FINCOR Weekly Market Perspectives 28/01/2003

2013

Weekly Markets
28th,

n Perspectives
January

For important disclosures, refer to the Disclosure Section, located at the end of this report.

Weekly Summary
S&P500 closed above the 1,500 mark for the first Portugal’s first bond sale since its 2011 rescue
time since December 2007. The index climbed for the programme was very well received, attracting
fourth straight week, increasing 1.1% over last week. strong demand. Portugal’s earlier than expected
Of the 147 companies in the S&P500 that have return to the market was a positive surprise.
already released results, about 76% managed to beat Moreover, the EU Economic and Monetary Affairs
consensus projections, while 67% beat sales Commissioner mentioned that there are several
estimates. The Republicans decided to raise the debt options under consideration to help Portugal (and
ceiling temporarily (by two months), which has also Ireland) return to markets, including possibly
supported financial markets. extending the maturity of bailout loans or
providing a new precautionary credit line.
European stocks also posted a weekly gain, reaching
a 23-month high. The Stoxx Europe 600 index has now The first FOMC meeting of 2013 will conclude this
advanced 3.6% in 2013. The euro area economy Wednesday. No major changes are expected. It
seems to be stabilizing, but the steadily increasing will be a busy week for data releases. In the US,
Euro will not help the recovery that is expected for the January’s employment report and the ISM
second half of the year. manufacturing index will be released. In Europe,
final PMIs for January are disclosed on Friday, and
The Bank of Japan announced that it will formally on Wednesday we will have the euro area EC
adopt a 2% inflation target and introduce an open- confidence indicators. The earnings season will
ended asset purchase programme starting from also continue. In Portugal, Portucel (on Tuesday)
January 2014, after the current purchase programme and BPI (on Wednesday) are expected to
has concluded. announce 2012 results.

Spain: Initial estimate points to a Germany: Ifo Business Climate Survey
0.6% q/q contraction in Q4 2012 provides positive news
• The Bank of Spain’s initial estimate points to a GDP • The headline index rose from 102.4 to 104.2,
quarterly drop of 0.6% in Q4 2012. If confirmed by providing further signs that the economy could
the official figure, it would be the weakest outturn fare better in Q1 2013;
since Q2 2009; • The headline reflects increased optimism
• Q4 2012 would be the fifth consecutive quarterly about future prospects, rather than an
contraction; underlying improvement in actual economic
• The Government forecast the economy to contract conditions;
by 0.5% in 2013; • The sectorial breakdown points to an increase
• The EC’s Economic Sentiment Indicator for Spain in the manufacturing and construction
have shown signs of stabilization in recent months. components.
Nevertheless, the Spanish economy remains weak.
Spanish GDP and EC Economic Sentiment Ifo Business Climate Indicator and German GDP
120 6
Indicator
120 7 115 4
5 110
110 2
3 105
100 0
100
1
-2
90 95
-1
-4
EC Economic Sentiment Indicator (LHS) 90
80 -3
Spanish GDP (% y/y, RHS) Ifo Business Climate Indicator (LHS) -6
85
German GDP (% y/y, RHS)
70 -5
80 -8
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Statistical Office of Spain, European Commission Source: European Commission, Ifo Institute

Euro-zone: Composite PMI rose from Germany: Investors expect the
47.3 to 48.2 German economy to improve
• January’s flash euro-zone Purchasing Managers’ • The headline index, which measures investors’
Indices provided further evidence that the pace of expectations for the German economy in six
contraction in the euro is decelerating. Composite months’ time increased from 6.9 to 31.5, a
PMI rose to 48.2, above the consensus forecast of two-and-a-half year high and above its long-
47.4. This was the third consecutive increase and run average;
left the index at its highest level since March 2012; • January’s figures point to a rise in sentiment;
• The manufacturing index rose from 46.1 to 47.5, • However, the ZEW current conditions index
while the services index increased from 47.8 to registered a smaller rise.
48.3. German composite index rose above 50 for
the first time since March 2012. However, the
French index fell to 44.4.
Composite PMI Output and Euro-zone GDP
62 4 ZEW Indicator of Economic Sentiment
59
2
---------------- Germany ------------------- ----------------- Euro-zone ------------------
56
53 Economic Expectations Current Situation Economic Expectations Current Situation
0
50 October 2012 -11.5 10.0 -1.4 -79.4
47
-2 November 2012 -15.7 5.4 -2.6 -80.3
44
41 -4
December 2012 6.9 5.7 7.6 -79.9
38 January 2013 31.5 7.1 31.2 -75.3
35 -6
Source: Zew Institute
2005 2006 2007 2008 2009 2010 2011 2012 2013

Composite PMI Output (LHS) Euro-zone GDP (% y/y, RHS)
Source: Bloomberg, Eurostat

UK: First estimate suggests that Poland: The economy is still slowing
GDP fell by 0.3% q/q in Q4 2012 down
• The first estimate of Q4 2012 real GDP delivered a • Nominal retail sales fell by -2.5% y/y in
0.3% q/q decline. A fading Olympics boost and a fall December, after +2.4% y/y in November 2012.
in energy output represented important It was the first drop since April 2010;
headwinds; • The weakness was broadly based, extending
• Manufacturing is still contracting (-1.4% q/q) and to core consumer durables. Car sales were a
there was a negative surprise in the decisive large drag;
finance sector; • The economy has probably slowed more
• Construction showed a small 0.3% q/q gain; sharply at the end of 2012, mainly reflecting a
• Four of the last five quarters have registered a weak private consumption. A 25bp rate cut
negative q/q real GDP growth rate. seems likely at the February 6th meeting.
UK GDP Chained GDP at Market Prices % q/q 40 Poland Retail Sales (% y/y)
0.9
0.7 30
0.6 0.6 0.6
0.4 20

0.1 10

0
-0.2
-0.3 -0.3 -10
-0.4 -0.4

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 -20
2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: UK Office for National Statistics Source: Polish Statistics Office

South Korea: Real GDP up 1.5% y/y in China: January flash PMI reaches its
Q4 2012 highest level in two years
• Real GDP reaccelerated to 1.5% q/q saar in Q4 • China’s flash reading for January Markit
2012 (consensus +2.0%), after having slowed for manufacturing PMI rose for the fifth
two consecutive quarters; consecutive month;
• In a y/y base, real GDP growth stayed flat at • The index increased from 51.5 in December to
1.5%. In 2012 as a whole, real GDP increased 51.9, the highest reading since January 2011;
2.0% y/y, following a 3.6% gain in 2011; • The new orders component eased to 52.7 in
• Private consumption firmed up modestly, while January (from 52.9 in December). Meanwhile,
the contribution of net exports declined. the export orders component rose to 50.1
(from 49.1 in December).
South Korea GDP (% y/y)
14
12
10
8
6
4
2
0
-2
-4
-6
00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Bank of Korea Source: Bloomberg

US: Markit manufacturing flash PMI Portugal: 2012 cash deficit was met
rises to 56.1
• The US Markit manufacturing flash PMI for • Portugal’s 2012 central government deficit was
January rose to 56.1, from December´s final €8.3bn or 4.9% of GDP, lower than the target
reading of 54.0; set out by the Troika;
• The index has risen in each of the last three • Tax revenues fell 6.8% y/y, reflecting the sharp
months and is now at its highest level since drop registered by domestic demand. Primary
March 2011; spending decreased 3.6% y/y;
• The output, new orders and employment indices • The national accounts budget deficit will be
all rose; disclosed next month by the Portuguese
• The ISM index and the various regional PMIs have Statistical Office. It is expected to reveal a
been more downbeat. higher budget deficit, as losses from public
companies, hospitals and PPP will be included.

Portugal 2012 Cash Budget - Selected Items (% y/y)
Primary
Revenues Tax Revenues Indirect Taxes Spending Wage Costs

-3.2 -3.6
-4.7
-6.8

-17.9

Source: Bloomberg Source: Ministry of Finance

IMF expects global output to expand Brazil: Copom Minutes were released
by 3.5% in 2013
• Global growth is expected to increase during 2013. • The Copom mentioned that it expects a
However, this upturn is projected to be more strengthening of activity during 2013;
gradual than in the Oct 2012 WEO projections; • Projected inflation for 2013 and 2014
• Growth in the US is forecast to average 2% in 2013, deteriorated since the previous meeting and
rising above trend in the second half of the year; remains above the 4.5% target;
• The near-term outlook for the euro area has been • The Copom still believe that keeping the Selic at
revised downward. Activity is now expected to the current 7.25% will deliver inflation at the
contract by 0.2% in 2013; 4.5% target;
• Emerging Markets are expected to expand by 5.5%. • Total credit to the economy grew 2.4% m/m in
WEO Jan 2013 Update Oct 2012 WEO December (+16.2% y/y). The level of NPLs
2011 2012 2013 2014 2013 2014
Global Economy 3.9% 3.2% 3.5% 4.1% 3.6% 4.2%
reached 5.8% (7.9% for personal loans).
Advance Economies 1.6% 1.3% 1.4% 2.2% 1.6% 2.3% Brazil CPI Index and Selic Target Rate
United States 1.8% 2.3% 2.0% 3.0% 2.1% 2.9% 8% 18%
Euro-Zone 1.4% -0.4% -0.2% 1.0% 0.1% 1.1%
7% 16%
Germany 3.1% 0.9% 0.6% 1.4% 0.9% 1.3%
France 1.7% 0.2% 0.3% 0.9% 0.4% 1.1% 6% 14%
Italy 0.4% -2.1% -1.0% 0.5% -0.7% 0.5%
Spain 0.4% -1.4% -1.5% 0.8% -1.4% 1.0% 5% 12%
Japan -0.6% 2.0% 1.2% 0.7% 1.2% 1.1%
4% 10%
Emerging and Developing Economies 6.3% 5.1% 5.5% 5.9% 5.6% 5.9%
Brazil 2.7% 1.0% 3.5% 4.0% 3.9% 4.2% 3% 8%
Russia 4.3% 3.6% 3.7% 3.8% 3.9% 3.9%
India 7.9% 4.5% 5.9% 6.4% 6.0% 6.4% 2% 6%
China 9.3% 7.8% 8.2% 8.5% 8.2% 8.5% 2006 2007 2008 2009 2010 2011 2012
South Africa 3.5% 2.3% 2.8% 4.1% 3.0% 3.8% CPI IPCA y/y (LHS) SELIC Target Rate (RHS)
Source: IMF World Economic Outlook January 2013 Update Source: Bloomberg

Japan: BoJ introduced a 2% price European Banks will repay €137bn of
target LTRO loans to ECB next week
• The BoJ monetary policy meeting on January
21st-22th raised the price target from 1% to 2%; • It is the first opportunity to pay back part of the
• The current asset purchase program will change €1tn borrowed a year ago;
from the start of 2014 and it will become open- • The ECB announced banks will repay €137bn of
ended. A predetermined value of financial assets the LTRO, leaving €882bn outstanding;
will be purchased each month (JPY2tn in long- • Large part of the put back is likely to come from
term JGBs and JPY10tn in short-term JGBs); banks in core countries. Limited activity is
• The Government and the BoJ agreed to expected from peripheral banks;
strengthen policy coordination and work • From now on, banks have the option to repay the
together to “overcome deflation early”; LTRO on a weekly basis until expiry;
• In the BoJ’s Interim Outlook for Economic • With 2 years remaining, LTRO remains an
Activity and Prices, the bank lowered its FY2012 attractive facility. Many banks still can’t achieve
real GDP growth from 1.5% (its October comparable terms in the funding market.
estimate) to 1%. Bank Country Amount that it is Total
expected to repay (€bn) LTRO (€bn)
BoJ Outlook for Economic Activity and Prices (%) KBC Belgium 8.3 8.9
FY2012 FY2013 FY2014 Belfius (state-owned) Belgium 5.0 25.0
Real GDP Jan-13 1.0 2.3 0.8 Commerzbank Germany 10.0 16.0
Oct-12 1.5 1.6 0.6 Deutsche Pfandbriefbank (state-owned) Germany < 2.0 4.0
Core CPI Jan-13 -0.2 0.4 2.9 (0.9) Bankinter Spain 1.4 9.5
Oct-12 -0.1 0.4 2.8 (0.8)
Sabadell Spain 1.5 24.0
Source: BoJ
Llodys UK 8.0 - 10.0 13.5
FY2014 core CPI forecast in parenthesis excludes consumption
Source: Bloomberg
tax hike effect

PSI20 Weekly Review
• Sonae Industria (SONI PL) showed the best performance in the
index over last week. The stock advanced 23.9% to €0.653. The
company is strongly exposed to an euro area economy that
seems to be stabilizing. Meanwhile, Sonae Industria has
undertaken a restructuring program, but its high leverage
remains a concern;
• BCP (BCP PL) added more than 14%. The execution of the bank’s
operational turnaround is still key to investor sentiment and to
be able to redeem the State CoCos. BCP is expected to report
FY2012 earnings on February 11th;
• Portugal Telecom (PTC PL) was the mais loser. The shares of the
Portuguese telecom company fell 6.0%. Oi has replaced its CEO,
following the rumours that some shareholders were dissatisfied
with the results achieved throughout 2012. Moreover, Oi
reported unaudited FY2012 results. Revenues reached
BRL27.5bn (vs. consensus BRL28.0bn). EBITDA was BRL8.7bn, a
1% beat vs. consensus of BRL8.6bn;
• EDP (EDP PL) was down 2.2% over last week. The Portuguese
Treasury State Secretary said in a press interview that the
remaining 4.14% stake in the company still owned by the State
might by placed in the market. Nevertheless, the Government
may still ask for new direct proposals. Source: Bloomberg

Portuguese Sovereign and Corporate Debt Weekly Review
Portugal 10-year Government Bond Yield (%)
18
• Portugal’s first bond sale since its 2011 rescue programme 17
16
was very well received, attracting strong demand, mostly 15
14
from non-domestic investors. Portugal sold €2.5bn (more 13
12

than the €2bn initially planned) of five-year bonds through 11
10
9
banks, as the country makes progress in regaining access to 8
7
long-term markets. The 4.35% bonds due in October 2017 6
5

were allotted at a yield of 4.891%; Jan-12 Mar- 12 Mai-12 Jul-12 Set-12 Nov-12 Jan-13

• This issuance has probably been an important first step for
Portugal to see ECB’s OMT programme being activated;
• The maturities of Portuguese loans from the EFSF and the
the EFSM are likely to be extended at the March Eurogroup
meeting, in a move that is expected to reduce its
refinancing risk for the coming years;
• Moreover, according to the EU Economic and Monetary
1400 BES CDS 5Y 1400
Affairs Commissioner, the combination of an ESM
1200 1200
precautionary programme with the ECB’s OMT programme
1000 1000
could eventually be used to help Portugal return to the
800 800
market;
600 600
• Portugal’s 10-year government bond yield fell to the lowest BESPL C DS EUR SR 5Y
Corp
400 400
level in more than two years on January 23rd. However, the BESPL C DS EUR SUB 5Y
Corp
200 200
rate finished the week one basis point higher at 6.13%. Jan-12 Mar- 12 Mai-12 Jul-12 Set-12 Nov-12 Jan-13
Source: Bloomberg

IBEX35 Weekly Review
• Gas Natural (GAS SM) showed the best performance over last week in
the IBEX35. The Spanish Government disclosed a draft decree law that
incorporates a €157mn charge to be included in the gas access tariffs
related to the overcoast paid by the company to Sonatrach over the
2005-2008 period;
• Obrascom Huarte Lain (OHL SM) has exercised an equity swap contract
representing 5% of the share capital of Abertis. OHL now holds 15% of
the motorway group;
• Grifols (GRF SM) rose 5.8%. Baxter released Q4 2012 results and
confirmed the growth prospects for the plasma industry;
• Repsol (REP SM) advanced 3.8%. According to the Spanish press, Repsol
will enter Namibia. The company will become the operator of the
offshore area;
• Telefonica (TEF SM) rose 0.3%. The European Commission fined the
company €66.9mn for an illegal non-compete contract clause in the
Iberia markets. Moreover, Telefonica is seeking €1.25bn of credit lines
to extend debt maturing in 2014;
• Bankinter (BKT SM) was the worst performer over last week. The stock
went down 4.8%. Credit Agricole (ACA FP) announced the disposal of a
5.2% stake in the Spanish bank through an accelerated book building.
Credit Agricole now holds a stake of 9.9% in Bankinter. The French bank
agreed to a 180-day lockup period in respect of its remaining holding. Source: Bloomberg

Last week’s European and US equity market highlights
• Nokia (NOK1V FH) lost 7.0% over last week. Nokia announced 4.5
Nokia Share Price (€)

Q4 2012 results and Q1 2013 outlook in line with its pre- 4.0

announcement. The company said it will omit dividend for the 3.5

3.0
first time in the last 143 years. Despites higher than expected 2.5

Smartphone gross margins, investors remain concerned about 2.0

Nokia’s ability to increase the shipment of Lumia devices; 1.5

1.0
• Unilever (UNA NA) advanced 2.7%. Q4 2012 results were well Jan-12 Mar- 12 Mai-12 Jul-12 Set-12 Nov-12 Jan-13
30
Unilever Share Price
ahead of consensus on organic revenue growth (7.8% vs. the 29
company-compiled consensus of 6.3%); 28

• Novartis (NOVN VX) rose 1.6%. Q4 2012 core EPS was broadly 27

in line with Bloomberg consensus. The company issued 2013- 26

2015 guidance. It was also announced that current chairman 25

Dr. Vasella would not be standing up for re-election and will 24

23
be replaced; Jan-12 Mar-12 Mai-12 Jul-12 Set-12 Nov-12 Jan-13

• Apple (AAPL US) fell 11.8%. The company has lost the title of
most valued company to Exxon Mobil (XOM US). Apple
reported Q1 FY2013 revenues of $54.51bn, below consensus
of $54.73bn. EPS of $13.81 was above consensus of $13.44.
The company hasn’t been able to deliver what investors have
been accustomed to. Moreover, investors seem to have been
disappointed by Apple’s guidance.
Source: Bloomberg

What we are watching this week:
• Key data will be released this week in the US Event (Cont.) Date Hour (GMT) Survey Prior
Retail Sales (y/y), Germany 31-Jan 07:00 -1.5% -0.9%
(Change in non-farm payrolls, ISM Producer Prices (y/y), France 31-Jan 07:45 2.0% 1.9%
Consumer Spending (y/y), France 31-Jan 07:45 0.1% -0.2%
Manufacturing). The FOMC meets on Tuesday and Consumer Price Index (y/y), Spain 31-Jan 08:00 3.0% 2.9%
Wednesday; Spains Ban on Short Selling Ends
Unemployment Rate (s.a), Germany
31-Jan
31-Jan
n.a.
08:55
n.a.
6.9%
n.a.
6.9%
• In Europe, final PMIs for January are released on Unemployment Rate, Brazil 31-Jan 11:00 4.5% 4.9%
Consumer Price Index (y/y), Germany 31-Jan 13:00 2.0% 2.1%
Friday. The euro-zone money supply data is due Personal Income, US 31-Jan 13:30 0.8% 0.6%
Personal Spending, US 31-Jan 13:30 0.3% 0.4%
today. On Wednesday, we have the euro area EC PCE Core (y/y), US 31-Jan 13:30 1.4% 1.5%
confidence indicators. Initial Jobless Claims, US
Gross Domestic Product y/y, Canada
31-Jan
31-Jan
13:30
13:30
350K
1.4%
330K
1.1%
Event Date Hour (GMT) Survey Prior
Consumer Confidence Ind. sa, Italy 28-Jan 09:00 86 85.7 Chicago Purchasing Manager, US 31-Jan 14:45 50.3 51.6
Euro-Zone M3 s.a. 3 mth ave. 28-Jan 09:00 3.8% 3.4% GDP (prel.) Q4 2012 GDP, y/y 31-Jan 00:30 3.0% 1.0%
Durable Goods Orders, US 28-Jan 13:30 2.0% 0.7% Ext Trade - Export (YoY), South Korea 1-Fev 00:00 9.4% -5.5%
Durables Ex Transportation, US 28-Jan 13:30 0.8% 1.6% Ext Trade - Imports (YoY), South Korea 1-Fev 00:00 0.8% -5.3%
Cap Goods Orders Nondef Ex Air, US 28-Jan 13:30 -1.2% 2.7% Manufacturing PMI, China 1-Fev 01:00 51.0 50.6
IMF Meets with Spain to discuss Banking Reform 28-Jan n.a. n.a. n.a. HSBC Manufacturing PMI, China 1-Fev 01:45 52.0 51.5
GfK Consumer Confidence Survey, Germany 29-Jan 07:00 5.7 5.6 PMI Manufacturing, Spain 1-Fev 08:15 45.5 NA
Consumer Confidence Indicator, France 29-Jan 07:45 86 86
PMI Manufacturing, Italy 1-Fev 08:45 47.4 46.7
2012 GDP, Poland, y/y 29-Jan 09:00 2.2% 4.3%
PMI Manufacturing, France 1-Fev 08:50 42.9 42.9
RBI Rate Anouncement, India 29-Jan 05:30 n.a. n.a.
Consumer Confidence, US 29-Jan 15:00 64.0 65.1
PMI Manufacturing, Germany 1-Fev 08:55 48.8 48.8
Industrial Production (y/y), South Korea 29-Jan 23:00 1.2% 2.9% Unemployment Rate (SA), Italy 1-Fev 09:00 11.2% 11.1%
ECB LTRO Repayment Begins 30-Jan n.a. n.a. n.a. PMI Manufacturing, Euro-Zone 1-Fev 09:00 47.5 47.5
GDP (Constant SA) (y/y), Spain 30-Jan 08:00 -1.7% -1.6% PMI Manufacturing, UK 1-Fev 09:30 51.0 51.4
Economic Sentiment, Italy 30-Jan 09:00 n.a. 75.4 Euro-Zone CPI Estimate (y/y) 1-Fev 10:00 2.20% 2.20%
Business Confidence, Italy 30-Jan 09:00 89.5 88.9 Euro-Zone Unemployment Rate 1-Fev 10:00 11.90% 11.80%
Euro-Zone Economic Confidence 30-Jan 10:00 88.2 87.0 Industrial Production nsa (y/y), Brazil 1-Fev 11:00 -4.70% -1.00%
Business Climate Indicator, Euro-Zone 30-Jan 10:00 -1.00 -1.12 PMI Manufacturing, Brazil 1-Fev 12:00 n.a. 51.1
Euro-Zone Indust. Confidence 30-Jan 10:00 -13.5 -14.4
Change in Nonfarm Payrolls, US 1-Fev 13:30 155K 155K
Euro-Zone Consumer Confidence 30-Jan 10:00 -23.9 -23.9
Unemployment Rate, US 1-Fev 13:30 7.8% 7.8%
Euro-zone Services Confidence 30-Jan 10:00 -9.0 -9.8
ADP Employment Change, US 30-Jan 13:15 165K 215K
Markit US PMI Final, US 1-Fev 13:58 n.a. n.a.
GDP q/q (Annualized), US 30-Jan 13:30 1.2% 3.1% U. of Michigan Confidence, US 1-Fev 14:55 71.4 71.3
Personal Consumption, US 30-Jan 13:30 2.1% 1.6% Construction Spending m/m, US 1-Fev 15:00 0.7% -0.3%
FOMC Rate Decision, US 30-Jan 19:15 0.25% 0.25% ISM Manufacturing, US 1-Fev 15:00 50.5 50.7
Industrial Production y/y, Japan 30-Jan 23:50 -5.6% -5.5% Source: Bloomberg

Next Week Preview: Economics
• The euro area inflation estimate is due Friday and is likely to Change in Non-Farm Payrolls (000s)
remain flat at 2.2% y/y. In the UK, PMI manufacturing will be Jan Fev Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2010 -40 -35 189 239 516 -167 -58 -51 -27 220 121 120
released on Friday and it is expected to fall to 51.0 from 51.4
2011 110 220 246 251 54 84 96 85 202 112 157 223
in December; 2012 275 259 143 68 87 45 181 192 132 137 161 155
• In Colombia, the central bank is likely to cut its policy rate by
US Conf. Board Consumer Confidence
an additional 25bp to 4.00% in response to continued weak 74

activity indicators; 72

• In the US, durable goods orders will be released today (13:30 70

GMT) and should be supported by aircraft orders. 68

66
Nonetheless, excluding transportation, core orders probably
64
increased at a more modest pace; 62
• The Conference Board should disclose its measure of US 60

consumer confidence on Tuesday (15:00 GMT). It is likely to Jan-12 Fev-12 Mar-12 Abr-12 Mai-12 Jun-12 Jul-12 Ago-12 Set-12 Out-12 Nov-12 Dez-12

65 US ISM Manufacturing Index
have slipped from 65.1 to 64.0 in January, reflecting the drag
60
on sentiment caused by the payroll tax cut;
• US Q4 2012 real GDP (1st estimate) will be disclosed on 55

Wednesday (13:30 GMT). Real GDP probably slowed quite 50

sharply to 1.2%, from 3.1% in Q3 2012. In the third-quarter, 45

GDP growth was driven by a surge in government expenditure; 40

• The employment report and the ISM Manufacturing index will 35

both be released on Friday at 15:00GMT. Payroll employment 30
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
is expected to show a steady increase (155,000). Source: Bloomberg

Next Week Preview: FOMC meeting and Portuguese Earnings
Season
FOMC will hold its first meeting of 2013 Portucel and BPI to report earnings
• The first FOMC meeting of 2013 is unlikely to • Portucel (PTI PL) is expected to released Q4 2012
bring any major changes; results on January 29th;
• The majority of Fed officials will probably be • The paper division is expected to benefit from
satisfied with the market response to their QE stable UWF paper prices (-1% y/y) with lower
policy announcements. However, the minutes discounts. The pulp unit is likely to reflect the rising
from the last FOMC meeting revealed that trend of BEKP prices (+7% y/y). EBITDA margins
"several… (members) thought that it would should benefit from lower wood costs;
probably be appropriate to slow or to stop • Investors’ focus will probably be at the company’s
purchases well before the end of 2013“; expectations regarding demand evolution in the
• The annual voting rotation of the regional Fed UWF paper industry. Consensus expects Q4 2012
Presidents is not expected to sift the balance of Revenues, EBITDA and Net Profit of €381mn,
power significantly. €103mn and €52mn respectively;
FED's Asset Holdings ($bn)
3,000 • BPI (BPI PL) is due to report 2012 results on January
2,500 30th. Top line is expected to remain sluggish,
2,000
reflecting NIM pressures. Impairments should be
1,500
down both y/y and q/q. Stable nominal costs are
1,000

500
expected. International operations should remain
0 solid;
03 04 05 06 07 08 09 10 11 12
Source: Federal Reserve • Consensus expects Q4 2012 Net Profit of €28.9mn.

Next Week Preview: European Earnings Season
Company Name
th
Monday, 28 January
Colruyt
Company Ticker Time (GMT)

COLR BB 16:45
Event Description

Q3 2013 Sales and Revenue Release
Many Blue Chips are expected to
Ryanair Holdings RYA ID Q3 2013 Earnings Release
th
Tuesday, 29 January
Philips Electronics PHIA NA 06:00 Y 2012 Earnings Release
report earnings this week
Software SOW GR 06:00 Y 2012 Earnings Release
Sandvik
British Land
William Hill
SAND SS
BLND LN
WMH LN
07:00
07:00
08:30
Y 2012 Earnings Release
Q3 2013 Sales and Revenue Release - Interim Management Statement
Q4 2012 Sales and Revenue Call - Trading Update
• Philips (PHIA NA) is due to report Q4 2012
British Land
National Grid
BLND LN
NG/ LN
09:00
14:00
Q3 2013 Sales and Revenue Call - Interim Management Statement
Q3 2013 Sales and Revenue Call - Interim Management Statement
results on January 29th. The company has a
Luxottica Group LUX IM Q4 2012 Sales and Revenue Release
th
Wednesday, 30 January low correlation with the general industrial
Roche ROG VX 06:00 Y 2012 Earnings Release
Nordea
Antofagasta
NDA SS
ANTO LN
06:00
07:00
Q4 2012 Sales and Revenue Release - Production Results
cycle and Q4 is usually its biggest quarter
Scania
SKF
SCVB SS
SKFB SS
08:30
12:00
Y 2012 Earnings Release of the year. Investors will focus on the
Unibail-Rodamco UL FP Aft-mkt Y 2012 Earnings Release
STMicroelectronics
Hennes & Mauritz
STM IM
HMB SS
Aft-mkt Y 2012 Earnings Release
group’s cost cutting momentum;
Fiat F IM Y 2012 Earnings Release
Imperial Tobacco
United Utilities
IMT LN
UU/ LN
• Roche (ROG VX) will report H2 2012 results
TeliaSonera AB
th
Thursday, 31 January
TLSN SS 06:00 Y 2012 Earnings Release
on January 30th. Consensus expects
Skandinaviska Enskilda Banken
Ericsson
SEBA SS
ERICB SS
06:00
06:30
Y 2012 Earnings Release revenues of CHF22.897bn and diluted core
Infineon Technologies IFX GR 06:30 Q1 2013 Earnings Release
Royal Dutch Shell
Diageo
RDSA LN
DGE LN
07:00
07:00
S1 2013 Earnings Release
EPS of CHF6.91. in Q3 2012, Roche showed
Vedanta Resources VED LN 07:00 Q3 2013 Sales and Revenue Release - Production Results
Fortum
AstraZeneca
FUM1V FH
AZN LN
07:00
07:00
a 1.4% revenue beat vs. consensus, with
British Sky Broadcasting
UPM-Kymmene
BSY LN
UPM1V FH
07:00
07:30
S1 2013 Earnings Release
key products beating consensus by 4%-7%;
Novo Nordisk NOVOB DC Bef-mkt Y 2012 Earnings Release
Banco Santander
Deutsche Bank
SAN SM
DBK GR
Bef-mkt
Bef-mkt
• Royal Dutch Shell (RDSA NA) reports its Q4
Atlas Copco
LVMH
ATCOA SS
MC FP
11:00
Aft-mkt
2012 results on January 31th. Brent prices
Fiat Industrial FI IM Y 2012 Earnings Release
Lonmin PLC
SSE
LMI LN
SSE LN
Q1 2013 Sales and Revenue Release - Production Report
were stable but US gas prices showed a
st
Friday, 1 February
Electrolux ELUXB SS 07:00 Y 2012 Earnings Release
robust increase. However, refining margins
OMV OMV AV 07:00 Q4 2012 Sales and Revenue Release - Trading Statement
Banco Bilbao Vizcaya Argentaria
Banco Popular Espanol
BBVA SM
POP SM
Bef-mkt
Bef-mkt
came off during the quarter;
CaixaBank
BT Group
CABK SM
BT/A LN
Q3 2013 Earnings Release
• LVMH (LVMH FP) will report FY2012 results
Enel Green Power EGPW IM Q4 12 Sales and Revenue Release - Preliminary Results
Tate & Lyle
Source: Bloomberg
TATE LN Q3 2013 Sales and Revenue Release - Interim Management Statement after market close on January 31th.

Next Week Preview: US Earnings Season
Company Name
th
Monday, 28 January
Company Ticker Time (GMT) Estimate Event Description
Healthcare will probably be the
Biogen BIIB US Bef-mkt 1.459 Q4 2012 Earnings Release
Caterpillar
Seagate Technology
Yahoo!
CAT US
STX US
YHOO US
12:30
Aft-mkt
Aft-mkt
1.703
1.278
0.279
highlight with Lilly, Pfizer and
American Electric Power
th
Tuesday, 29 January
AEP US 0.456 Q4 2012 Earnings Release
Merck reporting this week
Valero Energy VLO US Bef-mkt 1.19 Q4 2012 Earnings Release
Pfizer
DR Horton
PFE US
DHI US
Bef-mkt
Bef-mkt
0.442
0.141
• Pfizer (PFE US) will release earnings on
Corning
Tyco International
GLW US
TYC US
Bef-mkt
Bef-mkt
0.324
0.394
January 29th. The focus will probably be on
Harley-Davidson Inc
International Paper
HOG US
IP US
Bef-mkt
Bef-mkt
0.314
0.65
2013 guidance and on management’s
Danaher DHR US 11:00 0.856 Q4 2012 Earnings Release
Ford Motor Co F US 12:00 0.256 Q4 2012 Earnings Release comments for launch expectations for
Illinois Tool Works Inc ITW US 13:00 0.899 Q4 2012 Earnings Release
Robert Half International Inc
Broadcom
RHI US
BRCM US
21:00
Aft-mkt
0.408
0.735
Xeljanz and Eliquis;
Amazon.com
Boston Scientific
AMZN US
BSX US
Aft-mkt 0.265
0.11
• Ford Motor (F US) will report Q4 2012
United States Steel
Eli Lilly & Co
X US
LLY US
-0.768
0.788
earnings on January 29th. Earnings are likely
th
Wednesday, 30 January
Northrop Grumman NOC US Bef-mkt 1.736 Q4 2012 Earnings Release to be driven by strong operating income
Boeing BA US 12:30 1.186 Q4 2012 Earnings Release
Southern Co SO US 12:30 0.39 Q4 2012 Earnings Release from North America. The company has
QUALCOMM QCOM US 21:00 1.125 Q1 2013 Earnings Release
ConocoPhillips
JDS Uniphase
COP US
JDSU US
Aft-mkt
Aft-mkt
1.414
0.139
guided towards strong losses in Europe.
th
Thursday, 31 January
PulteGroup PHM US Bef-mkt 0.308 Q4 2012 Earnings Release
The company will also provide general
Colgate-Palmolive
Time Warner Cable
CL US
TWC US
Bef-mkt
Bef-mkt
1.395
1.551
2013 outlook;
Dow Chemical
Whirlpool
DOW US
WHR US
Bef-mkt
11:00
0.341
2.248
Q4 2012 Earnings Release • Dow Chemical (DOW US) will report Q4
Altria Group MO US 12:00 0.545 Q4 2012 Earnings Release
United Parcel Service UPS US 12:45 1.376 Q4 2012 Earnings Release 2012 results on January 31th, which will
Viacom VIAB US 0.911 Q1 2013 Earnings Release
Dominion Resources
st
Friday, 1 February
D US 0.694 Q4 2012 Earnings Release probably reflect a positive evolution on
Exxon Mobil
Merck
XOM US
MRK US
Bef-mkt
Bef-mkt
2.004
0.81
integrated margins for polyethylene and an
Mattel
Chevron
MAT US
CVX US
11:00
13:30
1.148
3.028
improvement in the Performance Plastics
Ford Motor F US 14:30 January 2013 Sales and Revenue Release
Source: Bloomberg segment.

Next Week Preview: Government Debt Issuance Calendar and
Idea of the week
Italy will probably be the highlight Idea of the week: Repsol (REP SM)
of the week • Investors expect an announcement on the sale of the
• Over the week, Italy is expected to auction LNG business. If the deal goes ahead, it will probaby
T-Bills and bonds; be enough for Repsol to maintain its investment
• Italy and Spain will have bond redemptions grade credit rating;
this week; • The company is expected to present sector leading
• Germany will issue ultralong bonds (July organic production growth with the start-up of key
2044). fields in Peru and Brazil;
Next week's Selected Bonds and T-Bills Supply • As volumes growth, earnings are likely to improve;
Issue Country Date Amount (€bn) Hour (GMT)
Dec 2014 Italy 28-Jan 4.0 10:00 • Repsol has underperformed the sector following the
Sep 2018 Italy 28-Jan 2.5 10:00
3M France 28-Jan 4.0 13:50
expropriation of YPF. But, the company has an
6M France 28-Jan 2.0 13:50 interesting portfolio of projects.
12M France 28-Jan 1.5 13:50
12M Germany 28-Jan 3.0
6M Italy 29-Jan 8.5 10:00
Jul 2044 Germany 30-Jan 2.0 10:30
Nov 2017 Italy 30-Jan 3.0 16:00
Nov 2022 Italy 30-Jan 3.5 16:00
Next week's Selected Bonds and T-Bills redemptions
Issues Country Date Amount (€bn) Hour (GMT)
Bonds Spain 31-Jan 14.3
T-Bills France 31-Jan 7.8
T-Bills Italy 31-Jan 9.8
T-Bills Netherlands 31-Jan 4.8
Bonds Italy 01-Fev 21.0
Source: Treasuries; Fincor Source: Company Information

Charts we are watching
12
• Following some Brazilian press reports that Oi’s OI (OIBR4 BZ) Share Price (BRL)
shareholders were dissatisfied with CEO Francisco Valim’s 11
handling of the company, the Brazilian Telecom operator
announced its replacement by Jose Mauro da Cunha, its 10

current Chairman. In an attempt to ease market concerns, 9
Oi released in line selected preliminary unaudited figures
for 2012. Moreover, the company disclosed a BRL1bn 8

dividend, equivalent to a 7% yield. According to the
7
Brazilian press, Portugal Telecom (PTC PL) could be in talks
to buy the stakes in Oi owned by the Jereissati and 6
Andrade families for $985mn. This is an additional 2011
Source: Bloomberg
2012 2013

evidence that the Portuguese company considers the 8,500
PSI 20 Portuguese Stock Index
Brazilian market to be key. 8,000
7,500
• Stocks in peripheral Europe have posted the biggest gains 7,000
among developed markets in 2013 ytd. Portugal’s 6,500
benchmark PSI 20 rose 8.5% and Spain’s IBEX 35 increased 6,000
5.3%. Germany’s Dax has only advanced 1.4%. With tail 5,500
risks having been removed by the ECB and peripheral 5,000

countries moving progressively to a current account 4,500

surplus, the improvement in investor sentiment could 4,000
2011 2012 2013
continue to support these stock markets. Source: Bloomberg

Disclosure Section
This research report is based on information obtained from sources which we believe to be credible and reliable, but is
not guaranteed as to accuracy or completeness. All the information contained herein is based upon information
available to the public.
The recipient of this report must make its own independent assessment and decisions regarding any securities or
financial instruments mentioned herein.
This report is not, and should not be construed as an offer or a solicitation to buy or sell any securities or related
financial instruments. The investment discussed or recommended in this report may be unsuitable for investors
depending on their specific investment objectives and financial position.
The material in this research report is general information intended for recipients who understand the risks associated
with investment. It does not take account of whether an investment, course of action, or associated risks are suitable
for the recipient.
Investors should seek financial advice regarding the appropriateness of investing in any securities or investment
strategies discussed or recommended in this research report and should understand that the statements regarding
future prospects may not be realized. Investors may receive back less than initially invested. Past performance is not a
guarantee for future performance.
Fincor – Sociedade Corretora, S.A. accepts no liability of any type for any indirect or direct loss arising from the use of
this research report.
Recommendations and opinions expressed are our current opinions as of the date referred on this research report.
Current recommendations or opinions are subject to change as they depend on the evolution of the company or may
become outdated as a consequence of changes in the environment.
Fincor - Sociedade Corretora, S.A. provides services of reception, execution, and transmission of orders.

Fincor – Sociedade Corretora, S.A.

Rua Castilho, 44 4º Andar
1250-071 Lisboa
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FINCOR Weekly Market Perspectives 28/01/2003

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