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7-May-09 REASSURING TEST

Analysts and investors will be happy to put the stress test question behind them, as results of these tests are due today. Known as
the Supervisory Capital Assessment Program, this test has been conducted by the Board of Governors of the Federal Reserve System,
the Federal Reseve Banks, the FDIC and the Office of the Comptroller of the Currency since February 25th among 19 large bank holding
companies (BHCs) with more than $100bn in assets. Supervisor believe BHCs should hold additional capital to provide a buffer against
higher losses than generally expected and should remain sufficiently capitalized over the next two years and able to lend to creditworthy
borrowers, should such losses materialize. Losses taken in the 6 quarters through the end of 2008 by the 19 BHC’s participating in the
SCAP are estimated at approximately $400bn. The “baseline scenario” reflected the consensus expectation in February 2009 among
professional forecasters on the depth and duration of the recession, while the “more adverse scenario” was designed to characterize a
recession that is longer and more severe than the consensus expectation. The average baseline scenario considers a -2.0 % real GDP
decline in 2009 and an increase of +2.1 % in 2010, while the alternative more adverse scenario is based on -3.3 % and +0.5 % figures. In
the baseline scenario, civilian unemployment rate is at 8.4 % in 2009 and 8.8 % in 2010 (8.9 % and 10.3 % in the more adverse scenario.
As for house prices (Case-Shiller 10-City Composite), baseline figures are at -14 % in 2009 and -4 % in 2010 (-22 % and -7 % in the more
adverse scenario). The participating BHCs were asked to project estimated losses on loans, securities, and trading-related exposures,
including potential losses stemming from off-balance sheet position, for 2009 and 2010 that would be consistent with both macro-
economic scenarios. They were instructed to project losses for 12 separate categories of loans held in the accrual book, for loans and
securities held in the available-for-sale and held-to-maturity (AFS/HTM) portfolios, and in some cases for positions held in the trading
account.
Alongside the forward-looking SCAP conducted by the Federal banking agencies, the U.S. Department of the Treasury
announced terms and conditions of the Capital Assistance program (CAP)
Terms
• Capital provided under the CAP will be in the form of a preferred security that is convertible into common equity at a 10 percent
discount to the price prevailing prior to February 9th.
• CAP securities will carry a 9 percent dividend yield and would be convertible at the issuer's option (subject to the approval of
their regulator).
• After 7 years, the security would automatically convert into common equity if not redeemed or converted before that date.
• The instrument is designed to give banks the incentive to replace USG-provided capital with private capital or to redeem the
USG capital when conditions permit.
• With supervisory approval, banks will be able to request capital under the CAP in addition to their existing CPP preferred stock.
• With supervisory approval, banks will also be allowed to apply to exchange the existing CPP preferred stock for the new CAP
instrument.
Conditions
• Recipients of capital under the CAP will be subject to the executive compensation requirements in line with the Emergency
Economic Stabilization Act of 2008.
• As part of the application process, banks must submit a plan for how they intend to use this capital to preserve and strengthen
their lending capacity – specifically, to increase lending above levels relative to what would have been possible without
government support. Taxpayers will be able to monitor the performance of banks receiving capital under the CAP. Banks
receiving capital will be required to submit to Treasury monthly reports on their lending broken out by category.
• Recipients will also be subject to restrictions on paying quarterly common stock dividends, repurchasing shares, and pursuing
cash acquisitions.
Bank of America (+17.07%) shares increased sharply yesterday, despite reports from the WSJ that the company may need to raise
about $34 billion in fresh capital. Bank officials declined to comment on the reports, though the New York Times cited a senior executive
who said the capital shortfall was $33.9 billion. Citigroup (+16.62%) bank analyst Keith Horowitz wrote Wednesday the total was higher
than expected. But the company could make up that gap by selling assets or converting the preferred shares it gave the government as
part of the $45 billion it got from the TARP to common shares. That latter scenario would make the government the largest shareholder in
one of the country's largest banks. Alternatives like that are reasons why the stock moved up. "Despite fundamental headwinds
associated with the current economic cycle,” said Horowitz. “We believe Bank of America valuation will undergo a beneficial shift.”
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 56,6 1,3291 98,51 3,18 3,24 1,06 3,67 6,55 -0,65 -0,04 0,73 1,43 -0,20 0,71 1,74 0,28 1,21 US
Perf 1d % 4,67 -0,33 -0,19 2,26 bp 2,9 bp 0,23 2,37 2,12 -1,01 -0,97 -0,66 0,03 -0,29 -0,85 0,34 -0,78 0,13 Europe
ECONOMIC DATA with impact
No major data in the US…
ECB meeting (11.45 GMT) – Refi rate expected to be cut by 25 bps to 1%
POSITIVE IMPACTS
INBEV : Q1 sales $8.20bn (8.30bn exp) / Ebitda $2.79bn (2.56bn exp) / Achieved $295 m of AB synergies in Q1 (Plans $1bn for FY)
SWISS RE : Q1 premiums SFR 6.53bn (SFR 6.35bn) / CR 90.2% (95.4% exp) / Shareholders Equity €23.6bn / Sees higher demand ,
prices in Reinsurance market / Revises up mid-term financial targets / Conf call at 1300 UKT
ZURICH FI : Q1 Gross Prem. $14.24bn ($14.04 e) / Life $5.5bn – Non-Life $9.8bn / ROE 6.6% / CR 95.8% (96.6% exp) / $1bn realised
losses & impairments / Solvency 157% / Challenging 2009 but on track to achieve cost-cut targets from 2009-11/ Conf call 830 UKT
PERNOD RICARD said it was reorganizing its wine and champagne unit
LANXESS : Q1 sales €1.05bn (1.27bn exp) / Ebitda €66m (59m exp) / Inventory reductions “more or less” completed” / No outlook
VEOLIA : Q1 revenue €9.27bn (8.95bn exp) but Ebitda in line (1.06bn vs 1.02bn exp) / Reaffirmed 2009 forecast
UNILEVER : Q1 sales €9.50bn (9.59bn exp) but org. growth 4.8% (4.4% exp) / Operating €1.23bn (1.26bn exp) but margin better
ITALCEMENTI : Q1 revenue €1.20bn, in line / Ebitda €189m (183m exp) / Said that Q2 should be in line with Q1 / Looking to the H2, it
said it should be less difficult "if sales prices remain steady and the expected decline in volumes becomes less negative".
BANCO POPOLARE has received authorisation from Italy's central bank to take over ITALEASE
NOVARTIS said that its cancer drug Glivec received EU approval as a treatment for patients with stomach cancer
LLOYDS : Good revenue performance in Q1 but continues to expect the group to report a 2009 loss before tax / Strong liquidity position
BARCLAYS : Q1 Rev £8.15bn / Impairments £2.3bn / Tier1 ratio 7.2% including sale of IShares / Sees profits distributed via Div lower
than previously 50% / Conf call at 0900 UKT
DIAGEO sees trading in line with views / Maintained FY profit guidance
BOVIS HOME has been successful in delivering cash flow ahead of its expectations
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7-May-09 REASSURING TEST

OLD MUTUAL said FuM fell 6% to £245bn from 31 March / Net client cash outflow £2.9bn / Pro-forma FGD surplus £0.9bn / Overall
capital position remains comfortable

CISCO : Q3 revenue $8.16bn (8.07bn exp) / EPS $0.30 (0.25 exp) / Sees Q4 revenue between $8.29-8.60bn (8.26bn exp)
PRUDENTIAL : Q1 EPS $1.05 ($0.83 expected) / Expects FY EPS to range from $4.80 to $5.20 ($4.87 expected)
NEWS CORP : Q3 revenue $7.4bn (7.7bn exp) / EPS $0.16, in line
NEGATIVE IMPACTS
DEUTSCHE TEL. (had released most of its Q1 Apr. 22) : Q1 rev. €15.9bn (15.67bn e) / Ebitda €4.81bn (4.83bn e) / Net loss €1.12bn
due mainly to an impairment of goodwill at its UK wireless biz / FCF €251m / Net debt €42.8bn (43.3bn e) / Cut Ebida target on April 22
NORSKE SKOG : Q1 revenue NK5.26bn (6.03bn exp) / Ebitda NK504m (639m e) / Plans profit improvement programme for 2009-10
L’OREAL : Q1 sales €4.37bn (4.42bn exp) / Organic growth -4.3% / Luxury segment was particularly disappointing (-17.5%) / Sees
gradual improvement in performance in the course of 2009 and plans cost-cutting & other measures to improve earnings
SOC GEN : Q1 rev. €4.91bn (€5.5bn e) / Costs €3.78bn (In line) / Operating €1.14bn (€1.77bn) / Risk Provisions €1.35bn (€1.1bn e)
CIB unit had €1.5bn in extra writedowns / Can’t rule out extra writedowns in the future / Tier1 ratio 9.2% / Conf call at 1400 UKT
AXA : Q1 rev. €27.6bn (€27.4bn e) / L&S €16.45bn - P&C €9.1bn (in line) / APE €1.6bn (€1.7bn exp) / Solvency 157% / Environment
to remain difficult throughout 2009 / Expects to have suitable flexibility & strength to face recession / Didn't rule out new deals in Italy
PORSCHE and VOW said they plan to merge their operations, creating an integrated auto giant with 10 independent brands, including
Porsche's sportscar operations / Porsche said it will consider options to raise capital… / No more details
FIAT’s CEO said he is interested in SAAB Brand
CENTRICA & BRITISH GAS cut electricity prices by 10%
HEIDELBERGCEMENT : Q1 Sales €2.36bn (In line) / Sees lower 2009 sales & Operating profit vs 2008 / Has proposed to banks that
debt conditions be amended to match current market environment
NOKIAN : Q1 sales €155.6m (167m exp) / Operating loss 2.7m (+4m exp) / Sees Q2 & 2009 sales & operating clearly weaker yoy
DANSKE BANK is bracing for a multi-year global financial downturn (CEO) / Co took too big risks & has no plans to sell or buy assets
RESULTS DIVIDENDS EVENTS
Soc Gen / Swiss Re / Altana / Ciment Français / Italcementi /
Adidas AGM / Google AGM / Hochtief AGM / Old
Today Deutsche Telekom / Unilever / Diageo / General Motors / Axa (€0.40) / E.On (€1.50) / Technip (€1.20)
Mutual AGM / Fugro AGM
VeriSign / Toyota
Adidas (€0.50) / HeidelbergCement (€0.12) /
Hochtief (€1.40) / Lanxess (€0.50) / Scania (SEK
Friday OMV / Puma / Repsol / Havas sales / Mc Do sales Alcoa sales
2.50) / Yara (NOK 0.40) / Bilfinger Berger (€2.00)
/ Fresenius Medical (€0.58)
PPR (€3.30) / Fresenius SE (€0.71) / Fugro
Monday Lonmin / NEC / TUI / Maroc Tel / Microsoft Centrica AGM / Tele2 AGM
(€1.50) / Score (€0.80)
Baloise / Abertis / Enel / EDF / Intercontiental Hotels / Vivendi (€1.40) / Holcim (€1.05) / M6 (€0.85) /
Tuesday Intel analyst meeting / Bayer AGM
Mediaset / Mediobanca / Deutsche Boerse Tele2 (SEK 3.5 +1.5) / Telefonica (€0.50)
Allianz / Generali / Dexia / E.On / ING / Telefonica /
Air Liquide (€2.25) / Bayer (€1.40) / BP (GBp ConocoPhillips AGM / Dexia AGM / JCDecaux
Telekom Austria / Acciona / ThyssenKrupp / Vallourec /
Wednesday 10,64889) / Veolia Environnement (€1.21) / AGM / Safeway AGM / Unilever AGM / TUI AGM /
Theolia sales / Bouygues sales / TF1 / Allied Irish Banks
Informa (GBp V) Accor AGM
interim
TRADING IDEAS
BUY FRANCE TEL / DTE / TEF / TOTAL / ENI / BP / ROYAL DUTCH on eco recovery
BUY NESTLE / L OREAL / VIVENDI on reversal Head & Shoulder possibility
BUY GLAXO / DANONE / UNILEVER looking good & BUY GSZ on double bottom possibility still / BUY ROCHE on island reversal
SELL RENAULT seems enough over bought so far

BUY GSZ / SELL EDF // BUY CHEVRON / SELL CONOCOPHILIPS // BUY DAIMLER / SELL RENAULT // BUY BAYER / SELL BASF
BROKER METEOROLOGY
LAFARGE........................................... RAISED TO NEUTRAL..................................................................................BY CREDIT SUISSE
TUI ...................................................... RAISED TO NEUTRAL FROM SELL ....................................................... BY GOLDMAN SACHS
ERICSSON ........................................ RAISED BUY FROM NEUTRAL ........................................................... BY BANK OF AMERICA
BNP PARIBAS ................................... RAISED TO NEUTRAL FROM SELL .................................................................................BY ING
FORTIS............................................... STARTED AT OVERWEIGHT ............................................................................ BY JP MORGAN
SBM OFFSHORE ............................... RAISED TO OVERWEIGHT FROM EQUAL .......................................... BY MORGAN STANLEY
CARREFOUR ..................................... RAISED TO BUY FROM HOLD ........................................................................................BY S&P

MEDIASET ......................................... ADDED TO LEAST PREFERRED.......................................................... BY BANK OF AMERICA

RBS .................................................... CU TO SELL FROM NEUTRAL ....................................................................................... BY UBS
BARCLAYS ........................................ CUT TO SELL FROM NEUTRAL ..................................................................................... BY UBS
MAN GROUP...................................... CUT TO HOLD FROM BUY.................................................................................. BY CITIGROUP

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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7-May-09 REASSURING TEST

CHART OF THE DAY

ADP National Employment Report SA Private Nonfarm Level Change (million)
Since 2001

40 0

20 0

-20 0

-40 0

-60 0

-80 0

2 001 20 02 2003 2004 2005 2006 2007 2008 2 009

Source : Bloomberg

After showing a reduction of of 708 000 jobs in March an historical high payrolls fell by an estimates 491 000 workers in April. This data
is much better than the forecast which expected 645 000 job cuts, confirming that the worst of recession’s employment losses may have
passed.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
0.50 GMT Japan Bank of Japan to publish Minutes April 6-7 meeting
7.45 GMT France Trade Balance March - € 3,9 bn - € 3,9 bn - € 4,1 bn
11.00 GMT Germany Factory orders March -1,0%,-35,8%YoY -3,5%,-38,2%YoY
12.00 GMT United Kingdom BoE announces rates May 7 0,50% 0,50% 0,50%
12.45 GMT Euro area ECB annouces Interest rates May 7 1,00% 1,25%
13.30 GMT United States Nonfarm productivity (preliminay) 1st quarter 1,5 % 0,6% -0,4%
13.30 GMT United States Unit labor cost (preliminary) 1st quarter 2,7% 5,7%
13.30 GMT United States Initial jobless claims May 2 635 000 631 000
13.30 GMT United States Continuing claims April 25 6 350 000 6 271 000
14.30 GMT United States Ben Bernanke speaks on banking
20.00GMT UnitedStates Consumer credit March -$3,3bn -$7,5bn

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

DJIA 8512,3 4,12% - 3,01% EUR/USD 1,3299 0,48% -4,86%
S&P 500 919,5 5,31% 1,80% EUR/JPY 131,07 -0,41% 3,32%
Nas daq 1759,1 2,81% 11,55% USD/JPY 98,57 0,04% 8,06%
CA C 40 3283,5 8,37% 2,04% Oil Price % 5 Days Ytd
DA X 4880,7 5,93% 1,47% Brent $/b 55,8 13,49% 33,41%
Eur os tox x 50 2437,3 7,88% - 0,42% Gold Price % 5 Days Ytd
DJ 600 208,0 8,10% 4,87% Gold $/oz 913,6 2,64% 3,35%
FTSE 100 4396,5 7,72% - 0,85% Rates USA Euro Japan
Nikkei 9331,9 1,47% 5,33% Central Banks* 0,25 1,25 0,11
Shanghai Comp 2576,4 7,96% 41,50% Overnight 0,15 0,35 0,11
Sens ex ( India) 12059,5 5,11% 25,00% 3 Months 0,18 0,68 0,20
MICEX ( Rus s ia) 986,1 11,22% 59,17% 10 Y ears** 3,18 3,24 1,42
Bov es pa ( Bras il) 51499,5 12,39% 37,15% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
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7-May-09 REASSURING TEST

ECONOMIC DATA PREVIEW
Watch in the United-States the weekly release of the initial jobless claims and of the continuing claims due at 13.30 GMT. After
declining two weeks ago initial jobless claims are expected to slightly increase as the weak domestic and foreign demand is forcing
companies to cut jobs. Meanwhile continuing claims should reach another historical high.

Watch in the Euro area the European Central Bank leading rate announce due at 12.45 GMT . As recession is deepening in the Euro
area and as the deflation is getting closer and closer the European Central Bank is expected to cut its leading rate of 25 bp to reach
1%. Watch in France the release of the trade balance due at 7.45 GMT, French trade deficit is expected to narrow drive by the good
resistance of exportations./JB

ECONOMY
UNITED-STATES : U.S. COMPAGNIES CUT FEWER JOBS IN APRIL AS PER THE ADP EMPLOYMENT REPORT
After showing a reduction of 708 000 jobs in March an historical high payrolls fell by an estimates 491 000 workers in April. This data is
much better than the forecast which expected 645 000 job cuts confirming that the worst of recession’s employment losses may have
passed. This improvement is following the good resistance of the consumer spending increasing of 2,2% at the first quarter and expect
to pursue their increase trend. American companies which were over laying off due to a fear state of mind are progressively getting back
to a more stable situation. More generally we can say that the U.S. economy already touched the bottom and will recover more
substantially this summer.

EURO ZONE : PMI SERVICES IS IMPROVING IN THE EURO AREA

After reaching an historical low in February at 39.2 the PMI services survey rose at 40.9 in march and reached 43.8 in April confirming
that the worst is past in the euro area and that the economy is slowly but surely recovering. Indeed this encouraging data is following the
rise of the PMI manufacturing in Europe another sign of that the recession is slowing down. If we look to the break down the major
countries of the euro area has seen an improvement of their PMI services respectively at 42.0, 46.5 and 43.8 for Italy,France and
Germany. Meanwhile the European composite PMI rose more modestly from 40.5 to 41.1. Nevertheless if these data are encouraging
they remained under the level of 50 signalling that the activity is still contracting in the service sector.

EURO ZONE : RETAIL SALES DROPPED BY RECORD IN MARCH

European retail sales fell of 0.6% in March (forecast +0.1%) and to an historical low 4.2% from a year ago ( forecast -2.6%). If we look to
the detail by sector , retail sales concerning food drink and tobacco dropped of -1.4%,-5.2% YoY and non food products remained flat
since last month but dropped of 1.9% from a year ago. The substantial decline of European retail sales is mainly explained by the rise of
unemployment humping household purchase power and by the drop of inflation as retail sales data are released in value. As
unemployment should rise since next winter and as prices are on a lasting drop trend retails sales will still be hit in the coming months.
/JB
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7-May-09 REASSURING TEST

VIX index : implied volatility on the S&P 500 $Libor -3-Month(Interbank Rate)
6
85
80
5,5
75 5
70
65 4,5
60 4
55
50 3,5
45 3
40
35 2,5
30 2
25
20 1,5
15
1
10
5 0,5
07/05/2007 07/11/2007 07/05/2008 07/11/2008 07/05/2009 07/05/2007 07/11/2007 07/05/2008 07/11/2008 07/05/2009
Source : Bloomberg Source : Bloomberg

United States : 10-year Treasury yield 10-year Treasury spread USA-Euro zone
5,5 1,2
5,25 1
5
0,8
4,75
4,5 0,6

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
07/05/2007 07/11/2007 07/05/2008 07/11/2008 07/05/2009 07/05/2007 07/11/2007 07/05/2008 07/11/2008 07/05/2009
Source : Bloomberg Source : Bloomberg

Oil : Brent ($/b) Forex : Euro vs 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
07/05/2007 07/11/2007 07/05/2008 07/11/2008 07/05/2009 07/05/2007 07/11/2007 07/05/2008 07/11/2008 07/05/2009
Source : Bloomberg Source : Bloomberg