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30-Apr-09 THE LONG VIEW

Equity markets soared again yesterday giving “a long view” to the recent equity rally. As for yesterday, on the one hand, U.S.
markets cheered the FOMC statement that concluded the recession and financial markets conditions has somewhat eased. On the other
hand, they were upbeat after U.S. Q1 GDP data showed that inventories were on a sharp downside trend from historically high levels (as
the confirmation of the beginning of a recovery), despite the fact that this contraction of inventories had a strong negative impact on GDP
growth (see below). On the longer term, markets find support in 1) surprisingly solid earnings as Q1 earnings have on the whole been
better than expected, leading to a surge in upgrades 2) a strong recovery of the financial sector as the London G20 (04/02) finally meant
that the mark to market valuation of toxic assets will be progressively abandoned 3) strong upgrades of China GDP estimates (strong loan
growth, low interest rates, large government infrastructure projects, returning momentum in the residential property market…) 4) massive
fiscal stimuli and monetary easing worldwide 5) still low commodity prices, mainly oil.
US real GDP advanced data for Q1 did not affect equity markets at all, despite the fact that GDP contracted by a bigger than
expected 6.1 % QoQ annualized (4.7 % expected) after -6.3 % in Q4 08 and -0.5 % in Q3. The real GDP is now at -2.6 % YoY.
Government spending surprisingly fell 3.9 % QoQ annualized (vs. +1.3 % in Q4), with a contribution of -0.81 % in the overall data, while
most economists anticipated a large increase in spending to support the economy. Aside from that drop in government spending, the
news in the GDP report was actually a little bit better than expected. In particular, consumption (70 % of the GDP) increased by a much
bigger than expected 2.2% in Q1 (with a contribution of +1.50 % in the overall data), helped by a healthy 6.2% jump in real disposable
income. The core PCE deflator rose 1.5 % QoQ annualized vs. +0.9 %. The private investment figures were very bad (Gross Private
Investment -51.8 % vs -23 % in Q3), but the monthly data had already prepared us for that. Business investment plummeted by 37.9% (-
44.2 % for structures, -33.8 % for equipment & software) and residential investment fell by 38.0%. What started out as a housing-led
downturn that would hit consumption hardest is now clearly having a much bigger impact on businesses. A sharp decline in inventories
subtracted 2.8% from Q1 GDP (with a contribution of -2.79 %), which was more than enough to offset a 2.0% positive contribution from
net external trade. Imports fell by 34.1%, outpacing exports, which fell by 30.0%.
The FOMC statement helped the markets by indicating that growth contraction was close to a trough: information received since
the FOMC met in March 18th indicates that the economy has continued to contract, though the pace of contraction appears to be
somewhat slower. Household spending has shown signs of stabilizing but remains constrained by ongoing job losses, lower housing
wealth, and tight credit. Weak sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories, fixed
investment, and staffing. Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of
financial market conditions, economic activity is likely to remain weak for a time. The Committee sees some risk that inflation could persist
for a time below rates that best foster economic growth and price stability in the longer term.
On the Quantitative Easing side, the Fed still has a long way to go to fulfil the pledges it has already made to buy $1250bn of
mortgage-backed securities (MBS), $300bn of Treasury securities and $200bn of GSE agency debt. Last week the Fed owned only
$362bn of MBS and $63bn of agency debt and its holding of Treasury securities had increased by only $55bn since it announced it would
begin buying government debt at that last meeting on March 18th. By the time the Fed has finished all of its shopping in the asset markets
and expanded the TALF facility, which provides loans against recently issued asset-backed securities, it will have nearly doubled the
size of its balance sheet again to $4,000bn. The Fed left its key funds rate unchanged at 0% to 0.25%. Not surprisingly, Treasury
yields climbed on the news that the Fed would stand pat, with 10-year yields (3.08 % yesterday) now higher than they were when
the Fed announced it would begin buying government bonds. There is still plenty more quantitative easing in the pipeline and the
Fed would add to that if it saw signs of corporate bond yields and mortgage interest rates rising too much.
After a holiday close yesterday, Japanese stocks rose today (+4.0 % at 06.45 GMT) following the upward move initiated by U.S.
markets. The Japanese March industrial production (+1.6 %) rose more than expected (+0.8 % est.) with the YoY data beginning to
bottom out (-34.2 % vs. -38.4 %). The Bank of Japan held its overnight target rate at 0.10 %.

WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last US
Perf 1d % Europe
ECONOMIC DATA with impact
In the US, watch the Employment Cost Index (ECI) for Q1, expected at +0.5 % QoQ/+2.4 % YoY (13.30 GMT), personal income and
spending for March expected at -0.2 % and -0.1 % MoM with PCE deflator expected flat MoM and +0.2 % “core” (13.30 GMT) and the
Chicago PMI for April (14.45 GMT) expected up (35.0 vs. 31.4). Income and spending data have already been overtaken by the GDP
release. The Chicago PMI may be watched more closely ahead of Friday’s national ISM. Initial Weekly Jobless Claims are expected
unchanged at 640k (13.30GMT).
In the Euro-zone, watch the Unemployment Rate expected up to 8.7 % from 8.5 % in March (10.00 GMT) while the German national
Unemployment Rate for April may have risen to 8.2 % from 8.1 % (08.55 GMT).

POSITIVE IMPACTS
CAP GEMINI : Q1 sales €2.205 bn (2.18bn exp) / Confirmed like-for-like revenues to decline around 2% + operating margin above 6.5%
in the H1 / No guidance for H2
RENAULT : Q1 sales €7.08bn (7.6bn exp) / Revised upward its production expectations for the Q2 (from 31% expected in February to
56%) + confirmed positive FCF in 2009 / Plans real estate sales for €300-400m
TECHNIP : Q1 revenue €1.57bn, in line / Ebitda €191 (174m exp) / Order book €6.93bn / FY outlook confirmed
BASF : Q1 revenue €12.22bn (13.58bn exp) but Ebit ex-items €985m (704m exp) / Does not see any economic recovery + sees
group sales declining in 2009 prompting it to cut 2K jobs in 2009
WACKER CHEMIE : Q1 revenue €873m (843m exp) / Ebit €58.2m (-9m exp) / FCF +71m / Sees 2009 sales substantially down yoy
MERCK : Multiple sclerosis sufferers taking Merck's Cladribine are less likely to become disabled and brain scans show the medicine cuts
the risk of damaging lesions (researchers)
FRESENIUS MED. CARE : Q1 revenue $2.56bn (2.59bn exp) / Ebit $396m (394m exp) / Confirmed FY guidance
FRESENIUS SE : Q1 revenue €3.4bn (3.37bn exp ) / Ebit €477m (479m exp) / Confirmed FY guidance
MAN AG : Q1 revenue €2.6bn (2.32bn exp) / Order intake €2.3bn (2.07bn exp) / Operating €100m (77m exp)
UCB said Q1 update earnings performance in-line with its expectations but revenue declines / Sees 2009 revenue between € 3.1-
3.3bn (3.03bn exp), recurring EBITDA greater than €680 m (640m exp)
ERICSSON : Q1 sales SK49.6bn (50.2bn exp) (Multimedia unit a bit disappointing) / GM 36.3% (35% exp) / Operating SK 1.78bn (2bn
exp) hit by restructuring charges and continued losses at Sony Ericsson / Kept its relatively optimistic view of the infrastructure market
STANDARD LIFE : Q1 New Business Sales £3.36bn, in line / Said capital position “robust” but conditions remain challenging
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30-Apr-09 THE LONG VIEW

BSKYB : Q1 revenue £1.39bn (1.33bn exp) / Ebitda £311m (309m exp) / Added 80,000 net new customers in Q3 (52,000 exp) /
Q3 churn 10.6% (10.8% exp) / Expect conditions to remain challenging
BG GROUP : Q1 operating £1.22bn (1.07bn exp) / Guidance unchanged
BANCO SABADELL Q1 NII €394.6m (€380m expected) / Net Profit €162.1m (€145m exp) / Says non-performing loans end-March
2.82% vs 2.35% End-Dec / Coverage Ratio 96.71%
BANKS : EU states have approved new rules that will force banks to retain 5% of securitised products they originate and sell in a bid to
make markets safer for investors, an EU diplomat said Yesterday.
AXA repeated it has no intention of launching a capital increase & credited the Co's model of two businesses - insurance and asset
management - along with geographical diversity (Les Echos)
NOVO NORDISK : Q1 sales dkk12.5bn in line / Oper pft dkk3.81bn (3.70 exp) / Sees 2009 oper pft up 18% (19% exp) & 2009 sales up
14.5% (15% exp).
ANGLO AMERICAN : Platinium equivalent refined production in line with FY target / balance sheet strengthened / is positioned strongly
to weather economy / Undrawn bank facilities, cash over $9bn.
CADBURY : Q1 underlying operating margin improved / cost savings in line with plan / leaves FY guidance unchanged.

VISA Q2 Revenues $1.65bn ($1.61bn expected) / EPS $0.73 ($0.64 expected) / Co affirmed its financial outlook for 2009 & 2010

NEGATIVE IMPACTS
SAINT-GOBAIN : Q1 revenue €8.78bn (8.71bn exp) thanks to better prices but volume lower than exp. / No guidance for FY but said
the H1 will be extremely challenging / Has not yet seen any concrete evidence that the economic crisis has bottomed out
STM : Q1 revenue $1.66bn ($1.79bn exp) / GM 26.3% (26.6% exp) / EPS loss -$0.62 (-0.35 exp) due restructuring charges at ST-
Ericsson + impairment on stake in Numonyx / Sees Q2 revenue $1.73-1.93bn (1.72bn exp) but on weaker margins (25% vs 27% exp)
INFINEON : Q2 revenue €747m, in line / Ebit loss 150m (-140m exp) / Net loss 258m (-180m exp) / Said that strong improvement for
Q3 revenues is expected but considerable uncertainties regarding the developments in the Q4 remain…
FIAT : Talks between the U.S. Treasury Department and Chrysler lenders aimed at cutting the automaker's debt and keeping it out of
bankruptcy broke down late on Wednesday (WSJ)
AIRLINES-TRAVEL : World Health Organization raised the pandemic threat awareness level to 5, meaning the world is at imminent risk
of a pandemic from H1N1 swine flu
DASSAULT SYSTEMES : Q1 revenue €309.7m (316.5m exp) / Operating margin 13% (20% exp) / Cut 2009 revenue and EPS goals
= Now sees 2009 non-IFRS revenue to fall by 5 to 9% (from a rise by 1-3%) / Sees FY EPS €1.78 to 2 (€2.02-2.12 announced in Feb.)
ERSTE BANK : Q1NII €1.23bn (€1.28bn exp) / Com Income €444.6m (€455m exp) / Risk Provisions €370m (€435m e) / No FY outlook

RESULTS DIVIDENDS EVENTS

AstraZeneca / BASF / BG group / B Sky B / Cap Gemini /
Technip / Scor / Dassault Systemes / Lufhansa / Edison / Allianz (€3.50) / Credit Suisse ( CHF 0.10) /
Today AXA AGM / Deutsche Tel AGM / BASF AGM
Ferrovial / Novo Nordisk / Kellogg / Motorola / Safeway / Danone (€1.20) / Ahold (€0.18)
Eastman Kodak / International Paper
Friday Chevron
Santander (€0,25737) / BASF (€1,95) / Beirsdorf
(€0,70 + 0,20) / Carrefour (€1.08) / Deutsche Tel
Monday Acerinox / Alcatel Lucent / TNT Stress Test Results
(€0.78) / Inditex (€0.55) / Lagardere (€1.30) /
Schneider Electric (€3.45)
Adidas / Alstom / Beiersdorf / Hannover Re / Hypo Real
Tuesday Cap Gem (€1.00) / H&M (SEK 15.50)
Estate / Linde / Metro Group / UBS / Walt Disney
Total / Adecco / BMW / BNP Paribas / Carlsberg / Holcim / Antofagasta ($ 0.48 +0.056) / Baloise (CHF
Wednesday Italcementi / Lafarge / Cisco / Rhodia / Tenaris / Clariant / 4.50) / GDF Suez (€0.80+0.60) / Kingfisher (GBp E.On AGM
Delhaize / Deutsche Post / Prudential 3,777778)
TRADING IDEAS
An eye on Eurostoxx cash index 2358 resistance level and next target 2608.
BUY MUNICH RE / AXA / AEGON / NESTLE / L OREAL / VIVENDI on reversal Head & Shoulder possibility
BUY CARS asDAIMLER / RENAULT / PEUGEOT / VOLKSWAGEN & BUY OIL names as TOTAL / ENI / BP / ROYAL DUTCH on eco recovery
BUY PHILIPS / DANONE / UNILEVER looking good & BUY KPN / AHOLD / GSZ on double bottom possibility / BUY ROCHE on island reversal

BUY TEF / SELL DTE // BUY SIEMENS / SELL ALSTOM // BUY L OREAL / SELL CARREFOUR // BUY MUNICH RE / SELL AXA // BUY AHOLD /
SELL METRO
BROKER METEOROLOGY

MICHELIN .............................RAISED TO HOLD FROM SELL ...................................................................................... BY CITIGROUP

SANOFI ................................RAISED TO OVERWEIGHT FROM NEUTRAL ............................................................... BY JPMORGAN
FRANCE TELECOM .............RAISED TO NEUTRAL FROM UNDERWEIGHT ............................................................ BY JPMORGAN
NORDEA ..............................RAISED TO HOLD FROM SELL ........................................................................... BY DEUTSCHE BANK
BARCLAYS ..........................RAISED TO BUY FROM SELL...................................................................................................... BY RBS

TELEKON AUSTRIA ............CUT TO EQUAL WEIGHT .................................................................................. BY MORGAN STANLEY

LLOYDS ...............................CUT TO SELL FROM HOLD ........................................................................................................ BY RBS
TELEFONICA .......................CUT TO UNDERPERFORM ............................................................................................. BY BERNSTEIN
HSBC ....................................RESUMED SELL .......................................................................................................................... BY RBS

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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30-Apr-09 THE LONG VIEW

CHART OF THE DAY

U.S. GDP and Household consumption
Since 1992
a/a, % a/a, %
5,5 6,0
5,0 5,5
4,5 5,0
4,0 T1 09
4,5
3,5 4,0
3,0 3,5
2,5
3,0
2,0
2,5
1,5
2,0
1,0
1,5
0,5
1,0
0,0
-0,5 0,5
-1,0 0,0
-1,5 -0,5
-2,0 -1,0
-2,5 -1,5
-3,0 -2,0
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

PIB - G - Consommation des ménages - D -

Source : Bloomberg
After dropping of 0.5% (annualized) at the third quarter 2008 and of 6.3% at the fourth quarter, the American GDP dropped again of
6.1% at the first quarter 2009. The drop of the GDP from a year ago ( YoY) reached now -2.6% its lowest level since the third quarter of
1982. Meanwhile the personal consumption which represent 70% of the American GDP rose of 2.2%.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
0.50 GMT Japan Industrial production (preliminary) March 0,8%,-34,7% YoY -9,4%,-38,4% YoY
Japan BoJ target rate April 30 th 0,10% 0,10%
5.00 GMT Japan Vehicle production (YoY) March -56,2% YoY
7.45 GMT France Producer prices March -0,4%,-5,3% YoY -0,6%,-4,5% YoY
8.55 GMT Germany Unemployment rate April 8,2 % 8,2% 8,1%
10.00 GMT Italy Consumer price index (preliminary) April 0,2%,+1,1% YoY 0,1%,+1,2% YoY
10.00 GMT Euro area Consumer price index estimate (YoY) April 0,7% YoY 0,6% YoY
10.00 GMT Euro area Unemployment rate March 8,6 % 8,7% 8,5%
13.30 GMT United States Personal income March -0,1% -0,2% -0,2%
13.30 GMT United States Personal spending March -0,1% 0,2%
13.30 GMT United States Personal spending core March 0,2%,+1,8% YoY 0,2%,+1,8% YoY
13.30 GMT United States Initial jobless claims April 25 th 640 000 640 000
13.30 GMT United States Continuing claims April 18 th 6 200 000 6 137 000

Inde x e s P rice % 5 D a ys Ytd Forex Price % 5 Days Ytd

DJIA 8185,7 3,79% - 6,73% EUR/USD 1,3288 1,13% -4,86%
S&P 500 873,6 3,59% - 3,28% EUR/JPY 129,21 -0,38% 1,98%
Nas daq 1711,9 4,02% 8,56% USD/JPY 97,23 0,72% 6,80%
CA C 40 3116,9 3,55% - 3,14% Oil Price % 5 Days Ytd
DA X 4704,6 2,40% - 2,20% Brent $/b 49,8 0,71% 19,06%
Eur os tox x 50 2334,6 2,74% - 4,62% Gold Price % 5 Days Ytd
DJ 600 197,3 3,02% - 0,54% Gold $/oz 895,5 -1,00% 1,49%
FTSE 100 4189,6 4,10% - 5,52% Rates USA Euro Japan
Nikkei 8816,2 - 2,50% - 0,49% Central Banks* 0,25 1,25 0,11
Shanghai Comp 2475,4 0,28% 35,95% Overnight 0,05 0,33 0,11
Sens ex ( India) 11403,3 5,41% 18,20% 3 Months 0,09 0,75 0,20
MICEX ( Rus s ia) 922,0 1,89% 48,82% 10 Y ears** 3,08 3,13 1,45
Bov es pa ( Bras il) 47226,8 5,21% 25,77% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
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30-Apr-09 THE LONG VIEW

ECONOMIC DATA PREVIEW

Watch in the United-States the personal income and the personal spending for March due at 13.30 GMT. Both personal income and
personal spending are expected to drop of 0.1% after respectively decreasing of 0.2% and rising of 0.2% in February.

Watch in the euro area the consumer price index for April due at 10.00 GMT, expected drop at 0.5% after reaching 0.6 % in March ,
leading the Euro area will close to a deflation situation, watch as well in Germany the unemployment rate for April due at 8.55 GMT,
expected to rise as the global economic downturn is cutting the demand for German’s good aboard and as domestic demand is not
taking over./JB

ECONOMY
UNITED-STATES : THE GDP (ANNUALIZED) FOR THE FIRST QUARTER
After dropping of 0.5% (annualized) at the third quarter 2008 and of 6.3% at the fourth quarter, the American GDP dropped again of
6.1% at the first quarter 2009. The drop of the GDP from a year ago ( YoY) reached now -2.6% its lowest level since the third quarter of
1982. The explanation of this drop is mainly due to the decline of the Gross Private Investment of 51.8% ( -37.9% for the non residential
investment and -38 % for the residential investment) and in the historical drop of stocks seen at the first quarter 2009. Excluding stocks
the GDP dropped only of 3.4% meaning much better than the consensus expectations at -4.7%. Meanwhile the personal consumption
which represent 70% of the American GDP unexpectedly rose of 2.2% at the first quarter, meaning its highest rise since the first quarter
2007 despite the rose of the unemployment at the same moment and despite the fact that the budgetary revival plan did not impact the
economy yet.

EURO AREA : CONFIDENCE RISE FOR THE FIRST TIME IN 11 MONTHS

After reaching a low point at 64.7 in March euro area economic confidence rose to 67.2 (forecast 65.6). This is the first increase since
May 2008 showing that slowly the euro area may have reach the bottom. Indeed after the good resistance of France household
consumption and production outlook as well as the IFO business sentiment in Germany we are seen more and more positive signed of
stabilization in the euro area. Despite the fact that the situation will remained very tense on the labor market as the unemployment
should rise since the end of the year, the recession will last till the second quarter but the GDP will slowly start to recover at the third
quarter./JB
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30-Apr-09 THE LONG VIEW

VIXindex: impliedvolatilityontheS&P500 $Libor -3-Month(InterbankRate)
6
85
80 5,5
75
5
70
65 4,5
60
55 4
50
3,5
45
40 3
35
30 2,5
25
20 2
15 1,5
10
5 1
30/04/2007 30/10/2007 30/04/2008 30/10/2008 30/04/2009 30/04/2007 30/10/2007 30/04/2008 30/10/2008 30/04/2009
Source : Bloomberg Source : Bloomberg

UnitedStates : 10-year Treasuryyield 10-year TreasuryspreadUSA-Eurozone

5,5 1,2
5,25 1
5
0,8
4,75
0,6
4,5
4,25 0,4
4 0,2
3,75
0
3,5
3,25 -0,2
3 -0,4
2,75
-0,6
2,5
2,25 -0,8

2 -1
30/04/2007 30/10/2007 30/04/2008 30/10/2008 30/04/2009 30/04/2007 30/10/2007 30/04/2008 30/10/2008 30/04/2009
Source : Bloomberg Source : Bloomberg

Oil : Brent ($/b) Forex: Eurovs Dollar (EUR/USD)

150 1,65
140
1,6
130
1,55
120
110 1,5
100
1,45
90
1,4
80
70 1,35
60
1,3
50
40
1,25

30 1,2
30/04/2007 30/10/2007 30/04/2008 30/10/2008 30/04/2009 30/04/2007 30/10/2007 30/04/2008 30/10/2008 30/04/2009
Source : Bloomberg Source : Bloomberg