BT Monthly Markets Chart Pack � January 2009 by mrbelding

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									BT Monthly Markets Chart
Pack – January 2009

An overview of movements in global financial markets
 Global share markets finished weaker in the first
 month of 2009...


 Global share markets got off to a rocky start in 2009,
  with all the major indices taking a hit in January amid further
  evidence that the world economy is undergoing a significant
  slowdown. In the US, the benchmark S&P 500 Index fell
  8.6% while markets in Europe (-8.7%), the UK (-6.4%) and
  Japan (-9.8%) also closed significantly in the red.

 The Australian share market fell for the fifth month in a
  row in January, with the S&P/ASX 200 Accumulation Index
  closing 4.9% lower amid rising unemployment and concerns
  that the economy is headed for its first recession since
  1991.




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…but continue to perform well over the long-term,
despite some major market events
Impact of major market events on global shares since 1986

    6,200
                                                                                    Jul 01
                                                                                    Tech Wreck                 Jun 07
    5,700                                                                                                      US Sub-prime
                                                                                                               Crisis
    5,200
                                                                                            Sep 01
                                                               Jul 98
    4,700                                                      Russian Bond
                                                                                            Attack on
                                                                                            Twin Towers
                                                               Crisis
    4,200

    3,700                                               Aug 97
                                                        Asian Currency
                                                        Crisis
    3,200             Nov 89
                      Fall of the
    2,700             Berlin Wall          Feb 94                                      Mar 03
                                           Bond Market Crash                           Troops enter
            Oct 87
    2,200   Wall Street        Jan 91                                                  Iraq
            crash              Gulf War
    1,700

    1,200

     700
       Jan-87      Jan-89      Jan-91     Jan-93   Jan-95      Jan-97    Jan-99   Jan-01   Jan-03     Jan-05    Jan-07    Jan-09

Global shares measured by the MSCI World ex-Australia (net dividends) Index in A$.
Source: BT Financial Group, MSCI


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The Australian share market closed 4.9% lower in
January
S&P/ASX 200 Accumulation Index – year to 31 January 2008

    39,000

    37,000

    35,000

    33,000

    31,000

    29,000

    27,000

    25,000

    23,000

    21,000
       31/01/2008     31/03/2008      31/05/2008   31/07/2008   30/09/2008   30/11/2008   31/01/2009

Source: BT Financial Group, Premium Data



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Key Australian economic news – January

 The Reserve Bank of Australia cut interest rates by a full 1.00% at its February
  meeting, taking the official cash rate to just 3.25% - it’s lowest level since early
  1964.

 The Westpac/Melbourne Institute’s consumer confidence survey fell by 2.2% in
  January to be 12.8% lower for the year.

 The unemployment rate moved slightly higher again in December, this time to
  4.5% (was 4.4% in November).

 After falling 12% in November, newspaper job advertisements fell even further in
  December, this time by 13.9%. It was the third consecutive month in which
  newspaper job advertisements have fallen by more than 10%.

 Australia’s trade balance came in below market expectations in November,
  narrowing to A$1.45bn on the back of falling exports.

Source: BT Financial Group



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The Australian dollar loses ground against all the
major currencies

 The Australian dollar (A$) fell 10% against the US dollar (US$) in January, giving
  up all of last month’s gains as weaker commodity prices and a resurgent US$
  combined to push our own currency lower. Since its high of US$0.9849 cents
  back in July last year, the A$ has now fallen 36% against the US$ and it’s
  difficult to imagine any sort of sustained recovery in the near-term if global
  growth remains weak and commodity prices continue to trend lower.

 At the end of January:

             A$1 bought             US$0.6347         -10.1%

                                    €0.4971           -1.8%

                                    ¥57.07            -11.0%


Source: BT Financial Group



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The Australian dollar versus the US dollar…

Currency markets – A$ per US dollar

     0.9900
     0.9600
     0.9300
     0.9000
     0.8700
     0.8400
     0.8100
     0.7800
     0.7500
     0.7200
     0.6900
     0.6600
     0.6300
          Jan-04     Jul-04   Jan-05    Jul-05   Jan-06   Jul-06   Jan-07   Jul-07   Jan-08   Jul-08   Jan-09

Source: BT Financial Group. Figures at 31 January 2009



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the Euro…

Currency markets – A$ per Euro

     0.6550

     0.6400

     0.6250

     0.6100

     0.5950

     0.5800

     0.5650

     0.5500

     0.5350

     0.5200

     0.5050

     0.4900
          Jan-04    Jul-04    Jan-05    Jul-05   Jan-06   Jul-06   Jan-07   Jul-07   Jan-08   Jul-08   Jan-09
Source: BT Financial Group. Figures at 31 January 2009



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and the Yen

Currency markets – A$ per Yen

     110

     105
     100
      95

      90

      85

      80

      75
      70
      65

      60
      55
       Jan-04     Jul-04    Jan-05    Jul-05   Jan-06    Jul-06   Jan-07   Jul-07   Jan-08   Jul-08   Jan-09


Source: BT Financial Group. Figures at 31 January 2009



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Official world interest rate movements – January

 Both the European Central Bank and the Bank of England cut their official
  interest rates in January while the US Federal Reserve and the Bank of Japan
  left their rates on hold. Here in Australia, the Reserve Bank cut the official
  cash rate by 1.00% at its early February meeting.
                                                              Direction of
                                Current rate   Last moved     last move
               Australia        3.25%          Feb 2009
               US               0% - 0.25%     Dec 2008
               Europe (ECB)     2.00%          Jan 2009
               Japan            0.10%          Dec 2008
               United Kingdom   1.50%          Jan 2009




Source: BT Financial Group



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Global share market returns

31 January 2009

                                    1 year   3 years (pa)   5 years (pa)
        Global
        S&P 500 Index (US)         -40.09%      -13.59%          -6.10%
        Nasdaq (US Tech.)          -38.22%      -13.81%          -6.50%
        Nikkei 225 (Japan)         -41.19%      -21.70%          -5.81%
        Hang Seng (Hong Kong)      -43.39%        -5.54%         -0.02%
        DAX (Germany)              -36.68%        -8.56%         1.34%
        CAC (France)               -38.93%      -15.61%          -3.95%
        FTSE 100 (UK)              -29.43%      -10.36%          -1.12%
        Australia
        S&P/ASX 200 Accum. Ind.    -34.32%        -6.56%         6.00%
        S&P/ASX Small Ordinaries   -47.86%      -12.24%          1.20%
        S&P/ASX 300 Listed Prop.   -52.85%      -20.52%          -5.92%

Source: BT Financial Group



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Short-term asset class performance
1-year rolling returns to 31 January 2009 (%)                                                                                Best performing
                                                                                                                             asset class for the
                                                                                                                             year



                2009     2008     2007    2006    2005    2004    2003     2002     2001    2000     1999    1998    1997    1996    1995     1994

Australian
                 7.39     6.78     6.09    5.77    5.62    4.95    4.82     5.05     6.32    5.09     5.13    5.54    7.45    7.96    5.66     5.30
cash

Australian
                15.16     4.24     3.45    5.91    7.23    2.44    9.20     3.94    14.02    -1.09    8.86   12.72   11.29   20.10    -6.19   16.06
bonds

Australian
                -52.85   -23.30   38.86   10.62   32.67    8.75   13.86    15.18    20.12    -6.51   12.91   27.10   10.63   20.93   -10.48   32.61
property

Australian
shares          -34.70    1.53    22.50   25.02   30.79   15.95   -11.28    7.28    11.94   15.72    10.84   13.45   10.86   29.98   -17.58   52.18

International
                 6.64     8.51     4.42    5.59    8.99    6.83   11.64     7.56    11.50    -1.10    9.95   11.27    9.09   19.82    -1.53   12.41
bonds

International
                -17.28   -14.01   13.41   19.71    7.96    7.33   -31.04   -14.50    8.97   13.65    35.12   31.07   10.29   26.91    -8.68   23.84
shares




Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property
Index, UBS Composite 0+ years index, Barclays Capital Global Aggregate Bond Index hedged to $A



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Short-term asset class performance (cont’d)
1-year returns to 31 January 2009 (%)
                                                                                                   31 January 2008
                                                                                                   31 January 2009


                                                                                                  4.2
Australian bonds
                                                                                                               15.2

                                                            -23.3
Listed property
                           -52.9

Australian shares                                                                              1.5
                                               -34.7

Global bonds                                                                                           8.5
                                                                                                     6.6

Global shares                                                          -14.0
                                                                    -17.3

Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property
Index, UBS Composite 0+ years index, Barclays Capital Global Aggregate Bond Index hedged to $A



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 Long-term asset class performance
 31 January 2009
$24,000
                                                                                         Australian shares
$22,500
$21,000
$19,500
$18,000                                                                             Listed property
$16,500
$15,000                                                        Global shares Australian bonds
$13,500
$12,000
$10,500
 $9,000
 $7,500                                                                                                              Cash
 $6,000
 $4,500
 $3,000
 $1,500
     $0
        84 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
 Note: Accumulated returns based on $1,000 invested in December 1984
 Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property
 Index, UBS Composite 0+ years index, UBS Bank Bill 0+ years



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Oil prices fell for the seventh consecutive month in
January amid rising stockpiles and weaker demand
Oil prices – US$ per barrel

     $150

     $135

     $120

     $105

      $90

      $75

      $60

      $45

      $30

      $15

        $0
             88   89   90   91   92   93   94   95   96   97   98   99   00   01   02   03   04   05   06   07   08


Source: BT Financial Group. West Texas Intermediate oil price at 31 January 2009



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Summary

    There is mounting evidence that the Australian economy is on the brink of its
     first since recession since 1991, particularly with unemployment now at its
     highest level in almost two years. That said, the Rudd government has shown
     that it’s ready to act by way of additional stimulus measures should economic
     conditions continue to deteriorate.

    In terms of interest rates, it would seem that inflation is no longer as much of a
     concern as it was last year for the RBA, meaning the Bank has some scope to
     cut the official cash rate even further in the coming months should the need
     arise.

    With global growth set to slow even further and with commodity prices likely to
     remain under pressure in the months ahead, it’s hard to see a sustained
     recovery in the Australian dollar in the near-term.

    Gains in global share markets, including here in Australia, are likely to remain
     under pressure in the near-term, particularly as global growth continues to slow
     down.

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