         14%     3%     10    8         8        9         9       9
 South Africa                                4.8%           -6%            -5%    -9%        -6%         -6%     -13%   23   23         18       20       20      23
 Taiwan                                      7.6%            1%            -1%    -2%         3%          5%     -2%     6   12         11       12       13      14
 Thailand                                    2.0%            3%            -1%    7%         18%         26%     10%     2   14         3        3         3       4
 Turkey                                      1.5%            2%            3%     -2%        20%         45%     8%      3    6         10       2         1       6

                                                                                  1    Best performing country                    25   Worst performing country
Source: MSCI, RIMES, Morgan Stanley Research. Data as of April 17, 2013.

                                                                                                                                                                        22
                                                                                                                                                                                                                                                                                                                                                                                                                       MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             April 19, 2013
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     Asia / GEMs Strategy



MSCI APxJ/EM Equities – Country and Industry Group Weights




                                                                                                                                                                                                                                                                                                                                                                                     Pharmaceuticals Biotechnology
                                                                                                                                           Consumer Durables & Apparel




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 Telecommunication Services
                                                      Automobiles & Components




                                                                                                             Commercial & Professional




                                                                                                                                                                                                                                                                    Food Beverage & Tobacco




                                                                                                                                                                                                                                                                                                                                                                                                                                                   Semiconductor Equipment
                           Industry Group Weights




                                                                                                                                                                                                                                                                                              Health Care Equipment &
                                                                                                                                                                                                                                       Food & Staples Retailing




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       Technology Hardware &
                                                                                                                                                                                                                                                                                                                        Household & Personal
                                                                                                                                                                                                 Diversified Financials




                                                                                                                                                                                                                                                                                                                                                                                                                                                                               Software & Services
                                                                                                                                                                           Consumer Services




                                                                                                                                                                                                                                                                                                                                                                                                                                                   Semiconductors &
                                                                                                                                                                                                                                                                                                                                                                                     & Life Sciences




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Transportation
                                                                                             Capital Goods




                                                                                                                                                                                                                                                                                                                                                                                                                       Real Estate




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       Equipment
                                                                                                                                                                                                                                                                                                                                                 Insurance


                                                                                                                                                                                                                                                                                                                                                               Materials
                                                                                                                                                                                                                                                                                                                        Products




                                                                                                                                                                                                                                                                                                                                                                                                                                       Retailing
                                                                                                             Services




                                                                                                                                                                                                                                                                                              Services




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   Utilities
                                                                                                                                                                                                                            Energy
                                                                                   Banks




                                                                                                                                                                                                                                                                                                                                                                             Media
Country / Industry
Group
Country Weights                                     2.3% 22.8%                             4.5%              0.3%                        0.7%                            1.5%                  2.8%                       9.1%       3.5%                         4.4%                        0.7%                      0.8%                   4.1% 10.9%                  1.0%      1.2%                            5.9%            1.5%          5.7%                      1.9%                      2.3%                    6.3%                           2.1%               3.7%
Australia               19.8%                                                    7.1%      0.1%              0.3%                                                        0.3%                  0.4%                       1.1%       1.7%                         0.2%                        0.2%                                             1.1%          3.6%                    0.6%                            1.6%            0.0%                                    0.1%                                              0.4%                           0.5%               0.3%
Brazil                   8.7%                                                    2.1%      0.2%              0.0%                        0.1%                            0.1%                  0.3%                       1.3%       0.2%                         1.1%                        0.1%                      0.1%                   0.0%          1.5%                                                    0.2%            0.2%                                    0.2%                                              0.3%                           0.3%               0.5%
Chile                    1.3%                                                    0.2%                                                                                                                                     0.1%       0.1%                         0.1%                                                                                       0.2%                                                                    0.1%                                                                                      0.0%                           0.1%               0.4%
China                   12.4%                       0.3%                         3.1%      0.5%                                          0.1%                                                  0.1%                       2.0%       0.1%                         0.4%                        0.1%                      0.1%                   1.0%          0.5%                    0.0%                            0.8%            0.3%          0.0%                      0.6%                      0.1%                    1.4%                           0.3%               0.5%
Colombia                 0.8%                                                    0.2%                                                                                                          0.1%                       0.2%       0.1%                                                                                                                    0.1%                                                                                                                                                                                                                0.1%
Czech Republic           0.2%                                                    0.1%                                                                                                                                                                                                                                                                                                                                                                                                                                          0.0%                                              0.1%
Egypt                    0.2%                                                    0.0%      0.1%                                                                                                0.0%                                                                                                                                                                                                                  0.0%                                                                                                      0.0%
Hong Kong                6.6%                                                    0.6%      0.5%                                          0.0%                            0.6%                  0.4%                                                                                                                                            0.9%                                                                  2.2%            0.1%          0.0%                                                                        0.1%                           0.2%               0.9%
Hungary                  0.2%                                                    0.1%                                                                                                                                     0.1%                                                                                                                                                                                                                                                                                                 0.0%
India                    4.7%                       0.2%                         1.2%      0.2%                                          0.0%                                                  0.2%                       0.6%                                    0.3%                                                  0.2%                                 0.3%          0.0%      0.3%                            0.0%                                                    0.7%                                              0.1%                           0.0%               0.2%
Indonesia                2.2%                       0.3%                         0.8%      0.1%                                                                                                                           0.1%                                    0.2%                                                  0.1%                                 0.2%          0.1%      0.1%                                                                                                                                      0.3%                           0.0%               0.1%
Korea                   10.1%                       1.2%                         0.9%      1.0%              0.0%                        0.2%                            0.0%                  0.2%                       0.3%       0.1%                         0.3%                                                  0.2%                   0.3%          0.9%          0.0%      0.1%                                            0.1%          3.4%                      0.3%                      0.3%                    0.1%                           0.1%               0.2%
Malaysia                 2.6%                       0.0%                         0.7%      0.3%                                                                          0.2%                  0.1%                       0.1%                                    0.3%                        0.0%                                                           0.1%                                                    0.0%            0.0%                                                                                      0.3%                           0.1%               0.3%
Mexico                   3.9%                                                    0.5%      0.2%                                                                                                0.0%                                  0.3%                         0.8%                                                  0.1%                                 0.8%          0.2%                                                      0.0%                                                                                      0.7%                           0.1%
Morocco                  0.1%                                                    0.0%                                                                                                                                                                                                                                                                                                                                0.0%                                                                                                      0.0%
New Zealand              0.3%                                                                                                                                            0.0%                                                                                                                                                                                0.1%                                                                                                                                                              0.1%                           0.0%               0.0%
Peru                     0.4%                                                    0.2%                                                                                                                                                                                                                                                                        0.2%
Philippines              0.7%                                                    0.1%      0.2%                                                                          0.0%                  0.0%                                                               0.0%                                                                                                                                               0.1%                                                                                                      0.1%                           0.0%               0.1%
Poland                   1.1%                                                    0.4%                                                                                                                                     0.2%       0.0%                         0.0%                                                                         0.1%          0.2%          0.0%                                                                                              0.0%                                              0.0%                                              0.1%
Russia                   3.9%                                                    0.7%                                                                                                                                     2.1%       0.2%                                                                                                                    0.4%                                                    0.0%                                                                                                      0.3%                                              0.1%
Singapore                3.9%                                                    1.3%      0.7%                                                                          0.1%                  0.1%                                  0.0%                         0.2%                                                                                                     0.1%                                      0.7%            0.1%                                                                                      0.5%                           0.2%
South Africa             4.8%                                                    0.4%      0.2%                                          0.1%                                                  0.5%                       0.5%       0.3%                         0.1%                        0.1%                                             0.3%          0.6%          0.5%      0.1%                            0.2%            0.4%                                                                                      0.6%
Taiwan                   7.6%                       0.2%                         0.7%      0.2%                                          0.1%                            0.0%                  0.3%                       0.1%       0.1%                         0.2%                                                                         0.2%          0.9%                    0.0%                            0.0%            0.1%          2.3%                                                1.9%                    0.4%                           0.1%
Thailand                 2.0%                                                    0.8%                                                                                                                                     0.4%       0.2%                         0.1%                        0.0%                                                           0.2%          0.0%                                      0.0%                                                                                                      0.2%                           0.0%               0.0%
Turkey                   1.5%                       0.0%                         0.7%      0.1%                                          0.0%                                                  0.1%                       0.1%       0.1%                         0.1%                                                                                       0.0%                                                    0.0%                                                                                                      0.1%                           0.1%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     weight > 1%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     weight > 0.25% but < 1%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     weight > 0% but < 0.25%
         Source: MSCI, RIMES, Morgan Stanley Research. Data as of April 17, 2013.                                                                                                                                                                                                                                                                                                                                                                                                                    weight = 0%

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               23
                                                                                                   MORGAN STANLEY RESEARCH
                                                                                                                             April 19, 2013
                                                                                                                     Asia / GEMs Strategy



Top APxJ/EM Countries by Market Capitalization
                                                                                                      Country weights in MSCI
                                                                                                      Australia                         19.8%
                                                                                                      China                             12.4%
                                                                                    Australia         Korea                             10.1%
                           Turkey, 2%
            Thailand, 2%                    Chile, 1%                               China             Brazil                             8.7%
                                                            Others, 4%              Korea             Taiwan                             7.6%
        Indonesia, 2%                                                                                 Hong Kong                          6.6%
                                                                                    Brazil
  Malaysia, 3%                                                Australia, 20%                          South Africa                       4.8%
                                                                                    Taiwan            India                              4.7%
                                                                                    Hong Kong         Singapore                          3.9%
        Mexico, 4%                                                                  South Africa      Russia                             3.9%

                                                                                    India             Mexico                             3.9%
    Russia, 4%                                                                                        Malaysia                           2.6%
                                                                                    Singapore
                                                                                                      Indonesia                          2.2%
 Singapore, 4%                                                         China, 12%   Russia            Thailand                           2.0%
                                                                                    Mexico            Turkey                             1.5%
India, 5%                                                                                             Chile                              1.3%
                                                                                    Malaysia
                                                                                                      Poland                             1.1%
                                                                                    Indonesia
 South Africa, 5%                                                                                     Colombia                           0.8%
                                                                 Korea, 10%         Thailand          Philippines                        0.7%
             Hong Kong, 7%                                                          Turkey            Peru                               0.4%
                                                    Brazil, 9%
                                                                                    Chile             New Zealand                        0.3%
                              Taiwan, 8%                                                              Egypt                              0.2%
                                                                                    Others
                                                                                                      Czech Republic                     0.2%
                                                                                                      Hungary                            0.2%
                                                                                                      Morocco                            0.1%

       For each of the larger APxJ/EM countries, we summarize their macro economic background and model
        ranking details in the next section of slides.
    Source: MSCI, RIMES, Morgan Stanley Research. Data as of April 17, 2013.

                                                                                                                                                24
                                                                                                                                                                                                                                                                                                                     MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                                                                                                   April 19, 2013
                                                                                                                                                                                                                                                                                                                                                                           Asia / GEMs Strategy



Australia: Factor Rankings (OW; Rank #6)
 Model Ranking                                                                                                                                                                                                               Top 10 Market Cap Stocks (sorted by Mcap)
                                                                                                    Weight in                            Current                       Current                          Previous                                                                                                                                                   Stock               Mcap                     P/E                 ROE
                                                                                                    the model                             Level                         Rank                              Rank              Ticker                  Company Name                                                                        Sector                     Rating              (USD bn)                 2013E               2013E               DY 2013E
                                                                                                                                                                                                                            BHP.AX                  BHP Billiton Plc                                                                    Materials                          OW                178.6               14.0x               19.3%                 3.5%
Trailing P/Book Ratio                                                                                          6%                           2.0x                              14                                  14
                                                                                                                                                                                                                            CBA.AX                  Commonwealth Bk Aust                                                                Financials                         EW                120.8               14.2x               19.1%                 5.3%
12M Consensus Fwd P/E *                                                                                       10%                          14.0x                              23                                  24        WBC.AX                  Westpac Banking                                                                     Financials                         EW                106.6               14.1x               15.7%                 5.6%
Trailing Dividend Yield                                                                                        9%                          4.3%                                6                                  5         RIO.AX                  Rio Tinto Plc                                                                       Materials                          EW                105.6               8.8x                25.6%                 3.3%
Trailing ROE                                                                                                   7%                          11.4%                              15                                  15        ANZ.AX                  ANZ Bank                                                                            Financials                         UW                88.9                12.8x               15.4%                 5.2%
Earnings Revisions Breadth 3MMA                                                                                5%                          -1.0%                              10                                  22        NAB.AX                  Nat Aust Bank                                                                       Financials                         EW                79.6                12.5x               14.9%                 5.9%
Price Momentum ^                                                                                               7%                          1.1%                               17                                  22        WES.AX                  Wesfarmers                                                                          Cons. Stap.                        OW                48.9                19.8x               9.7%                  4.4%
Relative Strength Index (RSI) ^                                                                               10%                           49.0                              12                                  22        WOW.AX                  Woolworths                                                                          Cons. Stap.                        UW                44.6                18.2x               32.0%                 3.8%
                                                                                                                                                                                                                            CSL.AX                  CSL Ltd                                                                             Health Care                        EW                31.0                24.4x               36.3%                 1.8%
Fund Flows as % of AUM ^                                                                                       9%                          0.3%                                1                                   1
                                                                                                                                                                                                                            WDC.AX                  Westfield Group                                                                     Financials                         OW                26.3                17.8x               9.1%                  4.5%
Currency (12M EER Change) #                                                                                   10%                          -2.1%                              18                                  11
Leading Indicator Change                                                                                       9%                          -0.5%                              13                                  12
Macro Risk                                                                                                     6%                                                              5                                   5
MS Macro View & Industry Skew                                                                                 12%                                                             11                                  14
                                                                                                                                                                                                                            Source: MSCI, IBES, Morgan Stanley Research. For non-covered stocks we have provided sedol
* We use Z-Score of P/E in our model                                                                                                                                                                                        code and consensus valuations. For important disclosures regarding companies that are the
^ We use them as contrary indicators, i.e., lower is better                                                                                                                                                                 subject of this screen, please see the Morgan Stanley Research Disclosure Website at
# We adjust it by considering the export vs. domestic exposure of each individual country                                                                                                                                   www.morganstanley.com/researchdisclosures.


Fund Flows as percentage of AUM                                                                                                                                                                                             12M Forward P/E close to long-run average
   2.0%                                                                                                                                                                                                                        2 2 .0 x

   1.5%                                                                                                                                                                                                                        2 0 .0 x

   1.0%
                                                                                                                                                                                                                               1 8 .0 x
                                                                                                                                                                                                                                                                                                                                                                                                                          + 1 S.D.

   0.5%
                                                                                                                                                                                                                               1 6 .0 x
                                                                                                                                                                                                                                                                                                              A verag e
   0.0%
                                                                                                                                                                                                                               1 4 .0 x                                                                                                                                                                                                                 1 4 .0 x

  -0.5%
                                                                                                                                                                                                                               1 2 .0 x
                                                                                                                                                                                                                                                                                                - 1 S .D .

  -1.0%
                                                                                                                                                                                                                               1 0 .0 x

  -1.5%
                                                                                                                                                                                                                                8 .0 x
          Sep-01

                   Mar-02



                                     Mar-03

                                              Sep-03

                                                       Mar-04

                                                                Sep-04

                                                                         Mar-05

                                                                                  Sep-05

                                                                                           Mar-06

                                                                                                     Sep-06

                                                                                                              Mar-07

                                                                                                                       Sep-07

                                                                                                                                Mar-08

                                                                                                                                         Sep-08

                                                                                                                                                  Mar-09

                                                                                                                                                           Sep-09

                                                                                                                                                                    Mar-10

                                                                                                                                                                             Sep-10

                                                                                                                                                                                      Mar-11

                                                                                                                                                                                               Sep-11

                                                                                                                                                                                                         Mar-12

                                                                                                                                                                                                                   Sep-12
                            Sep-02




                                                                                                                                                                                                                                          Jan-92

                                                                                                                                                                                                                                                   Jan-93

                                                                                                                                                                                                                                                            Jan-94

                                                                                                                                                                                                                                                                     Jan-95

                                                                                                                                                                                                                                                                              Jan-96

                                                                                                                                                                                                                                                                                       Jan-97

                                                                                                                                                                                                                                                                                                   Jan-98

                                                                                                                                                                                                                                                                                                            Jan-99

                                                                                                                                                                                                                                                                                                                     Jan-00

                                                                                                                                                                                                                                                                                                                              Jan-01

                                                                                                                                                                                                                                                                                                                                       Jan-02

                                                                                                                                                                                                                                                                                                                                                Jan-03

                                                                                                                                                                                                                                                                                                                                                         Jan-04

                                                                                                                                                                                                                                                                                                                                                                  Jan-05

                                                                                                                                                                                                                                                                                                                                                                           Jan-06

                                                                                                                                                                                                                                                                                                                                                                                    Jan-07



                                                                                                                                                                                                                                                                                                                                                                                                       Jan-09

                                                                                                                                                                                                                                                                                                                                                                                                                 Jan-10

                                                                                                                                                                                                                                                                                                                                                                                                                           Jan-11



                                                                                                                                                                                                                                                                                                                                                                                                                                               Jan-13
                                                                                                                                                                                                                                                                                                                                                                                              Jan-08




                                                                                                                                                                                                                                                                                                                                                                                                                                      Jan-12
 Source: RIMES, MSCI, EPFR, IBES, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                                                                                                               25
                                                                                                                                       MORGAN STANLEY RESEARCH
                                                                                                                                                                           April 19, 2013
                                                                                                                                                                   Asia / GEMs Strategy



Australia: Macro Economic Background
   Lackluster Growth: MS economics team assumes another year of lackluster           Business and Consumer Sentiments Lifts
    growth for Australia in their base case. The growth outlook is balanced
    between the well-known restraints on domestic activity-fiscal tightening, high                                   CONSUMER AND BUSINESS CONFIDENCE*
    currency and structural change versus the slower-than-usual response to prior                2.0
    rate cuts. Strong mining export volumes are expected to cushion real GDP.                    1.5
    However, the impact of higher export volumes is expected to be offset by lower               1.0
    export prices to some extent. The outlook for national income, which adjusts                 0.5
    real GDP for the change in export prices relative to import prices, remains                  0.0




                                                                                       Z SCORE
    problematic. With net exports providing a positive contribution this year, team
                                                                                             -0.5
    expects that there will be a slower growth in domestic demand led by
    deceleration in business investment spending.                                            -1.0
                                                                                             -1.5                                        C ON SUM ER
   Monetary Policy: Our team expect RBA to be on hold for an extended period.
                                                                                             -2.0
    Team believes that the key medium-term issue for RBA is the outlook for the                                                          B USINE SS

    business investment. It is expected that peak in mining-related investment is            -2.5
                                                                                                       *B US IN ES S I S S TA N DA R D D EV IA TI ON S F R OM LO NG-T ER M
    relatively close but investment will not fall sharply over the coming year. The          -3.0 A V ER A GE O F N A B, A CC I,     PM I FO R M A NUFA C TURI NG, SE RVI CE S & C ONS TR UC TI ON

    downside risks associated with the end of mining-related investment boom are                 1997      1999         2001          2003        2005       2007        2009        2011        2013
    expected to be concentrated in 2014-15.
                                                                                      Source: ABS, ACCI, AiG, NAB, Melbourne Institute / Westpac, Morgan Stanley Research

Forecast Summary                                                                      Income Growth is Weak
Australia                                                                                                       REAL NATIONAL PRODUCTION & INCOME
                                            2011    2012      2013E       2014E                   8
                                                                                                  7                  REAL NATIO NAL INCOME
Real GDP Growth                              2.4     3.6        3.0         3.1
                                                                                                  6
CPI (Inflation % year -end)                  3.3     1.8        2.5         2.4                   5
Exports (%)                                 -0.8     6.3       10.6        11.4                                                                              3.1
                                                                                                  4
Imports (%)                                 10.8     6.8        6.7         7.0
                                                                                       4 QRT %
                                                                                                  3
C/A balance as % of GDP                     -2.3    -3.7       -4.2        -4.4                   2
                                                                                                  1                                REAL GDP
FX rate (AUS/USD, Year-end)                 1.02    1.04       1.01        0.85
                                                                                                  0
                                                                                                 -1                                                          0.2
                                                                                                 -2
                                                                                                 -3      - 2.9                                         -3 .2
                                                                                                 -4
                                                                                                   1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Source: ABS, RBS, Morgan Stanley Research                                             Source: ABS, Morgan Stanley Research
                                                                                                                                                                                                        26
                                                                                                                                                                                                                                                                                MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                                                             April 19, 2013
                                                                                                                                                                                                                                                                                                                                     Asia / GEMs Strategy



 Brazil: Factor Rankings (UW; Rank #20)
 Model Ranking                                                                                                                                                                                  Top 10 Market Cap Stocks (sorted by Mcap)
                                                                                       Weight in                     Current                   Current                     Previous                                                                                                                                        Stock                Mcap                P/E           ROE
                                                                                       the model                      Level                     Rank                         Rank              Ticker                     Company Name                                                            Sector                   Rating               (USD bn)            2013E         2013E            DY 2013E
                                                                                                                                                                                               ABV.N                      AmBev                                                                   Cons. Stap.                    EW                124.1             22.1x              39.7%         3.1%
Trailing P/Book Ratio                                                                             6%                     1.4x                            8                        5
                                                                                                                                                                                               PBR.N                      Petrobras                                                               Energy                         OW                104.6              6.8x               8.9%         5.7%
12M Consensus Fwd P/E *                                                                          10%                    10.1x                           15                       13            VALE.N                     Vale                                                                    Materials                      EW                 85.6             7.6x               15.2%         4.7%
Trailing Dividend Yield                                                                           9%                     3.7%                            8                        8            ITUB.N                     Itau Unibanco Holding S.A.                                              Financials                     EW                 79.6             11.5x              18.5%         2.6%
Trailing ROE                                                                                      7%                   10.5%                            18                       20            BBD.N                      Banco Bradesco                                                          Financials                     EW                 65.3             13.2x              15.9%         2.7%
Earnings Revisions Breadth 3MMA                                                                   5%                    -3.8%                           13                       15            CIEL3.SA                   Cielo S.A.                                                              IT                             OW                 20.8             15.3x             118.6%         5.2%
                                                                                                                                                                                               BRFS3.SA                   Brasil Foods                                                            Cons. Stap.                    UW                 20.3             24.6x              11.4%         1.4%
Price Momentum ^                                                                                  7%                    -5.6%                           12                       11
                                                                                                                                                                                               CCRO3.SA                   CCR                                                                     Industrials                    EW                 17.5             23.9x              41.0%         3.1%
Relative Strength Index (RSI) ^                                                                  10%                     43.0                           10                        7            245877                     Itausa-Investimentos Itau S/A                                           Financials                      -                 15.7             8.9x               15.7%         3.9%
Fund Flows as % of AUM ^                                                                          9%                     0.7%                            7                       14            BVMF3.SA                   BM&F Bovespa                                                            Financials                     EW                 12.9             21.7x              6.1%          3.9%
Currency (12M EER Change) #                                                                      10%                   -10.9%                           14                       14
Leading Indicator Change                                                                          9%                     0.1%                            9                        7
Macro Risk                                                                                        6%                                                    14                       14
MS Macro View & Industry Skew                                                                    12%                                                    22                       21
                                                                                                                                                                                               Source: MSCI, IBES, Morgan Stanley Research. For non-covered stocks we have provided sedol
* We use Z-Score of P/E in our model                                                                                                                                                           code and consensus valuations. For important disclosures regarding companies that are the
^ We use them as contrary indicators, i.e., lower is better                                                                                                                                    subject of this screen, please see the Morgan Stanley Research Disclosure Website at
# We adjust it by considering the export vs. domestic exposure of each individual country                                                                                                      www.morganstanley.com/researchdisclosures.


 MSCI Brazil Trailing P/Book                                                                                                                                                                   Trailing ROE
     3 .5 x                                                                                                                                                                                         2 5 .0 %


     3 .0 x
                                                                                                                                                                                                    2 0 .0 %                          + 1 S .D .
     2 .5 x                     + 1 S .D .

                                                                                                                                                                                                    1 5 .0 %
     2 .0 x                                                                                                                                                                                                                                                                                                      A verag e

                                                                                                           A verag e
     1 .5 x                                                                                                                                                                                         1 0 .0 %                                                                                                                                                                                      1 0 .5 %
                                                                                                                                                                                      1 .4 x

     1 .0 x
                                                                                                                                                                                                                                                                                                                                            -1 S .D .
                                                                                                                                                                                                        5 .0 %
     0 .5 x                                                                                                                     - 1 S .D .


     0 .0 x                                                                                                                                                                                             0 .0 %
                                                                                                                                                                                                                 Sep-95

                                                                                                                                                                                                                             Sep-96

                                                                                                                                                                                                                                         Sep-97

                                                                                                                                                                                                                                                  Sep-98




                                                                                                                                                                                                                                                                                      Sep-02

                                                                                                                                                                                                                                                                                               Sep-03

                                                                                                                                                                                                                                                                                                        Sep-04

                                                                                                                                                                                                                                                                                                                  Sep-05

                                                                                                                                                                                                                                                                                                                            Sep-06




                                                                                                                                                                                                                                                                                                                                                                     Sep-10

                                                                                                                                                                                                                                                                                                                                                                              Sep-11

                                                                                                                                                                                                                                                                                                                                                                                         Sep-12
              Sep-95




                                          Sep-98




                                                                     Sep-01




                                                                                                  Sep-04




                                                                                                                             Sep-07




                                                                                                                                                         Sep-10




                                                                                                                                                                                                                                                           Sep-99

                                                                                                                                                                                                                                                                    Sep-00

                                                                                                                                                                                                                                                                             Sep-01




                                                                                                                                                                                                                                                                                                                                       Sep-07

                                                                                                                                                                                                                                                                                                                                                  Sep-08

                                                                                                                                                                                                                                                                                                                                                           Sep-09
                       Sep-96




                                                   Sep-99
                                 Sep-97




                                                            Sep-00




                                                                              Sep-02

                                                                                        Sep-03




                                                                                                           Sep-05

                                                                                                                    Sep-06




                                                                                                                                      Sep-08

                                                                                                                                               Sep-09




                                                                                                                                                                  Sep-11

                                                                                                                                                                            Sep-12




 Source: MSCI, RIMES, IBES, DataStream, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                                                         27
                                                                                                                                                                                             MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                           April 19, 2013
                                                                                                                                                                                                                                                                   Asia / GEMs Strategy




Brazil: Macro Economic Background
   GDP Growth: Our Brazil economics team is at the lower end of the forecast
    range, 2.8% of GDP growth for 2013 represents a substantial recovery from the             Brazil: Real GDP Growth
    pace seen in 2012. Team expects Brazil to remain in an uneasy balancing act as
                                                                                                  1 0 .0 %
    policymakers try to limit inflationary pressures (which would argue for a somewhat
    stronger currency) with growth concerns (which argues for a weaker currency).
                                                                                                   8 .0 %
    However, while inflation will likely be a key issue for investors, team believes that
    Brazil’s GDP growth is more likely to be capped by structural problems, like tight             6 .0 %
    labour market which creates hindrance to growth. This is expected to continue in
    2013, especially due to industrial sectors’ inability to pass through the rising wage          4 .0 %
    pressure due to stiff import competition. Although the tight labour market is a
    constraint to growth, the strong wage gains and lower interest rates are expected              2 .0 %
    to support the consumer demand, while investment is likely to lag.
                                                                                                   0 .0 %
   Inflation: Inflation is expected to remain elevated for most for 2013 but is likely to
    edge down in 2H. While Brazil’s current core inflation is 6.2%, the recent uptick in
                                                                                                  -2 .0 %
    CPI is related to food price shock. Lowering Brazil’s real inflation will required
    material tightening, and our MS economics team believes that central bank is                  -4 .0 %
    unlikely to hike interest rates, given the given the electoral calendar, with the




                                                                                                                               Q4-01




                                                                                                                                                             Q2-03


                                                                                                                                                                           Q1-04




                                                                                                                                                                                                         Q3-05




                                                                                                                                                                                                                                                         Q4-07




                                                                                                                                                                                                                                                                                         Q2-09


                                                                                                                                                                                                                                                                                                          Q1-10




                                                                                                                                                                                                                                                                                                                                        Q3-11
                                                                                                                 Q1-01




                                                                                                                                                Q3-02




                                                                                                                                                                                            Q4-04




                                                                                                                                                                                                                       Q2-06


                                                                                                                                                                                                                                        Q1-07




                                                                                                                                                                                                                                                                        Q3-08




                                                                                                                                                                                                                                                                                                                       Q4-10




                                                                                                                                                                                                                                                                                                                                                         Q2-12
    presidential campaign starting in July 2014. However, team does expect that the
    monetary authority will adjust rates some time over the next 12 months to control
    inflation expectation.                                                                   Source: DataStream, Morgan Stanley Research

Economic Forecast                                                                            Brazil: Consumer Inflation (% Change YoY)
                                 2009     2010      2011    2012E     2013E    2014E           9 .0 %
Real GDP Growth                  -0.3      7.5       2.7      0.9       2.8     3.4                                                                                                                               CPI                                        C ore C PI
CPI (Inflation % year -end)       4.3      5.9       6.5      5.8       5.6     6.2            8 .0 %
Trade Bal (US$bn)                25.3     20.1      29.8     19.4      10.6     5.3
C/A balance as % of GDP          -1.5     -2.2      -2.1     -2.4      -3.3     -3.2           7 .0 %
FX rate (USD/BRL, Year-end)      1.74     1.67      1.88     2.04      2.10     2.00
                                                                                               6 .0 %


                                                                                               5 .0 %


                                                                                               4 .0 %


                                                                                               3 .0 %


                                                                                               2 .0 %




                                                                                                                                                                                                                                                                                Apr-10




                                                                                                                                                                                                                                                                                                                                                          Oct-12
                                                                                                                                       Apr-05




                                                                                                                                                                                   Dec-06




                                                                                                                                                                                                                               Aug-08




                                                                                                                                                                                                                                                          Jun-09
                                                                                                        Jan-04




                                                                                                                                                                      Jul-06




                                                                                                                                                                                                May-07

                                                                                                                                                                                                         Oct-07




                                                                                                                                                                                                                                                                                                           Feb-11

                                                                                                                                                                                                                                                                                                                    Jul-11

                                                                                                                                                                                                                                                                                                                               Dec-11

                                                                                                                                                                                                                                                                                                                                                May-12
                                                                                                                 Jun-04

                                                                                                                          Nov-04




                                                                                                                                                             Feb-06




                                                                                                                                                                                                                   Mar-08




                                                                                                                                                                                                                                                Jan-09




                                                                                                                                                                                                                                                                    Nov-09




                                                                                                                                                                                                                                                                                                 Sep-10
                                                                                                                                                    Sep-05



Source: MS Economic Team, Morgan Stanley Research                                            Source :DataStream, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                   28
                                                                                                                                                                                                                                                         MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                                             April 19, 2013
                                                                                                                                                                                                                                                                                                                     Asia / GEMs Strategy



 China: Factor Rankings (OW; Rank #2)
 Model Ranking
                                                                          Weight in                   Current                  Current            Previous
                                                                          the model                    Level                    Rank                Rank
Trailing P/Book Ratio                                                           6%                           1.6x                   10                     10
12M Consensus Fwd P/E *                                                         10%                          9.0x                   7                       9
Trailing Dividend Yield                                                         9%                          3.2%                    12                     14
Trailing ROE                                                                    7%                         15.0%                    9                      11
Earnings Revisions Breadth 3MMA                                                 5%                          1.2%                    5                       9
Price Momentum ^                                                                7%                         -10.5%                   3                       9
Relative Strength Index (RSI) ^                                                 10%                          32.7                   5                       4
Fund Flows as % of AUM ^                                                        9%                          1.6%                    22                     22
Currency (12M EER Change) #                                                     10%                         4.1%                    6                      13
Leading Indicator Change                                                        9%                          0.6%                    2                      11
Macro Risk                                                                      6%                                                  19                     17
MS Macro View & Industry Skew                                                   12%                                                 3                       2

* We use Z-Score of P/E in our model
^ We use them as contrary indicators, i.e., lower is better
# We adjust it by considering the export vs. domestic exposure of each individual country


Two Month Price Momentum (in US$)                                                                                                                                    Flows as a Percentage of AUM
   50                                                                                                                                                                 5.0%

   40
                                                                                                                                                                      4.0%
   30
                                                                                                                                                                      3.0%
   20
                                                                                                                                                                      2.0%
   10

    0                                                                                                                                                                 1.0%

  -10                                                                                                                                                                 0.0%
  -20
                                                                                                                                                                      -1.0%
  -30
                                                                                                                                                                      -2.0%
  -40

  -50                                                                                                                                                                 -3.0%
                                                                                                                                                                              Sep-01

                                                                                                                                                                                       Mar-02



                                                                                                                                                                                                         Mar-03

                                                                                                                                                                                                                  Sep-03

                                                                                                                                                                                                                           Mar-04

                                                                                                                                                                                                                                    Sep-04

                                                                                                                                                                                                                                             Mar-05

                                                                                                                                                                                                                                                      Sep-05

                                                                                                                                                                                                                                                               Mar-06

                                                                                                                                                                                                                                                                        Sep-06

                                                                                                                                                                                                                                                                                 Mar-07

                                                                                                                                                                                                                                                                                          Sep-07

                                                                                                                                                                                                                                                                                                   Mar-08

                                                                                                                                                                                                                                                                                                            Sep-08

                                                                                                                                                                                                                                                                                                                      Mar-09

                                                                                                                                                                                                                                                                                                                               Sep-09

                                                                                                                                                                                                                                                                                                                                        Mar-10

                                                                                                                                                                                                                                                                                                                                                 Sep-10

                                                                                                                                                                                                                                                                                                                                                          Mar-11

                                                                                                                                                                                                                                                                                                                                                                   Sep-11

                                                                                                                                                                                                                                                                                                                                                                            Mar-12

                                                                                                                                                                                                                                                                                                                                                                                     Sep-12
                                                                                                                                                                                                Sep-02
        Dec-04

                 Jun-05

                          Dec-05




                                            Dec-06




                                                              Dec-07

                                                                       Jun-08

                                                                                Dec-08

                                                                                         Jun-09




                                                                                                             Jun-10

                                                                                                                      Dec-10

                                                                                                                                Jun-11




                                                                                                                                                  Jun-12

                                                                                                                                                            Dec-12
                                   Jun-06




                                                     Jun-07




                                                                                                  Dec-09




                                                                                                                                         Dec-11




 Source: MSCI, RIMES, IBES, DataStream, EPFR, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                                              29
                                                                                                                                                                            MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                     April 19, 2013
                                                                                                                                                                                                                             Asia / GEMs Strategy




China: Macro Economic Background
   GDP Growth: China 1Q13 GDP growth surprised on the downside by
    decelerating to +7.7% YoY, down from +7.9% YoY in 4Q12, below consensus             China GDP Growth
    forecast of +8.0%. Sequentially, the seasonally-adjusted GDP growth                   %                                                      G D P ( % , Y oY )                                             G DP (% , Q oQ , S A A R )
    decelerated to +1.6% QoQ SA in 1Q13 from +2.0% QoQ SA in 4Q12. Activity               25
    growth indicators in March also confirmed weak growth momentum. Industrial
    production and other hard data, e.g., electricity, steel, cement, also showed         20
    notable moderation in March. Our eco team expect growth to improve modestly                                                                                                                                                                                          MS
    in 2Q with the help of liquidity release in 1Q. However, they see more downside                                                                                                                                                                                 f o r e c a st
                                                                                          15
    risk to our annual GDP growth forecast of 8.2% YoY.
   Money Supply: China’s broad money supply growth accelerated in March on               10
    record deposit gains, partially helped by quarter-end liquidity effect. M2 growth
    picked up to +15.7%Y (vs. +15.2%Y in Feb). Faster money supply growth was              5
    likely influenced by expiring wealth management products and fiscal spending
    increase before the quarter end. The reacceleration in money supply growth and
                                                                                           0
    the stable 7-day repo rates in the inter-bank market imply that the central bank




                                                                                                                          1Q07




                                                                                                                                                             3Q08

                                                                                                                                                                     1Q09




                                                                                                                                                                                                       3Q10




                                                                                                                                                                                                                                            1Q12

                                                                                                                                                                                                                                                   3Q12




                                                                                                                                                                                                                                                                                    1Q14
                                                                                                        1Q06

                                                                                                                   3Q06



                                                                                                                                     3Q07

                                                                                                                                                     1Q08




                                                                                                                                                                                3Q09

                                                                                                                                                                                                1Q10



                                                                                                                                                                                                                1Q11

                                                                                                                                                                                                                            3Q11




                                                                                                                                                                                                                                                            1Q13

                                                                                                                                                                                                                                                                        3Q13



                                                                                                                                                                                                                                                                                           3Q14
    has yet to take on a tightening bias in March. Team maintains their view that
    domestic demand recovery will continue with the help of loose financial
    conditions, which could give rise to higher inflationary pressures in 2H2013.       Source: CEIC, Morgan Stanley Research

    Economic Forecast                                                                   Industrial Production growth declined
                                  2009    2010      2011   2012    2013E    2014E        50                    YoY%                                                                             Ind u str y Va lu e- ad de d
    Real GDP Growth                9.2    10.3       9.3    7.8      8.2      7.9                                                                                                               E le ct ric it y G e ne ra te d
                                                                                         40
    CPI (Inflation % average)      -0.7    3.3       5.4    2.6      3.2      3.3
    Exports (%)                   -16.0   31.3      20.3    7.9      8.9     12.5
                                                                                         30
    Imports (%)                   -11.2   38.7      24.9    4.3     10.9     13.1
    C/A balance as % of GDP        5.2     4.1       2.8    2.7      2.4      2.0        20
    FX rate (USD/CNY, Year-end)   6.83    6.61      6.29   6.29     6.30     6.15
                                                                                         10


                                                                                          0


                                                                                        -10


                                                                                        -20
                                                                                               Jan-00




                                                                                                                            Jan-02




                                                                                                                                                            Jan-04


                                                                                                                                                                       Jan-05


                                                                                                                                                                                       Jan-06


                                                                                                                                                                                                       Jan-07


                                                                                                                                                                                                                   Jan-08


                                                                                                                                                                                                                                   Jan-09


                                                                                                                                                                                                                                                   Jan-10


                                                                                                                                                                                                                                                               Jan-11


                                                                                                                                                                                                                                                                               Jan-12


                                                                                                                                                                                                                                                                                           Jan-13
                                                                                                                Jan-01




                                                                                                                                            Jan-03


Source: MS Economic Team, Morgan Stanley Research                                       Source: CEIC, MSCI, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                    30
                                                                                                                                                                                                                                         MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                         April 19, 2013
                                                                                                                                                                                                                                                                                 Asia / GEMs Strategy



 Hong Kong: Factor Rankings (OW; Rank #4)
 Model Ranking                                                                                                                                                                    Top 10 Market Cap Stocks (sorted by Mcap)
                                                                          Weight in                      Current                  Current              Previous                                                                                                            Stock     Mcap     P/E                          ROE
                                                                          the model                       Level                    Rank                  Rank                    Ticker             Company Name                                      Sector               Rating    (USD bn) 2013E                        2013E    DY 2013E
Trailing P/Book Ratio                                                               6%                         1.4x                      6                      6                1299.HK            AIA Group                                         Financials              OW               50.0            20.0x        9.3%        1.3%
12M Consensus Fwd P/E *                                                            10%                        14.9x                     11                     14                0013.HK            Hutchison Whampoa                                 Industrials             OW               44.6            13.2x         6.7%       2.8%
Trailing Dividend Yield                                                             9%                         2.6%                     18                     18                0016.HK            SHK Properties                                    Financials              OW               36.0            14.7x        5.5%        3.1%
Trailing ROE                                                                        7%                         8.7%                     23                     23                0001.HK            Cheung Kong Holdings                              Financials              OW               34.5            10.3x         8.0%       2.8%
Earnings Revisions Breadth 3MMA                                                     5%                         5.1%                      1                      5                0004.HK            Wharf Holdings                                    Financials              EW               26.0            16.5x         5.3%       1.8%
Price Momentum ^                                                                    7%                        -3.2%                     14                     19                0003.HK            Hong Kong & China Gas                             Utilities               EW               25.2            28.0x        16.1%       1.7%
Relative Strength Index (RSI) ^                                                    10%                         45.7                     11                     12                0002.HK            CLP Holdings                                      Utilities               EW               22.0            16.8x        11.1%       3.9%
                                                                                                                                                                                 0006.HK            Power Assets Holdings Ltd                         Utilities               OW               20.3            14.9x        16.9%       3.8%
Fund Flows as % of AUM ^                                                            9%                         0.9%                     12                      8
                                                                                                                                                                                 0388.HK            HK Exchanges & Clearing                           Financials              UW               19.1            29.0x        28.6%       3.1%
Currency (12M EER Change) #                                                        10%                         2.3%                      4                     17
                                                                                                                                                                                 B0PB4M             Link Real Estate Investment Trust                 Financials               -               12.8            27.6x         5.2%       3.6%
Leading Indicator Change                                                           9%                           NA                      NA                     NA
Macro Risk                                                                          6%                                                   3                      3
MS Macro View & Industry Skew                                                      12%                                                  10                     17
                                                                                                                                                                                  Source: MSCI, IBES, ModelWare, Morgan Stanley Research. For non-covered stocks we have
                                                                                                                                                                                  provided sedol code and consensus valuations. For important disclosures regarding companies
* We use Z-Score of P/E in our model                                                                                                                                              that are the subject of this screen, please see the Morgan Stanley Research Disclosure Website
^ We use them as contrary indicators, i.e., lower is better                                                                                                                       at www.morganstanley.com/researchdisclosures.
# We adjust it by considering the export vs. domestic exposure of each individual country


 MSCI Hong Kong FY2 Earnings Revisions Breadth                                                                                                                                  Trailing ROE
  1 00 %                                                                                                                                                                2 0%     1 4.0%

    80 %                                                                                                                                                                         1 3.0%
                                                                                                                                                                        1 0%
    60 %                                                                                                                                                                         1 2.0%
                                                                                                                                                                                                     + 1 S .D .
                                                                                                                                                                                 1 1.0%
    40 %                                                                                                                                                                0%
                                                                                                                                                                                 1 0.0%
    20 %                                                                                                                                                                                                                                           A v e ra g e
                                                                                                                                                                        -10 %      9.0%
                                                                                                                                                                                                                                                                                                                               8 .7 %
     0%
                                                                                                                                                                                   8.0%
   -20 %                                                                                                                                                                -20 %
                                                                                                                                                                                   7.0%
   -40 %                                                                                                                                                                                                                                                             -1 S .D .
                                                                                                                                                                                   6.0%
                                                                                                                                                                        -30 %
                                                        Y o Y P e r fo rm a n c e ( L e ft )
   -60 %                                                                                                                                                                           5.0%
                                                        F Y 2 E a rn in g s R ev isio n (3 M M A )
   -80 %                                                                                                                                                                -40 %      4.0%
                                                                                                                                                                                                     Jun-02


                                                                                                                                                                                                              Jun-03


                                                                                                                                                                                                                       Jun-04


                                                                                                                                                                                                                                Jun-05




                                                                                                                                                                                                                                                     Jun-07


                                                                                                                                                                                                                                                                  Jun-08


                                                                                                                                                                                                                                                                            Jun-09


                                                                                                                                                                                                                                                                                      Jun-10


                                                                                                                                                                                                                                                                                                      Jun-11


                                                                                                                                                                                                                                                                                                                  Jun-12
           Jan-97

                    Jan-98

                             Jan-99

                                      Jan-00

                                               Jan-01

                                                        Jan-02

                                                                 Jan-03

                                                                          Jan-04

                                                                                   Jan-05

                                                                                            Jan-06

                                                                                                     Jan-07

                                                                                                                Jan-08

                                                                                                                         Jan-09

                                                                                                                                   Jan-10

                                                                                                                                             Jan-11

                                                                                                                                                      Jan-12

                                                                                                                                                               Jan-13




                                                                                                                                                                                           Jun-01




                                                                                                                                                                                                                                          Jun-06
 Source: MSCI, RIMES, IBES, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                          31
                                                                                                                                                                                                                 MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                         April 19, 2013
                                                                                                                                                                                                                                                                                                 Asia / GEMs Strategy




Hong Kong: Macro Economic Background
   GDP Growth: Hong Kong 4Q12 GDP growth edged up to 2.5% YoY, up from
    1.4% in 3Q12. This was higher than consensus expectation of 2.4%YoY. This             Expenditure-based GDP breakdown and Contribution
    confirms that the recovery which has begun in 3Q12, has strengthened in 4Q12.               22
    For the year as a whole, the Hong Kong economy grew by 1.4%. Expect public
                                                                                                18
    consumption, growth across all expenditure categories accelerated in 4Q12. MS
    economics team expect a mild cyclical recovery ahead. Team believes that                    14
    domestic demand will remain a key driver of growth, even with the external
                                                                                                10
    environment expected to improve gradually. Within domestic demand,
    consumption is expected to maintain a steady pace of growth, while fixed                     6
    investment, supported by construction work could boost domestic demand
                                                                                                 2
    further. Current MS GDP growth forecast for 2013 is 3.8%, slightly higher than
    the upper end of government's projection of 1.5% to 3.5%.                                   -2


   Inflation: Hong Kong’s headline inflation accelerated in Feb-13, partly on shift in         -6

    timing of Lunar New year. Headline and underline inflation accelerated to 4.4% in                                                P ri v a t e C o n s u m p ti o n                                                                    P u b li c C o n s u m p ti o n
                                                                                            -1 0                                     F ix e d I n v e s tm e n t                                                                          C h a n g e in S to c ks
    Feb-13, from 3.0% and 3.1% respectively in Jan-13. MS economics team expect                                                      N et E x ports of G o ods
                                                                                                                                     R e a l G D P g r o w th , %
                                                                                                                                                                                                                                          N e t E x p o r ts o f S e r v i c e s

    headline inflation to ease slightly in 2Q. However, it is expected to tick up in        -1 4




                                                                                                          1Q00


                                                                                                                          4Q00




                                                                                                                                                                          1Q03


                                                                                                                                                                                          4Q03




                                                                                                                                                                                                                                          1Q06


                                                                                                                                                                                                                                                          4Q06




                                                                                                                                                                                                                                                                                                           1Q09


                                                                                                                                                                                                                                                                                                                       4Q09




                                                                                                                                                                                                                                                                                                                                                                   1Q12


                                                                                                                                                                                                                                                                                                                                                                               4Q12
                                                                                                                                          3Q01


                                                                                                                                                          2Q02




                                                                                                                                                                                                          3Q04


                                                                                                                                                                                                                          2Q05




                                                                                                                                                                                                                                                                          3Q07


                                                                                                                                                                                                                                                                                          2Q08




                                                                                                                                                                                                                                                                                                                                       3Q10


                                                                                                                                                                                                                                                                                                                                                   2Q11
    2H13 as the base effect will turn less favourable and inflationary pressures are
    expected to pick up again as the recovery in domestic demand gathers pace.            Source: Census and Statistics Department, CEIC, Morgan Stanley Research

Economic Forecast                                                                         Headline and Underlying Inflation
                                2009      2010      2011      2012E   2013E   2014E         8
Real GDP Growth                  -2.5      6.8       4.9       1.4     3.8     4.5
CPI (Inflation % average)        0.6       2.3       5.3       4.1     4.5     4.0          6
Exports (%)                     -12.6     22.7      10.2       2.9     6.9     8.9
Imports (%)                      -11       25       11.9       3.9     7.7      9           4
C/A balance as % of GDP          9.5       6.6       6.5       1.1     2.9     1.5
FX rate (USD/HKD, Year-end*)    7.75      7.77      7.76       7.75    7.8     7.8          2

                                                                                            0


                                                                                           -2
                                                                                                                                                                                                                                                          Co m b in e d E ffec t of F isc a l M ea s ur e s, p p ts
                                                                                           -4                                                                                                                                                             Un d e rl yi n g In fla tio n ( ne t o f fis ca l m e a su re s)
                                                                                                                                                                                                                                                          He a d lin e In fla tio n
                                                                                           -6




                                                                                                                                                                                                                 May-09




                                                                                                                                                                                                                                                                                                                                                          May-12
                                                                                                 Jan-07




                                                                                                                                                                 May-08
                                                                                                                 May-07

                                                                                                                                 Sep-07




                                                                                                                                                                                 Sep-08




                                                                                                                                                                                                                                 Sep-09

                                                                                                                                                                                                                                                 Jan-10

                                                                                                                                                                                                                                                                 May-10

                                                                                                                                                                                                                                                                                 Sep-10

                                                                                                                                                                                                                                                                                                  Jan-11

                                                                                                                                                                                                                                                                                                                  May-11

                                                                                                                                                                                                                                                                                                                              Sep-11




                                                                                                                                                                                                                                                                                                                                                                          Sep-12

                                                                                                                                                                                                                                                                                                                                                                                      Jan-13
                                                                                                                                                 Jan-08




                                                                                                                                                                                                 Jan-09




                                                                                                                                                                                                                                                                                                                                              Jan-12
Source: MS Economic Team, Morgan Stanley Research* for 3Q14                               Source :CEIC, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                                               32
                                                                                                                                                                                                                                                                                                                  MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                                                                                                  April 19, 2013
                                                                                                                                                                                                                                                                                                                                                                          Asia / GEMs Strategy



India: Factor Rankings (EW; Rank #10)
 Model Ranking                                                                                                                                                                                                                  Top 10 Market Cap Stocks (sorted by Mcap)
                                                                                                     Weight in                            Current                        Current                     Previous                                                                                                                                                   Stock                Mcap                 P/E                ROE
                                                                                                     the model                             Level                          Rank                         Rank                    Ticker                Company Name                                                                   Sector                      Rating               (USD bn)             2013E              2013E     DY 2013E
                                                                                                                                                                                                                               TCS.NS                Tata Consultancy Services                                                      IT                             OW                    53.8               22.1x             42.8%       1.1%
Trailing P/Book Ratio                                                                                           6%                          2.5x                                20                             20
                                                                                                                                                                                                                               RELI.NS               Reliance Industries                                                            Energy                         OW                    48.8               11.7x             12.9%       1.1%
12M Consensus Fwd P/E *                                                                                        10%                         13.0x                                 6                             10              ITC.NS                ITC Ltd.                                                                       Cons. Stap.                    OW                    44.6               32.9x             39.3%       1.8%
Trailing Dividend Yield                                                                                         9%                          1.4%                                24                             24              HDBK.NS               HDFC Bank                                                                      Financials                     OW                    28.8               22.1x             22.5%       0.9%
Trailing ROE                                                                                                    7%                         17.0%                                 4                              5              INFY.NS               Infosys Limited                                                                IT                             OW                    24.3               17.5x             28.2%       1.8%
Earnings Revisions Breadth 3MMA                                                                                 5%                         -0.4%                                 8                              6              ICBK.NS               ICICI Bank                                                                     Financials                     OW                    23.0               14.7x             13.6%       2.1%
                                                                                                                                                                                                                               HDFC.NS               HDFC                                                                           Financials                     OW                    22.9               27.5x             23.7%       1.5%
Price Momentum ^                                                                                                7%                         -6.1%                                11                             10
                                                                                                                                                                                                                               HLL.NS                Hindustan Unilever                                                             Cons. Stap.                    UW                    19.5               30.6x             93.8%       2.0%
Relative Strength Index (RSI) ^                                                                                10%                          41.9                                 8                              5              LART.NS               Larsen & Toubro                                                                Industrials                    EW                    16.2               16.9x             19.4%       1.6%
Fund Flows as % of AUM ^                                                                                        9%                          0.6%                                 5                              5              AXBK.NS               AXIS Bank                                                                      Financials                     UW                    10.4               11.4x             20.7%       1.3%
Currency (12M EER Change) #                                                                                    10%                         -7.9%                                19                             18
Leading Indicator Change                                                                                        9%                         -0.8%                                14                              9
Macro Risk                                                                                                      6%                                                              21                             21
MS Macro View & Industry Skew                                                                                  12%                                                               2                              3
                                                                                                                                                                                                                                Source: MSCI, IBES, ModelWare, Morgan Stanley Research. For non-covered stocks we have
                                                                                                                                                                                                                                provided sedol code and consensus valuations For important disclosures regarding companies
* We use Z-Score of P/E in our model                                                                                                                                                                                            that are the subject of this screen, please see the Morgan Stanley Research Disclosure Website
^ We use them as contrary indicators, i.e., lower is better                                                                                                                                                                     at www.morganstanley.com/researchdisclosures.
# We adjust it by considering the export vs. domestic exposure of each individual country


 Trailing Return on Equity                                                                                                                                                                                                     Trailing Dividend Yield - Below Long-term Average
   2 6%                                                                                                                                                                                                                          2 .6 %

                                                                                                                                                                                                                                 2 .4 %
   2 4%
                                                                                                                                                                                                                                 2 .2 %
   2 2%                                                                                                                                                                                                                                                                                                                                                                                                 + 1 S .D .
                                     + 1 S .D .                                                                                                                                                                                  2 .0 %

   2 0%                                                                                                                                                                                                                          1 .8 %

   1 8%                                                                                                                                   A verag e                                                                              1 .6 %                                                                                                                         A verage
                                                                                                                                                                                                                    1 7 .0 %     1 .4 %                                                                                                                                                                                                1 .4 %
   1 6%
                                                                                                                                                                                                                                 1 .2 %
   1 4%                                                                                                                                            -1 S. D .                                                                                                                                                               -1 S .D .
                                                                                                                                                                                                                                 1 .0 %

   1 2%                                                                                                                                                                                                                          0 .8 %

   1 0%                                                                                                                                                                                                                          0 .6 %
                                                                                                                                                                                                                                          May-93

                                                                                                                                                                                                                                                   May-94

                                                                                                                                                                                                                                                            May-95

                                                                                                                                                                                                                                                                     May-96



                                                                                                                                                                                                                                                                                       May-98

                                                                                                                                                                                                                                                                                                May-99



                                                                                                                                                                                                                                                                                                                  May-01

                                                                                                                                                                                                                                                                                                                           May-02



                                                                                                                                                                                                                                                                                                                                              May-04

                                                                                                                                                                                                                                                                                                                                                       May-05

                                                                                                                                                                                                                                                                                                                                                                 May-06

                                                                                                                                                                                                                                                                                                                                                                            May-07

                                                                                                                                                                                                                                                                                                                                                                                      May-08

                                                                                                                                                                                                                                                                                                                                                                                               May-09

                                                                                                                                                                                                                                                                                                                                                                                                           May-10

                                                                                                                                                                                                                                                                                                                                                                                                                    May-11

                                                                                                                                                                                                                                                                                                                                                                                                                              May-12
                                                                                                                                                                                                                                                                              May-97




                                                                                                                                                                                                                                                                                                         May-00




                                                                                                                                                                                                                                                                                                                                     May-03
          Jan-92

                   Jan-93

                            Jan-94



                                               Jan-96

                                                        Jan-97

                                                                 Jan-98




                                                                                            Jan-01

                                                                                                      Jan-02

                                                                                                               Jan-03



                                                                                                                                 Jan-05

                                                                                                                                          Jan-06

                                                                                                                                                     Jan-07




                                                                                                                                                                                Jan-10

                                                                                                                                                                                         Jan-11
                                      Jan-95




                                                                          Jan-99

                                                                                   Jan-00




                                                                                                                        Jan-04




                                                                                                                                                              Jan-08

                                                                                                                                                                       Jan-09




                                                                                                                                                                                                  Jan-12

                                                                                                                                                                                                           Jan-13




 Source: MSCI, RIMES, IBES,EPFR, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                                                                                                33
                                                                                                                                                                     MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                           April 19, 2013
                                                                                                                                                                                                                   Asia / GEMs Strategy




India: Macro Economic Background
    GDP Growth: Our economic team has reduced their growth forecast for 2013 to            Improvement in Export Growth to support Capex
     5.9%Y from 6.1%Y to reflect the lower-than-expected GDP growth for QE Dec-
     12 and challenging domestic and external environment. While GDP growth
                                                                                                                                           G F C F Y o Y% , LS
     bottomed out in QE Dec-12 and will gradually pick up, team now expects the             23%                                            Ex po r ts Y oY % 3 M M A, R S                                                                                              5 5%
     recovery to be stretched out marginally as compared to earlier expectation. An
                                                                                            18%
     improvement in agriculture GDP growth (low base in 2012), slight pick up in
                                                                                                                                                                                                                                                                       3 5%
     export growth that also supports manufacturing and trade services, and                 13%
     stabilization of private capex at low levels is expected to help improve the overall
                                                                                              8%                                                                                                                                                                       1 5%
     GDP growth in F2014. Team believes that initial phase of recovery will be driven
     by an improvement in productivity growth rather than big rise in investment /            3%
                                                                                                                                                                                                                                                                       -5 %
     GDP. They expect government to continue take policy measures to slowly
                                                                                             -2 %
     improve productivity and growth mix. As the macro-stability environment
                                                                                                                                                                                                                                                                       -2 5 %
     improves, it should set the stage for higher growth rate.                               -7 %

    External Demand: Team believes that external demand will play an important       -1 2 %                                                              -4 5 %
     role in recovery. Exports are expected to improve more sustainably in 2H2013




                                                                                                    Jun-9 7

                                                                                                              Jun -98




                                                                                                                                           Jun-0 1

                                                                                                                                                        Jun -02




                                                                                                                                                                                     Jun-0 5




                                                                                                                                                                                                                             Jun-0 9
                                                                                                                        Ju n-99

                                                                                                                                  Jun-00




                                                                                                                                                                  Ju n-03

                                                                                                                                                                            Jun-04




                                                                                                                                                                                               Jun -06

                                                                                                                                                                                                         Ju n-07

                                                                                                                                                                                                                    Jun-08




                                                                                                                                                                                                                                       Jun -10

                                                                                                                                                                                                                                                   Ju n-11

                                                                                                                                                                                                                                                             Jun-12
     on the back of gradual recovery in growth in US and Europe as expected by our
     global economic team. As capex trend is likely to get influenced by trend in
     export growth, team expects improvement in export to aid growth in trade        Source: CSO, Budget Document, Morgan Stanley Research. E=MS Estimate
     services, manufacturing and capex spending.                                   Improvement in Productivity Dynamic to drive Initial Phase of recovery
Economic Forecast                                                                                                                                    Tra il ing 4 -q tr a vg , Y oY %                                                                    MS e
                                                                                            14%                                                                                                                                                                           1 4%
                                   2009    2010      2011    2012E    2013E     2014E                     High G ow th , L ow / M ode ra te Infl ati on
                                                                                                                                                                                                                     L ow gro wth,                      Gr ow th
                                                                                                                                                                                                                     Hi gh Infla tio n                  Ac c e le ra ti ng,
    Real GDP Growth                  6.4    8.9       7.3     5.1      5.9        6.8                                                                                                                                                                   Infl atio n
                                                                                            12%                                                                                                                                                                           1 2%
    CPI (Inflation % Avg)          10.8    12.1       8.9     9.3      8.2        6.8                                       Re al GDP                                 CP I (IW )                                                                        M ode ra ting
    Exports (%)                    -15.3   35.9      34.2     -3.5     8.9       17.7
    Imports (%)                    -15.0   30.3      32.5     4.6      9.2       13.0       10%                                                                                                                                                                         1 0%
    C/A balance as % of GDP         -2.0   -3.2      -3.4     -4.9     -4.2      -3.3
    FX rate (USD/INR, Year-end)*   46.7    44.8      52.4     54.7     50.0      49.0        8%                                                                                                                                                   M a r-13              8%


                                                                                             6%                                                                                                                                                                         6%


                                                                                             4%                                                                                                                                                                         4%
                                                                                                                                                                                                                                                 De c-1 2

                                                                                             2%                                                                                                                 2%
                                                                                               M ar 03 M a r 04 M a r 0 5 M a r 0 6 M a r 0 7 M a r 0 8 M a r 0 9 M a r 1 0 M a r 1 1 M a r 1 2 Ma r 1 3 M ar 1 4


Source: MS Economic Team, Morgan Stanley Research *3Q13                                     Source :CSO, CEIC, MS Economics Team, Morgan Stanley Research Estimate
                                                                                                                                                                                                                                                                                 34
                                                                                                                                                                                                                             MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                    April 19, 2013
                                                                                                                                                                                                                                                                            Asia / GEMs Strategy



  Indonesia: Factor Rankings (EW; Rank #17)
 Model Ranking                                                                                                                             Top 10 Market Cap Stocks (sorted by Mcap)
                                                        Weight in                Current            Current         Previous                                                                                                                                      Stock                Mcap                P/E        ROE
                                                        the model                 Level              Rank             Rank                Ticker                   Company Name                                                             Sector                Rating               (USD bn)            2013E      2013E         DY 2013E

Trailing P/Book Ratio                                               6%            4.0x                25               25                 B800MQ                   Astra International                                                      Cons. Disc.                 -                 32.3              12.7x        25.5%          3.5%
                                                                                                                                          BBCA.JK                  Bank Central Asia                                                        Financials                 UW                 27.1              19.1x        27.2%          1.3%
12M Consensus Fwd P/E *                                            10%           14.8x                21               22
                                                                                                                                          BMRI.JK                  Bank Mandiri                                                             Financials                 OW                 24.9              13.0x        25.0%          2.3%
Trailing Dividend Yield                                             9%            2.2%                19               20                 TLKM.JK                  Telekomunikasi                                                           Telecom                    OW                 23.2              14.6x        30.0%          4.4%
Trailing ROE                                                        7%           21.6%                 2                3                 BBRI.JK                  Bank Rakyat Indonesia                                                    Financials                 OW                 20.8              10.1x        30.5%          3.0%
Earnings Revisions Breadth 3MMA                                     5%           -0.7%                 9               13                 UNVR.JK                  Unilever Indonesia                                                       Cons. Stap.                OW                 17.9              31.2x       126.3%          2.9%
Price Momentum ^                                                    7%            3.8%                21               23                 PGAS.JK                  Perusahaan Gas Negara                                                    Utilities                  OW                 14.7              16.9x        39.7%          3.6%
Relative Strength Index (RSI) ^                                    10%            53.7                16               24                 SMGR.JK                  Semen Indonesia                                                          Materials                  OW                 11.1              18.7x        33.5%          2.2%
                                                                                                                                          BBNI.JK                  Bank Negara Indonesia                                                    Financials                 EW                  9.6              11.2x        19.1%          2.7%
Fund Flows as % of AUM ^                                            9%            0.8%                10                7                 INTP.JK                  Indocement Tunggal Prakarsa                                              Materials                  OW                  9.2              16.3x        28.6%          2.5%
Currency (12M EER Change) #                                        10%           -4.4%                21               23
Leading Indicator Change                                            9%            0.2%                 6                8
Macro Risk                                                          6%                                23               23
MS Macro View & Industry Skew                                      12%                                 9                6
                                                                                                                                          Source: MSCI, IBES, ModelWare, Morgan Stanley Research. For non-covered stocks we have
                                                                                                                                          provided sedol code and consensus valuations For important disclosures regarding companies
* We use Z-Score of P/E in our model                                                                                                      that are the subject of this screen, please see the Morgan Stanley Research Disclosure Website
^ We use them as contrary indicators, i.e., lower is better                                                                               at www.morganstanley.com/researchdisclosures.
# We adjust it by considering the export vs. domestic exposure of each individual country


  Trailing ROE                                                                                                                            Trailing P/Book close to +1 S.D.
  2 9.0%
                                                                                                                                          7.0x
  2 8.0%
                                                                                                                                          6.0x
  2 7.0%
                             + 1 S .D .
  2 6.0%                                                                                                                                  5.0x
                                                                                                                                                                             + 1 S .D .
  2 5.0%                                                                                                                                  4.0x
                                                       A verage                                                                                                                                                                                                                                                                4 .0 x
  2 4.0%
                                                                                                                                                                   A v e ra g e
                                                                                                                                          3.0x
  2 3.0%

                                                                 -1 S .D .                                                                2.0x
  2 2.0%
                                                                                                                               2 1 .6 %                                                                                                                                                -1 S .D .
  2 1.0%                                                                                                                                  1.0x

  2 0.0%
                                                                                                                                          0.0x
           Jan-04




                    Jan-05




                                     Jan-06




                                              Jan-07




                                                        Jan-08




                                                                        Jan-09




                                                                                  Jan-10




                                                                                           Jan-11




                                                                                                           Jan-12




                                                                                                                      Jan-13




                                                                                                                                                 Sep-95

                                                                                                                                                          Sep-96

                                                                                                                                                                    Sep-97

                                                                                                                                                                                Sep-98

                                                                                                                                                                                         Sep-99

                                                                                                                                                                                                  Sep-00

                                                                                                                                                                                                           Sep-01

                                                                                                                                                                                                                    Sep-02

                                                                                                                                                                                                                              Sep-03

                                                                                                                                                                                                                                       Sep-04

                                                                                                                                                                                                                                                Sep-05

                                                                                                                                                                                                                                                         Sep-06

                                                                                                                                                                                                                                                                   Sep-07

                                                                                                                                                                                                                                                                              Sep-08

                                                                                                                                                                                                                                                                                         Sep-09

                                                                                                                                                                                                                                                                                                  Sep-10

                                                                                                                                                                                                                                                                                                             Sep-11

                                                                                                                                                                                                                                                                                                                      Sep-12
 Source: MSCI, RIMES, IBES, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                          35
                                                                                                                                                                                                           MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                               April 19, 2013
                                                                                                                                                                                                                                                                       Asia / GEMs Strategy




Indonesia: Macro Economic Background
   Currency Trend: MS FX team believes that challenging backdrop for BOP
    suggests an ongoing bias towards depreciation. Our economics team also         IDR on a Slow Bleed
    believes that currency adjustments process is not completed yet. Team sees IDR
                                                                                       106
    depreciation as a central part of the adjustment game to aid macro rebalancing




                                                                                           Depreciationa
    and to improve competitiveness of the non-commodity trade balance.                 104

   Inflation: Indonesia’s headline inflation for March came in at +5.9% YoY (vs.                          102

    +5.3% Y in Feb-13). This is higher than Bank of Indonesia’s inflation target of                        100
    4.5%±1%. The acceleration in headline CPI was driven entirely by the food                               98
    segment, where CPI picked up from 10.3%Y in Feb-13 to 13.0%Y in Mar-13.
                                                                                                            96
   Impossible Trinity: Team continues to reiterate that current macroeconomic




                                                                                           Appreciation
                                                                                                            94
    conditions of high growth and uncomfortable current account deficit do not go
                                                                                                            92
    hand in hand with steady rupiah, especially in sub-par global environment of soft
    commodity prices and uncertain risk appetite. Team calls this the “Impossible                           90

    Trinity”. Current Inflation data suggests that CAD is likely to remain at an                            88
    uncomfortable level. Any upside surprises in inflation would likely to complicate




                                                                                                                                                                                 Nov-10




                                                                                                                                                                                                                                                          Nov-11




                                                                                                                                                                                                                                                                                                                                       Nov-12
                                                                                                                                       May-10




                                                                                                                                                                                                                         May-11

                                                                                                                                                                                                                                  Jul-11
                                                                                                                    Jan-10




                                                                                                                                                                Sep-10
                                                                                                                             Mar-10




                                                                                                                                                   Jul-10




                                                                                                                                                                                                                                             Sep-11




                                                                                                                                                                                                                                                                                                         May-12

                                                                                                                                                                                                                                                                                                                    Jul-12

                                                                                                                                                                                                                                                                                                                             Sep-12
                                                                                                                                                                                                  Jan-11

                                                                                                                                                                                                              Mar-11




                                                                                                                                                                                                                                                                           Jan-12

                                                                                                                                                                                                                                                                                            Mar-12




                                                                                                                                                                                                                                                                                                                                                   Jan-13

                                                                                                                                                                                                                                                                                                                                                                Mar-13
    the management of Impossible Trinity, as currency depreciation would further
    compound import-led inflation, but resisting currency adjustments could worsen
    external imbalance, increasing macro stability risk.                                Source: DataStream, Morgan Stanley Research

Economic Forecast                                                                        Indonesia is Moving to BoP surplus despite CAD
                                 2009     2010      2011      2012E   2013E   2014E              8 .0 %                                                             C u rr e n t A c c o u n t B a l a n c e a s % o f G D P
Real GDP Growth                   4.6      6.2       6.5        6.2     5.6     5.9                                                                                 O v e ra ll B o P a s % o f G D P
CPI (Inflation % year -end)       4.8      5.1       5.4        4.3     5.4     5.4              6 .0 %
Exports (%)                      -14.3    32.1      27.0       -6.3     5.0     8.0
Imports (%)                      -24.0    43.7      30.3        8.3     4.5     8.3              4 .0 %
C/A balance as % of GDP           2.0      0.7       0.2       -2.8    -2.6    -2.6
FX rate ( USD/ IDR, Year-end*)   9457     9023      9088       9646   10000   10200              2 .0 %


                                                                                                 0 .0 %


                                                                                           -2 .0 %


                                                                                           -4 .0 %


                                                                                           -6 .0 %
                                                                                                                             Q3-07



                                                                                                                                                Q1-08



                                                                                                                                                                         Q3-08



                                                                                                                                                                                                      Q1-09




                                                                                                                                                                                                                                                      Q2-10



                                                                                                                                                                                                                                                                                    Q4-10



                                                                                                                                                                                                                                                                                                            Q2-11



                                                                                                                                                                                                                                                                                                                             Q4-11



                                                                                                                                                                                                                                                                                                                                                Q2-12
                                                                                                            Q1-07

                                                                                                                     Q2-07



                                                                                                                                      Q4-07



                                                                                                                                                            Q2-08



                                                                                                                                                                                          Q4-08



                                                                                                                                                                                                                 Q2-09

                                                                                                                                                                                                                          Q3-09

                                                                                                                                                                                                                                  Q4-09

                                                                                                                                                                                                                                           Q1-10



                                                                                                                                                                                                                                                                   Q3-10



                                                                                                                                                                                                                                                                                                 Q1-11



                                                                                                                                                                                                                                                                                                                     Q3-11



                                                                                                                                                                                                                                                                                                                                      Q1-12



                                                                                                                                                                                                                                                                                                                                                            Q3-12

                                                                                                                                                                                                                                                                                                                                                                         Q4-12
Source: MS Economic Team, Morgan Stanley Research* for 3Q14                             Source :Haver, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                                 36
                                                                                                                                                                                                                                               MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                              April 19, 2013
                                                                                                                                                                                                                                                                                                      Asia / GEMs Strategy



  Korea: Factor Rankings (EW; Rank #8)
 Model Ranking                                                                                                                                              Top 10 Market Cap Stocks (sorted by Mcap)
                                                                    Weight in                 Current              Current                Previous                                                                                                                                              Stock              Mcap                   P/E                  ROE
                                                                    the model                  Level                Rank                    Rank           Ticker                  Company Name                                                                     Sector                      Rating             (USD bn)               2013E                2013E              DY 2013E
                                                                                                                                                           005930.KS               Samsung Electronics                                                              IT                                OW                220.3              8.0x                 26.7%               0.7%
Trailing P/Book Ratio                                                       6%                   1.1x                        3                      3
                                                                                                                                                           005380.KS               Hyundai Motor                                                                    Cons. Disc.                       OW                 36.0              4.5x                 25.8%               1.1%
12M Consensus Fwd P/E *                                                    10%                   8.2x                        2                      4      012330.KS               Hyundai MOBIS                                                                    Cons. Disc.                       OW                 23.0              6.7x                 22.2%               0.8%
Trailing Dividend Yield                                                     9%                   1.1%                       25                     25      005490.KS               POSCO                                                                            Materials                         EW                 22.2              10.7x                 5.4%               3.0%
Trailing ROE                                                                7%                  11.1%                       17                     19      000270.KS               Kia Motors                                                                       Cons. Disc.                       OW                 18.7              5.9x                 21.2%               1.4%
Earnings Revisions Breadth 3MMA                                             5%                 -13.0%                       24                     21      000660.KS               SK Hynix                                                                         IT                                OW                 18.1              11.0x                18.8%               0.0%
                                                                                                                                                           055550.KS               Shinhan Financial Group                                                          Financials                        OW                 17.1              7.8x                  9.3%               2.6%
Price Momentum ^                                                            7%                  -7.6%                       10                     14
                                                                                                                                                           051910.KS               LG Chem                                                                          Materials                         OW                 14.3              7.0x                 20.8%               2.0%
Relative Strength Index (RSI) ^                                            10%                   29.1                        4                     23      105560.KS               KB Financial Group                                                               Financials                        EW                 12.3              6.9x                  8.1%               2.5%
Fund Flows as % of AUM ^                                                    9%                   1.2%                       17                     20      035420.KS               NHN Corp                                                                         IT                                EW                 12.0              22.3x                29.9%               0.2%
Currency (12M EER Change) #                                                10%                  6.3%                         9                     12
Leading Indicator Change                                                    9%                   0.6%                        1                      2
Macro Risk                                                                  6%                                               8                      8
MS Macro View & Industry Skew                                              12%                                              12                     13       Source: MSCI, IBES, ModelWare, Morgan Stanley Research. For non-covered stocks we have
                                                                                                                                                            provided sedol code and consensus valuations For important disclosures regarding companies
* We use Z-Score of P/E in our model                                                                                                                        that are the subject of this screen, please see the Morgan Stanley Research Disclosure Website
^ We use them as contrary indicators, i.e., lower is better                                                                                                 at www.morganstanley.com/researchdisclosures.
# We adjust it by considering the export vs. domestic exposure of each individual country


Trailing P/Book , currently at 72nd percentile                                                                                                             MSCI Korea Trailing Dividend Yield
 1 4 .0 x                                                                                                                                                     3.0%


 1 3 .0 x
                                                                                                                                                              2.5%
 1 2 .0 x
                                        + 1 S .D .                                                                                                                                                                                                                                                                                                  + 1 S .D.
 1 1 .0 x
                                                                                                                                                              2.0%
 1 0 .0 x                                                                                                                                                                                                                                                                                                                                       Av erage
                                       A verage
  9 .0 x
                                                                                                                                                              1.5%

  8 .0 x                                                                                                                                           8 .2x
                                                                                                                                                                                                                                                                                                                                                                                  1 .1 %
  7 .0 x                                                                                     - 1 S .D .                                                       1.0%                                                                                                                 -1 S .D .

  6 .0 x

  5 .0 x                                                                                                                                                      0.5%
                                                                                                                                                                                Mar-93

                                                                                                                                                                                         Mar-94

                                                                                                                                                                                                  Mar-95




                                                                                                                                                                                                                                                                 Mar-02

                                                                                                                                                                                                                                                                          Mar-03



                                                                                                                                                                                                                                                                                             Mar-05

                                                                                                                                                                                                                                                                                                      Mar-06

                                                                                                                                                                                                                                                                                                               Mar-07




                                                                                                                                                                                                                                                                                                                                                                         Mar-13
                                                                                                                                                                       Feb-92




                                                                                                                                                                                                           Feb-96

                                                                                                                                                                                                                    Mar-97

                                                                                                                                                                                                                             Mar-98

                                                                                                                                                                                                                                      Mar-99

                                                                                                                                                                                                                                               Feb-00

                                                                                                                                                                                                                                                        Mar-01




                                                                                                                                                                                                                                                                                    Feb-04




                                                                                                                                                                                                                                                                                                                        Feb-08

                                                                                                                                                                                                                                                                                                                                 Mar-09

                                                                                                                                                                                                                                                                                                                                           Mar-10

                                                                                                                                                                                                                                                                                                                                                      Mar-11

                                                                                                                                                                                                                                                                                                                                                                Feb-12
            Jan-00




                              Jan-02


                                       Jan-03


                                                Jan-04
                     Jan-01




                                                         Jan-05


                                                                  Jan-06


                                                                           Jan-07


                                                                                    Jan-08




                                                                                                                                 Jan-12
                                                                                                Jan-09


                                                                                                          Jan-10


                                                                                                                   Jan-11




                                                                                                                                          Jan-13




 Source: MSCI, RIMES, IBES, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                                           37
                                                                                                                                                                                               MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                   April 19, 2013
                                                                                                                                                                                                                                                           Asia / GEMs Strategy




Korea: Macro Economic Background
    GDP Growth : MS economics team revised down Korea’s GDP growth to 3.3%               Fixed Investment: The Only Economics Segment Still in a
     YoY (from 3.7%Y) in 2013 and 4.1%Y (from 4.2%Y) in 2014. Despite the                 Slump
                                                                                          10                                                                                                                                                                                                                                             10
     downward revision in GDP, team still hold a relatively positive view on Korea’s




                                                                                                 R G P G th, ppts
     economy. MS 3.3% 2013 GDP growth forecast is still above both 3.0%




                                                                                                  eal D row
                                                                                           8                                                                                                                                                                                                                                             8
     consensus projection and the 2.8% Bank of Korea outlook. Team’s above
     consensus view on Korea’s economy is based on its export competitiveness and          6                                                                                                                                                                                                                                             6

     expectation of rebound in Korea’s consumption. The downward revision in GDP           4                                                                                                                                                                                                                                             4
     forecast is mainly because Korea’s capex investment has been weaker than
     expectation. Team believes that capex is the weakest link for Korea’s economy         2                                                                                                                                                                                                                                             2

     currently. Despite IP bottoming out, capex continues in a downward trend.
                                                                                           0                                                                                                                                                                                                                                             0

    Monetary Policy: In line with our economics team’s expectation, Bank of Korea         -2                                                                                                                                                                                                                                            -2
     kept the policy rate unchanged at 2.75% in April. This is the 6th consecutive                                                                                                      Private Consumption                                                          Govt Consumption

     month that BoK has kept the policy rate unchanged. Team maintains their view          -4                                                                                           Fixed Investment                                                             Net Exports                                                         -4
                                                                                                                                                                                        GDP Growth Rate (R)
     that the BoK will keep the policy rate unchanged this year. They believe that the
                                                                                           -6                                                                                                                                                                                                                                            -6
     stimulus measures could come from the fiscal side, i.e. supplementary budget to




                                                                                                  08

                                                                                                                               08

                                                                                                                                        08

                                                                                                                                               08

                                                                                                                                                          09

                                                                                                                                                                          09

                                                                                                                                                                                 09

                                                                                                                                                                                          09

                                                                                                                                                                                                          10

                                                                                                                                                                                                                    10

                                                                                                                                                                                                                           10

                                                                                                                                                                                                                                      10

                                                                                                                                                                                                                                                      11

                                                                                                                                                                                                                                                              11

                                                                                                                                                                                                                                                                       11

                                                                                                                                                                                                                                                                                       11

                                                                                                                                                                                                                                                                                                 12

                                                                                                                                                                                                                                                                                                        12

                                                                                                                                                                                                                                                                                                                  12

                                                                                                                                                                                                                                                                                                                                  12
                                                                                                1Q

                                                                                                                             2Q

                                                                                                                                      3Q

                                                                                                                                             4Q

                                                                                                                                                        1Q

                                                                                                                                                                        2Q

                                                                                                                                                                               3Q

                                                                                                                                                                                        4Q

                                                                                                                                                                                                        1Q

                                                                                                                                                                                                                  2Q

                                                                                                                                                                                                                         3Q

                                                                                                                                                                                                                                    4Q

                                                                                                                                                                                                                                                    1Q

                                                                                                                                                                                                                                                            2Q

                                                                                                                                                                                                                                                                     3Q

                                                                                                                                                                                                                                                                                     4Q

                                                                                                                                                                                                                                                                                               1Q

                                                                                                                                                                                                                                                                                                      2Q

                                                                                                                                                                                                                                                                                                                3Q

                                                                                                                                                                                                                                                                                                                                4Q
     support the economy. They think that Korea's monetary environment is already
     loose with the low rate and abundant liquidity.                                     Source: CEIC, Morgan Stanley Research

Economic Forecast                                                                        Bank of Korea Base Rate: No Rate Change this year
                                   2009    2010    2011         2012E   2013E   2014E                                                                                                                                                                                                                                           MS
                                                                                           5 .5 %
    Real GDP Growth                 0.3     6.2     3.6           2.0     3.3     4.1                                                                                                                                                                                                                                           F or e c a s t

    CPI (Inflation % average)       2.8     2.9     4.0           2.2     2.7     3.0      5 .0 %
    Exports (%)                    -13.9   28.4    19.0          -1.3     6.0    10.0
    Imports (%)                    -25.8   31.6    23.4          -0.9     7.0    10.0      4 .5 %

    C/A balance as % of GDP         3.9     2.9     2.3           3.8     3.2     3.0      4 .0 %
    FX rate (USD/KRW, Year-end)*   1165    1135    1152          1071    1090    1040
                                                                                           3 .5 %

                                                                                           3 .0 %

                                                                                           2 .5 %

                                                                                           2 .0 %

                                                                                           1 .5 %
                                                                                                                    Jan-00


                                                                                                                                    Jan-01


                                                                                                                                               Jan-02


                                                                                                                                                               Jan-03


                                                                                                                                                                               Jan-04


                                                                                                                                                                                               Jan-05


                                                                                                                                                                                                               Jan-06


                                                                                                                                                                                                                           Jan-07


                                                                                                                                                                                                                                           Jan-08


                                                                                                                                                                                                                                                            Jan-09


                                                                                                                                                                                                                                                                            Jan-10


                                                                                                                                                                                                                                                                                            Jan-11


                                                                                                                                                                                                                                                                                                       Jan-12


                                                                                                                                                                                                                                                                                                                       Jan-13
Source: MS Economic Team, Morgan Stanley Research* as of 3Q14                            Source :CEIC, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                          38
                                                                                                                                                                                                                                                                                                              MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                                                                                            April 19, 2013
                                                                                                                                                                                                                                                                                                                                                                    Asia / GEMs Strategy



 Malaysia: Factor Rankings (EW; Rank #11)
 Model Ranking                                                                                                                                                                                                    Top 10 Market Cap Stocks (sorted by Mcap)
                                                                                                 Weight in                           Current                      Current                    Previous                                                                                                                                                      Stock              Mcap                   P/E              ROE
                                                                                                                                                                                                                 Ticker                        Company Name                                                                     Sector                     Rating             (USD bn)               2013E            2013E              DY 2013E
                                                                                                 the model                            Level                        Rank                        Rank
                                                                                                                                                                                                                 MBBM.KL                       Maybank                                                                          Financials                          EW                  26.7               13.4x              14.7%        5.5%
Trailing P/Book Ratio                                                                                      6%                          2.2x                                17                         15         CIMB.KL                       CIMB Group                                                                       Financials                          OW                  18.9               12.1x              16.9%        3.3%
12M Consensus Fwd P/E *                                                                                   10%                         14.7x                                17                          5         PUBMe.KL                      Public Bank                                                                      Financials                          EW                  18.9               13.8x              23.0%        3.2%
Trailing Dividend Yield                                                                                    9%                          2.8%                                16                         13         AXIA.KL                       Axiata Group Berhad                                                              Telecom                             OW                  18.8               19.6x              14.4%        3.8%
                                                                                                                                                                                                                 SIME.KL                       Sime Darby                                                                       Industrials                         EW                  18.7               17.1x              12.7%        3.0%
Trailing ROE                                                                                               7%                         13.9%                                13                         13         PCGB.KL                       Petronas Chemicals Group Berhad                                                  Materials                           EW                  17.0               14.2x              16.5%        3.5%
Earnings Revisions Breadth 3MMA                                                                            5%                         -7.0%                                19                         19         MXSC.KL                       Maxis Berhad                                                                     Telecom                             EW                  16.7               23.7x              30.4%        5.9%
Price Momentum ^                                                                                           7%                          7.3%                                23                          7         690461                        Tenaga Nasional Bhd                                                              Utilities                            -                  14.1               11.1x               9.4%        2.6%
                                                                                                                                                                                                                 IOIB.KL                       IOI Corporation                                                                  Cons. Stap.                         UW                  10.6               19.6x              13.0%        2.0%
Relative Strength Index (RSI) ^                                                                           10%                          81.0                                24                         15         GENM.KL                       Genting Malaysia                                                                 Cons. Disc.                         EW                  6.9                12.8x              12.6%        2.4%
Fund Flows as % of AUM ^                                                                                   9%                          1.0%                                15                         12
Currency (12M EER Change) #                                                                               10%                         -0.2%                                15                          8
Leading Indicator Change                                                                                  9%                            NA                                 NA                         NA
Macro Risk                                                                                                 6%                                                               9                         10
MS Macro View & Industry Skew                                                                             12%                                                               7                         10         Source: MSCI, IBES, ModelWare, Morgan Stanley Research. For non-covered stocks we have
                                                                                                                                                                                                                 provided sedol code and consensus valuations For important disclosures regarding companies
* We use Z-Score of P/E in our model                                                                                                                                                                             that are the subject of this screen, please see the Morgan Stanley Research Disclosure Website
^ We use them as contrary indicators, i.e., lower is better                                                                                                                                                      at www.morganstanley.com/researchdisclosures.
# We adjust it by considering the export vs. domestic exposure of each individual country


 Trailing ROE                                                                                                                                                                                                    Relative Strength Index – Currently Overbought
   1 7 .0 %
                                                                                                                                                                                                                 1 00
   1 6 .0 %
                                                                                                                                                                                                                  90
   1 5 .0 %                                                                                                                                                                                                       80
                                                  + 1 S .D .                                                                                                                                                                                                                                                                                                                  O v e r b r o u g h t (7 0 )

   1 4 .0 %                                                                                                                                                                                           1 3 .9 %    70
                                         A verage                                                                                                                                                                 60
   1 3 .0 %

                                                                                                                                                                                                                  50
   1 2 .0 %
                                                                                                                                                                                                                  40
   1 1 .0 %                                                                                                                                                     -1 S .D .
                                                                                                                                                                                                                  30
   1 0 .0 %
                                                                                                                                                                                                                                            O v e r s o ld ( 3 0 )
                                                                                                                                                                                                                  20
    9 .0 %
                                                                                                                                                                                                                  10
    8 .0 %
                                                                                                                                                                                                                    0
              Jun-03

                       Dec-03

                                Jun-04

                                         Dec-04

                                                    Jun-05



                                                                      Jun-06

                                                                               Dec-06

                                                                                        Jun-07

                                                                                                 Dec-07

                                                                                                          Jun-08

                                                                                                                   Dec-08




                                                                                                                                              Jun-10

                                                                                                                                                       Dec-10

                                                                                                                                                                  Jun-11

                                                                                                                                                                           Dec-11
                                                             Dec-05




                                                                                                                            Jun-09

                                                                                                                                     Dec-09




                                                                                                                                                                                    Jun-12

                                                                                                                                                                                             Dec-12




                                                                                                                                                                                                                                   May-06




                                                                                                                                                                                                                                                                 May-07




                                                                                                                                                                                                                                                                                            May-08




                                                                                                                                                                                                                                                                                                                       May-09




                                                                                                                                                                                                                                                                                                                                                                               May-11




                                                                                                                                                                                                                                                                                                                                                                                                            May-12
                                                                                                                                                                                                                          Jan-06



                                                                                                                                                                                                                                               Sep-06

                                                                                                                                                                                                                                                        Jan-07



                                                                                                                                                                                                                                                                          Sep-07

                                                                                                                                                                                                                                                                                   Jan-08



                                                                                                                                                                                                                                                                                                     Sep-08

                                                                                                                                                                                                                                                                                                              Jan-09



                                                                                                                                                                                                                                                                                                                                Sep-09

                                                                                                                                                                                                                                                                                                                                         Jan-10

                                                                                                                                                                                                                                                                                                                                                  May-10

                                                                                                                                                                                                                                                                                                                                                           Sep-10

                                                                                                                                                                                                                                                                                                                                                                     Jan-11




                                                                                                                                                                                                                                                                                                                                                                                                  Jan-12



                                                                                                                                                                                                                                                                                                                                                                                                                     Sep-12

                                                                                                                                                                                                                                                                                                                                                                                                                                Jan-13
                                                                                                                                                                                                                                                                                                                                                                                         Sep-11
 Source: MSCI, RIMES, IBES, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                                                                                             39
                                                                                                                                                                                    MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                              April 19, 2013
                                                                                                                                                                                                                                                      Asia / GEMs Strategy




Malaysia: Macro Economic Background
   GDP Growth: Our economics team revised up their GDP forecast from 4.0%Y to
    4.8%Y for 2013 and from 4.5%Y to 4.8%Y for 2014. This upgrade reflects the       Domestic Demand and External Demand
    upside surprise in 4Q12 data and the expected continued decoupling of domestic     25 %       E xternal D em a nd D o m es tic D em a n d

    demand in the run-up to election in 1H13. These growth forecast assume that        20 %
    the political status quo remains same. However, it still remains below consensus   15 %
    forecast of 5.0%Y growth for 2013 and 5.3%Y for 2014.                              10 %

                                                                                            5%
   Domestic Demand: Malaysia exporters had been suffering from a double
    whammy. Manufacturing exports have been lackluster at 1.1%Y 3MMA in Jan-13              0%

    and commodity related exports declined -1.5%Y 3MMA amid negative terms of              -5 %

    trade. As a result, non-commodity trade balance has dipped into deficit territory     -10 %

    and commodity trade surplus has also declined. However, domestic demand               -15 %
    which tends to be correlated with exports has decoupled since 2H11as                  -20 %
    policymakers have been preparing the economy for impending elections.                 -25 %
    Investment momentum has picked up significantly as Economic Transformation




                                                                                                                                                Jul-07




                                                                                                                                                                                 Jul-08




                                                                                                                                                                                                                                                                                                                                Jul-12
                                                                                                                           Nov-06




                                                                                                                                                             Nov-07




                                                                                                                                                                                                                                    Nov-09




                                                                                                                                                                                                                                                                         Nov-10




                                                                                                                                                                                                                                                                                                             Nov-11




                                                                                                                                                                                                                                                                                                                                              Nov-12
                                                                                                      Mar-06

                                                                                                               Jul-06



                                                                                                                                       Mar-07




                                                                                                                                                                        Mar-08



                                                                                                                                                                                               Nov-08

                                                                                                                                                                                                         Mar-09

                                                                                                                                                                                                                  Jul-09



                                                                                                                                                                                                                                             Mar-10

                                                                                                                                                                                                                                                       Jul-10



                                                                                                                                                                                                                                                                                  Mar-11

                                                                                                                                                                                                                                                                                           Jul-11



                                                                                                                                                                                                                                                                                                                      Mar-12
    Program (ETP) project got underway whilst consumption momentum gets
    support from feel-good measure. Such policy measures are likely to keep
                                                                                        Source: CEIC, Morgan Stanley Research
    supporting growth in the run-up to elections.
Economic Forecast                                                                       Facing a Double Whammy on the Export Front
                                2009     2010      2011   2012E   2013E    2014E           60
Real GDP Growth                  -1.5     7.2       5.1     5.6    4.8      4.8            50
CPI (Inflation %, Avg)            0.7     1.7       3.2     1.7    2.3      2.5
Exports (%)                                                                                40
                                -21.1    26.4      14.5     0.1    1.0      7.0
Imports (%)                     -20.8    34.1      13.9     4.7    2.5      7.0            30
C/A balance as % of GDP          15.7    11.1      11.1     6.4    5.4      5.7
                                                                                           20
FX rate (USD/MYR, Year-end*)     3.41    3.13      3.16    3.05    3.05     3.0
                                                                                           10
                                                                                            0
                                                                                           -10
                                                                                           -20
                                                                                                                               M a nu fa ct ure s Exp o rts, % Yo Y , 3M M A
                                                                                           -30                                 C o m m o dit y-R e la t ed E xp ort s, %Y o Y , 3 M M A
                                                                                           -40
                                                                                                  Jan-00


                                                                                                                  Jan-01


                                                                                                                                    Jan-02


                                                                                                                                                    Jan-03


                                                                                                                                                                      Jan-04


                                                                                                                                                                                      Jan-05


                                                                                                                                                                                                        Jan-06


                                                                                                                                                                                                                           Jan-07


                                                                                                                                                                                                                                             Jan-08


                                                                                                                                                                                                                                                                Jan-09


                                                                                                                                                                                                                                                                                  Jan-10


                                                                                                                                                                                                                                                                                                    Jan-11


                                                                                                                                                                                                                                                                                                                       Jan-12


                                                                                                                                                                                                                                                                                                                                         Jan-13
Source: MS Economic Team, Morgan Stanley Research* 3Q14                                 Source :Haver, Morgan Stanley Research

                                                                                                                                                                                                                                                                                                                                                       40
                                                                                                                                                                                                                                                      MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                    April 19, 2013
                                                                                                                                                                                                                                                                                            Asia / GEMs Strategy



 Mexico: Factor Rankings (UW; Rank #25)
Model Ranking                                                                                                                                                                      Top 10 Market Cap Stocks (sorted by Mcap)
                                                                                Weight in                       Current              Current                  Previous                                                                                                            Stock            Mcap            P/E        ROE
                                                                                the model                        Level                Rank                      Rank              Ticker                Company Name                                            Sector            Rating           (USD bn)        2013E      2013E         DY 2013E

Trailing P/Book Ratio                                                                    6%                      3.1x                       23                          22        AMX.N       America Movil                                                     Telecom                 EW              78.5        11.1x       30.1%           1.7%
                                                                                                                                                                                  WMMVY.PK    Wal-Mart de Mexico                                                Cons. Stap.             EW              56.9        27.1x       19.5%           2.3%
12M Consensus Fwd P/E *                                                                 10%                     17.1x                       20                          20
                                                                                                                                                                                  FMX.N       Femsa                                                             Cons. Stap.             EW              44.2        29.5x       12.6%           1.1%
Trailing Dividend Yield                                                                  9%                     1.5%                        23                          23        KOF.N       Coca-Cola Femsa                                                   Cons. Stap.             UW              35.9        31.6x       14.5%           1.3%
Trailing ROE                                                                             7%                     14.8%                       11                          12        GMEXICOB.MX Grupo Mexico S.A.B. de C.V.                                       Materials               OW              29.3        10.3x       34.4%           4.8%
Earnings Revisions Breadth 3MMA                                                          5%                     -4.3%                       15                           4        GFNORTEO.MX Grupo Financiero Banorte                                          Financials              OW              18.3        15.8x       17.2%           1.3%
Price Momentum ^                                                                         7%                     2.0%                        18                          12        PENOLES.MX Industrias Penoles S.A.B. de C.V.                                  Materials               EW              15.9        15.9x       29.3%           2.0%
                                                                                                                                                                                  TV.N        Grupo Televisa                                                    Cons. Disc.             EW              15.0        21.0x       16.4%           0.5%
Relative Strength Index (RSI) ^                                                         10%                      49.8                       13                           2
                                                                                                                                                                                  ALFAA.MX    Alfa SAB de CV                                                    Industrials             EW              12.9        19.3x       15.6%           0.8%
Fund Flows as % of AUM ^                                                                 9%                     1.3%                        18                          15        CX.N        Cemex                                                             Materials               EW              12.7        90.9x        1.3%            NA
Currency (12M EER Change) #                                                             10%                     1.4%                        8                            5
Leading Indicator Change                                                                 9%                     -0.2%                       12                           1
Macro Risk                                                                               6%                                                 11                          12
MS Macro View & Industry Skew                                                           12%                                                 17                          18
                                                                                                                                                                                   Source: MSCI, IBES, ModelWare, Morgan Stanley Research. For non-covered stocks we have
                                                                                                                                                                                   provided sedol code and consensus valuations For important disclosures regarding companies
* We use Z-Score of P/E in our model                                                                                                                                               that are the subject of this screen, please see the Morgan Stanley Research Disclosure Website
^ We use them as contrary indicators, i.e., lower is better                                                                                                                        at www.morganstanley.com/researchdisclosures.
# We adjust it by considering the export vs. domestic exposure of each individual country


Effective Exchange Rate Change (12M Change)                                                                                                                                      Trailing P/Book
  1 5 .0 %                                                                                                                                                                        4 .0 x


  1 0 .0 %
                                                                                                                                                                                  3 .5 x
   5 .0 %
                                                                                                                                                                                                             + 1 S .D .                                                                                                                3 .1 x
                                                                                                                                                                        1 .4 %
   0 .0 %                                                                                                                                                                         3 .0 x

  -5 .0 %
                                                                                                                                                                                                    A verage
                                                                                                                                                                                  2 .5 x
 -1 0 .0 %

 -1 5 .0 %
                                                                                                                                                                                  2 .0 x

 -2 0 .0 %                                                                                                                                                                                                                                                               - 1 S .D .

 -2 5 .0 %                                                                                                                                                                        1 .5 x
                                                                                                                                                                                           Jan-00


                                                                                                                                                                                                    Jan-01


                                                                                                                                                                                                                  Jan-02


                                                                                                                                                                                                                           Jan-03


                                                                                                                                                                                                                                    Jan-04


                                                                                                                                                                                                                                             Jan-05


                                                                                                                                                                                                                                                       Jan-06


                                                                                                                                                                                                                                                                Jan-07


                                                                                                                                                                                                                                                                         Jan-08


                                                                                                                                                                                                                                                                                   Jan-09


                                                                                                                                                                                                                                                                                               Jan-10


                                                                                                                                                                                                                                                                                                          Jan-11


                                                                                                                                                                                                                                                                                                                     Jan-12


                                                                                                                                                                                                                                                                                                                              Jan-13
                      Mar-98




                                        Mar-00




                                                          Mar-02

                                                                   Mar-03


                                                                            Mar-04




                                                                                              Mar-06

                                                                                                       Mar-07




                                                                                                                          Mar-09




                                                                                                                                            Mar-11




                                                                                                                                                               Mar-13
             Mar-97




                               Mar-99




                                                 Mar-01




                                                                                     Mar-05




                                                                                                                 Mar-08




                                                                                                                                   Mar-10




                                                                                                                                                     Mar-12




 Source: MSCI, RIMES, IBES, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                  41
                                                                                                                                                                                                           MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                    April 19, 2013
                                                                                                                                                                                                                                                                            Asia / GEMs Strategy




Mexico: Macro Economic Background
   Growth Puzzle: Within Latin America, MS economics team is most optimistic
    on Mexico, as they continue to see new administration focused on advancing           Mexico Industrial Production and ISM Index
    an ambitious structural reform agenda, including comprehensive changes on              70                                                                  IS M M fg P M I (L e f t)                                                                                                                                                                            1 5 .0%
    the energy, fiscal and competition fronts. However, team’s positive outlook for                                                                            M e x ic o IP ( 6 - m o n t h a n n u a l i z e d ra te o f c h a n g e )
                                                                                           65
    further structural reforms progress does not fully extend to business cycle                                                                                                                                                                                                                                                                                     1 0 .0%
    during 2013 when Mexican activity is likely to track development in the US.            60
    Hence team maintains their below consensus call for growth to moderate to                                                                                                                                                                                                                                                                                       5 .0 %
                                                                                           55
    3.2%Y from 3.9%Y last year. While recent string of poor economic data (IP,
    Retail sales, unemployment rate etc.) has raised the concerns of deeper                50                                                                                                                                                                                                                                                                       0 .0 %
    economic stagnation in Mexico, but these may not be as bad it seems. Team
    believes that the frequency and magnitude of the recent data misses is a               45
                                                                                                                                                                                                                                                                                                                                                                    -5 .0%
    source of concern but some may have been exaggerated by temporary and                  40
    calendar issues. There have been plenty of bullish releases, such as bank                                                                                                                                                                                                                                                                                       - 1 0 .0 %
    credit report which showed persistent strength in consumer loans, consumer             35

    confidence near a five-year high and increasing capital good imports, pointing         30                                                                                                                                                                                                                                                                       - 1 5 .0 %
    to good momentum in early 2013. Though external factors and the US outlook




                                                                                                 Jun-01

                                                                                                          Dec-01

                                                                                                                       Jun-02



                                                                                                                                         Jun-03

                                                                                                                                                          Dec-03

                                                                                                                                                                   Jun-04

                                                                                                                                                                            Dec-04

                                                                                                                                                                                         Jun-05

                                                                                                                                                                                                  Dec-05
                                                                                                                                                                                                           Jun-06

                                                                                                                                                                                                                        Dec-06

                                                                                                                                                                                                                                  Jun-07

                                                                                                                                                                                                                                           Dec-07

                                                                                                                                                                                                                                                       Jun-08

                                                                                                                                                                                                                                                                  Dec-08
                                                                                                                                                                                                                                                                           Jun-09



                                                                                                                                                                                                                                                                                                  Jun-10

                                                                                                                                                                                                                                                                                                           Dec-10

                                                                                                                                                                                                                                                                                                                     Jun-11

                                                                                                                                                                                                                                                                                                                                 Dec-11
                                                                                                                                                                                                                                                                                                                                          Jun-12

                                                                                                                                                                                                                                                                                                                                                   Dec-12
                                                                                                                                                                                                                                                                                      Dec-09
                                                                                                                                Dec-02
    in particular remain a risk, the team sees enough evidence, particularly on the
    domestic front, to suggest that growth in the Mexican economy seems to be
    holding up just fine.                                                                Source: Haver, Morgan Stanley Research

    Economic Forecast                                                                    Mexico Real GDP Growth
                                   2009      2010       2011    2012E   2013E   2014E        1 0 .0 %
    Real GDP Growth                 -6.2       5.5        3.9    3.9      3.2     4.2           8 .0 %
    CPI (Inflation % year -end)      3.6       4.4        3.8     3.6     3.6     3.8
                                                                                                6 .0 %
    C/A balance as % of GDP         -0.6      -0.3       -1.0    -0.8    -1.2     -1.5
                                                                                                4 .0 %
    Trade Balance (US$bn)           -4.7      -3.0       -1.5    0.2     -8.1    -14.9
    FX rate (USD/MXN, Year-end)    13.09     12.36      13.95   12.85   12.40   11.60           2 .0 %

                                                                                                0 .0 %

                                                                                             - 2 .0 %

                                                                                             - 4 .0 %

                                                                                             - 6 .0 %

                                                                                             - 8 .0 %

                                                                                            - 1 0 .0 %

                                                                                            - 1 2 .0 %
                                                                                                                   Q1-01

                                                                                                                                Q4-01




                                                                                                                                                                                 Q1-04




                                                                                                                                                                                                                                               Q1-07




                                                                                                                                                                                                                                                                                                             Q1-10




                                                                                                                                                                                                                                                                                                                                                            Q2-12
                                                                                                                                                  Q3-02

                                                                                                                                                                   Q2-03




                                                                                                                                                                                                  Q4-04

                                                                                                                                                                                                                Q3-05

                                                                                                                                                                                                                                 Q2-06




                                                                                                                                                                                                                                                                Q4-07

                                                                                                                                                                                                                                                                              Q3-08

                                                                                                                                                                                                                                                                                               Q2-09




                                                                                                                                                                                                                                                                                                                              Q4-10

                                                                                                                                                                                                                                                                                                                                           Q3-11
    Source: MS Economic Team, Morgan Stanley Research                                    Source :Haver, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                             42
                                                                                                                                                                                                                                                                 MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                              April 19, 2013
                                                                                                                                                                                                                                                                                                      Asia / GEMs Strategy



 Russia: Factor Rankings (OW; Rank #1)
 Model Ranking                                                                                                                                                                               Top 10 Market Cap Stocks (sorted by Mcap)
                                                                             Weight in                          Current                  Current                  Previous                                                                                                                   Stock                  Mcap         P/E                  ROE
                                                                             the model                           Level                    Rank                      Rank                    Ticker                 Company Name                                            Sector            Rating                 (USD bn)     2013E                2013E       DY 2013E
                                                                                                                                                                                            GAZPq.L                Gazprom                                                 Energy                     EW               90.5              2.4x          13.8%        6.7%
Trailing P/Book Ratio                                                                  6%                              0.7x                        1                      1
                                                                                                                                                                                            ROSNq.L                Rosneft                                                 Energy                     OW               66.6              5.1x          17.3%        5.8%
12M Consensus Fwd P/E *                                                               10%                              4.6x                        4                      6                 SBER.RTS               Sberbank                                                Financials                 OW               66.1              5.6x          21.8%        3.6%
Trailing Dividend Yield                                                                9%                             4.0%                         7                      7                 LKOH.RTS               Lukoil                                                  Energy                     OW               46.9              4.2x          15.0%        4.6%
Trailing ROE                                                                           7%                            15.5%                         7                     10                 NVTKq.L                Novatek (RU)                                            Energy                     OW               32.8              10.8x         32.1%        2.8%
                                                                                                                                                                                            NKELyq.L               Norilsk Nickel                                          Materials                  EW               29.9              6.8x          30.4%        8.1%
Earnings Revisions Breadth 3MMA                                                        5%                             2.2%                         2                      7
                                                                                                                                                                                            MGNTq.L                Magnit                                                  Cons. Stap.                OW               23.1              4.6x          31.2%        1.3%
Price Momentum ^                                                                       7%                            -10.7%                        2                     17                 URKA.MM                Uralkali OAO                                            Materials                  EW               19.8              13.5x         20.2%        3.7%
Relative Strength Index (RSI) ^                                                       10%                              33.3                        6                     11                 MBT.N                  Mobile TeleSystems                                      Telecom                    OW               19.5              9.9x          52.2%        7.0%
Fund Flows as % of AUM ^                                                               9%                             0.4%                         2                      3                 TATNxq.L               Tatneft                                                 Energy                     UW               12.3              6.0x          14.6%        3.5%
Currency (12M EER Change) #                                                           10%                             -0.6%                       12                     19
Leading Indicator Change                                                               9%                             0.2%                         5                     13
Macro Risk                                                                             6%                                                         24                     24                  Source: MSCI, IBES, ModelWare, Morgan Stanley Research. For non-covered stocks we have provided sedol
MS Macro View & Industry Skew                                                         12%                                                         14                     12                  code and consensus valuations For important disclosures regarding companies that are the subject of this
                                                                                                                                                                                             screen, please see the Morgan Stanley Research Disclosure Website at
                                                                                                                                                                                             www.morganstanley.com/researchdisclosures. ++ Estimates, rating and/or price target for this company have
* We use Z-Score of P/E in our model
                                                                                                                                                                                             been removed from consideration in this report because, under applicable law and/or Morgan Stanley policy,
^ We use them as contrary indicators, i.e., lower is better                                                                                                                                  Morgan Stanley may be precluded from issuing such information with respect to this company at this time.
# We adjust it by considering the export vs. domestic exposure of each individual country


 Trailing P/B: Currently at 90th Percentile                                                                                                                                                USD / RUB
     3 .5 x                                                                                                                                                                                 34


     3 .0 x                                                                                                                                                                                 33


     2 .5 x                                                                                                                                                                                 32

                                                            + 1 S .D .
     2 .0 x                                                                                                                                                                                 31


     1 .5 x                                                                                                A verage                                                                         30


     1 .0 x                                                                                                                                                                                 29

                                                                                               - 1 S .D .                                                                         0 .7 x
     0 .5 x                                                                                                                                                                                 28


     0 .0 x                                                                                                                                                                                 27
                                                                                                                                                                                                 Jun-09




                                                                                                                                                                                                                                      Jun-10




                                                                                                                                                                                                                                                                           Jun-11




                                                                                                                                                                                                                                                                                                                       Jun-12
                                                  Nov-00

                                                           Nov-01

                                                                    Nov-02

                                                                             Nov-03

                                                                                      Nov-04

                                                                                                  Nov-05

                                                                                                            Nov-06




                                                                                                                                                                         Nov-12




                                                                                                                                                                                                          Sep-09


                                                                                                                                                                                                                    Dec-09




                                                                                                                                                                                                                                               Sep-10


                                                                                                                                                                                                                                                        Dec-10




                                                                                                                                                                                                                                                                                    Sep-11


                                                                                                                                                                                                                                                                                             Dec-11




                                                                                                                                                                                                                                                                                                                                Sep-12


                                                                                                                                                                                                                                                                                                                                             Dec-12
                                                                                                                                                                                                                             Mar-10




                                                                                                                                                                                                                                                                  Mar-11




                                                                                                                                                                                                                                                                                                           Mar-12




                                                                                                                                                                                                                                                                                                                                                         Mar-13
              Nov-96

                       Nov-97

                                Nov-98

                                         Nov-99




                                                                                                                       Nov-07

                                                                                                                                Nov-08

                                                                                                                                         Nov-09

                                                                                                                                                       Nov-10

                                                                                                                                                                Nov-11




 Source: MSCI, RIMES, IBES, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                      43
                                                                                                                                                                                       MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                  April 19, 2013
                                                                                                                                                                                                                                          Asia / GEMs Strategy




    Russia: Macro Economic Background
   Weaker Growth: MS economics team has cut the growth forecast for Russia to
    2.9%Y from 3.1%Y for 2013 and for 3.4%Y from 3.7%Y for 2014. Despite good              Slower Annual Growth in 2013
    progress in some areas, the policy consensus supporting ‘macro policy for stability’
    looks weak, delivery of structural reforms has been mixed and growth performance                                                 pp
                                                                                              10
    has been disappointing, falling to 3.4% in 2012, despite strong fiscal stimulus and
    credit growth. As a result, team now sees investment growth lower and GDP                  5
    slightly weaker. However, with employment still at historical lows and output
    running at capacity, downside is expected to be capped with both consumption and           0
    investment remaining resilient.
                                                                                              -5
   Macro for Growth: The 4Q GDP breakdown shows that 2012’s weak growth was
                                                                                              -1 0
    primarily explained by stronger imports and a sharp slowdown in investment. The
    widening gap to the 5-6%Y growth target has sparked calls from policy-makers for          -1 5




                                                                                                                                                                                                                                  2009

                                                                                                                                                                                                                                                  2010



                                                                                                                                                                                                                                                                              2012F

                                                                                                                                                                                                                                                                                         2013F

                                                                                                                                                                                                                                                                                                     2014F
                                                                                                              2000

                                                                                                                              2001

                                                                                                                                          2002

                                                                                                                                                    2003

                                                                                                                                                                2004

                                                                                                                                                                                2005

                                                                                                                                                                                                2006

                                                                                                                                                                                                            2007

                                                                                                                                                                                                                      2008




                                                                                                                                                                                                                                                                  2011
    looser fiscal and monetary policy to support growth, including higher spending,
    lower rates and a weaker RUB. Team sees a risk that “macro for growth” would
    drive inflation and imports. They expect that authorities will retain the current macro              Co ns um pt ion            G FCF        I nve n to ries
    framework while allowing some additional off-budget spending, using oil funds and                    Ne t e xp o rt s           G DP gro wth
    government guarantees, and see an enhanced risk of a weaker and more managed
    RUB as a result of the MinFin buying dollars. With a tight labour market and a          Source: MS economic Team, Morgan Stanley Research
    strong propensity to import, they also expect that further stimulus will leak into      The Current Policy Dilemma: Inflation and Output Diverge
    imports and inflation rather than drive growth.
                                                                                               14
    Economic Forecast                                                                                                                                                                  In d u s tr ia l P r o d u c t io n , Y o Y %                                         C P I, Y o Y %
                                                                                               12
                                    2009     2010       2011   2012E   2013E   2014E
    Real GDP Growth                  -7.8     4.3        4.3     3.4     2.9     3.4           10
    CPI (Inflation % year -end)       8.8     8.8        6.1     6.6     6.0     5.4
                                                                                                8
    Exports (%)                      -4.7     7.0        0.3     1.8     1.0     1.6
    Imports (%)                     -30.4    25.8       20.3     8.7     7.2     6.0            6
    C/A balance as % of GDP           3.9     4.8        5.3     4.0     2.7     1.3
    FX rate ( USD/RUB, Year-end)    30.2     30.5       32.0    30.4    30.9    30.9            4

                                                                                                2

                                                                                                0

                                                                                                -2
                                                                                                                                 May-10




                                                                                                                                                             Nov-10




                                                                                                                                                                                                   May-11

                                                                                                                                                                                                             Jul-11




                                                                                                                                                                                                                               Nov-11




                                                                                                                                                                                                                                                                    May-12
                                                                                                     Jan-10

                                                                                                                     Mar-10




                                                                                                                                           Jul-10




                                                                                                                                                                       Jan-11

                                                                                                                                                                                       Mar-11




                                                                                                                                                                                                                      Sep-11




                                                                                                                                                                                                                                         Jan-12

                                                                                                                                                                                                                                                         Mar-12




                                                                                                                                                                                                                                                                               Jul-12

                                                                                                                                                                                                                                                                                        Sep-12

                                                                                                                                                                                                                                                                                                 Nov-12

                                                                                                                                                                                                                                                                                                             Jan-13
                                                                                                                                                    Sep-10

    Source: MS Economic Team, Morgan Stanley Research                                      Source :Haver, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                      44
                                                                                                                                                                                                                                                                                                              MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                                                                                      April 19, 2013
                                                                                                                                                                                                                                                                                                                                                              Asia / GEMs Strategy



 Singapore: Factor Rankings (EW; Rank #12)
 Model Ranking
                                                                                                    Weight in                            Current                       Current                      Previous
                                                                                                    the model                             Level                         Rank                          Rank
Trailing P/Book Ratio                                                                                          6%                           1.5x                              9                              9
12M Consensus Fwd P/E *                                                                                       10%                          14.3x                             18                             17
Trailing Dividend Yield                                                                                        9%                           3.1%                             14                             12
Trailing ROE                                                                                                   7%                          11.3%                             16                             16
Earnings Revisions Breadth 3MMA                                                                                5%                          -2.4%                             12                             17
Price Momentum ^                                                                                               7%                           0.7%                             16                             16
Relative Strength Index (RSI) ^                                                                               10%                           53.8                             17                             20
Fund Flows as % of AUM ^                                                                                       9%                          0.42%                              3                              2
Currency (12M EER Change) #                                                                                   10%                           3.6%                              2                              2
Leading Indicator Change                                                                                       9%                            NA                              NA                             NA
Macro Risk                                                                                                     6%                                                             1                              1
MS Macro View & Industry Skew                                                                                 12%                                                            21                             22

* We use Z-Score of P/E in our model
^ We use them as contrary indicators, i.e., lower is better
# We adjust it by considering the export vs. domestic exposure of each individual country


 Fund Flows as % of AUM                                                                                                                                                                                                            12-Month Forward Consensus P/E
  2.5%                                                                                                                                                                                                                             2 6 .0 x

  2.0%
                                                                                                                                                                                                                                   2 4 .0 x
  1.5%
                                                                                                                                                                                                                                   2 2 .0 x
  1.0%
                                                                                                                                                                                                                                   2 0 .0 x
  0.5%                                                                                                                                                                                                                                                                                                                                                     + 1 S .D .
                                                                                                                                                                                                                                   1 8 .0 x
  0.0%

  -0.5%                                                                                                                                                                                                                            1 6 .0 x                                                                                                                                        A v e ra g e

  -1.0%                                                                                                                                                                                                                            1 4 .0 x                                                                                                                                                                         1 4 .3 x

  -1.5%                                                                                                                                                                                                                            1 2 .0 x
                                                                                                                                                                                                                                                                                                    -1 S .D .
  -2.0%
                                                                                                                                                                                                                                   1 0 .0 x
  -2.5%
                                                                                                                                                                                                                                    8 .0 x
                                                                                                                                                                                      Mar-11
          Sep-01

                   Mar-02

                            Sep-02

                                     Mar-03

                                              Sep-03

                                                       Mar-04

                                                                Sep-04

                                                                         Mar-05

                                                                                  Sep-05

                                                                                           Mar-06

                                                                                                     Sep-06

                                                                                                              Mar-07

                                                                                                                       Sep-07

                                                                                                                                Mar-08



                                                                                                                                                  Mar-09

                                                                                                                                                           Sep-09

                                                                                                                                                                    Mar-10

                                                                                                                                                                             Sep-10



                                                                                                                                                                                               Sep-11

                                                                                                                                                                                                        Mar-12

                                                                                                                                                                                                                 Sep-12

                                                                                                                                                                                                                          Mar-13
                                                                                                                                         Sep-08




                                                                                                                                                                                                                                              Sep-95

                                                                                                                                                                                                                                                       Sep-96

                                                                                                                                                                                                                                                                Sep-97




                                                                                                                                                                                                                                                                                                                                Sep-04




                                                                                                                                                                                                                                                                                                                                                  Sep-06

                                                                                                                                                                                                                                                                                                                                                              Sep-07

                                                                                                                                                                                                                                                                                                                                                                       Sep-08

                                                                                                                                                                                                                                                                                                                                                                                Sep-09

                                                                                                                                                                                                                                                                                                                                                                                         Sep-10

                                                                                                                                                                                                                                                                                                                                                                                                  Sep-11

                                                                                                                                                                                                                                                                                                                                                                                                           Sep-12
                                                                                                                                                                                                                                                                         Sep-98

                                                                                                                                                                                                                                                                                  Sep-99

                                                                                                                                                                                                                                                                                           Sep-00

                                                                                                                                                                                                                                                                                                     Sep-01

                                                                                                                                                                                                                                                                                                              Sep-02

                                                                                                                                                                                                                                                                                                                       Sep-03




                                                                                                                                                                                                                                                                                                                                         Sep-05
 Source: MSCI, RIMES, IBES, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                                                                               45
                                                                                                                                                                MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                   April 19, 2013
                                                                                                                                                                                                           Asia / GEMs Strategy




Singapore: Macro Economic Background
   Stagflation: MS economics team believes “stagflation-type” scenario of below-
    trend growth and above-trend inflation will likely persist in Singapore in 2013. A  Singapore Exports Trend
    combination of DM secular deleveraging, greying demography and stricter               60 %
    immigration policies suggests that Singapore is unlikely to sustainably return to                                                                                                   E x p o rt s ( Y o Y % , 3 M M A )
                                                                                          50 %
    8-9% growth seen in 2004-2007 period. Meanwhile, inflation is likely to be stickier                                                                                                 N O D X (Y oY % , 3 M M A )
                                                                                          40 %
    than expected. In order to manage the growth-inflation dilemma, team believes
    that policymakers will increasingly have to adopt a mix of S$NEER-plus policy         30 %

    and macroprudential measures; and also structural growth strategies, such as          20 %

    rebalancing exports from old DM markets to new EM markets and measures to             10 %
    boost productivity, to deal with the changed macro landscape                           0%

   Exports: Singapore’s total exports contracted by 19.5%Y in Feb-13 with               -10 %

    domestic exports contracting by bigger magnitude of 21.8% and NODX dropping          -20 %

    to -30.6%Y. The Feb %YoY headline numbers are distorted by base effect, given        -30 %
    that CNY fell in Jan last year and in Feb this year. The average Jan-Feb growth      -40 %
    numbers, which strip out the CNY effect, also shows that exports and NODX are




                                                                                                        Mar-81
                                                                                                        Mar-82
                                                                                                        Mar-83
                                                                                                        Mar-84
                                                                                                        Mar-85
                                                                                                        Mar-86
                                                                                                        Mar-87
                                                                                                        Mar-88
                                                                                                        Mar-89
                                                                                                        Mar-90
                                                                                                        Mar-91
                                                                                                        Mar-92
                                                                                                        Mar-93
                                                                                                        Mar-94
                                                                                                        Mar-95
                                                                                                        Mar-96
                                                                                                        Mar-97
                                                                                                        Mar-98
                                                                                                        Mar-99
                                                                                                        Mar-00
                                                                                                        Mar-01
                                                                                                        Mar-02
                                                                                                        Mar-03
                                                                                                        Mar-04
                                                                                                        Mar-05
                                                                                                        Mar-06
                                                                                                        Mar-07
                                                                                                        Mar-08
                                                                                                        Mar-09
                                                                                                        Mar-10
                                                                                                        Mar-11
                                                                                                        Mar-12
                                                                                                        Mar-13
    still weak at -3%Y and -16.4%Y respectively. Singapore trade has been
    underperforming other regional exporters for a while, and weakness in the Feb
                                                                                       Source: CEIC, Morgan Stanley Research
    numbers is across both electronics and non-electronics segments, with trade to
    DM economies particularly weak. The latest data points again supports the “stag”   GDP Growth (YoY% and QoQ%, SAAR)
    part of our economics' team view of a stagflation type environment in Singapore.      30
                                                                                                                                        G D P (% Q oQ , S A A R )
    Economic Forecast                                                                     25                                            G D P (% Y o Y )
                                   2009    2010    2011   2012E   2013E    2014E          20
    Real GDP Growth                 -0.8   14.8     5.2     1.3     2.3      4.0
                                                                                          15
    CPI (Inflation % average)        0.6    2.8     5.2     4.6     3.6      3.3
    Exports (%)                    -18.6   28.6    17.0     0.4     3.5     10.0          10
    Imports (%)                    -23.2   27.5    18.5     3.7     3.2     10.0
                                                                                           5
    C/A balance as % of GDP         17.7   26.8    24.6    18.6    18.8     19.3
    FX rate (USD/SGD, Year-end*)    1.40   1.31    1.30    1.22    1.22     1.20           0

                                                                                          -5

                                                                                         -1 0

                                                                                         -1 5

                                                                                         -2 0
                                                                                                                Q1-94

                                                                                                                        Q1-95

                                                                                                                                Q1-96




                                                                                                                                                        Q1-99

                                                                                                                                                                Q1-00




                                                                                                                                                                                                Q1-04




                                                                                                                                                                                                                                Q1-08

                                                                                                                                                                                                                                        Q1-09
                                                                                                Q1-92

                                                                                                        Q1-93




                                                                                                                                        Q1-97

                                                                                                                                                Q1-98




                                                                                                                                                                        Q1-01

                                                                                                                                                                                Q1-02

                                                                                                                                                                                        Q1-03



                                                                                                                                                                                                        Q1-05

                                                                                                                                                                                                                Q1-06

                                                                                                                                                                                                                        Q1-07




                                                                                                                                                                                                                                                Q1-10

                                                                                                                                                                                                                                                        Q1-11

                                                                                                                                                                                                                                                                Q1-12
Source: MS Economic Team, Morgan Stanley Research* 3Q14                                Source :Haver, Morgan Stanley Research
                                                                                                                                                                                                                                                                        46
                                                                                                                                                                                                                                                  MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                         April 19, 2013
                                                                                                                                                                                                                                                                                                 Asia / GEMs Strategy



 South Africa: Factor Rankings (UW; Rank #24)
Model Ranking                                                                                                                                                           Top 10 Market Cap Stocks (sorted by Mcap)
                                                                           Weight in                          Current             Current                 Previous                                                                                                                      Stock              Mcap                P/E        ROE
                                                                           the model                           Level               Rank                     Rank       Ticker                     Company Name                                                      Sector              Rating             (USD bn)            2013E      2013E             DY 2013E

Trailing P/Book Ratio                                                               6%                          2.3x                       18                 18       MTNJ.J                     MTN Group                                                         Telecom                      OW            33.9             12.1x          28.1%          6.1%
                                                                                                                                                                       SOLJ.J                     Sasol                                                             Energy                       UW            26.7             9.0x           19.9%          4.9%
12M Consensus Fwd P/E *                                                            10%                         11.5x                       14                 18
                                                                                                                                                                       NPNJn.J                    Naspers                                                           Cons. Disc.                  OW            24.4             25.5x          18.2%          0.7%
Trailing Dividend Yield                                                             9%                         3.3%                        10                 11       FSRJ.J                     Firstrand                                                         Financials                   OW            19.8             11.4x          22.8%          3.9%
Trailing ROE                                                                       7%                         14.8%                        12                  6       SBKJ.J                     Standard Bank                                                     Financials                   EW            19.7             5.1x           30.2%          4.6%
Earnings Revisions Breadth 3MMA                                                     5%                         -6.0%                       16                 18       B0L675                     Sanlam Ltd.                                                       Financials                    -            10.6             13.3x          12.4%          4.4%
Price Momentum ^                                                                    7%                         -9.3%                        4                  5       SHPJ.J                     Shoprite Holdings Ltd                                             Cons. Stap.                  OW            9.8              24.0x          30.3%          2.3%
                                                                                                                                                                       629068                     Remgro Ltd.                                                       Financials                    -            9.2              13.0x          8.5%           2.4%
Relative Strength Index (RSI) ^                                                    10%                          33.7                        7                 16
                                                                                                                                                                       610008                     Bidvest Group Ltd.                                                Industrials                   -            8.0              12.8x          20.4%          3.5%
Fund Flows as % of AUM ^                                                            9%                         1.2%                        16                 16       ANGJ.J                     AngloGold Ashanti Ltd                                             Materials                    OW            7.3              17.6x          7.8%           1.2%
Currency (12M EER Change) #                                                        10%                        -12.4%                       23                 20
Leading Indicator Change                                                           9%                          0.1%                        8                  NA
Macro Risk                                                                          6%                                                     16                 15
MS Macro View & Industry Skew                                                      12%                                                     24                 23
                                                                                                                                                                        Source: MSCI, IBES, Morgan Stanley Research. For non-covered stocks we have provided sedol
                                                                                                                                                                        code and consensus valuations For important disclosures regarding companies that are the
* We use Z-Score of P/E in our model
                                                                                                                                                                        subject of this screen, please see the Morgan Stanley Research Disclosure Website at
^ We use them as contrary indicators, i.e., lower is better                                                                                                             www.morganstanley.com/researchdisclosures.
# We adjust it by considering the export vs. domestic exposure of each individual country


Two-Month Price Momentum (in US$)                                                                                                                                      Effective Exchange Rate Change (12M Change)
  40.0%                                                                                                                                                                     4 0.0%

  30.0%
                                                                                                                                                                            3 0.0%
  20.0%
                                                                                                                                                                            2 0.0%
  10.0%
                                                                                                                                                                            1 0.0%
   0.0%
                                                                                                                                                                                0 .0 %
  -10.0%

  -20.0%                                                                                                                                                                   -1 0.0%
                                                                                                                                                                                                                                                                                                                                                      - 1 2 .4 %

  -30.0%                                                                                                                                                                   -2 0.0%

  -40.0%                                                                                                                                                                   -3 0.0%

  -50.0%
                                                                                                                                                                           -4 0.0%
           Dec-04

                    Jun-05

                             Dec-05

                                      Jun-06

                                               Dec-06

                                                        Jun-07

                                                                 Dec-07

                                                                          Jun-08

                                                                                   Dec-08




                                                                                                     Dec-09

                                                                                                                Jun-10

                                                                                                                         Dec-10

                                                                                                                                  Jun-11

                                                                                                                                            Dec-11

                                                                                                                                                     Jun-12

                                                                                                                                                              Dec-12
                                                                                            Jun-09




                                                                                                                                                                                                     Mar-98




                                                                                                                                                                                                                       Mar-00




                                                                                                                                                                                                                                         Mar-02

                                                                                                                                                                                                                                                  Mar-03

                                                                                                                                                                                                                                                           Mar-04




                                                                                                                                                                                                                                                                               Mar-06

                                                                                                                                                                                                                                                                                        Mar-07




                                                                                                                                                                                                                                                                                                            Mar-09




                                                                                                                                                                                                                                                                                                                                 Mar-11




                                                                                                                                                                                                                                                                                                                                                   Mar-13
                                                                                                                                                                                                                                                                                                  Mar-08
                                                                                                                                                                                         Mar-97




                                                                                                                                                                                                              Mar-99




                                                                                                                                                                                                                                Mar-01




                                                                                                                                                                                                                                                                      Mar-05




                                                                                                                                                                                                                                                                                                                      Mar-10




                                                                                                                                                                                                                                                                                                                                          Mar-12
Source: MSCI, RIMES, IBES, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                   47
                                                                                                                                                                                          MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                  April 19, 2013
                                                                                                                                                                                                                                                          Asia / GEMs Strategy




    South Africa: Macro Economic Background
   Little Impact from Global Growth: In S. Africa our economics team has kept their
    macroeconomics metrics broadly unchanged. Team maintains their GDP forecast of Regional Distribution of SA Exports
    2.5%Y for 2013 and 3.3% for 2014, and expect S. Africa’s current account deficit will
                                                                                          4 0%
    narrow from 6.3% in 2012 to 5% in 2013 and 4% in 2014. Although weak growth is                A s ia E u ro p e A fr ic a A m e ri c a                                                                                                                                   O th e r

    expected in Europe due to downward revision in France and Italy, these two            3 5%
    countries accounts for barely a tenth of SA exports. Also team expects weakness in
    India and Korea to be offset by exports in Japan, which accounts for roughly a fifth  3 0%

    of S. Africa’s Asian exports but sees a far larger GDP upgrade. Team maintains
                                                                                          2 5%
    their out-of-consensus call for a weak FX and high inflation. Team believes that S.
    Africa could experience some difficulty in funding its current account gap. This      2 0%
    should push USDZAR to close the year at 9.00 after peaking at 9.25 in 3Q, before
    appreciating somewhat after the 2014 elections to close that year around 8.80         1 5%


   Inflation: February CPI came in at 5.9%Y, much higher than MS and consensus            1 0%

    expectation of 5.6%Y, largely due to overshoot in insurance cost, which now              5%
    accounts for 9.9% of rebased and reweighted CPI basket. According to Statistics S.
    Africa, insurance costs rose by 7.9%M in Feb-the highest monthly record since the        0%
    introduction of the 2008 CPI basket. Team believes that the jump in insurance costs             20 01         20 05        20 07                                                                                                   2 00 9                                 201 1                               201 2

    was largely driven by medical insurance, where significant increase of 10% have
                                                                                        Source: Haver, Morgan Stanley Research
    been report. Team expect CPI to range between 6%Y and 6.3%Y in 2Q13, before
    rising to a peak of some 6.5% in July/August when the electricity tariff survey is  S. Africa CPI (YoY%)
    carried out.                                                                          1 4 .0 %


    Economic Forecast                                                                         1 2 .0 %

                                    2009     2010       2011   2012E   2013E    2014E         1 0 .0 %
    Real GDP Growth                  -1.5     2.9        3.1    2.5     2.5      3.3
                                                                                               8 .0 %
    CPI (Inflation % year -end)       6.4     3.5        6.3    5.7     5.7       5.2
    Exports (%)                     -19.4     4.7        5.9    0.7     2.7      5.2           6 .0 %
    Imports (%)                     -17.3     9.9        9.7    6.8     4.6      6.6
    C/A balance as % of GDP          -4.0    -3.5       -3.5    -5.8    -5.0     -4.0          4 .0 %
    FX rate ( USD/ZAR, Year-end)    7.40     6.60       8.40    8.00    9.20     8.80
                                                                                               2 .0 %

                                                                                               0 .0 %

                                                                                              - 2 .0 %

                                                                                              - 4 .0 %
                                                                                                                  Jul-01

                                                                                                                           Jan-02



                                                                                                                                             Jan-03



                                                                                                                                                               Jan-04

                                                                                                                                                                        Jul-04



                                                                                                                                                                                          Jul-05

                                                                                                                                                                                                   Jan-06



                                                                                                                                                                                                                     Jan-07

                                                                                                                                                                                                                              Jul-07



                                                                                                                                                                                                                                                 Jul-08



                                                                                                                                                                                                                                                                    Jul-09

                                                                                                                                                                                                                                                                              Jan-10



                                                                                                                                                                                                                                                                                                Jan-11

                                                                                                                                                                                                                                                                                                         Jul-11



                                                                                                                                                                                                                                                                                                                           Jul-12

                                                                                                                                                                                                                                                                                                                                    Jan-13
                                                                                                         Jan-01




                                                                                                                                    Jul-02



                                                                                                                                                      Jul-03




                                                                                                                                                                                 Jan-05




                                                                                                                                                                                                            Jul-06




                                                                                                                                                                                                                                        Jan-08



                                                                                                                                                                                                                                                           Jan-09




                                                                                                                                                                                                                                                                                       Jul-10




                                                                                                                                                                                                                                                                                                                  Jan-12
    Source: MS Economic Team, Morgan Stanley Research                                      Source :Haver, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                             48
                                                                                                                                                                                                                                                        MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                        April 19, 2013
                                                                                                                                                                                                                                                                                                Asia / GEMs Strategy



 Taiwan: Factor Rankings (UW; Rank #21)
 Model Ranking                                                                                                                                                                 Top 10 Market Cap Stocks (sorted by Mcap)
                                                                           Weight in                        Current             Current              Previous                                                                                                                                Stock        Mcap               P/E            ROE
                                                                           the model                         Level               Rank                  Rank                   Ticker                Company Name                                                    Sector                   Rating       (USD bn)           2013E          2013E          DY 2013E
                                                                                                                                                                              2330.TW               TSMC                                                            IT                         EW                 87.4         13.4x            26.7%        3.0%
Trailing P/Book Ratio                                                             6%                         1.8x                        11                 13
                                                                                                                                                                              2317.TW               Hon Hai Precision                                               IT                         OW                 30.6         8.1x             16.4%        2.4%
12M Consensus Fwd P/E *                                                          10%                        14.0x                        16                 19                2412.TW               Chunghwa Telecom                                                Telecom                    EW                 24.4         18.5x            10.7%        4.9%
Trailing Dividend Yield                                                           9%                         3.4%                         9                 10                2454.TW               MediaTek                                                        IT                         OW                 15.4         16.4x            15.6%        2.6%
Trailing ROE                                                                      7%                         8.6%                        24                 24                1303.TW               Nan Ya Plastics                                                 Materials                  OW                 14.2         21.6x            7.8%         0.4%
                                                                                                                                                                              1301.TW               Formosa Plastics Corporation                                    Materials                  OW                 14.2         15.6x            11.5%        2.0%
Earnings Revisions Breadth 3MMA                                                   5%                         0.7%                         6                 11
                                                                                                                                                                              619095                China Steel Corp.                                               Materials                   -                 14.1         34.6x             4.2%        2.1%
Price Momentum ^                                                                  7%                        -3.0%                        15                 15                2882.TW               Cathay Financial Holdings                                       Financials                 UW                 13.9         24.0x             7.4%        1.7%
Relative Strength Index (RSI) ^                                                  10%                         42.8                         9                 21                2308.TW               Delta Electronics Inc.                                          IT                         OW                 10.6         20.1x            14.6%        3.9%
Fund Flows as % of AUM ^                                                          9%                         1.0%                        14                 10                670039                Uni-President Enterprises Corp.                                 Cons. Stap.                 -                 8.6          18.2x            15.6%        2.4%
Currency (12M EER Change) #                                                      10%                         2.7%                        20                 21
Leading Indicator Change                                                          9%                          NA                         NA                 NA
Macro Risk                                                                        6%                                                      6                  6
MS Macro View & Industry Skew                                                    12%                                                     25                 25
                                                                                                                                                                               Source: MSCI, IBES, ModelWare, Morgan Stanley Research. For non-covered stocks we have
                                                                                                                                                                               provided sedol code and consensus valuations For important disclosures regarding companies
* We use Z-Score of P/E in our model                                                                                                                                           that are the subject of this screen, please see the Morgan Stanley Research Disclosure Website
^ We use them as contrary indicators, i.e., lower is better                                                                                                                    at www.morganstanley.com/researchdisclosures.
# We adjust it by considering the export vs. domestic exposure of each individual country


MSCI Taiwan FY2 Earnings Revision Factor (3MMA)                                                                                                                             Effective Exchange Rate Change (12M Change)
                                                                        Y o Y P e r f o rm a n c e (R i g h t)
  80%                                                                                                                                                                30%        8 .0 %
                                                                        F Y 2 E a rn i n g s R e v is i o n ( 3 M M A )
                                                                                                                                                                     20%        6 .0 %
  60%
                                                                                                                                                                     10%        4 .0 %
  40%
                                                                                                                                                                     0%         2 .0 %                                                                                                                                                              2 .7 %

  20%                                                                                                                                                                           0 .0 %
                                                                                                                                                                     -10%
                                                                                                                                                                               -2 .0 %
    0%                                                                                                                                                               -20%
                                                                                                                                                                               -4 .0 %
                                                                                                                                                                     -30%
  -20%                                                                                                                                                                         -6 .0 %
                                                                                                                                                                     -40%
                                                                                                                                                                               -8 .0 %
  -40%
                                                                                                                                                                     -50%
                                                                                                                                                                             -1 0 .0 %
  -60%                                                                                                                                                               -60%
                                                                                                                                                                             -1 2 .0 %
                  Jan-98


                           Jan-99


                                    Jan-00

                                             Jan-01


                                                      Jan-02


                                                               Jan-03

                                                                        Jan-04


                                                                                 Jan-05


                                                                                          Jan-06




                                                                                                              Jan-08


                                                                                                                       Jan-09


                                                                                                                                Jan-10

                                                                                                                                          Jan-11


                                                                                                                                                   Jan-12


                                                                                                                                                            Jan-13
         Jan-97




                                                                                                   Jan-07




                                                                                                                                                                                                  Mar-98




                                                                                                                                                                                                                    Mar-00




                                                                                                                                                                                                                                      Mar-02

                                                                                                                                                                                                                                               Mar-03

                                                                                                                                                                                                                                                         Mar-04




                                                                                                                                                                                                                                                                           Mar-06

                                                                                                                                                                                                                                                                                    Mar-07




                                                                                                                                                                                                                                                                                                         Mar-09




                                                                                                                                                                                                                                                                                                                             Mar-11




                                                                                                                                                                                                                                                                                                                                                  Mar-13
                                                                                                                                                                                         Mar-97




                                                                                                                                                                                                           Mar-99




                                                                                                                                                                                                                             Mar-01




                                                                                                                                                                                                                                                                  Mar-05




                                                                                                                                                                                                                                                                                                Mar-08




                                                                                                                                                                                                                                                                                                                    Mar-10




                                                                                                                                                                                                                                                                                                                                       Mar-12
 Source: MSCI, RIMES, IBES, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                               49
                                                                                                                                                                  MORGAN STANLEY RESEARCH
                                                                                                                                                                                                  April 19, 2013
                                                                                                                                                                                          Asia / GEMs Strategy




    Taiwan: Macro Economic Background
   Exports: Taiwan’s exports increased 3.3%YoY in March (vs. -15.8% YoY in Feb).
    This is above the consensus forecast of 2.2% and MS forecast of 0.9%. The March Recovery Remained very Mild at the Start of the year
    exports of US$27.2bn were the highest monthly total in 20 months. Team believes that 100
    2013 is a year of recovery for Taiwan's exports. They think that the "recovery" theme           Taiwan: Trade Growth, Quarterly, % YoY

    is still unchanged, even though some macro data in January/February were below             80
                                                                                                            Imports      Exports
    expectations. The better March exports suggested that Taiwan's economic recovery is
                                                                                               60
    still on track. The main drivers are the improving domestic demand in the emerging
    markets, particularly China and ASEAN. In 1Q this year, Taiwan's exports to China          40

    and ASEAN increased 4.4% YoY and 6.2% YoY respectively, above the average
                                                                                               20
    growth of 2.4% across all markets. Team believes that Taiwan’s export could show
    stronger recovery in 2H this year as the external demand recovery extends. In               0
    particular, China and ASEAN regions would continue to be the main drivers for
                                                                                              -20
    Taiwan's export sector, given their improving domestic demand. JPY depreciation
    would also benefit Taiwan in a way, as Taiwan is running a large trade deficit with       -40
    Japan and weaker JPY could help Taiwan reduce the import cost for products from
                                                                                              -60
    Japan. Recent NT$ depreciation would also be favorable for Taiwan's exports                  2005     2006      2007      2008       2009 2010 2011 2012                                                               2013
    competitiveness. The US ISM Manufacturing Expectation Index rose to 54.2 points in
                                                                                           Source: CEIC, Morgan Stanley Research
    March (vs. 52.5 points in Feb.). It was the highest reading in 13 months. The positive
    manufacturing expectation suggests that Taiwan’s exports may continue to show          Taiwan Exports vs. US ISM Mfg.
    recovery in the months ahead.                                                            60                                                                                                                            65




                                                                                                            Expansion
                                                                                           50
                                                                                                                                                                                                                           60
     Economic Forecast                                                                     40

                                     2009     2010       2011   2012E   2013E   2014E      30                                                                                                                              55
     Real GDP Growth                  -1.8    10.7        4.0    1.2      2.9     4.0      20
     CPI (Inflation % average)        -0.9     1.0        1.4    1.9      1.5     1.8                                                                                                                                      50
                                                                                           10
     Exports (%)                     -20.3    34.8       12.3    -2.3    8.0     11.0


                                                                                                                 3M A, % YoY
     Imports (%)                     -27.5    44.1       12.0    -3.8    8.0     10.0       0
                                                                                                                                                                                                                           45
     C/A balance as % of GDP          11.4     9.3        9.0    8.7      9.2     8.6
                                                                                          -10
     FX rate ( USD/TWD, Year-end*)    32.0    30.4       30.3    29.1    28.9    28.5                              M
                                                                                          -20
                                                                                                       Contraction                                                                                                         40

                                                                                          -30
                                                                                                                                      Taiwan Exports Growth                                                                35
                                                                                          -40
                                                                                                                                      US ISM Manufacturing Expectation Index (RHS)
                                                                                          -50                                                                                                                              30
                                                                                                2000


                                                                                                                               2001


                                                                                                                                      2002


                                                                                                                                             2003


                                                                                                                                                    2004


                                                                                                                                                           2005


                                                                                                                                                                   2006


                                                                                                                                                                          2007


                                                                                                                                                                                 2008


                                                                                                                                                                                        2009


                                                                                                                                                                                               2010


                                                                                                                                                                                                      2011


                                                                                                                                                                                                             2012


                                                                                                                                                                                                                    2013
     Source: MS Economic Team, Morgan Stanley Research                                  Source :DataStream, Morgan Stanley Research
                                                                                                                                                                                                                                  50
                                                                                                                                                                                                                                                MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                                       April 19, 2013
                                                                                                                                                                                                                                                                                                               Asia / GEMs Strategy



 Thailand: Factor Rankings (EW; Rank #16)
 Model Ranking                                                                                                                                              Top 10 Market Cap Stocks (sorted by Mcap)
                                                                  Weight in                       Current      Current                Previous                                                                                                                                                       Stock               Mcap                   P/E               ROE
                                                                  the model                        Level        Rank                    Rank               Ticker                Company Name                                                                            Sector                      Rating              (USD bn)               2013E             2013E                DY 2013E
                                                                                                                                                           PTT.BK                PTT Public Company                                                                      Energy                           OW                      31.1                7.0x              21.1%              5.0%
Trailing P/Book Ratio                                                       6%                     2.5x                 19                 21              ADVA.BK               Advanced Info Service                                                                   Telecom                          UW                      26.4               20.4x              86.6%              4.9%
12M Consensus Fwd P/E *                                                    10%                    12.3x                 19                 21              SCB.BK                The Siam Commercial Bank Public Company                                                 Financials                       EW                      20.8               12.6x              22.0%              3.1%
Trailing Dividend Yield                                                     9%                    2.8%                  17                 17              PTTE.BK               PTT Exploration & Production                                                            Energy                           EW                      20.2                9.0x              19.7%              3.5%
Trailing ROE                                                                7%                    16.7%                  5                  7              SCC.BK                Siam Cement                                                                             Materials                        UW                      19.1               17.3x              22.3%              2.7%
                                                                                                                                                           KBAN.BK               Kasikorn Bank Public Company                                                            Financials                       OW                      16.4               11.2x              22.8%              2.3%
Earnings Revisions Breadth 3MMA                                             5%                    1.3%                   4                  8              KBAN.BK               Kasikorn Bank Public Company                                                            Financials                       OW                      16.4               11.2x              22.8%              2.3%
Price Momentum ^                                                           7%                     2.9%                  19                 24              BBL.BK                Bangkok Bank Public Company Limited                                                     Financials                       EW                      15.1               11.6x              13.7%              3.3%
Relative Strength Index (RSI) ^                                            10%                     51.8                 15                 19              CPALL.BK              C P All                                                                                 Cons. Stap.                      OW                      14.3               31.2x              57.2%              2.7%
Fund Flows as % of AUM ^                                                   9%                     1.5%                  20                 19              PTTGC.BK              PTT Global Chemicals                                                                    Materials                        OW                      10.9                8.9x              16.4%              5.0%

Currency (12M EER Change) #                                                10%                    3.7%                  11                 15
Leading Indicator Change                                                   9%                      NA                   NA                 NA
Macro Risk                                                                  6%                                          15                 13
MS Macro View & Industry Skew                                              12%                                           5                  7
                                                                                                                                                            Source: MSCI, IBES, ModelWare, Morgan Stanley Research. For non-covered stocks we have
                                                                                                                                                            provided sedol code and consensus valuations For important disclosures regarding companies
* We use Z-Score of P/E in our model
                                                                                                                                                            that are the subject of this screen, please see the Morgan Stanley Research Disclosure Website
^ We use them as contrary indicators, i.e., lower is better
                                                                                                                                                            at www.morganstanley.com/researchdisclosures.
# We adjust it by considering the export vs. domestic exposure of each individual country


MSCI Thailand Trailing ROE                                                                                                                                 Fund Flows as a Percentage of AUM
  2 5.0%                                                                                                                                                      2.0%
  2 3.0%
                                                                                                                                                              1.5%
                                                                                     + 1 S .D .
  2 1.0%
                                                                                                                                                              1.0%
  1 9.0%
                                                                                                                                                              0.5%
  1 7.0%                              A verage                                                                                                  1 6 .7 %
                                                                                                                                                              0.0%
  1 5.0%
                                                                                                                                                             -0.5%
  1 3.0%

  1 1.0%                                                                                                                                                     -1.0%
                                                   -1 S .D .
   9.0%                                                                                                                                                      -1.5%

   7.0%                                                                                                                                                      -2.0%
   5.0%                                                                                                                                                      -2.5%
                                                         Jan-06




                                                                                         Jan-09




                                                                                                               Jan-11
           Jan-02



                    Jan-03



                             Jan-04



                                          Jan-05




                                                                  Jan-07



                                                                            Jan-08




                                                                                                      Jan-10




                                                                                                                             Jan-12



                                                                                                                                       Jan-13




                                                                                                                                                                      Sep-01
                                                                                                                                                                               Mar-02


                                                                                                                                                                                                 Mar-03
                                                                                                                                                                                                          Sep-03

                                                                                                                                                                                                                   Mar-04
                                                                                                                                                                                                                            Sep-04

                                                                                                                                                                                                                                     Mar-05
                                                                                                                                                                                                                                              Sep-05
                                                                                                                                                                                                                                                       Mar-06

                                                                                                                                                                                                                                                                Sep-06
                                                                                                                                                                                                                                                                          Mar-07

                                                                                                                                                                                                                                                                                   Sep-07
                                                                                                                                                                                                                                                                                            Mar-08
                                                                                                                                                                                                                                                                                                      Sep-08

                                                                                                                                                                                                                                                                                                                Mar-09
                                                                                                                                                                                                                                                                                                                         Sep-09

                                                                                                                                                                                                                                                                                                                                   Mar-10
                                                                                                                                                                                                                                                                                                                                            Sep-10

                                                                                                                                                                                                                                                                                                                                                      Mar-11
                                                                                                                                                                                                                                                                                                                                                               Sep-11
                                                                                                                                                                                                                                                                                                                                                                         Mar-12

                                                                                                                                                                                                                                                                                                                                                                                  Sep-12
                                                                                                                                                                                        Sep-02




 Source: MSCI, RIMES, IBES, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                                             51
                                                                                                                                                                               MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                April 19, 2013
                                                                                                                                                                                                                                        Asia / GEMs Strategy




Thailand: Macro Economic Background
   GDP Growth and Monetary Policy: MS economics team further upgraded their
    2013 GDP forecast from 4.0% to 4.7% and 2014 GDP forecast from 4.7% to 5.3%. Thailand Real GDP Growth
    This upgrade takes into account the strong upside surprise seen in 4Q12 GDP              25%
    growth which came in at 18.9%Y, the ramp effect into 2013 on the back of strong
                                                                                             20%
    trailing performance and the continued momentum expected from domestic
    demand. Team believes that populist policies will continue to support domestic           15%

    demand and lend growth alpha in Thailand. Team expects inflationary pressures            10%
    to remain manageable at 3.4% for both 2013 and 2014. The current account
                                                                                              5%
    surplus is likely to be lower than the levels seen in past years but is expected to
    stay at a very mild surplus of +0.3% of GDP for both 2013/2014.However,                   0%

    continued populist policies, particularly in non-productive areas, is likely to raise    -5%
    overheating risks. Bank of Thailand’s policy response will be important in terms of
                                                                                            -10%
    pacifying these overheating risks. To deal with the liquidity inflows and currency
    appreciation, policymakers are likely to implement measures to manage capital           -15%




                                                                                                      Jun-01



                                                                                                                       Jun-02



                                                                                                                                         Jun-03




                                                                                                                                                                           Jun-05



                                                                                                                                                                                            Jun-06



                                                                                                                                                                                                             Jun-07



                                                                                                                                                                                                                               Jun-08



                                                                                                                                                                                                                                                 Jun-09



                                                                                                                                                                                                                                                                 Jun-10



                                                                                                                                                                                                                                                                                  Jun-11



                                                                                                                                                                                                                                                                                                  Jun-12
                                                                                                                                                          Jun-04
    flows rather than cut policy rates. As the growth recovery firms out through 2013,
    our economics team expect BOT to begin unwinding the 75bps rate cut,
    undertaken post flood, in 4Q13, bringing the policy rate to 3.5% by 1Q14.             Source: CEIC, Morgan Stanley Research

    Economic Forecast                                                                      Strong External and Domestic Demand
                                                                                                                                                                       D o m e s ti c D e m a n d ( in c l I n v e n t o r ie s )
                                    2009     2010      2011    2012E   2013E   2014E           2 5 .0 %
                                                                                                                                                                       E x p o rt o f g o o d s & s e r v ic e s
    Real GDP Growth                  -2.3     7.8       0.1     6.4     4.7      5.3           2 0 .0 %
    CPI (Inflation % average)        -0.8     3.3       3.8     3.0     3.4      3.4
                                                                                               1 5 .0 %
    Exports (%)                     -13.9    27.1       14.3    3.2     13.5    14.0
    Imports (%)                     -25.1    37.0       24.9    7.8     11.0    14.3           1 0 .0 %
    C/A balance as % of GDP           8.3     3.1       1.7     0.7     0.3      0.3            5 .0 %
    FX rate (USD/THB, Year-end*)    33.20    30.08     31.17   30.62   29.50    28.8
                                                                                                0 .0 %

                                                                                                -5 .0 %

                                                                                              - 1 0 .0 %

                                                                                              - 1 5 .0 %

                                                                                              - 2 0 .0 %

                                                                                              - 2 5 .0 %
                                                                                                               Q1-00




                                                                                                                                                          Q1-03

                                                                                                                                                                   Q4-03




                                                                                                                                                                                                                      Q4-06

                                                                                                                                                                                                                              Q3-07

                                                                                                                                                                                                                                         Q2-08




                                                                                                                                                                                                                                                                                      Q2-11

                                                                                                                                                                                                                                                                                              Q1-12
                                                                                                                         Q4-00

                                                                                                                                 Q3-01

                                                                                                                                                  Q2-02




                                                                                                                                                                                    Q3-04

                                                                                                                                                                                            Q2-05

                                                                                                                                                                                                     Q1-06




                                                                                                                                                                                                                                                      Q1-09

                                                                                                                                                                                                                                                              Q4-09

                                                                                                                                                                                                                                                                          Q3-10




                                                                                                                                                                                                                                                                                                           Q4-12
    Source: MS Economic Team, Morgan Stanley Research. *3Q14                               Source :Haver, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                   52
                                                                                                                                                                                                                                                                          MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                                                                                               April 19, 2013
                                                                                                                                                                                                                                                                                                                       Asia / GEMs Strategy



 Turkey: Factor Rankings (EW; Rank #18)
 Model Ranking                                                                                                                                                                                  Top 10 Market Cap Stocks (sorted by Mcap)
                                                                                      Weight in                           Current                  Current                Previous                                                                                                                                Stock         Mcap            P/E                 ROE
                                                                                      the model                            Level                    Rank                    Rank               Ticker                     Company Name                                                      Sector                Rating        (USD bn)        2013E               2013E       DY 2013E
                                                                                                                                                                                               GARAN.IS                   Garanti Bank                                                      Financials               EW               22.5         13.9x             13.6%        2.9%
Trailing P/Book Ratio                                                                           6%                         2.0x                         15                         11
                                                                                                                                                                                               AKBNK.IS                   Akbank                                                            Financials               EW               21.0          NA               12.8%         NA
12M Consensus Fwd P/E *                                                                        10%                        11.2x                         22                         15          ISCTR.IS                   Isbank                                                            Financials               UW               17.0         12.4x             10.8%        1.6%
Trailing Dividend Yield                                                                         9%                         1.8%                         21                         19          B03MVJ                     KOC Holding A.S.                                                  Industrials               -               15.1          9.7x             13.6%        2.4%
Trailing ROE                                                                                    7%                        16.0%                          6                          9          TKC.N                      Turkcell                                                          Telecom                  EW               13.7          9.2x             17.3%        5.5%
                                                                                                                                                                                               HALKB.IS                   Turkiye Halk Bankasi A.S.                                         Financials               OW               13.0          9.6x             19.6%        2.1%
Earnings Revisions Breadth 3MMA                                                                 5%                        -0.1%                          7                          1
                                                                                                                                                                                               B03N0C                     Haci Omer Sabanci Holding A.S.                                    Financials                -               12.5          9.3x             11.9%        1.5%
Price Momentum ^                                                                                7%                         9.6%                         25                          8          B03MNV                     Anadolu Efes Biracilik ve Malt Sanayi A.S.                        Cons. Stap.               -               10.2         20.2x             12.5%        2.0%
Relative Strength Index (RSI) ^                                                                10%                         59.1                         19                          1          B0D000                     BIM Birlesik Magazalar A.S.                                       Cons. Stap.               -               8.0          29.8x             42.9%        2.2%
Fund Flows as % of AUM ^                                                                        9%                         0.9%                         13                         18          TUPRS.IS                   Tupras                                                            Energy                   EW                7.0         11.5x             23.3%        7.0%
Currency (12M EER Change) #                                                                    10%                        -0.9%                         17                          7
Leading Indicator Change                                                                        9%                         0.0%                         11                         14
Macro Risk                                                                                      6%                                                      18                         18
MS Macro View & Industry Skew                                                                  12%                                                      6                          8
                                                                                                                                                                                                Source: MSCI, IBES, ModelWare, Morgan Stanley Research. For non-covered stocks we have
                                                                                                                                                                                                provided sedol code and consensus valuations For important disclosures regarding companies
* We use Z-Score of P/E in our model
                                                                                                                                                                                                that are the subject of this screen, please see the Morgan Stanley Research Disclosure Website
^ We use them as contrary indicators, i.e., lower is better
                                                                                                                                                                                                at www.morganstanley.com/researchdisclosures.
# We adjust it by considering the export vs. domestic exposure of each individual country



 Trailing ROE                                                                                                                                                                                 Two-Month Price Momentum (in US$)
  2 4 .0 %                                                                                                                                                                                       60


  2 2 .0 %
                                                                                                                                                                                                 40

  2 0 .0 %                              + 1 S .D .
                                                                                                                                                                                                 20

  1 8 .0 %              Averag e
                                                                                                                                                                                                   0
  1 6 .0 %                                                                                                                                                                         1 6 .0 %
                                                                                                                                                                                                -20
  1 4 .0 %
                                                                                                                                    - 1 S .D .

                                                                                                                                                                                                -40
  1 2 .0 %


  1 0 .0 %                                                                                                                                                                                      -60
                                                                                                                                                                                                                                      Jun-06




                                                                                                                                                                                                                                                                                                Jun-09
                                                                                                                                                                                                        Dec-04

                                                                                                                                                                                                                 Jun-05

                                                                                                                                                                                                                             Dec-05




                                                                                                                                                                                                                                               Dec-06

                                                                                                                                                                                                                                                        Jun-07

                                                                                                                                                                                                                                                                 Dec-07

                                                                                                                                                                                                                                                                          Jun-08

                                                                                                                                                                                                                                                                                   Dec-08




                                                                                                                                                                                                                                                                                                         Dec-09

                                                                                                                                                                                                                                                                                                                    Jun-10

                                                                                                                                                                                                                                                                                                                             Dec-10

                                                                                                                                                                                                                                                                                                                                       Jun-11




                                                                                                                                                                                                                                                                                                                                                           Jun-12

                                                                                                                                                                                                                                                                                                                                                                       Dec-12
                                                                                                                                                                                                                                                                                                                                                Dec-11
             Jul-04




                               Jul-05




                                                  Jul-06




                                                                                      Jul-08




                                                                                                                           Jul-10

                                                                                                                                      Jan-11
                      Jan-05




                                         Jan-06




                                                           Jan-07

                                                                    Jul-07

                                                                             Jan-08




                                                                                               Jan-09

                                                                                                        Jul-09

                                                                                                                 Jan-10




                                                                                                                                               Jul-11

                                                                                                                                                        Jan-12

                                                                                                                                                                 Jul-12

                                                                                                                                                                          Jan-13




 Source: MSCI, RIMES, IBES, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                                                    53
                                                                                                                                                                                     MORGAN STANLEY RESEARCH
                                                                                                                                                                                                                                                           April 19, 2013
                                                                                                                                                                                                                                                   Asia / GEMs Strategy




Turkey: Macro Economic Background
   GDP Growth: MS economics team revised their GDP forecast to 4.4% from 4%
                                                                                         Current Account Deficit
    for 2013 and 4.8% from 5% for 2014. Team believe that lower interest rates will
                                                                                                         U S$ b n
    lead to a more solid pick-up in domestic demand and contribution of net exports        10

    might not be negative. Team believe that average interest rate in 2013 will be           0
    noticeably below that of 2012 and this should trigger a boost to growth via            -1 0
    increased loan growth and investment spending in 2H.
                                                                                           -2 0

   Monetary Policy: Team expect that the CBT will continue to take various                -3 0
    measures to control loan growth by raising the reserve requirement ratios and if       -4 0
    necessary tighten liquidity in the banking system. However, since the bank is not                                                                                                                                                                                                                                                 -4 8 .9
                                                                                           -5 0
    keen on any appreciation in the currency, team does not expect the policy rate or
                                                                                           -6 0
    the overnight rate to be raised throughout the year. In their base case assumption
    team assume a 25bps cut if inflation converges towards the targeted 5% during          -7 0

    the year.                                                                              -8 0                                                                                                                                                                                                                                    -7 7 . 2

                                                                                      -9 0
   Current Account: The current account deficit fell from 9.7% of GDP in 2011 to




                                                                                                                                                                                                   1996
                                                                                                  1984


                                                                                                                   1986


                                                                                                                                   1988


                                                                                                                                                   1990


                                                                                                                                                                   1992


                                                                                                                                                                                   1994




                                                                                                                                                                                                                   1998


                                                                                                                                                                                                                                   2000


                                                                                                                                                                                                                                                   2002


                                                                                                                                                                                                                                                                   2004


                                                                                                                                                                                                                                                                                   2006


                                                                                                                                                                                                                                                                                                   2008


                                                                                                                                                                                                                                                                                                                   2010


                                                                                                                                                                                                                                                                                                                                         2012
    5.8% in 2012 on successful implementation of the monetary and fiscal policy mix.
    Assuming that the CBT manages to keep the credit growth rate in check (~20%Y) Source: CEIC, Morgan Stanley Research
    and oil prices remain in a tight range around US$113/bbl, the team expects the
    current account deficit to reach 6.6% in 2013.                                   Real GDP Growth
Economic Forecast                                                                            15 .0%

                                2009     2010       2011   2012E   2013E    2014E
                                                                                             10 .0%
Real GDP Growth                  -4.8     9.2        8.5     2.5    4.4      4.8
CPI (Inflation % year -end)       6.5     6.4       10.5     6.2    6.3       5.6             5 .0%
Exports (%)                      -5.0     3.4        6.4    12.5    6.7       6.3
Imports (%)                     -14.3    20.7       10.9    -1.5    6.2       7.4             0 .0%
C/A balance as % of GDP          -2.3    -6.6       -9.9    -5.8    -6.6     -7.0
FX rate (USD/TRY, Year-end)     1.50     1.50       1.89    1.78    1.77     1.72            -5 .0%


                                                                                            -1 0.0%


                                                                                            -1 5.0%


                                                                                            -2 0.0%
                                                                                                          Mar-99


                                                                                                                          Mar-00


                                                                                                                                          Mar-01


                                                                                                                                                          Mar-02


                                                                                                                                                                          Mar-03


                                                                                                                                                                                          Mar-04


                                                                                                                                                                                                          Mar-05


                                                                                                                                                                                                                          Mar-06


                                                                                                                                                                                                                                          Mar-07


                                                                                                                                                                                                                                                          Mar-08


                                                                                                                                                                                                                                                                          Mar-09


                                                                                                                                                                                                                                                                                          Mar-10


                                                                                                                                                                                                                                                                                                          Mar-11


                                                                                                                                                                                                                                                                                                                          Mar-12
Source: MS Economic Team, Morgan Stanley Research                                        Source :Haver, Morgan Stanley Research
                                                                                                                                                                                                                                                                                                                                                54
           MORGAN STANLEY RESEARCH
                              April 19, 2013
                      Asia / GEMs Strategy




APPENDIX




                                               55
                                                                                                                                        MORGAN STANLEY RESEARCH
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                                                                                                                                                               Asia / GEMs Strategy

12-Month and 1-Month Performance:
Morgan Stanley Asia/GEMs Team’s Industry Model & Focus Lists

                                                                                                          Performance, US$
                                                                                                12 Month                     Past Month
            Name                                                BBG Ticker              Absolute        Relative       Absolute        Relative
            GEMs Focus List                                               -               -0.84%         -2.55%         -4.59%          0.32%
            APxJ Focus List                                               -               0.36%          -9.38%         -5.34%          -2.27%
            EM/APxJ Industry Model                                        -               7.82%          0.64%          -4.01%          -0.04%




  Performance Data is Total Return based (US$). Performance of GEMs / APxJ Focus lists is as of April 15, 2013. Performance of EM Industry model is as of April 15, 2013. Benchmark for GEMs
  Focus List is MSCI EM Index. Benchmark for APxJ focus list is MSCI APxJ Index. Benchmark for EM/APxJ Industry Model is combined MSCI EM/APxJ Index. Past performance is not a
  guarantee of future results. Results shown do not include transaction costs.

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                                                                                                                                                                           Asia / GEMs Strategy




                                                          Morgan Stanley ModelWare is a proprietary analytic framework that helps clients uncover value, adjusting for distortions and
                                                          ambiguities created by local accounting regulations. For example, ModelWare EPS adjusts for one-time events, capitalizes operating leases
                                                          (where their use is significant), and converts inventory from LIFO costing to a FIFO basis. ModelWare also emphasizes the separation of
                                                          operating performance of a company from its financing for a more complete view of how a company generates earnings.



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                                                                                                                                                                                                              57
                                                                                                                                                  MORGAN STANLEY RESEARCH
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                                                                                                                                                                          Asia / GEMs Strategy


Disclosures (cont.)

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                                                  Coverage Universe                           Investment Banking Clients (IBC)
                                                                                                                      % of         % of Rating
Stock Rating Category                                  Count          % of Total                Count            Total IBC           Category
Overweight/Buy                                          1031                 36%                   402                 39%                  39%
Equal-weight/Hold                                       1250                 44%                   480                 47%                  38%
Not-Rated/Hold                                           105                   4%                    27                  3%                 26%
Underweight/Sell                                         467                 16%                   113                 11%                  24%
Total                                                  2,853                                      1022
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Benchmarks for each region are as follows: North America - S&P 500; Latin America - relevant MSCI country index or MSCI Latin America Index; Europe - MSCI Europe; Japan - TOPIX; Asia - relevant MSCI
country index.




                                                                                                                                                                                                            58
                                                                                                                                                                         MORGAN STANLEY RESEARCH
                                                                                                                                                                                                            April 19, 2013
                                                                                                                                                                                                    Asia / GEMs Strategy


Disclosures (cont.)

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                                                                                                                                                                                                                                            59
                                                                                                                                                  MORGAN STANLEY RESEARCH
                                                                                                                                                                                  April 19, 2013
                                                                                                                                                                          Asia / GEMs Strategy


Disclosures (cont.)

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                                                                                                   MORGAN STANLEY RESEARCH
                                                                                                                                  April 19, 2013
                                                                                                                          Asia / GEMs Strategy




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