The Eurogroup meeting on Greece's bailout program was inconclusive, postponing a decision on disbursing further aid and revealing disagreements between the IMF and Eurogroup on debt targets. Portuguese GDP contracted again in Q3 while unemployment rose to a new high of 15.8%. Spanish plans for transferring assets to its bad bank are advancing with interest from foreign investors. Japanese Prime Minister Noda will hold elections in December amid calls for more aggressive monetary easing.

1. 2012
th,
Weekly Markets
19
n Perspectives
November
For important disclosures, refer to the Disclosure Section, located at the end of this report.

2. Weekly Summary
Euro area Q3 2012 GDP declined for the second improvement in the labour market. Fed vice-chair
quarter in a row, so an official technical recession Janet Yellen said that the Fed is considering tying
can now be declared. Fed policy to inflation and unemployment
targets.
Risk assets were not helped by US fiscal cliff
worries and escalating tensions in the Middle East. Portuguese output contracted by 0.8% q/q in Q3
The S&P500 finished lower for the second 2012, following a 1.1% contraction in the
consecutive week. The index is now more than 7% previous quarter. Q3 2012 was the 8th
off its highs in mid-September. consecutive quarter of sequential output
contraction. According to the Statistical Office of
Obama met with the four top leaders of congress Portugal, the unemployment rate reached 15.8%
at the White House last Friday in the first formal at the end of Q3 2012.
fiscal cliff talks. They emerged from their meeting
promising they would reach a fiscal compromise The Q3 2012 reporting season is almost over. In
before Christmas. Are we closer to a solution on Portugal, Mota-Engil should disclose its results on
the fiscal cliff ? Wednesday, November 21st.
The FOMC minutes showed committee members This week's Eurogroup/ECOFIN (Nov 20th)
were open to the idea of another round of QE, meeting should decide on the next steps for
after the conclusion of the maturity extension Greece in terms of a disbursement and debt
program in order to achieve a substantial sustainability.

3. US Retail Sales show US CPI and PPI inflation remain
weakness in October consistent with the Fed’s target
• October’s retail sales suggest that US • The annual rate of CPI inflation rose to 2.2% last
consumption has lost some momentum; month. Core inflation remained unchanged at
• It could have been due to Hurricane Sandy or 2.0%, in line with the Fed’s target;
due to the fiscal cliff; • The housing recovery is leading to a higher
• After excluding sales of gasoline, autos and growth rate of housing costs, which account for
building materials, underlying sales fell by 0.1% more than 30% of the CPI index (see chart);
m/m, after a strong 0.9% m/m rise in • October’s headline producer price inflation
September (see chart); reached 2.3% (down from 2.6% in September)
• If Sandy is to blame, then sales should recover and core producer price inflation was 2.1% (2.3%
in November. in September).
5%
CPI Housing (% y/y)
4%
Owners' Equivalent Rent
3%
2% 2.1%
1%
0%
-1%
2006 2008 2010 2012
Source: US Census Bureau Source: Bureau of Labor Statistics

4. Euro-zone GDP declines for a second quarter
• The first estimate of Euro area GDP for Q3 2012 • In France, the economy expanded 0.2% q/q in Q3
reported a contraction of 0.1%, after a 0.2% q/q 2012, after -0.1% q/q in Q2 2012, with
contraction in Q2 2012 (see chart); consumption recovering;
• The Euro-zone PMI and the German Ifo suggest • The Italian economy contracted by 0.2% q/q in
that we should expect further contraction in Q4 Q3 2012. The last 5 quarters have come at -0.1%,
2012; -0.7%, -0.8%, -0.7% and now -0.2%. Is the worst
• The German economy expanded 0.9% q/q in Q3 behind us in Italy?
2012, after 0.3% q/q in Q2 2012, helped by net • In Spain, Q3 2012 declined -0.3% q/q, after -0.4%
trade. However, domestic contributions were q/q in Q2 2012. The breakdown confirms a weak
mixed; domestic demand being partly offset by a strong
• Q3 2012 GDP in the Netherlands contracted export performance.
sharply by 1.1% q/q;
Level of real GDP
104 104
Dec. 2007=100
102 102
Germany
100 100
98 98
96 Spain 96
94 94
Italy
92 92
2008 2009 2010 2011 2012 2013
Source: Eurostat Source: Eurostat

5. The Portuguese recession … and the unemployment rate
goes on… reaches a new record high
• Portuguese output contracted by 0.8% q/q in Q3
• According to the Portuguese statistical office,
2012, following a 1.1% contraction in the previous
the unemployment rate was 15.8% in Q3 2012.
quarter. The Portuguese recession continues. Q3
This value is up 3.4% y/y and 0.8% q/q;
2012 was the 8th consecutive quarter of
• The employed population fell by 4.1% y/y and
sequential output contraction;
by 0.7% q/q;
• According to the Portuguese statistical office, real
• The Labor force decreased by 0.3% y/y, but rose
GDP registered a y/y change rate of -3.4% in Q3
by 0.2% q/q;
2012, after -3.2% in Q2 2012;
• The participation rate of the working age
• The domestic demand recorded a less negative
population stood at 61.3%, unchanged y/y and
contribution, reflecting a less expressive reduction
up 0.1% q/q.
of investment. However, the positive contribution
of net trade decreased significantly. 18%
Unemployment rate in Portugal 15.8%
GDP (y/y quarterly change rate, %) 16%
(% of workforce)
3%
14%
2%
12%
1%
10%
0%
8%
-1%
6%
-2%
4%
-3%
-3.4%
-4% 2%
-4.1%
-5% 0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1998 2000 2002 2004 2006 2008 2010 2012
Source: Statistical office of Portugal Source: Statistical office of Portugal

6. Spain: Transfer of assets to Portugal: TAP and ANA attract
the bad bank is getting closer bids
• Spain intends to use European bailout funds to • The government shortlisted 5 offers (including
pay for the majority stake the country plans to from companies such as Mota-Engil, Fraport
take in the bad bank for problem loans; and Vinci) for the Portuguese airport operator
• According to recent news, the vehicle (SAREB) is ANA, valuing the company between 12x and
generating interest among foreign investors. The 13x its 2011 EBITDA (€199.8mn);
government is expected to meet five investment • TAP, the Portuguese airline company, attracted
banks today to search for private capital; only one bid (Synergy, which is controlled by a
• The banks will transfer real estate linked assets Brazilian investor). 2011 Sales at TAP totaled
(credit as well as foreclosed) with some limits in €2.44bn, but the company reported a net loss
terms of size. The bad bank is to incorporate of €76.8mn. The airline’s financial debt amounts
assets at a discount of 63.1% for foreclosed and to €1.23bn;
45.6% for credit, higher than the impairments • Portugal is auctioning the two companies to
required under Oliver Wyman’s adverse scenario. raise cash under the bailout agreement with
the IMF and the European Union.
Source: Bank of Spain, Oliver Wyman and National Asset Management Agency

7. Japan to hold elections on Resilient domestic demand…
Dec. 16th weakness in external demand
• Prime Minister Noda announced his intention to • Malaysia´s economy expanded 3.6% q/q during
dissolve the lower house. The LDP and its Q3 2012 (5.2% y/y vs. consensus 4.8% y/y). The
coalition will probably gain the majority; strength of domestic demand has more than
• The LDP has a strong stance to public investment. offset the weakness in external demand;
But, how will the investment be financed? There • Hong Kong’s Q3 2012 GDP delivered a more
seems to be no intention to increase fiscal deficit; modest expansion (2.4% q/q annualized), after
• The pressure on the Bank of Japan is already a 0.4% q/q annualized contraction in the
increasing. Shinzo Abe, the current leader of the previous quarter. Real GDP expanded 1.3% y/y
LDP and probably the next Prime Minister, made (vs. consensus of 1.7%). The trade sector
a speech on monetary policy, requiring more continued to be a drag in Q3, while domestic
aggressive easing policies. demand held up better;
A weaker JPY.... and higher stock prices • Singapore’s Q3 GDP fell 5.9% q/q annualized.
2.5%
2.0%
2.09%
1.88% Domestic demand oriented activities looks
1.5% 1.10% 1.15%
resilient, but manufacturing and trade are being
1.0% affected by the weak global demand;
0.5%
0.01% 0.00% 0.01% • With slower demand growth in China and in the
0.0%
-0.5% -0.15% -0.02% US, the resilience of domestic demand has been
-1.0% decisive for these economies.
-1.5% -1.12%
12-Nov 13-Nov 14-Nov 15-Nov 16-Nov
Topix (Tokyo Stock Price Index) USDJPY exchange rate (Price of 1 USD in JPY)
Source: Bloomberg

8. Eurogroup meeting inconclusive US: More QE on the way?
• The Eurogroup decided to extend Greece’s • The minutes of the October 23-24 FOMC
fiscal adjustment period by two years as meeting suggested that more Quantitative Easing
requested by the Greek government; remains a strong possibility after the end of
• A final decision on the disbursement of the Operation Twist (at the end of 2012): "Looking
next aid tranche was postponed; ahead, a number of participants indicated that
• The meeting has revealed disagreement additional asset purchases would likely be
between the IMF and the Eurogroup. the appropriate next year after the conclusion of the
disagreement seems to bear on the date at maturity extension program“;
which the stock of debt can be brought back • The data-driven thresholds communication project
to 120% of GDP (2020 for the IMF, 2022 for seems to be gaining momentum;
the Eurogroup); • The Fed staff upgraded its real GDP growth
• Greece issued 1 and 3-month treasury bills to expectation for 2013 reflecting "better-than-
redeem €5bn bonds last Friday; expected incoming information for consumer
Greece Debt-to-GDP Ratio spending, residential construction, and labour
2011 170.6% market conditions“.
12%
US Unemployment Rate
2012 Est. 176.7%
10%
2013 Est. 188.3%
2014 Est. 188.9% 8% 7.9%
2015 Est. 184.2%
6%
2016 Est 174.7%
4%
160% 165% 170% 175% 180% 185% 190% 195% 2008 2009 2010 2011 2012 2013
Source: European Commission Source: Bloomberg

9. Portugal: Last week’s results (I)
Banco Espirito Santo (BES PL): Q3 2012 above Portugal Telecom (PTC PL): Good news from Brazil
market expectations. Still our top pick in the • Oi reported Q3 2012 numbers. They showed
Portuguese Banking Sector. improvement, both on the revenues and on the
• BES reported a net profit of €65m for Q3 2012, earnings side. Net profit increased to R$315mn,
well above consensus of €34m (Reuters), reflecting a revenue increase of 1.9% q/q;
reflecting strong trading gains in the quarter. The • On the revenue side, we would underline:
results were also helped by BES allowing its loan o the 1.9% q/q increase in Residential, due to
coverage to fall; the RGUs increase and a lower churn rate;
• The bank has reduced its ECB reliance to €9.8bn, - o a 3.4% q/q rise in Mobility, due to an
28% from June 2012; increase in the post-paid segment;
• Provisions were up 71% y/y and 38% q/q and o a 3.1% q/q rise in Corporate sustained by
reached €326m in Q3 2012. The ratio of credit at the offering of new products.
risk as a proportion of the loan portfolio rose • Portugal Telecom will report th Q3 2012
from 7.91% to 9.30% over the quarter. consolidated results on November 30 .
OI - Q3 2012 Earnings Summary
BES: Income Statement Summary Q3 2012 Q2 2012 Q3 2011 q/q y/y
Q3 2012 Q2 2012 Q3 2011 q/q y/y Lines in Service 18,707 18,722 19,078 0% -2%
Net Interest Income 299 313 331 -4% -10% Broadband Subs 5,556 5,332 4,776 4% 16%
Fee Income 167 238 187 -30% -11% Mobile Subs 48,398 47,794 42,871 1% 13%
Net Revenue 7,041 6,909 6,940 2% 1%
Trading Income 235 83 -182 n.m. n.m.
EBITDA 2,186 2,141 2,467 2% -11%
Operating Income 675 653 528 3% 28%
EBITDA Margin 31% 31% 36%
Operating Costs -286 -288 -284 -1% 1% EBIT 860 857 1,100 0% -22%
Impairments -326 -236 -191 38% 71% Net Interest Expense -554 -692 -302 -20% 83%
Net Income 65 14 -18 n.m. n.m. Net Income 315 64 426 n.m. -26%
Source: Company data Source: Company reports

10. Portugal: Last week’s results (II)
Sonae (SON PL): Surprising results from the Retail Sonae Indústria (SONI PL): Macro Challenges
division weigh on the company’s results
• Net income fell on the 9M 2012 to €92m. The • Q3 2012 net loss increased €42m y/y to €51m,
main reason was the non-existence of capital reflecting the European tough economic
gains associated with the sale of assets by Sonae environment;
RP; • Q3 2012 revenues in Europe fell 4.6% y/y. Total
• Q3 2012 Turnover fell 1% y/y. On the positive turnover was down 6% to €312m;
side, Sonae MC reported a growth of 0.8% y/y; • EBITDA margin continues to be under pressure
• Q3 2012 EBITDA increased 0.6% y/y to €167mn. and fell 232bps to 6.41%;
Once again, Sonae MC was a positive surprise • The Knowsley plant in the UK was closed, which
with its margin increasing surprisingly 0.4%, even caused an impairment of €41m;
considering the current competitive environment • The company stated its intention to sell more
in the Portuguese retail sector. non-core assets, which may lead to new
0.60
Sonae Share Price (€) impairments.
0.552
0.55 Martifer (MAR PL) reported its 9M 2012 results.
0.50 Operating revenues decreased 4.9% y/y. EBITDA
0.45
reached €14.6m, with a margin of 4.3% (+5.6pp
0.40
y/y). Net loss was €33m, reflecting €11.3m of
0.35
provisions and impairments, and higher financial
0.30
costs. Metallic Construction and Solar order books
Jan-12 Mar- 12 May-12 Jul-12 Sep-12 Nov-12 increased y/y to €380m and €230m respectively.
Source: Bloomberg

11. S&P 500 Earnings Update: Q3 2012 as of November 16th, 2012
• Q3 2012 earnings report is close to its end; • The decline in the bottom-up Q4 2012 EPS from
• 476 companies have reported Q3 2012 results. September end is similar to the decline in Q3
72% of companies reporting have beaten 2012 EPS during Q2 2012 reporting;
earnings estimates and 27% have missed. The • Bottom-up EPS consensus forecasts a 4%
average EPS surprise has been 3.7%; increase in 2012 to $100, and a 14% increase in
• Despite a tough macro environment, global 2013 to $114;
slowdown, soft commodity prices and slow • The equity market is now focused on post
capital markets, companies managed to keep election uncertainties, mainly the fiscal cliff
margins high; resolution and the dividend tax rate.
S&P 500 Q3 Earnings Summary as of November 16th , 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 41 41 100.0% 58.5% 0.0% 41.5% 2.2% 53.7% 0.0% 46.3% -0.2%
Basic Materials 26 26 100.0% 50.0% 3.8% 46.2% -2.6% 26.9% 0.0% 73.1% -1.8%
Industrials 71 75 94.7% 69.0% 2.8% 28.2% 3.0% 29.6% 0.0% 70.4% -1.0%
Consumer Goods 53 58 91.4% 79.2% 0.0% 20.8% 6.1% 30.2% 0.0% 69.8% 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 67 74 90.5% 74.2% 3.0% 22.7% 1.8% 39.4% 1.5% 59.1% -0.7%
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% 63.9% 0.0% 36.1% 4.2%
Technology 50 54 92.6% 70.0% 0.0% 30.0% 0.4% 54.0% 0.0% 46.0% -0.6%
S&P 500 476 499 95.4% 71.7% 1.1% 27.2% 3.7% 41.0% 0.2% 58.8% -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

12. DJ Europe 600 Earnings Update: Q3 2012 as of November
16th, 2012
• 377 companies have reported Q3 2012 results. mainly due to Cyclicals;
51% of companies reporting have beaten • Revenues have softened over the course of
earnings estimates and 47% have missed. The 2012. The disappointing macro data over the
average EPS surprise has been 4.7%; course of the year has been felt at the top-line;
• Companies have generally been guiding down • US Fiscal cliff and debt ceiling uncertainties are
expectations, and analysts’ 2012 and 2013 adding to earnings concerns.
earnings forecasts continue to be downgraded,
DJ Europe 600 Q3 Earnings Summary as of November 16th , 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 22 24 91.7% 55.6% 0.0% 44.4% 9.5% 47.4% 0.0% 52.6% -2.6%
Basic Materials 34 36 94.4% 51.9% 0.0% 48.1% -4.0% 52.9% 0.0% 47.1% 0.0%
Industrials 74 76 97.4% 58.6% 0.0% 41.4% 1.0% 52.8% 0.0% 47.2% 0.7%
Consumer Goods 48 49 98.0% 41.4% 0.0% 58.6% 4.4% 59.6% 0.0% 40.4% 2.5%
Health Care 28 29 96.6% 52.0% 4.0% 44.0% 2.4% 39.3% 0.0% 60.7% -0.2%
Consumer Services 33 36 91.7% 52.0% 4.0% 44.0% 20.1% 46.9% 3.1% 50.0% -0.8%
Telecommunications 17 18 94.4% 78.6% 0.0% 21.4% 11.7% 41.2% 0.0% 58.8% -0.3%
Utilities 18 18 100.0% 40.0% 0.0% 60.0% 7.9% 75.0% 0.0% 25.0% 6.3%
Financials 84 95 88.4% 43.8% 4.7% 51.6% 1.4% 50.0% 0.0% 50.0% -0.2%
Technology 19 20 95.0% 46.7% 0.0% 53.3% -12.7% 73.7% 0.0% 26.3% 1.1%
DJ Europe 600 377 401 94.0% 51.2% 1.8% 47.0% 4.7% 52.8% 0.3% 46.9% 0.4%
Source: Bloomberg

13. Last week’s market highlights
• KPN (KPN NA) slid 13% last week to €4.03, the lowest KPN vs. European Telecom Sector
110 De c. 2011=100
price in 10 years. A new-entrant in the Dutch mobile 100
market is a well known negative catalyst. Moreover, 90
KPN
German MTR cuts (effective December 1st) are expected 80
DJ Europe 600
70
to be a significant drag for E-Plus, KPN’s subsidiary in 60
Teleco m Sector
Germany. Management has already indicated they would 50
40
operate above previous leverage ratios and even accept Dec- 11 Mar- 12 Jun-12 Sep-12 Dec- 12
Source: Bloomberg
a lower credit rating to keep investing in its network. KPN 4
Bankia share price (€)
is finalizing its business plan through 2015. Consensus
3
seems to fear a right issue, not just a dividend cut;
• Bankia (BKIA SM)’s holders of junior and hybrid debt will 2
likely take a loss of up to 50% of the face value of their 1 1.01
securities, as a condition for the Spanish bank to receive
0
European aid. Negotiations are still ongoing; Jul-11 Sep-11 Nov-11 Ja n-12 Mar- 12 May-12 Jul-12 Sep-12 Nov-12
Source: Bloomberg
• Microsoft (MSFT US) announced that Windows President
Steven Sinofsky was leaving the company. Mr Sinofsky
was brought over to run the Windows Division after the
disappointing release of Windows Vista back in 2006. The
news have been negatively viewed by the investment
community, with the stock falling more than 7% during
the week. Source: Company data

14. What we are watching this week:
CALENDAR - Event Country Date Hour (GMT) Survey Prior
• Final Q3 GDP data and its components
NAHB Housing Market Index (Nov) US 19-Nov 15:00 41 41
for Germany are due Friday (Nov 23rd); Existing Home Sales (Nov) US 19-Nov 15:00 4.75M 4.75M
• Advance November PMI data for the BOJ rate announcement Japan 20-Nov Not Available 0.10% 0.10%
RBA MPC minutes Australia 20-Nov 00:30
Euro area, Germany and France should Housing Starts (Oct) US 20-Nov 13:30
Not Available Not Available
840K 872K
be disclosed on Thursday (Nov 22th). Richmond Fed's Lacker speaks on monetary policy in New York US 20-Nov 14:00 Not Available Not Available
EU general affairs ministers prep budget summit Euro-Zone 20-Nov 09:00
German IFO data for November are due Eurogroup meeting on Greece in Brussels Euro-Zone 20-Nov 16:00
Not Available Not Available
Not Available Not Available
Friday (Nov 23rd); Fed Chairman Bernanke speaks at Economic Club in New York US 20-Nov Not Available Not Available Not Available
• In the UK on Wednesday (Nov 21st), the Bank of England MPC Minutes UK 21-Nov 09:30 Not Available Not Available
Initial Jobless Claims (for week to 17 Nov) US 21-Nov 13:30 400K 439K
Bank of England releases the minutes of Continuing Claims (for week 17 Nov) US 21-Nov 13:30 3345K 3334K
its November meeting; Markit US PMI Preliminary US 21-Nov 14:00 51.0 Not Available
U. of Michigan Confidence (final; Nov) US 21-Nov 13:12 84.5 84.9
• Hurricane Sandy is likely to continue Leading Indicators US 21-Nov 15:00 0.1% 0.6%
distorting economic indicators in the HSBC Flash Manufacturing PMI China 22-Nov 01:45 Not Available 49.5
coming week, including housing starts Public holiday US 22-Nov Not Available Not Available Not Available
PMI Manufacturing France 22-Nov 08:00 44.0 43.7
(Nov 20th) and jobless claims (Nov 21st); ECB General Council meeting (no rate announcement) Euro-Zone 22-Nov Not Available Not Available Not Available
• The Fed chairman will speak on “The PMI Services France 22-Nov 08:00 45.0 44.6
PMI Manufacturing Germany 22-Nov 08:30 46.0 46.0
Economic Recovery and Economic PMI Services Germany 22-Nov 08:30 48.3 48.4
Policy” on Tuesday (Nov 20th). PMI Manufacturing (flash; Nov) Euro-Zone 22-Nov 09:00 45.6 45.4
PMI Services (flash; Nov) Euro-Zone 22-Nov 09:00 46.0 46.0
Weakness in US equity markets suggest Euro-Zone Consumer Confidence (flash; Nov) Euro-Zone 22-Nov 15:00 -25.9 -25.7
the Univ. of Michigan consumer GDP (final; y/y) Germany 23-Nov 07:00 0.4% Not Available
sentiment index could reverse some of Public holiday Japan 23-Nov Not Available Not Available Not Available
ECB President Draghi speaks at 22nd Frankfurt European Banking Congress Euro-Zone 23-Nov 09:00 Not Available Not Available
its recent gains. IFO - Business Climate (Nov) Germany 23-Nov 09:00 99.5 100.0

15. Next Week Preview: Eurogroup meeting and Black Friday
Eurogroup meeting on Greece Let’s go to the shopping mall…
• The Euro-zone Finance Ministers are to hold an • The first sales day after next week’s Thanksgiving
extraordinary meeting on Tuesday, November holiday is usually considered to be a reliable
20th to try to bridge the difference within the barometer of sales during the whole holiday
Troika (mainly regarding debt sustainability season;
issues). They will also try to find a solution to • The growing popularity of “Cyber Monday”
Greece’s additional funding needs; means that retail sales over this “long weekend”
• Nonetheless, and according to Eurogroup are important;
President Jean-Claude Juncker, the Finance • The whole holiday period accounts for an
Ministers might have to meet again by the end of important share of many retailers’ total annual
the month; sales. Will the treat of a fall in after-tax incomes
• Various press reports suggested that the funding on January 1st (fiscal cliff driven) restrain sales
needs could be covered via a cut in the interest over the holiday period?
rates Greece pays on its loans or through a
lengthening of loans maturities and issuance of T-
bills;
• The major issue that needs to be resolved is
Greece’s debt sustainability. However, given the
politically controversial decisions that would be
involved, European politicians will probably
continue kicking the Greek can down the road. Source: US Census Bureau

16. Next Week Preview: Portugal debt auction and Fiscal Cliff
Portugal will tap bond markets No fiscal cliff concerns this
this week week… Really?
• On November 21st, the Portuguese Treasury and • Last week ended on a hopeful note. Democratic
Debt Management Agency is going to auction and Republican Congressional leaders met at the
three Treasury Bill lines maturing on February White House with President Obama and
2013, May 2013 and May 2014, with an indicative emerged from their meeting promising they
global range amount of €1,75bn to €2bn; would reach a fiscal compromise before
• After this auction, the 2012 funding programme Christmas;
will be completed. Therefore the auction • President Barack Obama and top lawmakers
scheduled for December 19th will not be agreed on last Friday to work on a framework
proceeded. for reforming the U.S. tax code and
"entitlement" programs next year;
CALENDAR - Event Country Date Hour (GMT)
• Lawmakers have gone for the Thanksgiving
Treasury Bills France 19-Nov 14:00 holiday on an upbeat note. However, it will still
12M and 18M Treasury Bills Spain 20-Nov 9:30 probably be a bumpy road to reach an
2017 Government Bonds (GPB4.5bn) United Kingdom 20-Nov 10:30 agreement;
10Y Government Bonds (€4bn) Germany 21-Nov 10:30 • Meanwhile, the uncertainty may continue to
3, 6 and 12M Treasury Bills Portugal 21-Nov 10:30 affect household and business spending over
Government Bonds Spain 22-Nov 9:30 the next few weeks.
Source: Bloomberg

17. Next Week Preview: Key corporate events
Key corporate events in Europe Key corporate events in the US
• With the reporting season almost over, the • In a shorter week than usual due to the
biggest event next week in Europe could be Thanksgiving holiday, the highlight will probably
Xstata’s EGM on Tuesday. Shareholders will vote be Hewlett-Packard. The company is scheduled
on the merger of Glencore. to report on November 20th. HP guided down in
Company Date Event Services last month. Moreover, there’s been
CRH 19-Nov Capital Markets Day
Subsea 7 19-Nov Q3 Results
signs of PC softness.
Intertek Group 19-Nov Trading Statement
Mitie Group 19-Nov H1 Results
Xstrata 20-Nov EGM Company Date Event
Glencore 20-Nov EGM
British Land 20-Nov Q2 Results
Honeywell 19-Nov Defense and Space Investor Day
Signet Group 20-Nov Q3 Results
Easyjet 20-Nov FY Results Lowe's (LOW) 19-Nov Earnings release ($0.35)
OPAP 20-Nov Q3 Results Broacade Com (BRCD) 19-Nov Earnings release ($0.14)
Compass Group 21-Nov FY Results 19-Nov
Jonhson Matthey 21-Nov H1 Results
Randstad 21-Nov Investor Day Hewlett-Packard (HPQ) 20-Nov Earnings release ($1.14)
SABMiller 22-Nov H1 Results HJ Heinz (HNZ) 20-Nov Earnings release ($0.88)
Experian Group 22-Nov Shareholders Meeting
Campbell Soup (CPB) 20-Nov Earnings release ($0.85)
Smiths Group 22-Nov Shareholders Meeting
Halma 22-Nov H1 Results Best Buy (BBY) 20-Nov Earnings release ($0.12)
Mothercare 22-Nov H1 Results Medtronic (MDT) 20-Nov Earnings release ($0.88)
United Internet 22-Nov Q3 Results
Galp 23-Nov Shareholders Meeting Deere & Co (DE) 21-Nov Earnings release ($1.88)

18. Charts we are watching
• Mota-Engil, the Portuguese Construction and 2.0
Mota-Engil share price (€)
Engineering group, will release its Q3 2012 earnings 1.8
on November 21st, after market close. In Portugal,
1.6
revenues should reflect the weak performance of
the domestic construction market. However, 1.4
investors will probably focus on the performance of 1.2 1.295
the international division: Latin America, Central
1.0
Europe and, particularly, the African unit. The stock
price increased more than 34% since the beginning 0.8
Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12
of 2012. Mota-Engil announced in its H1 2012 results Source: Bloomberg
the new strategic plan, with ambitious goals for its 25%
Ireland Government Bond Yields
international units.
20%
• Last week, Fitch has revised the Outlook on Ireland’s
BBB+ sovereign rating to Stable. Ireland has made 15%
progress towards consolidating its fiscal expenditure.
it cut its deficit to 9.4% of GDP in 2011, from 12.6% 10%
in 2010, and intends to achieve an 8.6% deficit ratio 5 yea rs
this year. However, Irish growth is highly dependant 5%
3.4%
on external demand. Slowing growth in its main 2 yea rs 2.0%
0%
trading partners (the UK and the euro area) could hit Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12
GDP and hurt tax receipts. Source: Bloomberg

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