1. 2012
th,
Weekly Markets
12
n Perspectives
November
For important disclosures, refer to the Disclosure Section, located at the end of this report.

2. Weekly Focus
Barack Obama won Tuesday’s US elections and Parliament. The Eurogroup / Ecofin meetings will
investors’ focus shifted to the fiscal cliff, capital be held this week. There’s been some news
gains and dividends taxes (that are expected to be suggesting that Euro-zone finance ministers may
hiked), and to the debt ceiling. Both Fitch and delay a decision on approving the next tranche
Moody’s were quick to warn of the negative payment for Greece.
implications to the US rating if an agreement to
stabilise the fiscal outlook was not reached soon. At Draghi’s post ECB meeting press conference,
he said that the ECB stands ready to buy
The US election seems to have been the excuse for peripheral governments’ bonds. Additionally, the
the market to start a correction. Last week, the ECB might be willing to play a role in helping
S&P500 has had the worst 2-day performance in Greece.
2012. Apple’s slide continue to weigh on the index.
China’s 18th Communist Party Congress has
Last week was positive for gold, maybe reflecting started. The local government intends to double
the search for safe haven assets. German and US per capita GDP by 2020 and accelerate financial
bonds also had a good run. reforms (including Yuan convertibility and
interest rate liberalisation).
The Greek parliament passed the austerity bill
which includes cuts to pensions, public sector US Economic data is likely to be noisy due to
salaries, tax hikes and increases in the retirement Hurricane Sandy’s related distortions.
age, amid a second day of protests outside the

3. ECB acknowledges weaker Euro-zone: unemployment
growth outlook rises to 11.6%
• The ECB left the refi rate unchanged at 0.75%. • The euro-zone unemployment rate rose to a new
The monetary policy is seen as very record high of 11.6% in September. Back in
accommodative already. No strong hint at a refi February, the consensus forecast for 2013 was
rate cut in December; just 10.7%;
• Draghi mentioned that the surveys seem to • The employment indices of the PMI business
suggest that activity would weaken again surveys point to further falls in employment;
towards the end of the year; • With households’ real disposable incomes falling,
• President Draghi said that the ECB stands ready Euro-zone consumer spending should remain
to buy peripheral governments’ bonds; weak.
• He insisted that Spain would have to apply for Employment & Households' Real Incomes
(% y/y)
ESM aid and accept the associated conditions, 6% 3%
in order to receive support from the OMT; 4% 2%
• Mr Draghi confirmed that the ECB would give
2% 1%
the profits made on its Greek bond holdings to
0% 0%
Euro-zone governments. However, he ruled out
a write off or a restructuration; -2% -1%
Households' Real Incomes (LHS)
• No indication were given regarding other types -4% Employment -2%
of unconventional policy support that could
-6% -3%
come in the future. 2000 2002 2004 2006 2008 2010 2012
Source: Eurostat

4. German industrial production Poland: NBP cut 25bp and
slumps in September lowered its GDP forecast
• German industrial production fell 1.8% m/m in • The National Bank of Poland cut rates 25bp to
September. Excluding construction, the drop 4.50%. Another cut was signaled for December;
was even bigger (2.3% m/m); • The accompanying Monetary Policy Committee
• Thanks to the rise in July, industrial production Statement was dovish, suggesting that this cut
should have risen in Q3, suggesting that GDP could be the start of a monetary easing cycle;
probably expanded in that quarter; • The NBP cut its GDP growth outlook to 1.5%
• Industrial survey indicators are still pointing to (from 2.1%) for 2013 and to 2.3% for 2014
further falls in production; (from 3.0%). Inflation is seen at 2.5% in 2013
• Is Germany’s growth engine slowing down? and falling further to 1.6% in 2014.
7%
German Industrial Production Poland National Bank Reference Rate
65 & Manufacturing PMI 20%
60 6%
10%
55
50 0%
5%
45 -10%
40 4.5%
-20%
35 4%
30 -30%
2005 2007 2009 2011 2013
Manufacturing PMI (Adv. 2 months, LHS) 3%
Industrial Production (% y/y, RHS) 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Deutsche Bundesbank and Markit Source: National Bank of Poland

5. Greece: Parliament approves … Greece’s public debt is still
new austerity package, but… unsustainable
• The Government passed the latest package of • Due to the changes to the growth and fiscal
austerity measures and structural reforms assumptions underpinning the rescue package,
demanded by the Troika; Greece will probably need more money;
• In an interview with Reuters, Olli Rehn • In March this year, it was agreed that Greece would
acknowledged that Greek debt was receive a second economic adjustment program.
unsustainable. He considered that a The total amount of official support for the years
combination of factors related to the length of 2010-2014 was anticipated to be €237.5bn;
maturities and the level of interest rates of • The medium term objective of the second program
official loans could be used to reduce the debt was to get Greece’s debt to GDP ratio down to
burden of Greece. 120% by 2020. Greece’s public debt will be well
Greek GDP Forecasts (% y/y) above that level;
4%
• Greece will probably get a two year extension on
2% the deficit objectives;
0% • Since 2009, Greece has improved its primary
-2% position by around 8.7pp of GDP. However, the
-4%
austerity seen thus far has been associated with a
MoU (Mar 2012) decline in real GDP of around 15%. It seems, that
-6%
Budget (Nov 2012)
Greece will only be able to remain in the Euro area
-8%
2011 2012 2013 2014 2015 2016 with substantial official debt restructuring.
Source: IMF and Greek Ministry of Finance

6. European Commission Autumn Forecast 2012 (I)
• Economic outlook for the region continues to be • The Commission projects Greece's public debt
grim; increasing to 176.7% in 2012. The debt ratio
• Italy's economy is expected to shrink by 0.5% in should peak at 188.9% GDP in 2014. The
2013 due to weak domestic demand, a steeper government sees debt peaking at 191.6% in
contraction than the 0.2% decline expected by 2014;
the government. The Commission forecast the • Greece’s labour market is expected to bottom
deficit will narrow to 2.9% of GDP in 2012 and out in 2013. The unemployment rate, currently
2.1% in 2013, above the government's most at 25.1%, is expected to fall to around 22% in
recent forecasts of 2.6% for 2012 and 1.8% for 2014;
2013; • Key downside risks are a deterioration of the
• The Commission said it expects Greece's Sovereign Crisis in Europe, the Fiscal Cliff in the
economy to shrink 4.2% in 2013 and expand US and an economic slowdown in the
0.6% the following year; developing economies.
Real GDP General Government Gross Debt (as % of GDP)
Autumn 12 Forecast Spring 12 Forecast Autumn 12 Forecast Spring 12 Forecast
Country 2010 2011 2012 2013 2012 2013 Country 2010 2011 2012 2013 2012 2013
Germany 3.7% 3.0% 0.8% 0.8% 0.7% 1.7% Germany 82.5% 80.5% 81.7% 80.8% 82.2% 80.7%
Ireland -0.4% 1.4% 0.4% 1.1% 0.5% 1.9% Ireland 92.2% 106.4% 117.6% 122.5% 116.1% 120.2%
Greece -3.5% -7.1% -6.0% -4.2% -4.7% 0.0% Greece 148.3% 170.6% 176.7% 188.4% 160.6% 168.0%
Spain -0.1% 0.4% -1.4% -1.4% -1.8% -0.3% Spain 61.5% 69.3% 86.1% 92.7% 80.9% 87.0%
France 1.5% 1.7% 0.2% 0.4% 0.5% 1.3% France 82.3% 86.0% 90.0% 92.7% 90.5% 92.5%
Italy 1.8% 0.4% -2.3% -0.5% -1.4% 0.4% Italy 119.2% 120.7% 126.5% 127.6% 123.5% 121.8%
Netherlands 1.7% 1.0% -0.3% 0.3% -0.9% 0.7% Netherlands 63.1% 65.5% 68.8% 69.3% 70.1% 73.0%
Portugal 1.4% -1.7% -3.0% -1.0% -3.3% 0.3% Portugal 93.5% 108.1% 119.1% 123.5% 113.9% 117.1%
Euro Area 1.9% 1.4% -0.4% 0.1% -0.3% 1.0% Euro Area 85.6% 88.1% 92.9% 94.5% 91.8% 92.6%
Source: European Commission Source: European Commission

7. European Commission Autumn Forecast 2012 (II)
• France is expected to grow just 0.4% next year, • The Commission said Spain's economy would
half the 0.8% level on which the government's return to growth of 0.8% in 2014;
2013 budget is based on; • The Commission predicted Spain's deficit this
• France's budget deficit is expected to fall to 3.5% year would be 8% of GDP, compared with a
of GDP next year, above the EU target of 3%. European Union agreed target of 6.3%. The
France's 2012 deficit is seen around 4.5% of GDP; deficit should fall to 6.0% in 2013, and rise to
• Spain’s economy is expected to shrink by 1.4% 6.4% in 2014. Spain's government expects to
this year and next. The Spanish government cut the deficit to 4.5% next year;
expects the economy to contract by 0.5% in • The Portuguese economy is expected to slump
2013; by 3% this year and a further 1% in 2013. The
Unemployment Rate commission expects the economy to return to
Autumn 12 Forecast growth in 2014 (0.8%). Domestic demand is
Country 2011 2012 2013 expected to fall 7.1% in 2012 and 2.5% next
Germany 5.9% 5.5% 5.6%
year;
Ireland 14.4% 14.8% 14.7%
Greece 17.7% 23.6% 24.0%
• Unemployment rates should remain at high
Spain 21.7% 25.1% 26.6% levels in the Euro-zone, reflecting the low-
France 9.6% 10.2% 10.7% growth environment. Unemployment rates
Italy 8.4% 10.6% 11.5% under-25 are even a greater concern.
Netherlands 4.4% 5.4% 6.1%
Portugal 12.9% 15.5% 16.4%
Euro Area 10.1% 11.3% 11.8%
Source: European Commission

8. US Presidential Election: and the winner is…
• Barack Obama won Tuesday’s US elections. He • The uncertainty generated by the cliff already
won the Electoral College by a significant hit business spending. This could be an incentive
margin and also won the popular vote; for a deal to be struck sooner rather than later;
• With almost all the ballots in Florida counted, • The CBO released new estimates showing that
Barack Obama seems to have been the winner going off the fiscal cliff would reduce the budget
in that state. That will bring his total electoral deficit by more than $500bn over the first nine
votes to 332 compared to 206 for Republican months of next year. It would lower real GDP by
challenger Mitt Romney; a cumulative 2.9% in calendar year 2013;
• The status quo will be maintained in Congress. • President Barack Obama said on Friday he was
The Republicans still have a majority in the prepared to compromise with Republicans, but
House of Representatives and the Democrats insisted a tax increase for the rich must be part
retain control of the Senate. This provides little of any agreement.
clarity on the path to agreement on avoiding 3.5%
The Fiscal Cliff (% impact on Real GDP)
the fiscal cliff; 3.0%
2.9%
• Investors focus shifted to the fiscal cliff, capital 2.5%
gains taxes and to the debt ceiling; 2.0%
• Consensus seems to expect a compromise to 1.5%
1.4%
avert most of the fiscal cliff to be reached in 1.0% 0.8%
0.7%
late December. Congress reconvenes on 0.5%
November 12th. The following week is the 0.0%
0.1%
Thanksgiving break; Total High Income Tax
Cuts
Other Bush &
AMT
Payroll Tax Cut &
Unemployment
Spending Cuts
Source: CBO Benefits

9. US trade deficit narrows in US Consumer confidence at a
September five-year high
• September’s trade deficit was $41.5bn. • The University of Michigan’s measure of
August’s deficit was revised down to $43.8bn consumer confidence increased in November
from the previous estimate of $44.4bn; to 84.9, from 82.6 in the previous month;
• Nominal exports increased 3.1% m/m (3.1% • The recent drop in gasoline prices and the
m/m in real terms too). However, the weak improvement in both housing and labor market
global economic backdrop is expected to conditions are probably supporting consumer
continue to curtail exports; moods;
• Imports rose 1.6% m/m, reflecting the release • Will fiscal cliff negotiations begin to have a
of the iPhone 5 (which is made in China); greater impact?
• The narrowing in the trade deficit in September University of Michigan Consumer Confidence
120 120
could justify a upward revision to third-quarter
real GDP. 110 110
US Trade Balance 100 100
Exports Imports Trade Balance 90 90
Total Excl. Petrol
80 80
$bn % m/m $bn % m/m $bn $bn 70 70
Headline Index
July 183.2 -1.1% 225.7 -0.6% -42.5 -21.4 60 60
Average (1978-2010)
August 181.4 -1.0% 225.2 -0.2% -43.8 -20.3 50 50
September 187.0 3.1% 228.5 1.5% -41.5 -19.9 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Source: US Dept. of Commerce Source: U. of Michigan Survey Research Center

10. China’s economy seems to be … as showed by Taiwan’s
recovering… exports to China
• Industrial production rose 9.6% y/y in October, • Taiwan’s merchandise exports fell in October
compared to 9.2% y/y in September; 1.9% y/y. However, the sequential trend still
• Electricity production was up 6.4% y/y. This was seems to show an improvement;
the strongest monthly growth since April; • Exports to China /Hong Kong, which had been
• Seasonally-adjusted retail sales gained 1.4% on a weakening trend, seems to have stabilized.
m/m, after 2.1% in September; In October, exports fell 2.9% m/m, but that
• October macro data seems to suggest that the followed a strong jump at 11.2% m/m in
economy recovery is gaining traction; September;
• The housing market has stabilized in recent • Interestingly, exports to Europe rose 1.7% m/m
months. in October, after 2.9% m/m in September.
25%
China Industrial Production (y/y) Taiwan Export Orders to HK & China (y/y)
20%
15%
15% 5%
10% -5%
5% -15%
0% -25%
2008 2009 2010 2011 2012 2010 2011 2012
Source: National Bureau of Statistics of China Source: Ministry of Economic Affairs Taiwan

11. Portugal: Last week’s results (I)
REN (RENE PL): Q3 Results and 2012 Investor Day EDP (EDP PL): Q3 2012 Results
• 9M EBITDA was €389.1m, +11.1% y/y and • Q3 2012 EBITDA stood at €857m, down 2%
broadly in-line with Reuters consensus over-the-year ago period and 3% above
(€389.5m). 9M 2012 Net income stood at consensus (€831.5m);
€98.4m, +2.9% y/y, 3% below consensus, • Q3 2012 Net profit reached €213m, -1% y/y
reflecting higher financial expenses; (reflecting a higher tax rate) but 10% above
• The new strategy is focused on deleverage (Net consensus (€193.6m);
debt/EBITDA 4.9x in 2011) and • Regulatory reviews are almost completed in
internationalization; Portugal and Spain (pending Parliamentary
• REN has confirmed its dividend policy, i.e. to approval). Investors could remain focused on
maintain or slightly increase the nominal further news regarding EDP’s deleveraging and
dividend per share year on year. REN is fully Portugal’s de-risking;
funded until 2013. Considering financing and EDP - 9M Results
refinancing initiatives currently under way, the 9M 2012 9M 2012 9M 2011 y/y
company expects to be fully financed until 2015. (€mn) Reported Consensus Reported Change
EBITDA 2,742 2,717 2,775 -1.2%
REN Strategic Plan guidelines for 2016 LT Contracted Generation 609 623 -2.2%
Capex (2012-2016) Up to €1.7bn Liberalised Activities in Iberia 280 279 0.4%
RAB CAGR 2011-2016 between 2% and 5% Regulated Networks Iberia 809 800 1.1%
Wind Power 675 548 23.2%
EBITDA CAGR 2011-2016 between 3% and 5%
Brazil 397 554 -28.3%
Net income CAGR 2011-2016 5% Other -28 -29 -3.4%
Gearing Net debt/EBITDA lower than 4.5x in 2016 Net Income 795 775 824 -3.5%
Source: Company data Source: Company data, Reuters

12. Portugal: Last week’s results (II)
EDP Renovaveis (EDPR PL) – 9M 2012 Results: a Portugal Telecom (PTC PL): Q3 Trading Update
solid beat • Domestic trends remain sluggish, but
• 9M Revenues reached €936m, up 22% y/y; international showed a EBITDA acceleration;
• 9M EBITDA grew 23% y/y to €675m, a 1% beat • Domestic revenues reached €682m, down 6.7%
vs. Reuters consensus (€668m). Net income y/y. Residential revenues increased 4.1% y/y,
rose 48% y/y to €93m, 9% above consensus, reflecting a higher ARPU and an increase in the
whilst in the quarter alone net losses stood at number of clients, a good performance
€7.4m; considering the country’s current recession.
• EDP Renovaveis added 255MW y/y in 9M and it Personal mobile revenues were down 11.2%
has 395MW under construction; y/y. The ARPU and the number of clients
• The first minority sale to CTG is still expected to continue to be squeezed by the economic
occur in Q4 2012. backdrop. Enterprise revenues fell 8.2% y/y and
EDP Renovaveis - 9M 2012 Results Breakdown Wholesale revenues decreased 12% y/y;
9M 2012 9M 2012 9M 2011 y/y • Domestic EBITDA was €301m, very modestly
(€mn) Reported Consensus Reported Change
below consensus (€303m);
EBITDA 675 668 548 23%
Spain 257 213 21% • Portugal Pay-TV adds at +37k. PSTN line
Portugal 92 88 6% additions at +11k. Broadband additions at +29k.
Europe 439 358 23% In a sluggish environment, Portugal Telecom
Rest of Europe 101 61 67%
have been able to increase its number of
US 314 278 13%
Brazil 28 18 60% customers;
Net Profit 93 85 63 48%
Source: Company data, Reuters

13. Portugal: Last week’s results (III)
Zon (ZON PL): resilient given macro challenges
• Oi results will be only announced tomorrow on • Net income increased 6.3%y/y;
November 13th; • International Revenues have been growing
• Portugal Telecom will present its Q3 quite rapidly (24,7%q/q), although they only
consolidated earnings on November 30th. represent 4% of the company’s total revenues;
• EBITDA increased 0.9% q/q, reflecting higher
EBITDA margins in the international area and in
the domestic Pay TV division;
Portugal Telecom - Trading Update - Summary
• Zon reached 193k Iris subscribers, reflecting on-
(€ mn) Q3 2012 Q2 2012 Q3 2011 q/q y/y
going innovation including the recent launch of
Portugal 681.9 678.0 731.0 0.6% -6.7% “Timewarp” 7 day catch up TV;
Residential 178.6 178.5 171.0 0.1% 4.4%
• The company reduced its net debt by €9.9m
Personal 177.6 170.3 199.9 4.3% -11.2%
Enterprise 218.4 226.3 238.0 -3.5% -8.2% during Q3 2012.
Wholesale, other and eliminations 107.3 102.9 122.1 4.3% -12.1% Zon - Quarterly Results
EBITDA 301.0 307.3 329.9 -2.1% -8.8% (€mn) Q3 2012 Q2 2012 Q3 2011 q/q y/y
EBITDA Margin 44.14% 45.32% 45.13% Operating Revenues 215.3 214.5 213.6 0.4% 0.8%
Residential Domestic 206.2 207.2 213.6 -0.5% -3.5%
Fixed Retail Accesses (000') 3791.0 3714.0 3460.0 2.1% 9.6% International 9.1 7.3 24.7%
Arpu (€) 31.8 31.7 30.9 0.3% 2.9% EBITDA 79.7 79.0 79.5 0.9% 0.3%
Mobile EBITDA Margin 37.0% 36.8% 37.2%
Clients (000') 5806.0 5797.0 5873.0 0.2% -1.1% EBIT 27.5 26.6 23.6 3.4% 16.5%
Arpu from Customers (€) 8.3 8.0 9.2 3.8% -9.8% Net Income 9.6 9.7 9.0 -1.0% 6.7%
Source: Company data Source: Company data

14. DJ Europe 600 Earnings Update: Q3 2012 as of November 9th,
2012
• 317 companies have reported Q3 results; • Insurance and Oil & Gas have announced good
• The European earnings season continues to be numbers so far this season, while Food &
on the negative side, but showing some Beverages and Media have disappointed.
improvements compared to last quarter;
• According to Bloomberg, 71.3% of reported
companies have beaten their earnings estimates,
while 52.2% of them have exceeded their
revenue forecasts;
Dow Jones Europe 600 Q3 Earnings Summary as of November 9th , 2012
Number of companies Earnings Suprises Average Q3 Revenues Surprises Average Q3
Reported Total % of Co's Positive In-line Negative Surprise Positive In-line Negative Surprise
Oil & Gas 19 23 82.6% 52.9% 0.0% 47.1% 9.5% 44.4% 0.0% 55.6% -2.6%
Basic Materials 32 35 91.4% 53.8% 0.0% 46.2% -3.4% 46.9% 0.0% 53.1% -0.3%
Industrials 66 75 88.0% 58.8% 0.0% 41.2% 0.5% 51.6% 0.0% 48.4% 0.5%
Consumer Goods 44 49 89.8% 46.2% 0.0% 53.8% 5.1% 65.1% 0.0% 34.9% 2.6%
Health Care 26 29 89.7% 52.2% 4.3% 43.5% 2.4% 38.5% 0.0% 61.5% -0.4%
Consumer Services 26 34 76.5% 60.0% 0.0% 40.0% 24.6% 52.0% 4.0% 44.0% -0.8%
Telecommunications 15 17 88.2% 76.9% 0.0% 23.1% 11.0% 33.3% 0.0% 66.7% -0.6%
Utilities 13 17 76.5% 28.6% 0.0% 71.4% -8.9% 63.6% 0.0% 36.4% 0.9%
Financials 60 92 65.2% 48.9% 4.3% 46.8% 4.0% 53.2% 0.0% 46.8% -5.2%
Technology 16 20 80.0% 46.2% 0.0% 53.8% -17.3% 68.8% 0.0% 31.3% 1.0%
DJ Europe 600 317 391 81.1% 71.3% 1.1% 27.6% 5.0% 52.2% 0.3% 47.5% -0.7%
Source: Bloomberg

15. S&P 500 Earnings Update: Q3 2012 as of November 9th, 2012
• 451 companies have reported Q3 results as the conference calls reinforced the negative impact
Earnings Season comes near to its end; policy uncertainty has been having on the real
• Widespread sales misses have been economy;
disappointing; • According to Bloomberg, 71.3% of reported
• Q4 2012 guidance has been cautious, mainly at companies have beaten their earnings estimates,
the revenues level. Q4 earnings expectations are while 40% of them have exceeded their revenue
falling; forecasts.
• Management comment on the recent earnings
S&P500 Q3 Earnings Summary as of November 9th , 2012
Number of companies Earnings Suprises Average Q3 Revenues Surprises Average Q3
Reported Total % of Co's Positive In-Line Negative Surprise Positive In-Line Negative Surprise
Oil & Gas 40 41 97.6% 57.5% 0.0% 42.5% 2.2% 52.5% 0.0% 47.5% -0.2%
Basic Materials 25 26 96.2% 52.0% 4.0% 44.0% -2.5% 28.0% 0.0% 72.0% -1.7%
Industrials 69 75 92.0% 69.6% 2.9% 27.5% 3.1% 29.0% 0.0% 71.0% -1.0%
Consumer Goods 51 58 87.9% 80.4% 0.0% 19.6% 6.2% 29.4% 0.0% 70.6% 0.4%
Health Care 43 46 93.5% 86.0% 0.0% 14.0% 4.1% 34.9% 0.0% 65.1% -1.2%
Consumer Services 54 74 73.0% 69.8% 3.8% 26.4% 1.5% 35.8% 1.9% 62.3% -0.8%
Telecommunications 8 8 100.0% 50.0% 0.0% 50.0% 15.2% 50.0% 0.0% 50.0% -0.1%
Utilities 32 32 100.0% 62.5% 0.0% 37.5% 2.5% 9.4% 0.0% 90.6% -8.6%
Financials 85 85 100.0% 79.8% 0.0% 20.2% 7.5% 62.7% 0.0% 37.3% 4.2%
Technology 44 54 81.5% 68.2% 0.0% 31.8% -0.1% 52.3% 0.0% 47.7% -0.7%
S&P 500 451 499 90.4% 71.3% 1.1% 27.6% 3.7% 40.0% 0.2% 59.8% -0.3%
Comparative Data (full earnings Season)
Q2 2012 71.5% 1.0% 27.5% 4.0% 41.4% 0.2% 58.4% 0.4%
Source: Bloomberg

16. Last week’s market highlights
• Last Friday, Groupon (GRPN US) reported poor Q3 results, 30
Groupon share price ($)
25
with revenue below the low end of guidance. The
20
international segment weakness worsened in Q3. The 15
shares tumbled 30% to $2.76 for a market cap value of 10
$1.81bn. Last November, Groupon sold shares at $20 in an 5
initial public offering, valuing the company at about 0
Nov-11 Feb-12 Ma y-12 Aug-12 Nov-12
$12.7bn. Investors seems to have serious doubts about Source: Bloomberg
Groupon’s business model; 145
JP Morgan vs. S&P500 Financial Sector 145
Ja n 2012= 100
• JP Morgan (JPM US) filed its Q3 2012 10-Q in which it 135 135
discloses that the FED did not object to the bank’s 125 125
resubmitted capital plan. It contemplates up to $3bn in 115 115
105 105
share buybacks in Q1 2013. This is positive and well above 95 95
street expectations, and seems to suggest that JP Morgan 85
S&P500 F inancial Sector JP M org an
85
is recovering after its recent big trading losses; Jan-12 Ma r- 12 May-12 Jul-12 Sep-12 Nov-12
Source: Bloomberg
• BCP (BCP PL) posted a Q3 2012 net loss of €252m. NII (-
54% y/y; -35% q/q) was the major disappointment. CT1
ratio is 10.3% according to EBA criteria. Last week, the
stock gained 1.4% but is down -17.9% since the beginning
of 2012. The restructuring is ongoing. However, the asset
quality deterioration and the bank’s ability to repay the
€3bn of state CoCos are significant uncertainties. Source: Company data

17. What we are watching this week:
CALENDAR - Event Country Date Hour (GMT) Survey Prior
• The minutes for the two-day BOJ Governor Shirakawa speech Japan 12-Nov Not Ava ila ble Not Ava ila ble Not Ava ila ble
Japan real GDP (Q3 first prelim.) Japan 12-Nov Not Available Not Available Not Available
FOMC meeting concluded on German Chancellor Merkel to meet
Portuguese PM Coelho in Lisbon Portugal 12-Nov Not Available Not Available Not Available
October 24th will be released Eurogroup meeting Euro-zone 12-Nov Not Available Not Available Not Available
US Veterans Day (some markets closed) US 12-Nov Not Ava ila ble Not Ava ila ble Not Ava ila ble
on Wednesday (Nov 14th). The CPI inflation (Oct) (YoY) United Kingdom 13-Nov 09:30 2.4% 2.2%
ZEW Survey (Econ. Sentiment) Germany 13-Nov 10:00 -10.0 -11.5
market will probably search FED's Yellen speech on central bank
communications US 13-Nov Not Ava ila ble Not Ava ila ble Not Ava ila ble
for some insight into what CPI (YoY) Portugal 13-Nov 10:00 2.0% 2.9%
Chile monetary policy meeting Chile 13-Nov Not Ava ila ble Not Ava ila ble Not Ava ila ble
officials intend to do when the Industrial Production sa (MoM) Euro-Zone 14-Nov 10:00 -2.0% 0.6%
current Operation Twist WPI inflation (Oct)
Real GDP (YoY)
India
Portugal
14-Nov
14-Nov
Not Available
10:00
Not Available
-3.2%
Not Available
-3.3%
Bank of England Inflation Report United Kingdom 14-Nov 10:30
programme concludes at the ECB's Asmussen speech Euro-zone 14-Nov Not Ava ila ble
Not Available
Not Ava ila ble
Not Available
Not Ava ila ble
Unemployment Rate Portugal 14-Nov 11:00 Not Ava ila ble 15.0%
end of this year; Producer Price Index (MoM) US 14-Nov 13:30 0.2% 1.1%
PPI Ex Food & Energy (MoM) US 14-Nov 13:30 0.1% 0.0%
• The European Union finance Advance Retail Sales US 14-Nov 13:30 -0.2% 1.1%
Retail Sales Less Autos US 14-Nov 13:30 0.2% 1.1%
ministers meet in Brussels FOMC minutes of October 24 meeting US 14-Nov 19:00 Not Ava ila ble Not Ava ila ble
starting Monday (Nov 12th); Real GDP (Q3 first) (YoY)
Real GDP nsa (Q3 flash) (YoY)
France
Germany
15-Nov
15-Nov
06:30
07:00
0.0%
0.4%
0.3%
0.5%
• On November 14th, The CGTP Real GDP sa (Q3 final) (YoY)
Real GDP sa and wda (Q3 prelim) (YoY)
Spain
Italy
15-Nov
15-Nov
08:00
09:00
-1.6%
-2.9%
-1.6%
-2.6%
Retail Sales Ex Auto Fuel (Oct) (YoY) United Kingdom 15-Nov 09:30 2.1% 2.9%
(General Confederation of CPI (YoY) Euro-Zone 15-Nov 10:00 2.5% Not Ava ila ble
Real GDP sa (Q3 flash) (YoY) Euro-Zone 15-Nov 10:00 -0.6% -0.5%
Portuguese Workers), one of Consumer Price Index (Oct) (MoM) US 15-Nov 13:30 0.1% 0.6%
CPI Ex Food & Energy (Oct) (MoM) US 15-Nov 13:30 0.1% 0.1%
the main union confederation Empire Manufacturing US 15-Nov 13:30 -7.20 -6.16
FED's Bernanke speech on housing and
in Portugal, is to stage a strike mortgage markets US 15-Nov Not Available Not Available Not Available
Initial Jobless Claims US 15-Nov 13:30 373K 355K
against the government’s Continuing Claims US 15-Nov 13:30 3150K 3127K
Philadelphia Fed. US 15-Nov 15:00 1.5 5.7
austerity measures. Industrial Production (Oct) US 16-Nov 14:15 0.2% 0.4%
Capacity Utilization (Oct) US 16-Nov 14:15 78.3% 78.3%
HK, Malaysia and Singapore real GDP (Q3) Asia 16-Nov Not Available Not Available Not Available

18. Next Week Preview: Economics
• October’s US Retail Sales (Nov 14th) and
Industrial Production (Nov 16th) will be released
this week. Hurricane Sandy will probably have
affected the retail sales value and may have been
an additional drag on manufacturing in late
October;
• The Empire State and Philly Fed Indices will be
disclosed Thursday (Nov 15th). Both surveys cover
parts of the area affected by the hurricane;
• In Europe, September industrial production for Source: Bloomberg
the eurozone is due on Wednesday (Nov 14th). US Regional PMIs & National ISM Index
45 65
Thursday (Nov 15th) will see the release of
35
October inflation numbers for the eurozone as 25
60
well as advance Q3 2012 GDP numbers for the 15
55
euro area and its biggest economies (Germany, 5 50
France, Italy); -5 45
• In the UK, the Bank of England releases its -15
40
Empire State (LHS)
quarterly inflation report on Wednesday (Nov -25
Philly Fed (LHS) 35
14th). October inflation data is due on Tuesday -35
ISM (RHS)
-45 30
(Nov 13th). Wednesday (Nov 14th) will also see 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
the release of data from the labour market. Source: Bloomberg

19. Next Week Preview: Eurogroup meeting and Earnings season
Eurogroup / Ecofin finance Q3 Earnings season goes on…
ministers’ meetings Preview
• Eurogroup / Ecofin finance ministers’ meeting will • In Europe, we’ll highlight ENEL, Vivendi, Intesa
be held on November 12/13th; SanPaolo, Unicredit, E.ON, Vodafone and BES
• Euro-zone finance ministers are unlikely to take a (Tuesday, Nov 13th); Tecnicas Reunidas,
final decision to release the next tranche of loans Infineon, Sainsbury, SSE, RWE and Sonae
to Greece. The debt sustainability report (Wednesday, Nov 14th); Zurich Insurance and
prepared by the Troika will probably only be National Grid (Thursday, Nov 15th), and Henkel
available by the end of the month; (Friday, Nov 16th);
• Greece needs the money to redeem debt • SAP will hold its biannual Customer Event on
maturing on November 16th. European officials November 13-15th. Heineken will hold its
have already said that there’ll not be a default; Investor Day on November 13-14th. Danone
• According to recent news, the Banking Union will wil hold an investor seminar on November 14-
not be discussed; 16th. Royal Dutch Shell will hold its
• Cyprus intended to agree its aid programme with Management day on November 15th;
the Troika in time for this meeting. But, with • In the US, we’ll highlight Home Depot and
international lenders resuming talks with Cyprus Cisco Systems (Tuesday, Nov 13th); and Dell,
only on November 9th, probably the meeting Wal-Mart and Applied Materials (Thursday,
scheduled for December 3rd looks to be the Nov 15th).
likely timetable target.

20. Charts we are watching (I)
• Sonae (SON PL) is one of the best performers in the 0.60 Sonae (SON PL) share price (€)
0.573
PSI20 Portuguese stock market index, since the
0.55
beginning of 2012. Since its June’s lows, the stock’s
gained more than 55%. The ongoing sovereign de- 0.50
risking has provided support to the stock price. Sonae
will disclose its Q3 2012 numbers on November 14th 0.45
(after market close). Sonaecom (SNC PL) and Sonae 0.40
Sierra have already reported their numbers. For that
reason, the main focus should be on the retail 0.35
Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12
business. Given the tough macro context, will Sonae’s Source: Bloomberg
core business continue to show resilience?
200
BES, BPI and BCP share prices
• BPI (BPI PL) has been the best stock in the Portuguese Ja n 2012= 100
banking sector this year. BES (BES PL) share price is
150
down 3% year-to-date. The bank is expected to report BES BPI BCP
Q3 2012 results on November 13th (after market
close). BES has been able to meet regulatory capital 100
requirements without having to resort to public funds.
NII, margins both on domestic and international
activities, and the bank’s asset quality will be closely 50
Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12
followed by investors.
Source: Bloomberg

21. Charts we are watching (II)
• The iPhone 5, the new generation iPad and the Apple share price vs. S&P500 and S&P 500
iPad Mini seem to suggest a strong product cycle Jan 2012= 100
technology sector Ja n 2012= 100
125
for Apple (AAPL US). However, the stock is down 170
more than 20% since its September’s high. This has 120 160
150
clearly weigh on the S&P500 and on the 115
140
technology sector. Short-term, the company’s
110 130
aggressive product launch will probably lower its 120
105
EPS (higher costs). Nevertheless, demand upside 110
should drive earnings growth in the future. But, is 100 100
Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12
the market afraid that, given Android and Windows
S&P Tecnology Sector SPX Apple
competition, margins will disappoint? Source: Bloomberg
• Facebook (FB US) share price fell 3.9% last Friday to 40
Facebook share price ($)
$19.21. The stock is down more than 49% from its 35
$38 IPO price. Facebook delivered 43% y/y ad 30
revenue growth in Q3 2012. Revenues and
25
adjusted EBITDA reached $1,26bn and $701m,
respectively Meanwhile, the lock-up expiration 20 $19.21
table could weigh on the stock. Approximately 15
777 million shares will be eligible for sale in the
10
public market from November 14th. May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12
Source: Bloomberg

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