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12-Mar-09 TEST DAY

Major economic topics come from Asia: China’s industrial production rose 11 % YoY in February, compared with a 3.8 % gain in
January and February combined and 5.7 % in December. China’s biggest decline in exports on record and first deflation since 2002 were
among signs this week that China’s economy is at risk of a bigger slump. But production began to respond to the government’s stimulus
package ($585bn), which also pushed up investment spending. Retail sales rose 15.2 % YTD in January and February combined vs. 21.6
% a month earlier. Weaker inflation and more cautious consumer sentiment contributed to the weaker gain in retail sales. Bank of Korea
unexpectedly left its benchmark rate unchanged (2.0 %) despite an extremely weak domestic demand and plunging exports. In Japan, Q4
GDP was revised at -3.2 % QoQ (-12.1 % annualized) vs. -3.3 % (-12.7 %) initially, the fastest pace since 1974.
Today’s focus is the release of February’s retail sales figures in the U.S. The Fed said in its March Beige Book that “Consumer
spending remained sluggish on net, although many Districts noted some improvement in January and February compared with a dismal
holiday spending season… As reported by Richmond, Chicago, and San Francisco, discount chains fared much better than traditional
department stores and specialized retailers, recording sales gains in many cases as consumers continued to switch away from
discretionary spending and luxury items and toward basic necessities... Reports of gains in retail spending were largely limited to grocery
stores and pharmacies, although reports from Philadelphia, St. Louis, and Richmond indicated some pickup in sales of apparel, which the
latter District attributed in part to severe winter weather”. And the Redbook and ICSC weekly sales figures both picked up in February,
albeit from very low levels. So, there might be a slight improvement for a second month in a row in February after January’s rise (+1.0 %
MoM, -9.7 % YoY), the first rise after a 6 months slide. Gasoline price rose above $2/gal in February which could boost sales at filling
stations. However, it’s hard to believe that there will be a sharp turnaround in retail sales (Home Depot and Costco have recently
announced poor earnings) as house prices, equity prices and employment were plunging. But, as for the latter, remember that February’s
non-farm payrolls, although near a record low, were better than in January and December.
Despite a rebound yesterday ($913.92/oz vs. $897.31/oz), investors keep being cautious about gold, an inflation hedge and a safe
haven against economic and financial meltdown. Gold’s pop above $1,000/oz on Friday February 20th was due both to deflation fears
(decrease in house prices, decline of equity indexes, drop of raw material prices, CPI close to turn negative and to trigger an increase in
real interest rates…) and to inflation fears (monetary stimulus, huge widening of budget deficits…). But, despite the fact that the U.S.
Treasury 10-year rate rose slightly above 3.0 % on Tuesday after equities soared, there is no indication that long term rates have already
started an upward move connected to the widening of deficits. With central banks turning to Quantitative Easing, investors may consider
that massive buying of Treasuries might help long term rates stay at current low levels. Gold does not seem to be a safe haven anymore.
Equity markets took a breather yesterday after Tuesday’s surge. Oil prices declined sharply (WTI at $42.33/bbl, -3.38 $) after crude
inventories declined (-0.1 % at 345.3 million barrels). The yen rose on speculation the deepening global recession will increase demand
for the currency as a refuge (96.30 USD/JPY vs. 98.48). U.S. index futures were down roughly -0.7 % at 07.00 GMT.
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 42,9 1,2811 96,41 2,88 3,07 1,51 -1,18 1,47 -1,59 2,26 0,67 0,60 -0,57 2,03 0,25 0,98 0,06 US
Perf 1d % -6,79 -0,20 0,90 -2,2 bp 7 bp 1,22 -0,35 0,77 -1,01 1,48 1,22 0,71 -0,13 1,78 0,33 0,72 0,12 Europe
ECONOMIC DATA with impact
French CPI February – 7.45 GMT exp +0.2%
Euro area CPI – 10.00 GMT - -0.2%
German Industrial production –11.00 GMT – 3.0% exp
US advanced retail sales – 12.30 GMT
US Jobless claims 12.30 GMT / 645 K exp
US Business inventories 14.00 GMT –1.1%
Geithner testifies to senate 14.00 GMT
POSITIVE IMPACTS
DELHAIZE : FY EBIT €904.1m (€885 m exp) / Dividend up 2.8% to €1.11 / Sees 2009 operating profit growth between 0% & 3%
VODAFONE - TEF - FTE - DTE plan to share their mobile networks in the UK = Vodafone with O2, while Orange plans to ask T-Mobile
and 3 for permission to join their network sharing venture (The Guardian)
FRESNILLO, LONMIN, PETROFAC, INTERTEK, F&C Inv. Trust will enter the FTSE / Changes effective after the close on Friday 20
March, that is from start of trading on Monday 23 March
BANCO POPULAR has rejected merger proposals in “recent times” as it wants to remain independent (Chairman)
ROCHE said it has agreed with Genentech to buy the 44% of the U.S. biotech company that it doesn't already own for around $46.8 bn
UBS plans to re-open its property funds in Germany next month (The Head of real estate investment arm)
AREVA : France is looking to open up the capital (1% to 5%) to Middle Eastern investors to reinforce Areva's prospects in the region (FT)
RIO TINTO : Australia's parliament rejected a motion aimed at sinking China's proposed $19.5 bn investment in the company
INSURERS : NipponKoa Ins., Japan's No.5 non-life insurer, closed down 10% after officials said it would merge with No. 3 Sompo Japan

JPM's CEO said yesterday in session that his bank was profitable in January and February / He said that bank's bond department had
just had its 2 busiest months ever
NEGATIVE IMPACTS
LAGARDERE : FY operating €647m (655m exp) / Dividend €1.30, unch. / Sees 2009 operating “growth” from 3 of its 4 main divisions
between "0 to -10%" / "Impossible" to give guidance for its broadcasting division Lagardere Active / The press and broadcasting division is
implementing a new cost-cutting program aimed at saving €70 m on its operating profit / Will hold on to its 7.5% stake in EADS
CARREFOUR : FY operating €3.3bn (3.36bn e) / Div. €1.08, unch. / Net debt €6.65 (6.8bn e) / Took €524 m one-time charges incl.
€396m impairment / 2008 FCF €1.9 bn / Plans 2009 cost savings of €500 m / Market looking to new CEO to plot road to recovery
K+S : Q4 revenue €955.5 m (1.22bn exp) / Operating € 287.8 m (351m exp) / Dividend €2.40 / Sees “significantly” lower revenues and
earnings in 2009, but expects a marked increase in sales in 2010 as 'highly probable'
PEUGEOT : Thales' CEO, Denis Ranque, is being considered to replace Christian Streiff, the CEO of Peugeot (La Tribune)
AIR FRANCE is looking to order 100 B787 or A350 for more than $20bn at list prices / Delivery could start in 2014 (La Tribune)
LSE, WOLSELEY, 3I Group, FIRSTGROUP, and TATE & LYLE will leave the FTSE 100 / / Changes effective after the close on Friday
20 March, that is from start of trading on Monday 23 March
FORTIS : Moody's says that group ratings remain under review for possible downgrade
NORDEA : Shareholders will decide on a planned €2.5bn rights issue at an EGM (0800 UKT)
ENEL : FY Net €5.29bn (in line) / To launch €8bn rights issue in H109 / Confirms 2008 Div €0.49 / To offer 60% div payout for 2009
Sees 09 results better than 08 / Sees €10bn in asset disposals to reduce debt by 2010 / Sees €33bn capex 2009-2013 (€45bn prev.)
AEGON confirmed preliminary FY results but says decline in revaluation reserve of €1.7bn in Q4 driven by widening in credit spreads
 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

12-Mar-09 TEST DAY

FREDDIE MAC : Q4 2008 loss of $23.9 bn, $ -7.37 / sh. (-5.31 exp) / seeking $31 bn in additional capital from the Treasury / Losses
driven by net mark-to-market losses of $13.3 bn on its derivative portfolio, guarantee asset & trading securities due to the impacts of
spread widening & declines in interest rates + $7.2 bn in credit-related expenses + security impairments on its available-for-sale securities
of $7.5 bn primarily due to sustained deterioration in the performance of the underlying collateral on its non-agency mortgage-related
securities / FRE recognized an additional valuation allowance of $8.3 bn against its net deferred tax assets
RESULTS DIVIDENDS EVENTS
Today Carrefour / VW / Aegon final / Hannover Re / ADP / Delhaize / Geberit Nordea EGM
Friday Allianz / ENI / Eiffage
Monday Acerinox / Linde / Steria
Tuesday Cimport cimentos / Mediaset / Adobe / Goldman Sachs
Wednesday Baloise / BMW / Unicredit / Inditex / Lanxess / FedEx / Oracle / General Mills / Nike Land Securities (GBp 16.50) HP AGM
TRADING IDEAS
BUY FINANCIALS as CREDIT SUISSE / DPB / SCH / BBVA / ING / BNP / AGRICOLE / UNICREDITO
BUY TELEFONICA / VINCI / THYSSEN on reversal Head & Shoulder possibility
BUY ENI / NOKIA to play recovery
BUY RWE / ENEL / ALLIANZ / TOTAL / VIVENDI / SAP on double bottom possibility

BUY DANONE / SELL NESTLE / BUY METRO / SELL AHOLD // BUY ALLIANZ / SELL AEGON // BUY HOLCIM / SELL LAFARGE // BUY BAYER /
SELL BASF
BROKER METEOROLOGY

ADMIRAL .....................................RAISED TO OVERWEIGHT ......................................................................... BY MORGAN STANLEY

AVIVA...........................................CUT TO SELL FROM HOLD ..................................................................................... BY CITIGROUP

LUKOIL.........................................CUT TO SELL FROM BUY ........................................................................................ BY CITIGROUP
ROSNEFT..................................... CUT TO SELL FROM BUY ....................................................................................... BY CITIGROUP
INTESA SANPAOLO ..................CUT TO SELL FROM NEUTRAL ................................................................... BY GOLDMAN SACHS
SVEBSKA CELLULOSA..............CUT TO NEUTRAL FROM BUY ............................................................................................ BY UBS
EON .............................................CUT TO NEUTRAL FROM OVERWEIGHT ........................................................................ BY HSBC
EDP .............................................REMOVED TO CONVICTION BUY LIST ....................................................... BY GOLDMAN SACHS

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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12-Mar-09 TEST DAY

CHART OF THE DAY

Chinese trade balance (value/billion) and exports (% YoY) since 1995

50 60

50
40
40
30
30
20 20

10 10

0
0
-10
-10
-20

-20 -30
95 96 97 98 99 00 01 02 03 04 05 06 07 08

Trade balance exports

Source : Bloomberg

The global economic downturn is jeopardizing China main asset : exportations. Indeed most of the main economic partner of China
are facing a deep recession cutting sharply their demand for Chinese goods abroad. Chinese exports plunged of 25.7% in February
from a year ago way below the consensus forecast which was expected a drop of only 1.0%. If we look to the breakdown Chinese
exports dropped sharply toward the United-States at -23.9%, Canada - 27.7%, Japan -27.4% , and Taiwan -32.1%. Importations
dropped of 24.1% ( forecast - 22.5%) and after hitting a record $ 40 billion in November China’s trade surpluses dropped to $ 4.84
billion its lowest level since 2006.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
23.50 GMT Japan Gross Domestic Product (final) 4 th quarter -3,5% QoQ -3,3% QoQ
23.50 GMT Japan Gross Domestic Product annualized (final) 4 th quarter -13,4 % -12,7 %
2.00 GMT China Retail sales February 19,0% YoY
2.00 GMT China Industrial production February 5,7% YoY
7.45 GMT France Consumer price index February 0,1 %, + 0,6 % YoY 0,2%,+0,8%YoY -0,4%,+0,7% YoY
9.00 GMT Italy Gross Domestic Product (final) 4 th quarter -1,8%,-2,6%YoY -0,5%,-0,9% YoY
10.00 GMT Euro area Producer price index January -0,2%,+0,5% YoY -1,3%,+1,8% YoY
11.00 GMT Germany Industrial production January -3,0%,-15,5% YoY -4,6%,-12,0% YoY
12.30 GMT United-States Advanced retail sales February -0,4% -0,5% + 1,0%
Retail sales (less auto) February -0,2% -0,1% +0,9%
12.30 GMT United-States Initial jobless claims March 7 th 645 000 639 000
12.30 GMT United-States Continuing claims February 28 th 5 145 000 5 106 000
14.00 GMT United-States Business inventories January -1,1% -1,3%
14.00 GMT United-States Geithner testifies to Senate ( 2010 budget)

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

DJIA 6930,4 0,91% - 21,03% EUR/USD 1,2805 2,12% -8,34%
S&P 500 721,4 1,28% - 20,14% EUR/JPY 123,39 -0,34% -2,67%
Nas daq 1371,6 1,36% - 13,02% USD/JPY 96,36 1,79% 5,92%
CA C 40 2674,2 - 0,06% - 16,90% Oil Price % 5 Days Ytd
DA X 3914,1 0,60% - 18,63% Brent $/b 41,9 -4,91% 0,62%
Eur os tox x 50 1932,8 - 0,55% - 21,03% Gold Price % 5 Days Ytd
DJ 600 166,2 - 0,74% - 16,19% Gold $/oz 915,8 -1,76% 3,85%
FTSE 100 3693,8 1,55% - 16,70% Rates USA Euro Japan
Nikkei 7198,3 1,17% - 18,75% Central Banks* 0,25 1,50 0,10
Shanghai Comp 2121,7 - 2,69% 16,53% Overnight 0,20 0,85 0,10
Sens ex ( India) 8333,1 - 5,19% - 13,62% 3 Months 0,22 0,78 0,24
MICEX ( Rus s ia) 739,0 12,97% 19,28% 10 Y ears** 2,88 3,07 1,32
Bov es pa ( Bras il) 38804,8 1,05% 3,34% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
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12-Mar-09 TEST DAY

ECONOMIC DATA PREVIEW

Watch in the United-States the release of the retail sales for February due at 12.30 GMT. As the retail sales data are released in
value the rise of prices led them up in January but as prices will stop increasing in February the retails sales should drop .

Watch in France the release of the consumer price index for February due at 7.45 GMT . After dropping in January the consumer
prices will increase in February as the will no benefit anymore of the “sales effect” and of the “oil effect” as the barrel stopped
dropping./JB

ECONOMY

CHINA : EXPORTATIONS COLLAPSED TO AN HISTORICAL LOW AND THE TRADE SURPLUS SHARPLY NARROWED IN FEBRUARY
The global economic downturn is jeopardizing China main asset : exportations. Indeed most of the main economic partner of China
are facing a deep recession cutting sharply their demand for Chinese goods abroad. Chinese exports plunged of 25.7% in February
from a year ago way below the consensus forecast which was expected a drop of only 1.0%. If we look to the breakdown Chinese
exports dropped sharply toward the United-States at -23.9%, Canada - 27.7%, Japan -27.4% , and Taiwan -32.1%. Importations
dropped of 24.1% ( forecast - 22.5%) and after hitting a record $ 40 billion in November China’s trade surpluses dropped to $ 4.84
billion its lowest level since 2006. As the domestic demand is not taking over the economic slowdown of China might increase in the
coming months. Nevertheless it is important to bear in mind that China has four air bags first a saving rate at 50% of the GDP, second
and investment rate at 45% of the GDP, third a public debt reaching only 18% of the GDP and fourth exchange reserves reaching $
1.9 trillions. Not to mention a revival plan of $600 billion until 2010.

GERMANY : PRODUCER PRICES SLOWED AND FACTORY ORDERS PLUNGED IN JANUARY

German producer price inflation declined for a fourth month in January of 1.2% ( forecast -0.1%).Producer prices are led down by the
drop of oil prices as the barrel has been divided by five since its peak at $147 in July 2008.Germany is facing its worst recession since
world war two, domestic consumption is strongly hit and the global economic downturn is cutting the demand for German’s goods
abroad. Consequently companies are forcing to cut jobs and prices. It must be notice than from a year ago producer prices remained
positive at +2.0% but are on a down trend as their level of January 2008 was twice a s much + 4.0%. Meanwhile the deepening
recession is strongly hitting factory orders for the above explained reasons. As a consequence German’s factory orders dropped of
8% in January from a moth ago ( forecast-2.0%) and of 37.9% from a month ago. German economy was strongly hit in 2008 ( GDP at
the last quarter was -2.1%) and will start 2009 with a “growth lost” of 2%,meaning that if Germany growth will be zero in 2009 the GDP
will be at -2.0% at the end of the year. In such conditions the German GDP will be very low till mid 2009 and will rebound the second
half of the year but not enough to finish positive and German GDP should finish the year at -1.5% this year. That is why the European
Central Bank must cut its leading rate at 1.0% as soon as possible and the euro must drop at $1.10. In addition we must have a
coordinate revival plan in the euro area.

UNITED KINGDOM : TRADE DEFICIT WIDENS IN JANUARY

The United Kingdom trade deficit widens in January at -£ 3.5 billion (forecast -£ 3.7 billion). This deterioration of the trade deficit was
led by the drop of exports (down by 6.2% the sharpest fall since the end of 2006) as the global economic downturn humped the
demand for U.K. goods abroad and despite the weak level of the British pound. The Euro area the main commercial partner of the
United Kingdom is facing its deepest recession ever explaining widely the sharp drop of the exportations. As United Kingdom is facing
a deep recession importations are decreasing as well but not as much as exports, which explained the deterioration of the trade
deficit. Manufacturing shrank the most in at least four decades during the quarter through January as exporters of British goods from
cars to machinery cut production. /JB
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12-Mar-09 TEST DAY

VIXindex: impliedvolatility onthe S&P 500 $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
12/03/2007 12/09/2007 12/03/2008 12/09/2008 12/03/2009 12/03/2007 12/09/2007 12/03/2008 12/09/2008 12/03/2009
Source : Bloomberg Source : Bloomberg

UnitedStates : 10-year Treasury yield 10-year Treasury spreadUSA-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
12/03/2007 12/09/2007 12/03/2008 12/09/2008 12/03/2009 12/03/2007 12/09/2007 12/03/2008 12/09/2008 12/03/2009
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
12/03/2007 12/09/2007 12/03/2008 12/09/2008 12/03/2009 12/03/2007 12/09/2007 12/03/2008 12/09/2008 12/03/2009
Source : Bloomberg Source : Bloomberg
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12-Mar-09 TEST DAY