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The report is published by ANZ Wealth Management Asia. All charts and tables are individually sourced. "ANZ analysts" refer to investment professionals within the ANZ Regional Investment Committee, ANZ Economcis & Markets Research and ANZ Wealth Management Asia. For more information, please contact your ANZ Relationship Manager.

In this issue

Spotlight: Bonds for diversification

Equities: On the sidelines, for now

Fixed Income: Stay with quality corporates

Currencies: Asia in favour

Commodities: Gold forecasts upgraded

Markets MonthlyMagazine I September 2011

Risk Warning Statement : Investment involves risks. Past performance is not indicative of future performance. Investors should not make an investment decision based solely on this document


Spotlight

Bonds for diversification

The threat of a recession in developed markets has resulted in stretched bond prices. Despite this, ANZ analysts believe that investors should continue to seek out the diversification benefits from fixed income assets.

Over the past few months, ANZ analysts have extolled the benefits of diversification and encouraged investors to consider broadening their exposure across a range of equity sectors and regions. However, as the global financial crisis in 2008/2009 clearly demonstrated, the correlation between regional equity markets tends to rise during periods of market stress.

As a result, equity diversification is often less effective just when it is most needed. Commodity markets, which have been subject to a high level of speculative activity over the past few years, have also shown an increased correlation to equity markets when volatility rises, with the exception of gold.

Fixed Income returns

On the other hand, fixed income assets have been able to weather equity market gyrations. The chart below shows the calendar year returns of the Citi Broad Investment Grade Index, Citigroup High Yield Bond Index and the MSCI World Index since 2000. Notably, even during bear markets, high quality fixed income assets have been able to muster positive returns. In fact, global investment grade bonds have returned 7% p.a. on average over the last three years.

The same cannot be said of the high yield sector. The chart shows that the returns from high yield bond sector track those of the equity market more closely. Therefore, while it is tempting for investors to extract more returns from their fixed income assets by reducing quality or extending duration, the risk-return trade off for such investments is less attractive during volatile periods.

Be selectiveDespite the benefits, investors should take care navigating today’s fixed income universe. The high level of public indebtedness in the advanced economies means that sovereign bonds are no longer the safe havens they once were. The IMF estimates that by 2016, the amount owed by US, Japan, eurozone and UK will total about US$41tr, up from US$18tr in 2007, and account for over 80% of total global debt.

Looking ahead, adverse demographics could cause these numbers to balloon further. Given that the solutions to the G3 debt mountain are by no means clear-cut or easy to implement, recent central bank policy initiatives have succeeded in buying time and capping yields but have so far failed to tackle the underlying problems. Over the longer term, a credible fiscal consolidation and/or debt orderly debt restructuring will be required, but such moves increase the threat to economic growth and investor sentiment.

In addition, positive corporate bond rating changes over the past two years should not give rise to complacency. The chart below, showing the upgrade/downgrade ratio resulting from the S&P’s rating actions on the US bond market from 2001 to 2011, suggests that rating downgrades are prevalent during recessionary periods. At a time when economic conditions appear to be on the decline, investors will need to be particularly careful with their bond selection, or else employ the services of a professional bond manager.

Calendar year returns (2000 - 2010)

Source: Bloomberg. ANZ. September 2011. Returns in USD. Past performance is not a guarantee of future returns.

80%

60%

40%

20%

0%

-20%

-40%

-60%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Global EquitiesGlobal High YieldsGlobal Investment Grade Bonds


2 – 3

Source: ANZ Regional Investment Committee, ANZ EMR. As of September 2011.

Asset Classes 6-12 month view 3-6 month (Directional view)

Equities vs Bonds Negative

Global Bonds

Corporate vs Govt Bonds Positive

High Yields vs High Grades Negative

Emerging vs Developed Neutral

Regional Equities

US vs ROW Neutral

UK vs ROW Neutral

Europe vs ROW Highly Negative

Japan vs ROW Negative

Asia ex Jap vs ROW Neutral

AUST/NZ Slightly Negative

Emerging vs Developed Neutral

Alternatives

Gold Neutral

Oil Neutral

After a tumultuous August, the prospect of additional stimulus and seemingly attractive equity valuations has spurred some bargain hunting. However, ANZ analysts warn that this may

simply be a gradual slide down the “slope of hope”, and a sustainable rally in risk assets may still be some time away. Until such time, investors are advised to opt for defensive assets.

Investment Summary

Where are the opportunities?

With sovereign bond yields hovering at historical lows, ANZ analysts currently favour high grade global corporates. Despite the lackluster growth outlook, these bonds are expected to enjoy strong demand from investors faced with low cash rates. In addition, should the macro environment deteriorate further, the potential defensiveness of high quality fixed income offer investors some cushion against falls in their equity holdings. At the same time, investors may want to consider emerging market debt. Asian fixed income in particular has the scope for improving fundamentals, attractive yields and currency appreciation. (See fixed income section).

US Upgrade/Downgrade ratio (2001 - 2011YTD)

Source: Bloomberg. ANZ. September 2011. Past performance is not a guarantee of future returns.

Note: A ratio >1 means that upgrades outpaced downgrades and vice versa.

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD


After nursing declines of 8-10% in August, equity markets appear to have started September on a firmer footing. However, ANZ analysts note that the factors that vexed markets in August have not gone away. We remain cautious on the equity markets, but with a view that attractive buying opportunities could emerge in the months ahead.

Multiple equity markets have slipped into bear territory and based on the last 14 bear markets in the US since the 1920s, it would appear that bear markets tend to decline by an average of 39% over a course of 23 months. Sentiment surrounding the typical bear market can also be deemed to comprise of three stages: denial, realisation and finally surrender. Both these measures suggest that there could be further downside to the market.

This is not to say that hopes will not re-surge from time to time, leading to temporary rallies of 10-20%. It is evident from the news that many still cling to the belief that the US economy is not be as bad as earlier believed, or that Europe’s problems can be resolved without too much turmoil. However, ANZ analysts still advocate underweighting risk assets, based on their view that in the near term, the European situation is more likely to deteriorate than improve. Sentiment too is still far from gloomy, and therefore inconsistent with a strong buying opportunity.

The US remains ANZ analysts’ favoured region, although the lingering risk of a recession could result in further downside for the broader market. Nevertheless, while domestic growth is expected to be paltry, the weak USD (see currency section) could continue to boost the competitiveness of US exporters and underpin the earnings of large multinationals. We favour US large cap, high dividend paying stocks, although Asian investors may want to hedge their USD exposure.

The Japanese market is unlikely to escape unscathed as the global economy slows, although the post quakereconstruction process may provide some offset. Following the Swiss National Bank announcement, the JPY’s safe haven status may offer an additional impetus to buy Japanese stocks. The potential for the yen to appreciate also makes Japanese equities relatively defensive, although exporters would bear the brunt of such a trend.

ANZ analysts believe that Europe will continue to underperform as the sovereign debt crisis rumbles on. While valuations look cheap, earnings have been contracting in Germany, France and Switzerland. The downturn in PMIs does not bode well for Europe’s earnings outlook going forward.

EquitiesEquities


Finally, there is danger that Europe could be facing a banking crisis. European banks are increasingly tapping the ECB for funding, and deposits appear to be contracting in the periphery. IMF Chief, Christine Lagard, has also recently highlighted the urgent need to recapitalise European banks. Meanwhile, the political stumbling blocks to greater EFSF empowerment remain large, as does the barriers to greater fiscal integration. It may still be too early to buy European financials or stocks in periphery markets.

ANZ analysts note that emerging markets are not homogenous. Certain markets now appear to offer a lower beta than their developed market counterparts while retaining their growth potential. Therefore, while volatility is not expected to retreat in the months ahead, emerging market equities could benefit disproportionately when the risk on trade resumes.

The Russian market retreated 22% in the first 10 days of August on heavy volumes, before paring back losses to end the month 13.3% lower. The domestic economy continues to tread water, as evidenced by the poor first half results posted by the country’s two major retail companies. The government has recently outlined its plans for spending hikes, mainly increasing pre-election social spending. The increased expenditure is expected to be funded by the privatisation of state owned companies. The privatisation could raise as much as US$158b over six years and be a potential overhang on the market.

On a brighter note, Russia’s inflation is likely to fall within the central bank’s 7% target this year, the lowest since 1991. As a result, the central bank has moved from a tightening policy in 1H11 to a neutral stance. Valuations at around 5.2x forward earnings are also looking inexpensive. We are looking to turn positive on the Russian market in the months ahead.

Beta of selected markets

Source: MSCI. ANZ. Calculated using monthly returns in local currency terms. September 2011.

Beta from 1998Beta from 2008

2.50

2

1.5

1

0.5

0

Russ

ia

Indo

nesi

a

Indi

a

Sing

apor

e

Thai

land

MSC

I Em

ergi

ng M

arke

ts

Taiw

an

Sout

h Ko

rea

Braz

il

Chin

a

Hon

g Ko

ng

MSC

I Wor

ld

Phili

ppin

es

Mal

aysi

a


4 – 5


Brazil’s surprise rate cut in September triggered a rally in Brazilian equities. However, despite allowing for the possibility of more rate cuts, we remain cautious amid our belief that Brazil’s economic growth is set to slow materially. The petering out of inflationary pressures may not be surprising given that the service and manufacturing sectors, as well as employment, appears to be contracting. While credit growth is still healthy, delinquency rates are picking up and could weigh on banks’ bottom line despite policy easing.

Following the sharp market correction, Asian equity valuations, especially those in the more cyclical markets such as Taiwan and Korea, appear attractive. However, we remain concerned about the lack of positive catalysts, and the fact that slowing global growth could impact earnings, thus favoring markets with large domestic drivers.

China – We remain slightly positive on Chinese equities. The economy is expected to be more resilient given strong domestic growth drivers. Rising wages, medical care reform, and tax cuts are boosting consumption. Meanwhile, the ambitious public housing investment program will also help uphold investment growth. China’s monetary policy tightening cycle is well advanced and the country can afford policy easing should the global economy fall into a double-dip recession. We look to signs of a peak in inflation for the authorities to signal a change in its monetary policy stance. Hong Kong – We remain neutral on the HK market. A deepening economic downturn and rising inflationary pressures are negatives for the earnings outlook and market. However, we note that earnings have already been revised down significantly and consensus estimates indicate that earnings are now expected to fall by 6.5% in 2012. Nevertheless, given the challenging outlook for the banks and developers, the catalysts for a sustained rally appear limited in the near term.

India – ANZ analysts continue to favour the Indian market. Lower oil prices and a good harvest pave the way for the central bank to relax monetary policy. While economic growth is set to moderate in FY12, the clearing of various legislation, which has stalled investment projects to date, could give the economy a powerful lift over the medium term.

Korea – The Korean market is now trading at a 12M forward PER of 7.7x vs a 5-year average of 10.4x. However, we retain our neutral view on the market for now. The outlook for global growth appears challenging and the key components of the KOSPI, made up largely of automakers, shipbuilders, steel and chemical plays, as well as chip makers, are relatively cyclical.

Singapore – We continue to be neutral on the Singapore market. While valuations are not expensive, we fear that earnings may have further to fall. To date, the downward revision in consensus earnings estimates for Singapore has been less aggressive than the region’s. Going forward, revenues may have peaked for the tourism related and gaming sectors in the current cycle. The outlook for the property and industrial sectors also appear subdued.

Taiwan – We remain neutral on the Taiwan market as it is highly leveraged on the tech sector. Global PC shipments are being revised down and back to school demand in the US was disappointing, resulting in inventory which has to be worked down. In the meantime, DRAM prices continue to trend down, reflecting weak PC demand. Industry players suggest that the DRAM market may continue to struggle for a quarter or two more, before production cuts kick in. The low chip prices could also prompt some increase in chip content for new PCs going forward.

Indonesia – Despite a healthy growth momentum, contained inflation and rising domestic consumption, we remain neutral on the Indonesian market. Valuations look pricey and there appears little room for a slippage in earnings/macro growth or any execution risk pertaining to its investment projects. We also note that analysts have yet to revise earnings down for the Indonesian market. Therefore, on balance, we continue to wait for better opportunities to gain exposure.

ThaiIand – The Thai market has been relatively resilient in the recent sell-off. On the macro front, we would caution investors against harbouring too much hope of a decoupling as the Thai economy is highly trade dependent. See chart. As such, we are somewhat disturbed by the lack of downward earnings revisions in the Thai market to date. Meanwhile, valuations are not cheap when compared to its regional peers.

Market 6-12 month view

China Slightly Positive

Hong Kong Neutral

India Slightly Positive

Indonesia Neutral

Korea Neutral

Singapore Neutral

Taiwan Neutral

Thailand Neutral

Source: ANZ Regional Investment Committee. September 2011.


A perfect storm comprising fresh eurozone woes, the slowdown in global growth and the US debt ceiling fiasco/downgrade had caused select government bond yields to fall to historical lows. Despite stretched bond valuations, bond yields are likely to stay low, underpinned by flight-to-quality flows.

The Fed’s pledge to keep rates low until at least 2013 (assuming the economy does not turn around) does not imply that long term US bond yields will head doggedly towards the 1.50% level. Japan’s experience suggests that relatively wide ranges are still possible, despite the prevailing longer term downtrend. For example, 10-year Japanese Government Bonds have ranged within a 50bp band since 2003. See chart.

Fixed Income

Sell offs can be expected therefore, but investors with little or no bond exposure may want to view these episodes as opportunities to diversify their portfolios. ANZ analysts continue to favour a defensive stance, preferring high quality corporates over sovereigns and high yields. Unlike equities, corporate bonds do not need strong growth to outperform. In fact, sub-standard growth is likely to put management in a cautious mood, thus keeping cash levels high and leverage low. In the event of even weaker growth expectations, high grade corporates are likely to outperform high yields.

As with other quality bond markets, Australian and New Zealand fixed income have participated in the recent rally. Yields, particularly in the case of Australia, are flirting with 50-year lows, based on average yields of the UBS Australia Composite Bond Index.


10-year Japanese government bond yield % (Aug 2006 - Aug 2011)

Source: Bloomberg. ANZ. Sep 2011. Past performance is not a guarantee of future returns.

2.0

1.8

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0.0

Aug 06 Aug 07 Aug 08 Aug 09 Aug 10 Aug 11

That said, against the negative real returns offered by other global bond markets, sub-5% yields may still be appealing. In addition, the continued diversification of central bank reserves into AA and AAA bond markets will likely to benefit the Australian and NZ bond markets. Notably, the Bank of Russia is the latest central bank to announce its intention to start diversifying into Australian-dollar denominated assets.

Investors looking for higher yield may want to consider high quality emerging market bonds. Not only do these markets have stronger government balance sheets, EM central banks have more scope than their developed market counterparts to cut rates as was demonstrated by Brazil recently. Over in Asia, despite still-elevated inflation pressures, interest rates appear to be largely on hold.

The S&P’s downgrade of US debt to AA and Moody’s downgrade of Japan to Aa3 were the latest in a series of recent moves highlighting the divergent trends in sovereign creditworthiness between the advanced and emerging economies. The Czech Republic, for example, saw its ratings upgraded by two notches while Brazil was put on review for a credit upgrade. Emerging market bond fundamentals are clearly improving, and offer investors not just attractive yields but also the potential currency gains. (See currency section for Asian currency views).

Given their defensive mindset, ANZ’s fixed income analysts in Asia prefer to stay with high quality corporate names and perpetuals in Hong Kong, rather than reach for yield in the high yield Chinese real estate sector. While Chinese property sales have remained surprisingly resilient to date, and the larger companies have reasonable cash flow positions, there is concern that a default affecting one of China’s smaller players could hurt valuations in the entire sector.

Over in South East Asia, the Indonesian coal issues appear reasonably attractive. Even if coal prices were to fall, reflecting a deteriorating macro environment, stronger coal prices earlier in the year have already helped these companies to de-lever and restore balance sheets. Finally, recent issuances by higher quality multinationals in the dim sum bond market are signs of continued interest in these offshore bonds market. Selective names offer reasonable yields, low default risk and the potential for RMB appreciation.

10-yr JGB yieldBoJ cash rate


The growing presence of commodity investment funds suggest that sentiment swings could play a bigger role in price direction, even if the longer term fundamentals remain intact. As such, exchange traded base metal and energy markets are likely to be more vulnerable than the part-contract based bulk markets, while softs will continue to be driven by demand and supply factors.

Commodities

6 – 7


The outlook for base metals is expected to be volatile in the coming months, tossed about by global macro data. While ANZ analysts have downgraded their short term forecasts, they note that beyond the near term, still-robust demand from Asia could help offset the weaker demand from Europe and US. Notably, China’s relatively stable activity indicators are easing concerns of a hard landing, and helping put a floor on base metal prices. At the same time, copper prices may continue to be supported by tight supplies amid reports of strike actions at large mines and a sharp fall in output. Nevertheless, overall sentiment towards base metals is likely to remain under pressure until the economic environment stabilises.

The outlook for the bulks is mixed. Supply remains tight in the iron ore and coking coal markets while demand appears buoyant, boosted by strong demand from Chinese steel makers. However, there are concerns that Chinese steel producers’ weak profitability could limit their appetite for higher raw material prices. As for thermal coal, ample supply suggests that prices may only move higher towards the end of the year, when stronger seasonal demand returns.

ANZ analysts expect soft commodities to move relatively independently of broader growth and liquidity trends, being affected more by demand and supply factors. In the latest USDA (United States Department of Agriculture) WASDE (World Agricultural Supply and Demand Estimates) report, US cotton production was raised, against market expectations. However, the outlook for corn, soybean and wheat prices appears brighter on the back of a combination of production cuts, lower yields and smaller acreage for planting.

Closer to home, Malaysia’s palm oil production has only been getting stronger since March this year. This could lead to rising inventory levels, unless a sufficient price discount relative to other vegoils is in place to stimulate demand. ANZ analysts caution that palm oil’s previously attractive price discount to soybean has narrowed considerably.

Gold’s mid August stumble was a blemish on its relentless three-year rise, although prices have almost fully recovered at the point of writing. Despite this, ANZ analysts remain positive on gold, having recently upgraded their peak forecasts to US$2150/oz by Sep 2012.

Although future bouts of profit taking cannot be ruled out, the risk reward trade off for gold is likely to remain attractive for as long as policymakers are deemed to be ineffective. Under the current uncertain financial market conditions, the unusual lack of support for the US dollar is also likely to continue to channel safe haven flows into gold. More recently, Ben Bernanke’s pledge to keep interest rates low until mid 2013 served to reaffirm our bearish view of the dollar and positive assessment of the precious metal. Gold is not expected to experience headwinds until late 2012 or 2013, when an increased focus on the US QE exit strategy and the onset of higher interest rates may test investors’ appetite for gold.

As for oil, prices were volatile in August, reflecting the downgrade in global economic growth forecasts as well as initial expectations that a regime change in Libya could help restore oil exports. Libya’s oil output has dwindled to 50,000bbls/day compared to a pre-war production level of 1.6m bbls/day, but ANZ analysts believe that any ramp up is likely to be gradual, given the damage to a number of oil export terminals. Even assuming the oil infrastructure can be quickly restored, it is still unclear how effectively peace can be policed after the fall of Tripoli.

ANZ analysts see oil prices trending up over the medium term and see WTI averaging US$107.5/bbl by March 2012. Coupled with tight supply is the emerging market demand for oil, particularly from China and India, which is expected to remain resilient going into 2012. To date, China’s and India’s purchasing manager indices have remained above the expansionary threshold of 50.

Going forward, OPEC is said to be keen for oil prices to stay at around current levels. This is to help fund the large social spending packages that have been implemented and any slowdown in global demand for oil is therefore likely to be offset by introducing production cuts.

Returns of selected commodity segments (Aug 2011)

Source: Bloomberg. ANZ. * CRB All Commodities Index. Sep 2011. Past performance is not a guarantee of future returns.

15%

10%

5%

0%

-5%

-10%

Metals

-7.7%

Oils

-7.2%

BroadCommodities*

-1.8%

Agriculture Gold

9.4%

12.3%


The USD, having been shunned as a safe haven destination, has recently benefitted from the Swiss National Bank’s surprising decision to put a floor to EURCHF at 1.20. With investors wary of BoJ intervention, and the NOK and SEK too small to absorb safe haven flows, the USD has been the most liquid market to run to in times of stress. However, ANZ analysts believe that over the longer term, the structural USD weakness story remains intact.

On the other hand, should the ECB changes tack and cut rates, then EURUSD could come under considerable downward pressure. Coupled with further sovereign concerns, it would not be surprising to see EURUSD heading towards the sub 1.30 levels. However, should European policymakers take bold concrete action, the EUR could then potentially benefit. The departures of Stark and Axel Weber could be positive for the common currency if it removes the obstacles to further ECB action. In this scenario, USD debasement could continue.

Currencies

ANZ analysts expect the AUD to trend higher (a non-consensus view). This is partly driven by their bleak outlook for the USD but the AUD could also benefit from increased US liquidity if the two day FOMC meeting in September results in further monetary. Additionally, in a world of sustained low yields, the AUD’s attractive carry should continue to be attractive to investors.

Recent domestic data has highlighted the softness in parts of the Australian economy. However, we expect Australia’s growth to be supported by strong mining investment in 2012 and for the RBA to remain on the sidelines. In addition, rate cuts of 125bp by April 2012 are currently being priced in the market, and the AUD may find further support if these expectations which are gradually unwound. The AUDUSD is forecast to trend to 1.12 by March 2012.

While the NZ economy is not immune to a global slowdown, still-elevated commodity prices and the boost from the Rugby World Cup, estimated to amount to 1% of GDP, are likely to help the NZ economy outperform its global peers. This accelerating economic momentum and elevated

inflationary pressures are expected to cause the RBNZ to hike in December. That said, global concerns are likely to dominate positive domestic fundamentals in the near term, and the current wave of risk aversion will need to subside before the NZD can be re-rated. On balance, ANZ analysts are positive on the kiwi with an-end March 2012 forecast of 0.92.

Barring a sustained recession in the US or Europe, ANZ analysts expect any repatriation flows away from Asia to be modest. Compared to 2008, Asian fundamentals are in better shape and with elevated inflation readings, Asian central banks are likely to be more tolerant of further currency strength. The minimum EURCHF rate could also result in select Asian currencies becoming safe haven currencies of choice. We favour the CNY, SGD and IDR, as well as INR from a shorter term tactical perspective.

CNY –Notwithstanding the ongoing contraction in the HSBC’s China manufacturing PMI, ANZ analysts believe that China’s growth outlook remains robust amid still simulative monetary and fiscal policy settings. The Chinese authorities are also likely to stay focused on its battle against inflation, potentially allowing greater currency appreciation. We see USDCNY reaching 6.30 by Dec 2011.

INR – Besides having an attractive yield - the RBI repo rate currently stands at 8% - ANZ analysts believe that the rupee has yet to fully reflect the benefits accrued from lower oil prices, such as an improved fiscal and current account position. As such, ANZ analysts see the USDINR averaging 42.9 by year end.

IDR – While Indonesia’s upgrade to investment grade (IG) status by two rating agencies is widely expected within the next twelve months, investors with “IG” only mandates are unable to act on this view before the fact. Therefore, there is still scope for the currency to appreciate on the back of further domestic bond demand. We see the USDIDR trading around 8200 by Dec 2011. SGD – ANZ analysts believe that the SGD offers safe haven appeal. Similar to Switzerland and Japan, Singapore enjoys a current account surplus, which is a positive during periods of financial market stress. In addition, the Monetary Authority of Singapore’s reputation as a country with a low threshold for inflation, stellar fiscal position and ample reserves are all expected to help underpin the currency. We expect the USDSGD to reach new lows, with a year end target of 1.18.

TWD – While Taiwan may benefit from its close economic ties to China, it is likely to be affected by weaker G2 activity. In the meantime, moderating inflation offers the central bank room to put rates on hold. Against this backdrop, the USDTWD is expected to appreciate only modestly to 28.4 by year end.

Source: OECD. ANZ. September 2011

US & EU public debt (% of GDP)

110

100

90

80

70

60

50

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2010

EUUS


Currencies Level 1-mth chg YTD chg

USD-JPY 76.66 0.1% 5.5%

EUR-USD 1.44 -0.2% 7.4%

AUD-USD 1.07 -2.6% 4.6%

USD-SGD 1.20 0.0% 6.2%

NZD-USD 0.85 -2.9% 9.5%

GBP-USD 1.63 -1.1% 4.1%

USD-CAD 0.98 -2.4% 2.0%

USD-TWD 29.01 -0.5% 1.0%

USD-IDR 8534.00 -0.4% 5.1%

USD-INR 46.10 -4.3% -3.1%

USD-KRW 1066.77 -1.2% 5.3%

Country Equity Markets YTD 1-Yr 3-Yr

ASX 200 -9.5% -2.4% -16.3%

FTSE 100 -8.6% 3.2% -4.3%

Hang Seng -10.9% 0.0% -3.4%

India Sensex -18.7% -7.2% 14.5%

Jakarta Comp 3.7% 24.7% 77.4%

Korea KOSPI -8.3% 7.9% 27.5%

Malaysia KLCI -4.7% 1.7% 31.5%

Nikkei 225 -12.5% 1.5% -31.5%

S&P 500 -3.1% 16.2% -5.0%

Shanghai-A -8.6% -2.7% 7.1%

Singapore ST -9.6% -2.2% 5.3%

Taiwan Weighted -13.7% 1.6% 9.9%

Regional Equity Markets YTD 1-Yr 3-Yr

MSCI World -6.1% 11.3% -8.0%

MSCI Europe -7.6% 6.7% -20.2%

MSCI BRIC -13.1% -1.1% -4.7%

MSCI Emerging Market -10.3% 6.5% 8.0%

MSCAP ex Japan -8.4% 9.4% 12.5%

Fixed Income Yield 1-mth chg YTD chg

Aust Govt (10Y) 4.37 -43 -117

Bunds (10Y) 2.22 -32 -74

Gilts (10Y) 2.60 -26 -79

JGB (10Y) 1.03 -5 -9

NZ Govt (10Y) 4.52 -41 -135

SG Govt (10Y) 1.64 -42 -107

US Trsy (2Y) 0.20 -16 -39

US Trsy (10Y) 2.22 -57 -107

Base Metals (US$/lb) Dec-11 Mar-12 Jun-12

Aluminium 1.13 1.15 1.12

Copper 4.24 4.45 4.53

Nickel 10.63 10.98 11.25

Zinc 1.05 1.07 1.08

Lead 1.08 1.11 1.11

Tin 11.25 11.75 12.15

Precious Metals (US$/oz) Dec-11 Mar-12 Jun-12

Gold 1900 1970 2100

Platinum 2025 2150 2275

Palladium 868 933 1005

Silver 41.8 43.3 44.8

Energy (US$/bbl) Dec-11 Mar-12 Jun-12

WTI Nymex 102.5 107.5 110.5

Commodities Level 1-mth chg YTD chg

Aluminium 2469 -5.9% 0.0%

Copper 9275 -5.6% -3.4%

Gold 1829 12.3% 28.7%

Lead 2580 -1.3% 1.2%

Nickel 22200 -11.2% -10.3%

WTI Oil 89 -7.2% -2.8%

Zinc 2292 -8.0% -6.6%

Currencies Dec-11 Mar-12 Jun-12

USD-JPY 75 75 72

EUR-USD 1.5 1.52 1.52

GBP-USD 1.65 1.68 1.68

AUD-USD 1.12 1.12 1.12

USD-CAD 1.01 0.98 0.96

NZD-USD 0.91 0.92 0.93

USD-SGD 1.18 1.17 1.15

USD-TWD 28.4 28.1 27.8

USD-IDR 8200 7900 7700

USD-INR 42.9 41.8 40.6

USD-KRW 1020 990 970

Returns

Forecasts

Source: Bloomberg. As of 31 August 2011. .

8 – 9

Source: ANZ Economics & Markets Research. As of 30 August 2011. Forecasts are quarterly averages. .


Terms and Conditions

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