WWW.GLOBAL-EQUITIES.

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5-Mar-09 ONE STEP BEYOND

With the euro-zone recession deepening, the ECB is today almost certain to deliver the 50bp interest rate cut that President
Trichet signalled last month. What’s more, the market expect hints of further cuts to come as concerns over rates reaching levels that are
“too low” are gradually overcome by the need to support the economy. But the Bank will still be relatively vague about the scope for
unconventional measures to support the economy when interest rates can fall no further. This raises the danger that the euro-zone
recession might be longer-lived than elsewhere.
Today’s MPC decision could be yet another landmark in the policy response to this crisis. Most economists expect a 50 basis
points cut. But the main event could well be the start of policies aimed directly at increasing the quantity of money in the economy. The
Treasury has confirmed that the exchange of letters between the Governor and Chancellor will be published, probably giving permission
to the Bank of England to start quantitative easing. And Mervyn King has recently given strong hints that the MPC will vote on QE at the
forthcoming meeting. What form the quantitative easing will initially take is still unclear – in a recent speech, Mervyn King suggested that it
could take the form of purchases both of government bonds and of corporate bonds. Meanwhile, the required amount of QE depends on
the uncertain and variable links between banks’ reserves, the money supply and economic activity.
In France, the current valorisation levels are sensibly lower than the ones reached when playing on lows in the past. The CAC
return on equity levels is around 4/5% with a capital cost of 10.5% which was rather 12% in the last 20 years, meaning, according to
strategists, 60% of the CAC corporate are bound to be recapitalized or liquidated ! And only 40% will be able to run their activity on a back
to normal basis. Again, such low levels could be reached because of liquidity request from investors. Insurance companies have been
choosing corporate debts instead of equity for their risky yield assets as well, which did not help either lately.
However, both chartists and economists are beginning to think a rebound of the market should occur in Q2 this year, which
might have just started. Most of the de leveraging process will be over, with hedge funds being forced to reduce their 6 trillions worth
positions to between 500 to 900 bn by end of March ! Also, keep in mind the 29 looking like scenario is not that obvious on a fundamental
view, and should not be before long. 50% of the S&P earnings releases came out better than expected, 45% on the Eurostoxx in Q4,
which was the chance to look like 29 since the worldwide stimuli on both monetary and budgetary front will reach the economies on H2
(already reaching the Chinese one), while the de stocking effect will be gone, and even more, just a stable growth will be enough to make
output back on the rise to provide whatever needs to be provided as firms will be empty of inventories. As to the Japanese deflationist
parallel, remember that the PE were above 60 there before their crisis, and that the Japanese officials chose the tough way when they
reacted, which was with no comparison, by the way in term of timing and strength, with what happened in the US and the UK
Opening higher, the Shanghai index is trading back to flat levels, slightly disappointed that this morning committee did not provide
details of any widening or changes of the 585 bn$ stimulus package.
Rangy session ahead in the red, with short players enjoying a bad employment report out tomorrow before the US cash index
opening, meaning it is doubtful that the US managed to end in the green, except in case of a short covering before their close tonight. In
Europe, still the fear to see March 2003 lows broken (1847) remains, but should not be possible today (too far, and no significant data)
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 44,9 1,2584 99,34 2,99 3,14 5,14 4,20 -0,23 2,58 2,70 2,66 2,91 2,01 4,59 2,38 2,48 2,23 US
Perf 1d % 7,85 -0,61 -0,18 1,11 bp 8,8 bp 5,40 5,03 0,74 1,90 3,63 2,15 2,06 1,62 4,79 2,42 2,83 2,30 Europe
ECONOMIC DATA with impact
Bank of England (12h gmt) / should cut by another 0.5% to 0.5% / interesting to know what kind of quantitative easing they will propose
ECB (12h45 gmt) / 0.5% cut expected to 1.5% / minor as will need to know more about the stimuli impact / better than not though
Jobless Claims (13h30 gmt) expected 650k / bad but known as such / interesting ahead of the employment report which will be the
focus of the week out tomorrow / minor then
Mortgage Delinquencies (15h gmt) / previous was +6.99% / the lower the better / interesting to see when the stimulus starts working
US productivity Q4 revision (13h30 gmt) / minor as old news related data
Factory Orders (15h gmt) expected –3.5% from previous –3.9% / activity remained week in January / minor as already played
Geithner testifying at hearing on US Treasury budget (15h gmt)
Atlanta Fed President Lockhart speaking on US economy (17h45 gmt)
Senate Banking Committee hearing on government aid to AIG
POSITIVE IMPACTS
INBEV : FY revenue €16.1bn (15.80bn exp) / Ebitda €5.33bn (5.19bn exp) / Dividend €0.28, unchanged (0.3 exp) / Boosted Anheuser
Busch synergies targets to $2.25 bn
NH HOTELES : SANTANDER & Banco Espanol de Credito may end up getting a combined 25% stake in NH Hoteles from Spanish
unlisted hotels company Grupo Inversor Hesperia SA as part of a €600 m debt-restructuring deal (Expansion)
RIO TINTO may still be open to a merger of its Pilbara iron ore operations with those of BHP Billiton (The Australian citing a Dbk analyst)
AXA confirmed it did not need a capital increase
CASINO : FY Ebit €1.28bn, in line / Dividend €2.53 (2.30 exp) / Dividend 2.57 prefered shrs / To convert 6 ord. shrs for 7pfd non
voting shares / Sees better net debt/EBITDA ratio at end 2009 (below2.2x) / To complete 1bn asset disposal program by end 2010
LUFTHANSA might cut its dividend for 2008 to €0.85 from €1.25 in 2007, but more than the €0.60 exp. by analysts (Boersen-Zeitung)
EDF would be planning the sale of a part of its RTE business (La Tribune) / Separately note market talks that CEO M. Gadonneix could
be replaced at the end of the year by M. Richard (Current Director at the French Finance Ministry)
HANNOVER RE - FRESENIUS : Deutsche Boerse has decided on changes in its equity indices DAX that will take effect on 23 March
2009 / FRESENIUS PREF & HANNOVER RE will replace INFINEON & POSTBANK in the DAX
UBS announced it is refusing to comply with the IRS ‘s demand that it turn over the names of tax evaders / UBS is hiding behind Swiss
law which does not recognize tax evasion as a crime.
DAIMLER is not interested in taking over GM's Opel unit or Opel's Eisenach plant (Handelsblatt)
LLOYDS is making progress in its talks with the U.K. govt to reach an agreement on terms for using the state’s asset insurance plan (FT)
SANTANDER : Venezuela will defer for at least this year its planned nationalization of a local banking unit of SANTANDER (Reuters)
BARCLAYS was asked by Lehman’s liquidator to explain what happened to $3.3bn in bonus money & other liabilities acquired from LEH
SOLAR STOCKS : Mitsubishi Corp has bought a 34% stake in the solar power unit of Acciona (No financial details provided…)
NEGATIVE IMPACTS
ESSILOR : FY Operating €514.5m (534.8 exp) / Dividend €0.66, in line (+6.5%) / Confirmed its mid to LT targets
ARKEMA : FY sales €5.63bn (5.55bn exp) / Ebitda €498m (500m exp) / Cut dividend to €0.60 from €0.75 last year / Market conditions
have not showed signs of improvement since start of 2009, low visibility for the rest of 2009
GDF SUEZ : FY EBITDA €13.89bn (€13.96bn exp) / Dividend €1.4 & Confirms Special div €0.8 / Expects 2009 EBITDA higher than
2008 / Confirms €30bn “2008-2010 Investment Program” / Expects 2011 EBITDA of €17-18bn (in 2010 previously exp.)
 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

5-Mar-09 ONE STEP BEYOND

SALZGITTER : FY sales €12.5bn (12.17bn exp) / PTP €1bn (1.19bn exp) / Wrote down around €200 m on steel inventories in steel
and trading divisions / Sees stagnation to & beyong H2 2009 but no more forecasts
FRAPORT : Q4 sales €501.8m (€513m exp) / EBITDA €108.2m (€101m exp) / Div €1.15 / Sees 2009 EBITDA & Net decline
DEXIA has €13bn at risk in Central & eastern Europe (CEO) / Most of the money at risk is through sovereign debt or loans to local govts
ENEL would be planning a €7bn capital hike / The transaction will see the Treasury raising it stake in the group to 27% from 20% (Press)
SANTANDER & BBVA : S&P cut the outlook on the debt ratings of both Co to negative from stable / AA long-term debt ratings affirmed

WELLS FARGO : Moody's placed the long term credit ratings senior debt at Aa3 under review for possible downgrade.
JP MORGAN : Moody’s revised rating outlook to negative.
FORD : S&P cut corporate credit rating to CC from CCC+
RESULTS DIVIDENDS EVENTS
Casino / Essilor / GDF Suez / Aviva / Salzitter / Arkema / Essilor / Energias
Today Nike ($0.25) / British Airways investor / France Tel investor day
de Portugal
Friday Fugro / Belgacom / Italcementi / Veolia Environnement sales / WPP / Fugro
Fortis / Continental / Ciment Français / Acerinox / Texas Instruments Mid
Monday RFedEx ($0.11) / HP ($0.08)
Quarter
Roche AGM / Walt Disney / Caterpillar analyst
Tuesday Bulgari / EADS / E.On / Finmeccanica / SBM Offshore / Metropole TV meeting / Hospitality & Gaming conf at Deutsche
Bank / Transportation conf at JP Morgan
Banca Monte dei Paschi di Siena / JC Decaux / Deutsche Lufthansa / Enel
TUI Travel (GBp 7.666667) / Coca
Wednesday / International Power / Lagardere Groupe / Ingenico / National
Cola Co ($0.41)
Semiconductor / Bulgari / Terna
TRADING IDEAS
BUY BNP / SOC GEN to play rate cut + helpful for banks & BUY ACCOR & STM to play dollar
BUY RENAULT / AIR FRANCE / AXA / NOKIA to play recovery
BUY MUNICH RE / PHILIPS / AIR FRANCE / BASF / VEOLIA on double bottom possibility
BUY Eurostoxx cash to play double bottom possibility (1847.62) & BUY the dollar to play US will manage a recovery sooner than Europe

BUY NOVARTIS / SELL SANOFI // BUY PHILIPS/ SELL ASML // BUY SIEMENS / SELL ALSTOM
BROKER METEOROLOGY
TOMTOM ......................................RAISED TO NEUTRAL FROM SELL ............................................................ BY GOLDMAN SACHS
THOMSON ...................................RAISED TO HOLD FROM SELL ............................................................................................BY S&P
SIEMENS .....................................RAISED TO OVERWEIGHT ......................................................................... BY MORGAN STANLEY
ABB .............................................RAISED TO EQUALWEIGHT FROM UNDERWEIGHT .............................. BY MORGAN STANLEY

IBERDROLA ................................RATED NEW UNDERWEIGHT ............................................................................................ BY HSBC

SCHNEIDER ................................CUT TO UNDERWEIGHT ............................................................................ BY MORGAN STANLEY
AKZO NOBEL .............................CUT TO NEUTRAL FROM BUY .................................................................... BY GOLDMAN SACHS

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

5-Mar-09 ONE STEP BEYOND

CHART OF THE DAY

ADP National Employment Report - Private nonfarm level change since 2001

400

200

-200

-400

-600

-800
2001 2002 2003 2004 2005 2006 2007 2008 2009

Source : Bloomberg

According to the ADP private report, companies in the U.S. cut an estimated 697 000 workers in February (prior -614 000), which is
much more than expected by the economist forecast(-630 000) and happened to be the fastest drop since the statistic creation in
2001. Indeed in order to face the weak domestic demand due to strained credit and the drop of exports due to the global economic
downturn companies are massively cutting staff. Unfortunately the sharp rise of unemployment is hitting household purchase power
reducing their consumption and forcing as a vicious circle companies to cut jobs again.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
23.50 GMT Japan Capital spending fourth quarter -15,5% -13,0%
07.00 GMT Germany Retail sales January 0,2%,-0,7%YoY 0,1%,-0,3% YoY
07.45 GMT France ILO unemployment rate fourth quarter 7,9% 7,7%
07.50 GMT France Producer prices January 0,3%,-0,4% YoY -1,4%, 0,0% YoY
10.00 GMT Euro zone Gross Domestic Product (preliminary) fourth quarter -1,5,-1,2%YoY -1,5,-1,2%YoY
12.00 GMT United Kingdom Bank of England annouces rates March 5 th 0,50% 0,50% 1,00%
12.45 GMT Euro zone European Central Bank annouces interest rate March 5 th 1,50% 1,50% 2,00%
13.30 GMT United - States Nonfarm productivity (final) fourth quarter 1,1% 3,2%
13.30 GMT United - States Unit labor cost (final) fourth quarter 3,8% 1,8%
13.30 GMT United - States Initial jobless claims 28 th February 650 000 667 000
13.30 GMT United - States Continuing claims 21 th February 5 155 000 5 112 000
15.00 GMT United - States Factory orders January -3,5% -3,9%

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

DJIA 6875,8 - 5,34% - 21,66% EUR/USD 1,2589 -1,20% -9,88%
S&P 500 712,9 - 6,74% - 21,08% EUR/JPY 125,21 0,16% -1,11%
Nas daq 1353,7 - 5,02% - 14,16% USD/JPY 99,46 -1,01% 8,93%
CA C 40 2675,7 - 0,79% - 16,85% Oil Price % 5 Days Ytd
DA X 3890,9 1,16% - 19,11% Brent $/b 45,9 2,05% 9,79%
Eur os tox x 50 1943,5 - 1,11% - 20,60% Gold Price % 5 Days Ytd
DJ 600 167,6 - 2,60% - 15,50% Gold $/oz 913,3 -3,45% 3,58%
FTSE 100 3645,9 - 5,21% - 17,78% Rates USA Euro Japan
Nikkei 7433,5 - 2,28% - 16,10% Central Banks* 0,25 2,00 0,09
Shanghai Comp 2181,8 - 0,38% 19,83% Overnight 0,20 1,10 0,09
Sens ex ( India) 8260,4 - 5,12% - 14,38% 3 Months 0,25 0,79 0,26
MICEX ( Rus s ia) 685,7 8,36% 10,67% 10 Y ears** 2,98 3,14 1,32
Bov es pa ( Bras il) 38402,2 0,45% 2,27% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

5-Mar-09 ONE STEP BEYOND

Economic data preview
Watch in the United-States the release of the factory orders for January due at 15.30 GMT, expected to remained on a drop trend as
domestic demand is falling due to the credit crunch and the rise of unemployment and as exports are hit by the global economic downturn
cutting the demand for American goods abroad. Keep an eye on the release of the initial jobless claims and the continuing claims data of
last week confirming a sharp deterioration of the labour market as companies are laying off due to the deepening recession weakening the
demand.

Watch in the Euro area the European Central Bank announces interest rate decision due at 12.45 GMT. A cut of 50bp of the leading rate
is expected to reach 1.5% as recession is deepening and as inflation is on a lasting drop trend. Watch as well the preliminary release of
the Gross Domestic Product for the fourth quarter due at 10.00 GMT which will confirm the advanced data of the GDP and the deepening
recession in Europe.

Watch in the United Kingdom the announce of the Bank of England interest rate due at 12.00 GMT. A cut of 50bp of the leading rate is
expected to reach 1.0% as the United Kingdom is strongly hit by a financial crisis as well as a real estate and an economic crisis in a
country where household are particularly exposed to debts./JB

ate

ECONOMY
UNITED-STATES : ADP REPORT REVEALED AN HISTORICAL DROP IN PAYROLLS IN FEBRUARY
According to the ADP private report, companies in the U.S. cut an estimated 697 000 workers in February (prior -614 000), which is much
more than expected by the economist forecast(-630 000) and happened to be the fastest drop since the statistic creation in 2001. Indeed
in order to face the weak domestic demand due to strained credit and the drop of exports due to the global economic downturn companies
are massively cutting staff. Unfortunately the sharp rise of unemployment is hitting household purchase power reducing their consumption
and forcing as a vicious circle companies to cut jobs again.

UNITED-STATES : ISM NON MANUFACTURING COMPOSITE CONTRACTED IN FEBRUARY

After reaching its lowest level in November 2008 at 37.4 and after rising in December and in January respectively at 40.1 and 42.9 the ISM
non manufacturing in the United-States which represent 75% of the economy dropped in February at 41.6 in line with the economist
consensus. If we look to the breakdown the employment rose from 34.4 to 37.3 but after rising in December the new orders dropped from
41.6 to 40.7. The sharp rise of unemployment (697 000 cut jobs cut in February according to the ADP survey) is slashing payrolls and the
credit crunch is cutting household spending weakening confidence further. Despite the ambitious President Obama revival plan it must be
notice that all measure of economic policy takes 6 to 9 month to impact the activity, consequently the U.S. economy will not start
recovering before the second half of 2009.

EURO ZONE : PMI COMPOSITE DROPPED TO AN HISTORICAL LOW IN FEBRUARY

Europe’s services industries contracted for an eight straight month in February an reached an historical low at 36.2 exactly as expected.
This index is based on a survey of purchasing managers and a reading below 50 indicates a contraction. This gloomy data is not a
surprise as the global economic downturn is hitting exportations and the credit crunch is hampering household purchase power weakening
the demand and forcing companies to cut jobs, increasing the lake of demand and deepening as a matter of fact the recession. The Euro
area is facing its sharpest recession since world war two and the next six month will revealed a rise of unemployment and a deterioration
of the economic activity. If we look briefly the detail by countries the PMI services dropped in Italy at 37.9, in Germany at 41.3 and slightly
rose in France at 40.1(prior 40.1) but remained under the level of 50./JB
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5-Mar-09 ONE STEP BEYOND

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
05/03/2007 05/09/2007 05/03/2008 05/09/2008 05/03/2009 05/03/2007 05/09/2007 05/03/2008 05/09/2008 05/03/2009
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
05/03/2007 05/09/2007 05/03/2008 05/09/2008 05/03/2009 05/03/2007 05/09/2007 05/03/2008 05/09/2008 05/03/2009
Source : Bloomberg Source : Bloomberg

Oil : Brent ($/b) Forex: EurovsDollar (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
05/03/2007 05/09/2007 05/03/2008 05/09/2008 05/03/2009 05/03/2007 05/09/2007 05/03/2008 05/09/2008 05/03/2009
Source : Bloomberg Source : Bloomberg