Your Federal Quarterly Tax Payments are due April 15th Get Help Now >>

EM's by iBCAxiom

VIEWS: 1,757 PAGES: 51

									2010 EM Outlook
Emerging Markets Research Team

EM Research

EM Strategy Research Team
Dr. Michael Ganske, CFA, Head of EM Research Michael.ganske@commerzbank.com Luis Costa, CFA, EM Debt Strategist Luis.costa@commerzbank.com Barbara Nestor, Macro Analyst (Russia and CIS) Barbara.nestor@commerzbank.com Marina Vlasenko, Credit Analyst Marina.vlasenko@commerzbank.com Nuria Jorba, Credit Analyst Nuria.jorba@commerzbank.com Tatha Ghose, Macro Analyst (CE3, Turkey) Tatha.ghose@commerzbank.com Dmitry Sentchoukov, EM Strategist Dmitry.sentchoukov@commerzbank.com You-Na Park, Macro Analyst (China) You-na.park@commerzbank.com Alina Almetova, Research Assistant Alina.almetova@commerzbank.com

EM Research ‌ Outlook Presentation

1

Agenda
1. 2. 3. 4. 5. Why EM? Major trends in EM debt spreads Russia and CIS corporate credit outlook Outlook for selected EM countries Global forecast

EM Research ‌ Outlook Presentation

2

Why EM? Convergence in a deleveraging world
The era of globalisation which unleashed economic convergence (at least among the world’s largest economies) is not over. Therefore, the faster growth of emerging economies vs. the developed world is here to stay
G DP Growth (2000-07) CN

10.0%

8.0% IN

RU

6.0%

IR ID TH EG ZA BR MX TR KR

4.0%

PL AR

SA

ES AU CA FR IT DE NL JP GB US

2.0%

GDP per capita USD (2000) 0.0% 0 5000 10000 15000 20000 25000 30000 35000 40000

Real GDP growth (2000-07, ann.) vs. USD GDP per capita (2000) for the world’s 25 largest economies by GDP at PPP (2008). Please see our publication EM Credit Strategy: Why EM? Convergence in a deleveraging world published on 24 September 2009. Source: IMF WEO, Commerzbank Research

EM Research ‌ Outlook Presentation

3

Why EM? Convergence in a deleveraging world II
Convergence (or economic outperformance of EM vs. developed world) was nearly non-existent in 1990s …
12% 10% 8% 6% 4% 2% 0% -2% -4% -6% 0 RU 5000 10000 15000 20000 25000 30000 IN E G PL KR ES CN GDP Grow th (1993-99)
y = -0.0059Ln(x) + 0.0 824 R = 0.1073
2

… but has become the defining feature of the world economic landscape in the era of globalisation in 2000s
12% 10% 8% IN RU 6% IR ID TH TR EG ZA PL BR KR MXAR SA ES IT 0 5000 10000 15000 20000 AU CA GB FR NL DE 25000 30000 GDP Growth (2000-07) CN
y = -0.0127Ln(x) + 0.1518 R = 0.685 6
2

ID TH TR BR MX AR IR ZA SA

AU GB

US CA NL FR DE IT

JP 35000 40000

4% 2% 0%

US

GDP per c apita (1999)

JP

GDP per c apita (2000) 35000 40000

Global recession of 2008-09 spared no one, but EM has sustained its outperformance vs. the developed world …
8% 6% 4% 2% 0% 0 -2% -4% CN IN EG ID IR AR BR PL SA GDP per c apita (2008) AU KR 20000 30000 ES 40000 IT JP US CA 50000 FR GB DE NL 60000 GDP gr owth, IMF forecast (2008-09)
y = -0.0 201Ln(x) + 0.1982 R = 0.6567
2

… and IMF forecasts this trend to continue beyond 2009
10% 8% IN 6% 4% 2% 0% 0 5000 10000 15000 20000 25000 30000 EG ID TH ZA MX PL BR RU TR IR AR SA KR AU GB ES CA JP DE US FR NL CN GDP Growth, IMF for ecast (2010-2014)

y = -0 .0134Ln(x) + 0.1595 R = 0.5563
2

ZA TH

RU 10000 MX TR

IT GDP per capita forecast (2010) 35000 40000 45000 50000

Source: IMF World Economic Outlook, Commerzbank Research

Source: IMF World Economic Outlook, Commerzbank Research

EM Research ‌ Outlook Presentation

4

Why EM? Convergence in a deleveraging world III
Emerging economies saw their credit-to-GDP ratio rising from a lower base …
3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 IN ID CN EG TH ZA BR IR TR AR RU MX PL SA KR ES IT JP FR DE GB AU NL CA US 2000 2007 -0.20 TH EG 8% IN RU 6% ID 4% AR MX 2% 0% 0.00 0.20 0.40 0.60 0.80 1.00 TR KR ZA PL SA BR FR IT US IR Domes tic Credit to Private Sector vs . GDP

… and slower than their developed counterparts

12% 10% CN

GDP Growth (2000-07)

AU

JPDE

GB NL

CA

ES

Domestic Credit G rowth (2000-2007)

How new is “new normal”? Developed economies where the private sector leveraged itself up outperformed …
4% GDP Growth (2000-07) AU 3% US JP DE 2% FR IT GB NL CA y = 0.0185x + 0.0166 R 2 = 0.6138 ES

… whereas EM countries demonstrated a weaker relationship between credit and economic growth
12% 10% 8% IN RU 6% TH EG AR ID 4% MX 2% TR PL IR SA BR KR ZA GDP Growth (2000-07) CH

1% Domestic Credit Growth (2000-2007) 0% -0.20 0.00 0.20 0.40 0.60 0.80 1.00 -0.15 -0.10

Domestic Credit Growth (2000-2007) 0% -0.05 0.00 0.05 0.10 0.15 0.20 0.25 0.30

Credit growth is the change in the domestic credit to GDP ratio (e.g. the US value of 40% means that domestic credit to the private sector rose from 200% of GDP in 2000 to 240% in 2007). Source: IMF World Economic Outlook, IIF, Commerzbank Research

EM Research ‌ Outlook Presentation

5

Agenda
1. Why EM?

2. 3. 4. 5.

Major trends in EM debt spreads Russia and CIS corporate credit outlook Outlook for selected EM countries Global forecast

EM Research ‌ Outlook Presentation

6

EM Supply/Demand: How long can this rally go on? Money market funds
How long can this rally go on? Market rallies are driven by investors taking their cash ‘from the sidelines’ and reinvesting in the market… Developed world and EM equities have gained more than 60% and 90%, respectively, from their March lows, but still trade 25-35% below their 2007 highs. The market rally is driven by investors reallocating their funds from cash to equities/credit. We view the outflow of funds from money market funds as an indication that ‘cash on the sidelines’ is being put back into the market. How much cash is still on the sidelines? How big is potential new demand for equities/credit? In 2009, investors have withdrawn over $0.5trln from money market funds, or 42% of the $1.3trln they had put into money market funds in 2007-08. We believe that there is potential for the rally to continue into 2010. The experience of the previous recession and equity market crash in 2001-2002, shows us that in 2002-2004 investors withdrew from money markets 86% of the funds they put into them in 2000-2001. The reallocation of funds from money market funds to equities resulted in the S&P 500 rising every year in 2003-2007.
EM Research ‌ Outlook Presentation

…. but how much cash is still on the sidelines? So far, investors have withdrawn 23% of the funds they had put into money market funds in 2007-08.
800 600 400 200 0 2000 -200 -400 -600 2001 2002 2003 2004 2005 2006 2007 2008 2009 Jan-Aug'09 Sep-Nov'09 Money Market Funds Flows (US$,bn)

U.S. Money Market Funds. Source: ICI, Commerzbank Research

7

The acceleration of EM new issuance poses a threat to EM spreads in 2010
EM bond issuance – quarterly volumes and regional breakdown
US$m 25,000 20,000

EM bond issuance – yearly volumes

US$m 180,000
15,000

175,476 160,766 162,811

185,018

160,000
10,000 5,000 -

140,000 120,000
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 147 5,601 4,284 15,25 6,678 3,603 6,196 2,737

121,267 95,200

100,000 80,000 60,000 40,000 2004 2005 2006 2007

Eastern Europe 9,027 2,897 3,503 5,128 6,378 5,019 1,599 2,508 6,360 11,67 Russia & CIS Latin America Middle East Asia (ex-Japan) Africa 8,573 6,210 6,457 15,60 17,93 12,50 2,399 8,918 566 15,02 3,539 11,26 17,86 9,812 18,84 4,891 8,019 4,450 12,16

17,84 6,068 510

9,135 3,256 20,57 21,87 7,100 9,497 7,063 6,009 9,200 9,716 19,07 13,33 3,535 1,294

5,534 2,981 2,153 13,36 3,151 6,726 4,724 5,220 2,899 6,797 6,506 11,18 9,603 8,613 12,30 11,74 13,04 3,641 5,107 4,728 10,11 4,375 2,856 1,781 1,485 4,776 3,377 1,000 -

2008

2009

Source: Commerzbank

Source: Commerzbank

The share of Russian and other CIS issuance dropped substantially to only 7-8% of the total yearly volume in 2009 as Middle Eastern quasi-sovereign and sovereign entities picked-up significant market share (over 20% of the total EM issuance this year) Participation of Russian, Kazakh and Ukrainian sovereign bonds will likely increase in 2010, based on the expected upcoming deals in Russia ($8-9bn) and potential issuance by Kazakh sovereign, Ukraine sovereign and state-owned enterprises of the respective countries
EM Research ‌ Outlook Presentation

EM new bond issuance has already surpassed the record volumes observed in 2006/2007, but the concentration on the quasi-sovereign and sovereign bond issuance predominates Going into 2010, EM spread stability might be seriously threatened by the record volumes, as real money managers reach record low cash account allocations

8

Erratic patterns on the syndicated loan front will likely be the norm in 2010
EM syndicated loan quarterly flows
270,000 240,000 210,000 180,000 150,000 120,000 90,000 60,000 30,000 1Q04 4Q04 3Q05 2Q06 1Q07 4Q07 3Q08 2Q09
US$m

Realised and expected bank writedowns / loss provisions

Developed Asia Other Europe UK Euro Area US 0 200 400 600 800 1,000 1,200

realized, Q2 07 - Q2 09

Estimated addtl Q3 09-Q4 10

Source: Dealogic

Source: IMF

The pick-up on syndicated deals at the end of 2008 ($250bn in Q4 2008) compensated for the lack of activity (zero EM bond issuance in Q4 2008) in the new bond issuance pipeline over the same period… …but lending constraints at the core of the American and European banking system precluded EM syndicated volumes from expanding further

According to IMF projections (from mid 2009), the global banking system still had (on a weighted average basis) 50% more of writedowns to go, which suggests rather retrenched lending dynamics In our view, syndicate lending volumes in 2010 should remain depressed relative to the levels achieved in precrisis years as Western Europe and the US start implementing tougher regulatory capital allocation rules

EM Research ‌ Outlook Presentation

9

EM hard currency flows lagged improvements on the local debt front
EM Bond Fund Flows – Breakdown favours local currency
10,000 5,000 0 6-07 9-07 11-07 1-08 4-08 6-08 9-08 11-08 2-09 4-09 7-09 9-09 -5,000 -10,000 -15,000
Emerging M arkets Hard Currency Funds Emerging M arkets Lo cal Currency Funds Emerging M arkets B lend Funds

US$

The reflux rally (a gradual exodus of capital from low-yielding money market funds into riskier asset classes) continues to unfold, supporting the scenario of further gains on EM real money flows Approximately $280bn left US money market funds in the third quarter, supporting the good performance of high-yielding asset classes The cumulative breakdown of EM fund flows from mid-2007 suggests a better recovery sensitivity in the flows of EM local currency bonds – which have already closed the gap in the cumulative fund flows figures

Source: Emerging Portfolio Research

EM Bond Fund Flow – quarterly amounts
6,000 (US$m) 4,000 2,000 0 -2,000 -4,000 -6,000 1Q 2Q 3Q 4Q 2004 1,394 -1,052 262 1,343 2005 2,509 961 2,182 77 1Q 2Q 3Q 4Q 2008 522 174 -2,507 -4,870 2009 -3,037 877 3,162 3,853

2006 4,209 -1,240 32 3,232

2007 2,534 2,003 -1,185 -343

Source: Emerging Portfolio Research

EM Research ‌ Outlook Presentation

10

EM-HY relative valuation
CEMBI Broad vs. High Yield
17 15 13 11 9 7 5 1-08
(%)

EMBIG vs. High Yield
(bp)

Reasonably stable relative spreads betw een double B high yield and the CEMBI Broad

(bp)

(bp)

100 50 0 -50 -100 -150 -200 -250 -300 -350

15 14 13 12 11 10 9 8 7 6 5 1-08

600 500 400 300 200 100 0 4-08 7-08 10-08 2-09 5-09 9-09
EM B IGLOB A L Yld to M at JP M o rgan Do uble B HY Summary Yield to Wo rst Relative spread (rhs)

4-08

7-08

10-08

2-09

5-09

9-09

JP M o rgan Do uble B HY Summary Yield to Wo rst (lhs) CEM B I B ROA D Yld to M at (lhs) Relative spread (rhs)

Source: JPM, Commerzbank

Source: JPM, Commerzbank

In terms of relative valuation, High Yield bonds trade at a year record tight versus sovereign and quasi-sovereign bonds (as measured by our relative value analysis using the EMBIG and JPM double B HY). Relative spreads (EMBIG vs. High Yield) have returned to early 2008 levels The strong rally among EM corporates (CEMBI Broad YTD total return performance is now over 37%, with the performance in the sub investment-grade portion of the index at 67%) secured a reasonably stable pattern in the relative analysis EM corporates vs. HY double B

EM Research ‌ Outlook Presentation

11

Multi-lateral help corrected the spread distortions from late 2008 / early 2009
Official BoP support commitments
35 30 25 20 15 10 5 0
Hungary Georgia Latvia Serbia Bosnia and Herz. Armenia Romania Ukraine Belarus Poland % of GDP

General government balance deterioration across the board
% of GDP 6 4 2 0 -2 -4 -6 -8 -10 -12 2008 Turkey Hungary Russia Brazil Estimate Kazakhstan Argentina 2009 Projection Latvia Indonesia

IMF

Other

Czech Republic Philippines

Source: IMF

Source: Commerzbank

The one variable which generated the mispricing on EM sovereign default probability in late 2008 / early 2009 was multi-lateral agencies’ capital commitment. IMF resources tripled to $750bn and the European Commission’s resources for balance of payments support quadrupled to €50bn. Strong multi-lateral commitment stabilised spreads in credits such as Latvia, Ukraine and Hungary Timely multi-lateral help corrected dislocations on the perception of EM default probability, but the deterioration on the countries’ fiscal side was inevitable

EM Research ‌ Outlook Presentation

12

EM hard currency bonds now trade in flat / negative basis territory
EM 5-year basis model
1000 900 800 700 600 500 400 300 200 100 0 1/08 0 -50 2/08 4/08 6/08 7/08 9/08 11/08 12/08 2/09 4/09 6/09 7/09 9/09 10/09 100 50 200 150 (bp) A much stronger release of risk on the CDS side brought EM basis levels back to pre-Lehman levels (bp) 300 250

5y basis on Turkey
(bp) 1000 900 800 700 600 500 400 300 200 100 0 1-08 (bp) 200 150 100 50 0 -50 -100 -150 -200 3-08 6-08 9-08 12-08 3-09 6-09 9-09 Basis (rhs)

Turkey 15s (lhs)

Turkey 5y CDS (lhs)

WA CDS (lhs)

WA Asset Sw ap Spread (lhs)

WA Basis (rhs)

Source: IMF

Source: Commerzbank

The covering of long CDS positions (as risk perception improved) coupled with the aggressive rally in front-end and belly-ofthe-curve cash bonds brought basis levels to single-digit figures in our EM 5-year CDS basis model This leads to one of our core positions going into 2010: buy basis on selected names (Turkey 5y basis and Indonesia 5y basis, still in negative territory) In the EMEA corporate space, we still like buying basis on Evraz 13s vs. 5y CDS and VTB 18s vs. 5Y CDS

EM Research ‌ Outlook Presentation

13

Sovereign short-term debt profile
Short and mid-term corporate refinancing pressure
US$m 30,000 25,000 20,000 15,000 10,000 5,000 0
Brazil Colombia Kazakhst an Russia Turkey Ukraine 2010 8,919 1,663 2,085 320 3,275 2011 15,384 1,042 4,859 1,099 3,672 2012 9,081 896 2,795 2,043 2,815 2013 13,603 629 4,760 1,864 1,394 2014 7,335 1,526 4,503 1,065 1,793 2015 8,279 533 4,278 9,996 550 23 2016 9,762 855 2,621 7,253 139 305 2017 14,795 2,133 3,628 7,116 1,050 105 2018 5,591 1,022 2,586 12,546 0 110 2019 10,874 3,223 752 10,272 0 0

EM bond principal and interest payment – selected credits
1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Jan-10 Turkey USD Brazil EUR Feb-10 Turkey EUR Philippines USD Mar-10 Apr-10 May-10 Russia EUR Ukraine USD Jun-10 Brazil USD Ukraine EUR

23,933 27,694 20,802 25,082 19,082

Russia USD Philippines EUR

Source: Commerzbank

Source: Commerzbank

The still high refinancing pressure among Russian corporates along with the winding down of VEB lending support to key Russian corporates may be the trigger to a significant rise in debt capital markets activity out of Russia in 2010 From a relative analysis basis, the degree of short-term leverage among Latin corporates remains more comfortable if compared to that in the CIS region

Despite the noise on the political front and the uncertainty regarding Ukraine’s relationship with the IMF, the country’s refinancing profile (at the sovereign level) is relatively light in 2010, with only interest coupon payments worth less than $200m One of the largest principal payment related disbursements will come from Russia in March, when the final principal amortisation (and the bond redemption) on Russia 10s takes place ($1.6bn)

EM Research ‌ Outlook Presentation

14

Ratings breakdown of EM issuance still suggests a defensive approach
EM new issuance ratings profile (sovs + corps) – 2006 vs 2009
28% 27% 21% 17% 29%
30%

EM new issuance ratings profile (sovs + corps) – 2006 vs 2009
5 notch difference on average ratings

21% 20%

25% 20% 15%

9% 4% 0% AAA 2% AA A BBB BB 2006 2009

8% 2% 1% B CCC

8% 2%

10% 5% 0%

1% 0% CC

Unrated

AAA

AA

A

BBB

BB

B 2009

CCC

CC Unrated

2006

Source: Commerzbank

Source: Commerzbank

Compared to the ratings profile in the 2006 new issuance EM bond flows (one of the record years in EM new issuance), the ratings profile in 2009 stands at a much better credit quality level (5 notches above, at a BBB level) The credit quality ‘required’ by the market to absorb upcoming EM debt has risen massively if compared to that observed in pre-crisis years. This suggests a much higher concentration in the investment-grade area, which might exert special pressure on spreads at this particular segment of the EM bond market

EM Research ‌ Outlook Presentation

15

Agenda
1. 2. Why EM? Major trends in EM debt spreads

3. 4. 5.

Russia and CIS corporate credit outlook Outlook for selected EM countries Global forecast

EM Research ‌ Outlook Presentation

16

Rolling down the credit curve makes more sense now
Relative spread: Short-end corporate bonds – Belly-of-the-curve bonds (in asset swap terms)
(bp) 3000 2500 2000 1500 1000 500 0 6/08
Silent co rp bo nd buy-backs and so me degree o f speculative buying triggered a rally in the sho rt-end, no t exactly fo llo wed by the belly o f the curve P eak o f the sell-o ff with sho rt-end co rp bo nds underperfo rming the lo ng-end and the belly o f the curves Relative spreads seem to be no rmalised after a lo t o f spread vo latility in bo th ends

(bp) 800 600 400 200 0 -200 -400 -600 -800 -1000 -1200

7/08

9/08

10/08

12/08

1/09

2/09

4/09

5/09

short-end ASW (lhs)
Source: Commerzbank

long-end ASW (lhs)

relative spread (rhs)

The current environment (of notable pick-up in optimism) might call for some more catching up of belly-of-the-curve bonds versus the already priced-in short-end. Above we show an empirical measure of the appreciation of the short-end (asset-swap spreads in 2009 and 2010 corporate bonds) of the Russian corporate curves versus the belly of the curve in the same corporate names (from 2011 to 2016 maturities). The baskets of bonds comprises key credit names such as Bank of Moscow, Evraz, Gazprom, Rosbank, Raspadskaya, MDM Bank, Sberbank, Akbars, Vimpelcom, MTS, Megafon, Norilsk, Petrocommerce Bank, TMK, Tatfondbank and Transcreditbank The panic on every-single asset class observed in October / November last year brought short-term bonds to a record 1000bp above the rates observed in the belly of the curve (in asset swap terms). Following the peak in short-term bond yields, some degree of speculative buying and silent buy-backs by Russian corporates triggered a nice rally on short-term bonds versus the rest of the curve, and took the relative spreads between the two corporate bond baskets from -1000bp (short-end above belly of the curve, i.e.: an inverted curve) to levels above 600bp

EM Research ‌ Outlook Presentation

17

Russia: Fragmented banking sector recovery
Lending activities will continue gradual recovery going forward. However lack of trust in the banking system, insufficient supply of sustainable long-term funding sources for banks and a decreased borrowing appetite from customers will limit the amount of available banking products. Lending will be mostly short term and available for trusted borrowers. The liquidity situation in core banks is very comfortable and allows a reduction in debt to CBR. However some banks remain dependent on the regulator and the central bank is providing sufficient refinancing to the system. Interbank trust has not yet been restored to pre-crisis levels and the system remains fragmented with market leaders clearly dominating. M&A activity to continue and the number of smaller banks should continue to decline. Largest 200 of c.1100 banks are sufficient for the Russian banking system. Bank recapitalisation was successful but insufficient to create solid base for further growth – not all applications for refinancing were granted. State-owned and major private banks are well-capitalised, though. Capital problems for some smaller banks may emerge again in 2010. The banking sector is in need of investments. Focus on business efficiency. The banks cut costs and increased efficiency, building on potential for further profitability. Problems: persistently high funding costs and provisioning charges. Access to funding is improving. The deposit base is gradually recovering, major banks are seeing an inflow of retail deposits. The REPO system is functioning and access to foreign capital markets is rebounding (bilateral and supranational financing is available, MDM Bank successfully closed syndication, AK Bars exchanged the eurobond with increase of volume, Nomos and others are testing the market for eurobonds). Equity valuations still remain low making the equity capital market unattractive. Loan quality problem remains unresolved: restructuring of loan portfolios will continue. The official level of NPLs is far from actual figures. The real proportion of bad loans is at least 15-20% which are not fully provisioned. It appears to be too late for the government to create an effective mechanism to solve the loan quality problem. The banks will need to solve the problem themselves: it will take time to clean the balance sheets and profitability will remain under pressure due to further provisioning. Investment recommendations: Russian banks continued to repay external debt in a timely manner during the crisis which makes them more attractive for investors compared to their CIS neighbours. The majority of Russian banking eurobonds recovered to pre-crisis price levels, however spreads remain widened. Banking sector eurobonds are still trading some 150bp cheaper than corporate eurobonds, and some further spread tightening can still be expected. We like the issues of Promsvyazbank on the back of the EBRD entering the bank's capital; Alfa-Bank, HCFB, Ak Bars. State-related banks remain well supported and we like RSHB June14 and TRANSC11. We also recommend subordinated bonds of major state-related and leading private banks (Bank of Moscow, VTB, Alfa-Bank).

EM Research ‌ Outlook Presentation

18

Russia: corporate sector – is the crisis over?
The corporate sector is recovering post-crisis. The operational performance of larger Russian corporates is returning to pre-crisis levels on the back of export demand and rebounding commodity prices. Profitability was enhanced through cost reduction and margins should improve further in 2010. However, some sectors are recovering faster than others and the outlook remains dependent on the commodity market. Debt restructuring continues successfully. Mechel and Evraz managed to resolve the short-term liquidity problem, Rusal restructuring going ahead. Solvent and liquid borrowers managed to optimise the debt situation even further (MTS, Vimpelcom, etc). Evraz, TMK and Sistema managed to achieve covenant amendments at a premium – both borrowers and lenders are satisfied. Debt servicing has become more difficult than before the crisis. Interest coverage ratios significantly worsened for the absolute majority of borrowers. Many borrowers will use opportunities to refinance cheaper as soon as the market demand permits. However, supply partly shifted to the local market – borrowing in rouble looks more attractive and helps to reduce currency risk. Exporters will remain active on the eurobond market – we expect further supply from Gasprom and Lukoil, possibly new issuance by Norilsk Nickel, MMK which might be interesting for investors.

Investment recommendations: We retain our positive view on NCSP, Raspadskaya, Telecoms and the Oil&Gas sector – these borrowers can service debt from their own funds. Within our Oil&Gas universe we favour Gazprom issues. Severstal appears more attractive to us than Evraz due to its better liquidity situation. We also like NKNK bonds after its successful restructuring and await restructuring proposals from KZOS. We are cautious on Alrosa and Eurochem. On CIS universe we like KazakhGold and KievStar eurobonds on the back of the M&A deals with Polyus Gold and VimpelCom.

EM Research ‌ Outlook Presentation

19

Russian corps – sector overview
Debt metrics on main oil & gas credit names
(%) 25 20 15 10 5 0 Gazprom Lukoil Net Debt/EBITDA Transneft EBITDA/% TNK-BP

Debt metrics on main telco credit names
(%) 14 12 10 8 6 4 2 0 Sistema MTS Net Debt/EBITDA Vimpelcom EBITDA/%

Source: Commerzbank

Source: Commerzbank

Oil&Gas: the companies can easily cope with debt repayments themselves retaining strong profitability and liquidity, modest leverage ratios and access to refinancing. Leverage ratios will keep improving going forward. However the revenues are still under pressure. Telecoms: the crisis is almost over and next year investment appetites will become more aggressive. The companies can repay their debt in a timely manner. Operations are recovering, margins remained high through the crisis. Leverage ratios for the Big Three are moderate, well below 2x Debt/EBITDA. SIstema financials are weaker, however Bashkir assets add value and eurobond repurchase offer seems generous. The company will strengthen its credit profile in 2010.

EM Research ‌ Outlook Presentation

20

Russian corps – sector overview
Debt metrics on main metals & mining credit names
(%) 12 10 8 6 4 2 0 Net Debt/EBITDA TMK EBITDA/% Severstal Evraz Cash/Short-Term Debt Raspadskaya
Eurochem
Source: Commerzbank Source: Commerzbank

Debt metrics on other sectors
(%) 16 14 12 10 8 6 4 2 0 Net Debt/EBITDA EBITDA/% Alrosa Cash/Short-Term Debt NCSP

Metals & Mining: TMK, Evraz, Severstal, Mechel, RusAl are showing a major increase of leverage to double digit levels due to weak H1 2009 results. However, talks with creditors proved to be successful and most covenants were amended. Operations to improve going forward which should permit debt to be serviced under new terms. Severstal has the most comfortable short-term liquidity position among the abovementioned. Medium-term repayment risk for Evraz is manageable but should not be underestimated. Raspadskaya remains a ‘safe haven’. Other sectors: While NCSP is managing the crisis very successfully, Eurochem and Alrosa weakened credit metrics. Alrosa is in our view incapable of servicing the debt on a stand-alone basis, but it is likely to remain supported by the state and is managing to issue credit notes. We remain cautious about construction and development sector.

EM Research ‌ Outlook Presentation

21

Kazakhstan: Financial system to remain vulnerable
Main challenges going forward:
Asset quality deterioration to add pressure to banks’ weak profitability. Despite some signs of economic recovery, pressure on the credit quality of the Kazakh banks’ balance sheets is unlikely to ease in the next months. Delinquencies at a historically high level together with a significant portion of the loans being restructured will continue to drive provisioning charges upwards. As a result, we see profitability ratios remaining subdued. Foreign borrowing to remain tight throughout the year… The deleveraging process is due to continue in 2010 with international capital markets to remain closed to most financial institutions on the back of the major restructuring processes in Kazakh banks remaining unresolved. That said, we foresee some scope for new issuance among the likes of quasi-sovereign issuers such as Eurasian Development Bank, Development Bank of Kazakhstan and Halyk Bank. Foreign owned banks such as Bank CenterCredit and ATF Bank will continue benefiting from cheaper funding from parent and multilateral institutions such as EBRD or IFC. .. although moderate refinancing risks and stabilisation of the deposit base should help to ease pressures and support organic growth. Total debt burden of the Kazakh banking sector has been halved to $20bn after the announcement of BTA, Alliance and Temirbank restructuring. Discussions with creditors are still ongoing, a resolution is likely to be finalised in the next months. Going forward, higher commodity prices should trigger an economic recovery and support a solid deposit base growth. Delinquencies to remain at their highest levels…
(%) 40 35 30 25 20 15 10 5 0 Q4 07 Q1 08 * Q 2 08 Q3 08 Q4 08 Q1 09 Q2 09 LLP/Loans Q3 09 Nov-09

NPL/loans

… while deposits are expected to be boosted by next year’s economic recovery
9,000 8,500 8,000 7,500 7,000 6,500 6,000 5,500 5,000 4,500 4,000 J an-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 J ul-09 Oct-09 (KZT bn) Tenge devalua tion

Source: National Authorities, Commerzbank Research

EM Research ‌ Outlook Presentation

22

Kazakhstan: Financial system to remain vulnerable
Public sector response:
The financial authorities are taking steps to regulate and create a more sustainable banking sector. Despite the government’s measures to support the banking sector, in 2009 four financial institutions defaulted on their obligations and are still in the process of restructuring the large debt burden while several others remain in an extremely vulnerable position. In order to avoid similar imbalances in the future, the NBK and AFN are in the process of reforming the banking system, imposing new limits of leveraging which would lead to organic growth and a stable banking sector. Tightening regulations for capital adequacy. The minimum capital is expected to increase to KZT10bn ($68m) as of 1 July 2010 up from KZT 5bn.The Kazakh regulators are discussing an increase in the minimal capital requirements in order to consolidate the banking system even further. Impose a limit to foreign funding. The NBK will impose a maximum exposure to foreign borrowing of 30% of the total non-equity funding aiming to avoid over reliance on international wholesale funding and support local resources instead. Impose a limit on the loan-to-deposit ratio. The new limit will be set at 150%. Excluding the banks under restructuring, as of 1 December 2009, only two of the top ten commercial banks ATF Bank and Eurasian Bank did not comply with the requirement. The regulators thereby aim to promote the organic growth of the banks and avoid the rapid expansion of the balance sheet and the excess leverage ratio. Limit foreign ownership. NBK might also consider restoring a legal limit on foreign ownership of the banks below controlling or 50% of the aggregate capital with the optimal share in the range of 30% to 40%. We view this measure as rather unlikely in the short to medium term and it would most likely only be implemented if there is a significant increase in new foreign acquisitions.

Investment recommendations:
We remain overall underweight on Kazakhstan banks as an asset class although we expect selected banks to outperform the market. Foreign owned institutions such as ATF Bank and Bank CenterCredit are likely to continue receiving support from their parent financial groups which should help to mitigate balance sheet exposures. Next year, Bank CenterCredit will receive further support from the new shareholding structure once Kookmin Bank and IFC complete the deal and become controlling shareholders, thus we expect tightening along the curve. We also prefer ATFBP12.
EM Research ‌ Outlook Presentation 23

Ukraine: Financial sector lagging behind the regional recovery
Main challenges going forward:
Structural weaknesses of the banking sector unlikely to ease in the next months. The sharp economic downturn and the currency devaluation of more than 60% in the last year led to a rapid deterioration of the banks’ balance sheet. Lending has remained subdued since the beginning of the financial crisis and recovery is unlikely to begin before the second half of next year. The decline in credit quality and the fast growth in provision charges throughout 2009 is likely to continue in 2010 putting further pressure on profitability ratios. The deposit base remains volatile with no clear sign of stabilisation and a recovery unlikely any time soon. However, we expect some inflows on selected large and well regarded financial institutions. Access to funding to remain constrained. International funding will remain inaccessible to most Ukrainian banks while local funding still appears too unreliable given the economic and political instability. Thus, only those banks owned by large global financial players are likely to be granted the necessary equity and funding support. The quasi-sovereign institutions should also benefit from the government support; although given the current instability, this support cannot be guaranteed. Investment recommendations: Stagnating lending activities
82% 81% 80% 79% 78% 77% 76% 75% Apr- May- Jun- Jul-09 Aug- Sep- Oct- Nov09 09 09 09 09 09 09

Profitability is not on the cards in the short-term
5.00 4.00 3.00 2.00 1.00 0.00
Ju n09 Ju l-0 9

UAH bn

-3.00 -4.00 Income after provision Pre-provision income

Source: NBU, Commerzbank Research

Underweight on Ukrainian banks based on the ongoing economic and political instability and the structural weaknesses and limited access to funding. Pressure on the small privately owned institutions is unlikely to ease in the near future. We like Ukrsibbank secondary curve and prefer UKRSIB Dec11. More speculative investment ideas includes Ukreximbank (EXIMUK11) which is the institution most likely to receive government support, should it be needed.
EM Research ‌ Outlook Presentation 24

O

-2.00

Au g09

N ov -0 9

Se p09

ct -0 9

-1.00

Agenda
1. 2. 3. Why EM? Major trends in EM debt spreads Russia and CIS corporate credit outlook

4. 5.

Outlook for selected EM countries Global forecast

EM Research ‌ Outlook Presentation

25

Selected EM economies - summary of forecasts
Key statistics
Real GDP growth Inflation Current Account, % GDP Fiscal Balance, % GDP (2009) External Debt, % GDP (present) FX Reserves, USD bn (latest)

2008

2009F

2010F

2008

2009F

2010F

2008

2009F

2010F

China Russia

9.0

8.8

9.5

5.9

-0.5

2.1

9.7

6.6

6.2

-2.7

7.6

2131.6

5.6

-8.2

3.5

13.3

11.8

9.0

6.1

3.5

3.0

-8.6

39.5

378.0

Ukraine Czech Rep. Hungary Poland Turkey

2.1

-14.5

3.5

25.2

16.0

15.0

-7.2

-1.0

0.0

-8.6

85.5

24.7

2.7

-4.0

1.9

6.3

1.0

2.0

-3.0

-1.2

-2.0

-6.6

35.0

41.3

0.6

-6.2

1.0

6.1

4.1

3.5

-8.4

-1.7

-2.5

-4.0

110.6

45.0

4.8

1.5

3.0

4.2

3.5

4.0

-5.4

-0.9

-2.0

-6.3

41.9

84.0

1.2

-6.0

3.5

10.8

5.6

6.1

-5.6

-1.7

-2.4

-6.7

35.8

74.6

Source: Commerzbank

EM Research ‌ Outlook Presentation

26

Russia - Recovery from a deep recession
The Russian economy is slowly turning around after a sharp recession. The peak-to-trough GDP contraction in 2008-09 was c. 12% and output is likely to return to pre-crisis levels only in late 2012. The first growth impulse has arrived from higher commodity prices and stronger global demand. A modest output recovery has started in H2 2009, led by the export-sectors. The commodity dependence of Russia’s economy will remain accentuated, with nearly ¼ of output coming from hydrocarbon revenues and some 5% from base metals. At the same time the domestic economy remains constrained by structural weaknesses and impaired credit markets. Rising oil revenues and abundant liquidity will nevertheless spill-over into improved confidence in the domestic market next year. Russia’s pre-crisis decade of prosperity was built on strong macroeconomic policies, and a combination of high oil prices and easy access to foreign capital. The crisis has highlighted the importance of creating a diversified and more competitive economic base, which forms the basis of Russia’s national development strategy. Russia’s economy produces 11.5% of the global primary energy, five-times Russia’s share in global GDP. Potential savings in energy efficiency dwarf the capacity of other sectors. The country has a huge infrastructure gap, transport bottlenecks and a lack of spatial integration, which hold huge potential for efficiency gains. Liberalisation and technology transfer have gained emphasis lately but remain a political process.
U$ bn

Recovery in industry led by export-sectors
15 10 5 0 -5 -10 OECD leading indicator y/y -15 -20 -25 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09
Source: Ecowin, Commerzbank Research

Manufacturing output % y/y

70 60 50 40 30 20 10 0 Jan-07

Trade bal. 3MMA U$ bn (lhs) Export 3MMA % y/y (rhs)

80 60 40 20 0 -20 -40 -60 %

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Source: Ecowin, Commerzbank Research EM Research ‌ Outlook Presentation 27

Russia – deleveraging in Russia and the CIS
Shrinking foreign funding:
The credit markets in the CIS continue to stagnate after major liquidity and confidence crises, foreign debt restructuring (Kazakhstan, Ukraine) and severe deterioration in asset portfolio quality. Banking assets have not grown in the past year and lending activity remains low due to high credit risk of borrowers. In the absence of ‘bad banks’, the clean-up of bank portfolios remains slow. Central banks try to restore the credit channels primarily via the provision of abundant liquidity. After sharp de-leveraging in the banking sector, financial conditions are likely to ease in Russia and Kazakhstan. The banking system appears paralysed for longer in Ukraine. The impact of fiscal loosening and the lavish use of the oil Reserve Funds to finance fiscal gaps in Russia and Kazakhstan have helped to improve monetisation. Their overall impact has been limited so far but money supply growth (M2) has picked up in Russia by end-2010 since March. Similarly in Kazakhstan, the anti-crisis program ($10bn or 9.2% GDP) is covered from the National Oil Fund and supports monetary expansion. Despite the IMF’s financial aid to Ukraine, the monetisation in the economy is depressed and credit to the economy is contracting. With the temporary absence of the IMF, Ukraine will also resort to increased monetisation of its public sector deficit at the risk of undermining exchange rate stability. In Russia financial market liquidity should remain abundant, while the recovery of oil revenues and interest rates could continue to ease.
EM Research ‌ Outlook Presentation

loan exposure of BIS banks to the CIS (as % GDP)
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2005 2006 2007 Source: Ecowin, BIS, Commerzbank Research 2008 2009 Ukraine Kazakhstan Russia

Domestic credit to GDP
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2006 2007 2008 2009 Ukraine Russia Kazakhstan

Source: Ecowin, BIS, Commerzbank Research 28

Russia – commodity price recovery and net foreign asset accumulation
At $65-70/bbl oil prices balance of payments turn supportive of exchange rates
The recovery in oil prices has restored Russia’s net asset position on an upward trend. Although the oil reserve funds’ assets are being used for deficit finance, foreign exchange reserves have been restored to $390bn from a $330bn low in March. Russia’s balance of payment’s position should strengthen in 2010 at $65/bbl avg. oil prices. The current account surplus could reach $60bn (3%-4% of GDP). At a conservative estimate of $20bn net capital outflow (vs. U$ 40bn in 2009) Russia’s reserve accumulation would continue next year. The private sector debt redemption schedule is $80bn. The sovereign is planning to issue $10bn Eurobonds. A debt rollover rate in the private sector of 90% is sufficient for Russia’s foreign payments to balance. At conservative interest rate policy the CBR may even have to face an excess inflow of short-term capital. The recovery in oil prices has also helped to stabilise Kazakhstan’s balance of payments. The National Oil Fund’s assets have recovered from $22bn in March to 23.7bn, in addition to its stable stock of $20bn foreign exchange reserves. The NOF assets will continue to accumulate next year on a robust balance of payment position.
160 140 120 100 80 60 40 20 0 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 500 450 400 350 300 250 200 150 100 50 0

Foreign exchange reserves U$ bn (rhs) Oil price Brent U$/br Yearly avg.

Our forecasts
Current Forecast - yearly average 2008 20-Nov 2009 Brent Blend ($/bbl) WTI ($/bbl) Diesel ($/t) Gasoline (95 spot cif) ($/t) Jet fuel ($/t) Natural Gas HH ($/mmBtu) Coal (API #2) ($/t) Uranium ($/lb) 77.4 77.1 632 701 670 4.32 77.7 43.5 99 100 950 847 1008 8.9 147 64 64 63 540 610 570 4.1 68 46 2010 66 65 590 620 610 6.3 78 58

Source: Ecowin, Bloomberg, Commerzbank Research EM Research ‌ Outlook Presentation 29

Russia: V for recovery. Financial system
Banks’ “bad loan” problem caused by short maturity …
60% 50% 40% 30% 20% 10% 0% 2009 2010 and after Russia: Maturity of bank loan book, % of total

… rather than a high level of indebtedness
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% MEX TUR RUS BRA KAZ POL HUN UKR SOAF Domestic credit to non-financial / GDP (%)

As of end-2008. Source: CBR, Commerzbank Research

As at end-2008. Source: S&P, Commerzbank Research

The wave of RUB corporate defaults subsided …
35.0 30.0 25.0 20.0 15.0 10.0 5.0 RUB Corporate Debt Defaults (RUB, bn)

… as the peak in 3rd tier redemptions is behind us
120 100 80 60 40 20 0 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Bonds Maturity / Put (RUB, bn)

May-08

Jul-08

S ep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Default Tech. default (Uncured) Tech. default (Cured)

Sep-09
Coupon > 12% Coupon < 12%

Source: Cbonds, Commerzbank Research

As of September-2008. Source: Bloomberg, Commerzbank Research

EM Research ‌ Outlook Presentation

30

Russia: V for recovery. Politics
Misconception #1: “There will be a colour revolution in Russia” Not only are Medvedev / Putin public support ratings in Russia at 70%+ and growing (source: Levada Centre) … … but also the alternative (“colour revolution countries” such as Ukraine and Georgia) look decidedly less attractive than five years ago. – Indeed, the gap between Ukraine/Georgia GDP per capita and that of Russia / Kazakhstan has been widening almost every year since 2003. “Colour revolution countries” underperformed Russia and Kazakhstan economically
100% 80% 60% 40% 20% 0% 2003 2004 2005 Kazakhstan 2006 Georgia 2007 Ukraine 2008 Ukraine, 33% G eorgia, 25% GDP as % of Russia's 69% Russia, 100% Kazak hstan, 72%

Misconception #2: “Assertive foreign policy inevitably hinders foreign investments” In February 2007, at the Munich Conference on Security Policy, Putin made a speech that marked a shift towards a more assertive and confrontational foreign policy that climaxed with the war in Georgia in August 2008 … … at the same time, since the beginning of 2007, Russia has received over $145bn in inward FDI… … that is over twice as much as in the preceding five years (2002-2006). Russian inward FDI skyrocketed in 2007-09 despite more assertive and confrontational foreign policy
80 70 60 50 40 30 20 10 0 2002 2003 2004 2005 2006 2007 2008 2009.H1 Rus sia: FDI (US$,bn)

36% 31%

USD GDP per capita. Source: IMF World Economic Outlook, Commerzbank Research

Gross inward FDI. Source: UNSTAD, CBR, Commerzbank Research

EM Research ‌ Outlook Presentation

31

Russia: V for recovery. Rates
We recommend receiver positions in RUB/USD crosscurrency swaps. On the wrong side of the carry trade: interest rate differential and strong RUB are to result in a liquidation of USD/RUB long positions
25 20 15 10 5 0 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 US Jul-08 Oct-08 Jan-09 Apr-09 J ul-09 O ct-09 Russia 1-Year Swap Rates

We believe that the recovery in the financial system, fiscal stimulus and capital inflows from abroad will result in an improving domestic liquidity situation combined with appreciation pressure on the rouble. This situation is likely to be exacerbated by the liquidation of private long USD/RUB positions (currently estimated at $50bn-$70bn). Moreover, in our opinion, once again the CBR has opted to prevent appreciation of the rouble at the cost of lower interest rates (and potentially higher inflation). All this is likely to lead to lower interest rates, in our view.

Source: Bloomberg, Commerzbank Research

EM Research ‌ Outlook Presentation

32

Ukraine – the crisis and the aftermath
Dominance of the commodity sector
Slow recovery pulled by steel
Ukraine’s recovery is lagging the CIS. Its economy is similarly commodity-intensive as the CIS peers’, while global steel demand has been more exposed to the global slowdown than demand for oil. Ukraine’s terms of trade (steel price-to-oil price) is also lagging. The country’s metal exports net of energy imports have fallen to 1% GDP from 3%-4% pre-crisis as a result. Private sector capital inflows are scarce and arrive in the form of distressed asset buyouts and investments from Russia. IFI funding is expected to keep Ukraine afloat in the medium-term.
40% 35% 30% 25% 20% 15% 10% 5% 0% Ukraine base metals Russia oil & oil products Kazakhstan oil 15% 21% Oil /base metal export revenue as % GDP (2008)

31%

Ukraine’s commodity balance $bn
20 15 10 U$ bn Base metal export Energy import

Ukraine’s net commodity trade % GDP
5.0 4.0 3.0 Base metal exports net of energy import (% GDP)

5

2.0
0 2004 -5 -10
Source: Ecowin Commerzbank Research EM Research ‌ Outlook Presentation

2005

2006

2007

2008

2009 1-3Q

1.0 0.0 2005 2006 2007 2008 2009 1-3Q

Source: Ecowin Commerzbank Research 33

Ukraine – beyond the happy end
IMF bailout brought external debt spreads back to their LT average vs. G7 credit / Russian quasi-sovs …
4000 3500 3000 2500 2000 1500 1000 500 0 Jun-08 Aug-08 Oct-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Spread (bp)

… but worries about Naftogaz and 2010 elections led to underperformance
4000 3500 3000 2500 2000 1500 1000 500 0 May-08 Jul-08 Sep-08 Nov-08 J an-09 Apr-09 Jun-09 VTB'18 Aug-09 Oc t-09 Spread (bp)

EMBIG Ukraine

ML B Corp

ML B B Corp

Ukraine'13

… but in the medium-term the country’s reliance on volatile steel revenues …
8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2005 2006 2007 2008 2009.H1 Metal Export net of Energy Import (as % of GDP)

… is incompatible with the post-bailout public external debt load
35% 30% 25% 20% 15% 10% 5% 0% Public External Debt (% of GDP, 2008)

MEX

P OL

RO M

ES T

BUL

ICE

CZR

IND

ARG

CRO

THA

BRA

UKR,2009

UKR'2008

Source: JP Morgan, Merrill Lynch, National Authorities, IMF, Commerzbank Research

UKR‘2009 denotes public external debt (as of end-09) as % of GDP 2009 (fcast) Source: Bloomberg, National Authorities, Commerzbank Research

EM Research ‌ Outlook Presentation

KOR

HUN

CHN

RUS

TUR

SER

KAZ

INS

SLK

LIT

LAT

SA

34

Ukraine – solvency tested
Gross external debt % GDP
100% 80% 60% 40% 20% 0% 2007 2008 2009
Source: Ecowin, Commerzbank Research

Kazakhstan 64% 54% 36%

Ukraine

Russia

85% 59% 33%

52%

55% 29%

The IMF program has gone off-track in 2009, most likely until after the Presidential elections. The 4th financing tranche ($3.8bn) has not been disbursed. The upcoming elections have eliminated political consensus and produced fiscally unviable measures. Presidential elections are scheduled for 17 January 2010, with the second round in February. Ukraine’s budget financing remains a key concern. The original budget ceiling agreed with the IMF was 4% of GDP for 2010. Various savings measures have not been implemented and additional uncertainty has been introduced by the Social Subsistence Law raising welfare payments and the minimum wage by a cumulative 30%. The fiscal deficit is now likely to reach 6%-8% GDP. The government is running on temporary funding in the interim. Foreign payment obligations will be covered from NBU reserves ($27bn) and the public sector’s liabilities will be monetised. There is a risk that market confidence in Ukraine’s solvency could break down and undermine exchange rate stability. We expect the overhaul of the budget, the return of the IMF and consolidation after elections. Pressure on asset quality in the banking sector will remain. The estimated bank recapitalisation cost amounts to $10bn. Ukraine’s sovereign debt will have doubled to 20% GDP in 2009 and its gross external debt increased from 55% to 85% GDP. Ukraine’s debt burden will have increased significantly vs. the CIS peers as a result of its public and private sector bailout.
EM Research ‌ Outlook Presentation

35

Kazakhstan – strength in the oil sector
Kazakhstan’s GDP growth has been flat vs. growth contraction of 14.5% in Ukraine and 8.5% in Russia. The relatively modest weakness is attributable to the scale of the policy response and continued large-scale investments in the energy sector. The government’s anti-crisis plan ($10bn) is split as follows: 40% to direct equity support for banks and 60% as stimulus for the economy (construction sector, agriculture, infrastructure, SMEs). The government has ring-fenced the badly damaged part of the banking system to prevent a systemic failure and limit the damage to its own balance sheet. Kazak corporate issuers accounted for the bulk of EM corporate default this year. Oil extraction will continue to drive growth with 10% production increase in volume terms annually, or more, with the opening of the Kashagan oil field in the next few years. Kazakhstan’s balance of payment will strengthen following the debt-standstill, recovery in oil revenues and a major $20bn FDI pipeline. China has engaged in a $10bn loan-for-oil project and an additional $10bn for various other project commitments have been contracted in the energy sector. The banking system that emerges from the crisis will reduce growth in the non-oil economy. Asset growth will be constrained by the domestic deposit base (30% GDP) and limited wholesale funding from foreign sources as a result of new regulation.

Kazakhstan: growing dependence on oil revenues

3500 3000 2500 2000 1500 1000 500 0

Kazakhstan oil production ('000 bpd)

1995

2000

2005

2010F

2015F

Source: Ecowin, Fitch, Commerzbank Research

200 180 160 140 120 100 80 60 40 20 0 2002

Trade bal. Kazakhstan (U$ bn, rhs) Trade bal. Russia (U$ bn, lhs) Avg. oil price (U$/bbl, lhs)

50 45 40 35 30 25 20 15 10 5 0 2007 2008 2009

U$ bn

2003

2004

2005

2006

Source: Ecowin, Fitch, Commerzbank Research EM Research ‌ Outlook Presentation 36

Exchange rate regime options for CIS commodity producers
What choice for Kazakhstan?
Potential for KZT revaluation in the context of greater flexibility next year
Kazakhstan devalued the exchange rate by 20% in February 2009 after maintaining a tight peg for a long period. The NBK keeps the KZT in a +/-3% fluctuation band. Armenia, Georgia, and the Kyrgyz Republic also experienced strong depreciation pressures and adjusted their exchange rates. Although the CIS have partially reduced their trade dependence internally and on Russia, correlations via commodity prices, or financial linkages and remittance flows keep the region financially integrated.
120 110 100 90 80 70 60 Jan-00 RUB/KZT real eff. exch rate

Russia has moved to a higher degree of exchange rate flexibility in 2009. This may prompt other CIS countries to follow suit. Given the importance of primary commodities and their price volatility, full flexibility could translate into excessive exchange rate volatility. Russia therefore pursues a managed float. If oil prices stay high, the CBR is likely to face a renewed trade-off between maintaining a competitive exchange rate and allowing greater currency flexibility in 2010. A currency basked or a managed float would also suit Kazakhstan better than its USD-peg. It would support healthier banking developments (less strict anchoring by the fixed exchange rate, positive real interest rates, etc.) and allow the NBK to take into account changes in commodity prices and trading partners’ currencies.

Real exchange rate indices
RUB/KZT REER, Dec 2000=100
140 120 100 80 60 40 1994 Brazil Poland Russia South Africa 1996 1998 2000 2002 2004 2006 2008

CPI-based REER 2005=100

Jan-02

Jan-04

Jan-06

Jan-08

Source: NBK, BIS, Commerzbank Research EM Research ‌ Outlook Presentation

Source: NBK, BIS, Commerzbank Research 37

Growth fundamentals in the CEE: The record until the crisis
Growth & productivity
GDP growth CAGR 2003-7 Czech Rep Hungary Poland Turkey Slovakia Romania Bulgaria 5.5 3.7 5.1 6.9 7.1 6.3 6.1 Labour powered (%points) 0.1 0.3 0.5 0.5 0.7 -0.6 0.4 Capital powered (%-points) 3.1 2.0 2.9 3.7 4.4 2.9 2.1 Efficiency gains (TFP, %-points) 2.2 1.3 1.6 2.7 1.9 4.0 3.6

Average of above
Source: Commerzbank Corporates & Markets

5.9

0.4

3.2

2.3

Trend growth likely to be much slower over the coming years than during the previous cycle because of sharply reduced capital formation during 2008-10 Rough estimates suggest that Czech trend growth could fall to 3.5% (from 5.5%), Hungarian trend growth to 2% and Polish/Turkish growth to 4%
EM Research ‌ Outlook Presentation

38

CE3 recovery: Still sub-par, and subject to risk of collapse in net exports
CE3 manufacturing growth vs. OECD’s EU lead indicator, Y-o-Y
Y-o-Y % 6 4 2 0 -2 -4 -6 -8 -10 Jan-04 OECD leading indicator Eurozone, YoY (lhs) CE3 IP YoY 3ma (rhs) Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 20 15 10 5 0 -5 -10 -15 -20

Recovery has, so far, been sub-par. Hard data have seriously lagged leading indicators Export growth, itself, has noticeably lagged the growth momentum in customer economies Is this a matter of month-on-month versus year-onyear approach to looking at growth? Even as export growth finally appears to be picking up, a disproportionately high pick up in imports is dragging down the record trade-surpluses of the past 9 months (see lower chart) This is set to continue and is growth-negative for next year We have recently downgraded 2009 growth forecasts as Q3 numbers remained downbeat, and also downgraded 2010 numbers where fiscal austerity measures have been introduced, e.g. in the Czech Republic Poland is the only economy expected to enjoy a fullyfledged recovery next year

Source: CEIC, Commerzbank Corporates & Markets

CE3 export growth versus trade-balance
1.5 Eur bn Y-o-Y (%) 30 20 0.5 10 0 -0.5 -10 -20 -1.5 Jan-07 CE3 Trade balance (EUR bn) Jul-07 Jan-08 CE3 exports, YoY (RHS) Jul-08 Jan-09 Jul-09 -30

Source: CEIC, Commerzbank Corporates & Markets

EM Research ‌ Outlook Presentation

39

Turkey: Sensitive to commodity prices; could rates have to rise?
Leading indicators vs. hard data (new-orders)
Y-o-Y (%) 30 55 20 10 0 -10 -20 -30 New orders y-o-y Jul 2007 Jan 2008 Jul 2008 Jan 2009 Jul 2009 PMI (RHS) Consumer confidence (scaled, RHS) 50 45 40 35 60

Growth is likely to improve noticeably over the coming quarters, notching up 3.5% next year Leading economic indicators had ‘run away’ ahead of time; they then slipped slightly after Q2 tax incentives were withdrawn (see top chart). Hard data indicators, such as new-orders, are now beginning to catch up. Capital goods new orders now positive year on year The major risk comes from rising commodity and energy prices. Turkey has the highest sensitivity in the region to imported commodity price inflation If present levels were maintained, the prices of imported raw materials would soon turn 50-60% higher, year on year. The bottom chart highlights the risk to domestic inflation We see risks to the CBT’s guidance of steadily moderating inflation over the coming year. Rather, inflation could accelerate to higher than 6% The CBT also signals steady rates through 2010. Could it maintain this in an inflationary environment? A second factor which could boost inflation is the persistently large budget deficit. The medium-term plan fell short of signaling a convincing exit strategy in this regard

30 Jan 2010

Source: CEIC, Commerzbank Corporates & Markets

PPI inflation – a lead indicator for CPI inflation – vs. commodity prices
Y-o-Y (%) 40 20 0 5 -20 -40 Jan 2007 Jan 2008 Jan 2009 0 -5 Jan 2010 Y-o-Y (%) CRB index y-o-y PPI inflation (RHS) 20 15 10

Source: CEIC, Commerzbank Corporates & Markets

EM Research ‌ Outlook Presentation

40

Poland: Will strong growth push rates up most here within the CEE?
CPI inflation: headline vs. core
5 4 3 2 1 0 -1 Jan 2005 Core inflation (ex-food & energy) Y-o-Y (%) Headline CPI

Growth has fared the best in the region: it is expected to record 1.5% this year and 3-3.5% next year But, although growth is not a concern, inflation could be. Polish core inflation and wages have remained stubbornly high (and, crucially, on a rising trend; see chart opposite). Small dips, such as in October, may not mark a serious turn in the trend We think that inflation may not have enough time to moderate further before upward pressure, driven by a narrowing output-gap and higher commodity prices, takes hold If this proves correct, interest rates would have to rise But, because Poland has not cut rates to minimal this year, interest rates may not have to rise by much next year despite the inflationary pressure The caveat to this argument is that Poland is the only country in the region not following fiscal consolidation. Fiscal austerity is likely to narrow budget deficits next year in the Czech Republic, but not in Poland (see chart opposite) If expenditure limits are not adopted for the 2010-11 budgets, upward pressure on market interest rates is likely to return in force The finance minister, however, promises to impose a spending cap in future budgets

Jan 2006

Jan 2007

Jan 2008

Jan 2009

Jan 2010

Source: CEIC, Commerzbank Corporates & Markets

Fiscal deficit comparison among major CEE economies
7 6 (%) GDP 5 4 3 2 1 Poland Czech Republic Hungary Turkey Maastricht limit 2008 2009F 2010F

Source: CEIC, Commerzbank Corporates & Markets

EM Research ‌ Outlook Presentation

41

Czech Republic: Will inflation derail the central bank’s plans?
Confidence yet to recover as foreign order flow still downbeat
20 10 YoY (%) 110 105 100 0 -10 Foreign orders YoY 3ma 95 90 85 -20 -30 Jan 2007 Confidence (r. h. scale) Jan 2010 80 75

New orders, in particular foreign orders, have yet to show much improvement, year on year Business confidence is acutely driven by export-orders (top chart) Fiscal austerity has been adopted – this is negative for near-term growth, but positive for interest rates Commodity prices pose a major threat to domestic inflation next year (see lower chart) This is not adequately discounted by the central bank (which assumes import price deflation through much of next year) Interest rates have been brought down to 1.25% already – hence, further downside does not exist even if growth disappoints
6 4 2 0

Jan 2008

Jan 2009

Source: CEIC, Commerzbank Corporates & Markets

Imported commodity inflation to boost domestic inflation beyond target
Y-o-Y (%) 40 20 0 -20 -40 Jan 2005 Jan 2006 Czech import prices Y-o-Y, RHS Jan 2007 Jan 2008 Jan 2009 Jan 2010 Y-o-Y (%) CRB index y-o-y (6 month lagged)

But, upside risk – rate hikes earlier than the market expects – could arrive as a result of the inflation threat

-2 -4 -6 -8 -10

Source: CEIC, Commerzbank Corporates & Markets

EM Research ‌ Outlook Presentation

42

Hungary: Growth bites the dust as fiscal retrenchment takes hold
PMI remains sub-50; new-orders at significantly negative growth rates
64 60 56 52 48 44 40 36 06Q1 06Q3 07Q1 07Q3 08Q1 08Q3 09Q1 New-orders (r. h. scale) 09Q3 10Q1 PMI PMI Y-o-Y (%) 3mma 30 20 10 0 -10 -20 -30 -40 (%) GDP

Political risk to the budget deficit
8 7 6 5 4 3 2 1 0 IMF Target Source: CEIC, Commerzbank Corporates & Markets Fidesz projection Maastricht limit 2009F 2010F

Source: CEIC, Commerzbank Corporates & Markets

Interest rate vs. GDP growth – Monetary policy still to be substantially eased
12 8 4 Gap 0 -4 -8 Jan 2006 (%) Interest rate (%)

Sub-par growth outlook; no recovery yet. Official forecasts are for recession to continue next year Leading indicators (e.g. the PMI) are still the most lacklustre in the region (besides Romania and other crisis-ridden countries) Interest rates have still some catching up to do on the downside. We have a projected bottom at 6% interest rates, but this is subject to downside risk Hungary’s fiscal austerity package has been high profile. However, The incoming Fidesz party is already touting plans which could see the deficit overshoot its 3.8% target by a wide margin next year (see chart above)

Nominal GDP y-o-y (%) Jan 2007 Jan 2008 Jan 2009

Source: CEIC, Commerzbank Corporates & Markets

EM Research ‌ Outlook Presentation

43

China: Strong recovery thanks to expansionary fiscal and monetary policy
A surge in loan growth helped the economy to recover quickly… New loans in bn RMB
2000

1500

A stimulus package worth $580bn and loosening of monetary policy helped the Chinese economy to recover quickly. After a slowdown of growth to 6.1% in Q1 economic growth reached 8.9% in Q3. The stimulus package, which was announced in November 2008, contained mainly investments into infrastructure and some incentives for private households.

1000

500

0 2006 2007 2008 2009

Source: People‘s Bank of China

The People’s Bank of China cut interest rates by 216 bp to 5.31% in 2008 and abolished credit restrictions. The result was record lending of 7.4 trillion yuan in the first half of 2009. Due to the massive expansionary monetary policy some risks are arising - Asset price bubble - Surge in non-performing loans - Rise in inflation Although the People’s Bank of China signals no course change in monetary policy, Chinese authorities already took some steps to control liquidity and more measures should be in the pipeline
44

…but now the risk of an asset bubble is rising Shanghai Composite
70 00 60 00 50 00 40 00 30 00 20 00 10 00 0 2003

2004

2005

2006

2007

2008

2009

Source: Bloomberg

EM Research ‌ Outlook Presentation

China’s exchange rate policy will come more into the spotlight
China benefits from the US dollar peg and the weakness of the dollar USD-CNY spot price and trade weighted exchange rate
6.20
USD-CNY (left, inverted)

125 120 115 110 105

6.70 7.20 7.70 8.20

trade weighted CNY (right)

Since the Chinese and the world economy recovers the pressure on China to let the renminbi appreciate against the US dollar again will rise. The worst case would be a trade war between the US and China. But since both parties are not interested in a culmination of the conflict we think that China and the US will be able to avoid a trade war. A possible solution could be to manage the renminbi against a currency basket as was originally announced back in 2005. Despite some risks arising we expect the Chinese economy to show strong growth in 2010. Fiscal stimulus and expansionary monetary policy should still be supportive. Only in the second half of the year is growth likely to slow down on the back of a more restrictive monetary policy and the end of the economic stimulus package.

100 95 90

Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09

Source: Bloomberg, Commerzbank Corporates & Markets

Despite some risks arising, we expect China to show strong growth in 2010 again GDP, year-on-year percentage change
13 12 11 10 9 8 7 6 1997 1998 1999 2000 20 01 200 2 2003 2004 2005 2006 2007 20 08 200 9 2010 forecast Commerzba nk

However, after economic growth of 8.8% this year we expect strong growth of 9.5% next year again.

Source: IMF, Commerzbank Corporates & Markets

EM Research ‌ Outlook Presentation

45

Agenda
1. 2. 3. 4. Why EM? Major trends in EM debt spreads Russia and CIS corporate credit outlook Outlook for selected EM countries

5.

Global forecast

EM Research ‌ Outlook Presentation

46

Core markets – growth, inflation and rates forecast
Q1 2010 Policy Rates US Fed funds Eurozone UK Japan 10Y Bonds Euro (German Bunds) UK USA Japan 3.50 4.00 3.60 1.30 3.00 3.25 3.00 1.00 3.30 3.50 3.30 1.25 3.60 3.75 3.65 1.60 3.75 3.90 3.75 1.70 0.25 1.00 0.50 0.10 0.25 1.00 0.50 0.10 0.25 1.00 0.50 0.10 0.75 1.50 1.00 0.10 1.25 1.75 1.25 0.10 Q2 2010 Q3 2010 Q4 2010 Q1 2011

GDP at constant prices, % change on year 2009 Estimate Eurozone UK USA Japan Australia -3.8 -4.7 -2.5 -5.5 0.7 2010 Forecast 1.5 1.0 2.5 2.0 2.0

Consumer prices, % change on year 2009 Estimate 0.4 2.0 -0.5 -1.4 1.8 2010 Forecast 1.0 2.3 1.3 -0.5 2.2

Source: Commerzbank Corporates & Markets

EM Research ‌ Outlook Presentation

47

Our Energy Commodity Forecasts

Current 20-Nov Brent Blend ($/bbl) WTI ($/bbl) Diesel ($/t) Gasoline (95 Spot cif) ($/t) Jet Fuel ($/t) Natural Gas HH ($/mmBtu) Coal (API #2) ($/t) Uranium ($/lb)
Source: Commerzbank Corporates & Markets

1Q09 46 44 424 438 438 4.20 67.1 45.3

2Q09 60 60 505 597 536 3.80 64.6 47.3

3Q09 69 68 575 659 610 3.40 68.5 47.1

Forecasts 4Q09 1Q10 74 74 626 691 652 4.90 72.6 45.4 63 62 560 600 580 5.50 70.0 50.0

2Q10 64 63 580 630 600 6.00 75.0 55.0

3Q10 67 66 600 650 620 6.50 80.0 60.0

4Q10 70 69 627 600 630 7.00 85.0 65.0

Yearly Average 2008 2009 2010 99 100 950 847 1008 8.90 147 64 64 63 540 610 570 4.10 68 46 66 65 590 620 610 6.30 78 58

77.4 77.1 632 701 670 4.32 77.7 43.5

EM Research ‌ Outlook Presentation

48

Disclaimer
This document has been created and published by the Corporates & Markets division of Commerzbank AG, Frankfurt/Main or Commerzbank’s group companies mentioned in the document. Commerzbank Corporates & Markets is the investment banking division of Commerzbank, integrating research, debt, equities, interest rates and foreign exchange. The relevant research analyst(s), as named on the front cover of this report, certify that (a) the views expressed in this research report accurately reflect their personal views about the securities and companies mentioned in this document; and (b) no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or views expressed by them contained in this document. The research analyst(s) named on this report are not registered / qualified as research analysts with FINRA. The research analyst(s) may not be associated persons of Dresdner Kleinwort Securities LLC and therefore may not be subject to NASD Rule 2711 and incorporated NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst. It has not been determined in advance whether and in what intervals this document will be updated. Unless otherwise stated current prices refer to the most recent trading day’s closing price. Disclosures of potential conflicts of interest relating to Commerzbank AG, its affiliates, subsidiaries (together “Commerzbank”) and its relevant employees with respect to the issuers, financial instruments and/or securities forming the subject of this document valid as of the end of the month prior to publication of this document*: Commerzbank AG, or its affiliates, has received compensation from GAZPROM, Kazakhmys PLC within the last 12 months for the provision of investment banking services. Commerzbank AG, or its affiliates, expects to receive or intends to seek compensation for investment banking services from Kazakhmys PLC in the next three months. *Updating this information may take up to ten days after month end. Commerzbank Conflict of Interest: Commerzbank’s Policy on Management of Conflicts of Interest in Research (the “Guiding Principles to promote the integrity and independence of research”) is available at: https://cbcm.commerzbank.com/en/site/research/equity/disclaimer/index.jsp. This document complies with the Guiding Principles. Ratings & Definitions Explanation in terms of the ratings used are available at: https://cbcm.commerzbank.com/en/site/research/equity/ratingsanddefinitions/index.jsp. Explanation of valuation parameters and risk assessment Explanations in terms of the valuation parameters, the valuation system and the associated risks are available at: https://cbcm.commerzbank.com/en/site/research/equity/disclaimer/ValuationParamatersAndRiskAssessment.jsp. Disclaimer This document is for information purposes only and does not take account of the specific circumstances of any recipient. The information contained herein does not constitute the provision of investment advice. It is not intended to be and should not be construed as a recommendation, offer or solicitation to acquire, or dispose of, any of the financial instruments and/or securities mentioned in this document and will not form the basis or a part of any contract or commitment whatsoever. The information in this document is based on data obtained from sources believed by Commerzbank to be reliable and in good faith, but no representations, guarantees or warranties are made by Commerzbank with regard to accuracy, completeness or suitability of the data. The opinions and estimates contained herein reflect the current judgement of the author(s) on the data of this document and are subject to change without notice. The opinions do not necessarily correspond to the opinions of Commerzbank. Commerzbank does not have an obligation to update, modify or amend this document or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. The past performance of financial instruments is not indicative of future results. No assurance can be given that any financial instrument or issuer described herein would yield favourable investment results. Any forecasts or price targets shown for companies and/or securities discussed in this document may not be achieved due to multiple risk factors including without limitation market volatility, sector volatility, corporate actions, the unavailability of complete and accurate information and/or the subsequent transpiration that underlying assumptions made by Commerzbank or by other sources relied upon in the document were inapposite. Neither Commerzbank nor any of its respective directors, officers or employees accepts any responsibility or liability whatsoever for any expense, loss or damages arising out of or in any way connected with the use of all or any part of this document. Commerzbank may provide hyperlinks to websites of entities mentioned in this document, however the inclusion of a link does not imply that Commerzbank endorses, recommends or approves any material on the linked page or accessible from it. Commerzbank does not accept responsibility whatsoever for any such material, nor for any consequences of its use.

EM Research ‌ Outlook Presentation

49

This document is for the use of the addressees only and may not be reproduced, redistributed or passed on to any other person or published, in whole or in part, for any purpose, without the prior, written consent of Commerzbank. The manner of distributing this document may be restricted by law or regulation in certain countries, including the United States. Persons into whose possession this document may come are required to inform themselves about and to observe such restrictions. By accepting this document, a recipient hereof agrees to be bound by the foregoing limitations. Additional notes to readers in the following countries: Germany: Commerzbank AG is registered in the Commercial Register at Amtsgericht Frankfurt under the number HRB 32000. Commerzbank AG is supervised by the German regulator Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), Lurgiallee 12, 60439 Frankfurt am Main, Germany. United Kingdom: This document has been issued or approved for issue in the United Kingdom by Commerzbank AG London Branch. Commerzbank AG, London Branch is authorised by Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and subject to limited regulation by the Financial Services Authority. Details on the extent of our regulation by the Financial Services Authority are available from us on request. This document is directed exclusively to eligible counterparties and professional clients. It is not directed to retail clients. No persons other than an eligible counterparty or a professional client should read or rely on any information in this document. Commerzbank AG, London Branch does not deal for or advise or otherwise offer any investment services to retail clients. United States: Commerzbank Capital Markets Corporation (“CCMC”): This document has been approved for distribution in the US under applicable US law by CCMC, a wholly owned subsidiary of Commerzbank and a US registered broker-dealer. Any transaction by US persons must be effected with CCMC. Under applicable US law; information regarding clients of CCMC may be distributed to other companies within the Commerzbank group. Dresdner Kleinwort Securities LLC: Where this document has been approved for distribution in the US, such distribution is by either: (i) Dresdner Kleinwort Securities LLC; or (ii) other Commerzbank companies to US Institutional Investors and Major US Institutional Investors only; or (iii) if the document relates to non-US exchange traded futures, Dresdner Kleinwort Limited. Dresdner Kleinwort Securities LLC, or in case (iii) Dresdner Kleinwort Limited, accepts responsibility for this document in the US. Any US persons wishing to effect a transaction through Commerzbank group (a) in any security mentioned in this document may only do so through Dresdner Kleinwort Securities LLC, telephone: (+1 212) 429 2000; or (b) in a non-US exchange traded future may only do so through Dresdner Kleinwort Limited, telephone: (+ 11 44) 20 7623 8000; or (c) in a banking product may only do so through Commerzbank AG New York Branch, telephone (+1 212) 969 2700. European Economic Area: Where this document has been produced by a legal entity outside of the EEA, the document has been re-issued by Commerzbank AG, London Branch for distribution into the EEA. Singapore: This document is being distributed for Commerzbank in Singapore by Commerzbank AG, Singapore Branch purely as a resource and for general informational purposes only, and is intended for general circulation. Accordingly, this research document does not take into account the specific investment objectives, financial situation, or needs of any particular person and is exempted from the same by Regulation 34 of the Financial Advisers Regulations ("FAR") (as required under Section 27 of the Financial Advisers Act (Cap. 110) of Singapore ("FAA")). Hong Kong: This document is being distributed in Hong Kong by Commerzbank AG, London Branch. Unless permitted to do so by the securities laws of Hong Kong, no person may issue or have in its possession for the purposes of issue this document, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong, other than with respect to the securities referred to in this document which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571) of Hong Kong and any rules made thereunder, and to persons whose ordinary business is to buy and sell shares or debentures. Japan: Commerzbank AG, Tokyo Branch is responsible for the distribution of Research in Japan. Commerzbank AG, Tokyo Branch is regulated by the Japanese Financial Services Agency (FSA). Australia: Commerzbank AG does not hold an Australian financial services licence. This document is being distributed in Australia to wholesale customers pursuant to an Australian financial services licence exemption for Commerzbank AG under Class Order 04/1313. Commerzbank AG is regulated by Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) under the laws of Germany which differ from Australian laws. © Commerzbank AG 2009. All rights reserved. Version 9.09
Comm erzbank Cor porates & Markets Frankfurt Commerzbank AG DLZ - Gebäude 2, H ändlerhaus Mainzer Landstraße 153 60327 Frankfurt Lon don Commerzbank AG London Branc h PO BOX 52715 30 Gresham Street London, EC2P 2XY Tel: + 44 207 623 8000 New York Commerzbank Capital Markets C orp. 2 World Financial Center, 31 st floor, New York , NY 10020-1050 Tel: + 1 212 703 4000 Fax: + 1 212 703 4201

EM Research ‌ Outlook Presentation

50


								
To top