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15-May-09 THE WEALTHLESS OF NATIONS…

The recent bounce in equities seems justified by the improvements in the business surveys and the stabilisation in consumer
confidence. However, further large gains from here would require a V-shaped economic recovery. That scenario is not completely
unrealistic in some countries, notably the US (where the bulk of the fiscal stimulus has yet to kick in) and Japan (where the previous falls
in GDP have been among the largest and where the economy has most to gain from a rebound in world trade).
In the meantime, the recent improvement in key indicators of business confidence is not a complete surprise. Even bears such
as ourselves did not expect the major economies to continue shrinking at the same rate as they have done over the last two quarters. The
collapse in confidence following the bankruptcy of Lehman Brothers last September undoubtedly accelerated the rundown of inventories
and exacerbated the slump in world trade via its impact on the flow of trade finance. The unprecedented policy measures taken to avert
the threat of a financial meltdown and cushion the real economy have at least halted this downward spiral.
There are plenty of euro-zone GDP figures to look forward to today. We have been more bearish than consensus for some time, and
industrial production numbers released earlier this week have reinforced this stance. First, German Q1 GDP numbers reveals a fairly
sharp contraction of 3.8% compared with 2.1% in Q4 and a consensus expectation of 3.0%. The monthly industrial production figures
paint an alarming picture. Production excluding construction slumped by around 12% on the quarter. This is nearly twice the decline seen
in Q4, suggesting that this sector alone might have knocked 1.4 percentage points (pp) off GDP growth compared to Q4’s already dismal
2.1% contraction.
French Q1 GDP numbers (06.45 GMT) are unlikely to be as bad as Germany’s. Still, the 1.5% q/q fall that we expect is worse than
the Q4 number of minus 1.1%, and the consensus expectation of minus 1.3%. Industrial production has continued to drop, but in contrast
to the situation in Germany it is unlikely that the fall in Q1 was sharper than in Q4. France is one of the few countries that will publish a
breakdown by expenditure component at this stage. Monthly data measuring spending on manufactured goods suggest that total
consumer spending might have continued to rise. But with monthly trade data pointing to another sharp fall in exports, we suspect that net
trade acted as a heavier drag on GDP than in Q4.
Oil prices strengthened to six-month highs, with benchmark crudes reaching $58-60/bbl by early May. Oil futures have moved higher
in tandem with stronger global financial markets. Yet, new bullish macroeconomic sentiment has not yet produced signs of oil demand
recovery and oil market fundamentals remain weak.
In its last monthly report, the International Energy Agency revised its forecast 2009 global oil demand down 0.2 mb/d on weaker-
than-expected preliminary data and non-OECD country baseline changes. Global oil demand is projected at 83.2 mb/d, 2.6 mb/d (3.0%)
below 2008. Continued oil demand weakness is premised on strong economic recovery later this year remaining elusive.
Global oil supply averaged 83.6 mb/d in April, up 230 kb/d versus. March on higher OPEC output. Total 2009 non-OPEC supply is
revised up 50 kb/d, after stable North Sea production and higher-than-expected Russian production in recent months. Total non-OPEC
supply falls from 50.6 mb/d in 2008 to 50.3 mb/d in 2009, offset by a similar rise in OPEC NGL production. However despite bad jobless
claims figures yesterday WTI surged 2.28% at 58.7%.
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 58,7 1,3641 95,93 3,10 3,31 2,21 0,39 3,54 0,19 1,52 0,20 1,05 -0,27 3,20 1,04 1,50 0,56 US
Perf 1d % 2,28 0,01 -0,13 0,73 bp -3,8 bp 1,73 0,04 2,16 0,13 1,15 0,24 1,18 -0,86 3,24 0,82 1,30 0,46 Europe
ECONOMIC DATA with impact
US CPI for April (12.30 GMT) expected to stay flat MoM and to drop to -0.6 % YoY after entering in negative territory in March (-0.1 %,
MoM, -0.4 % YoY). The CPI Core Index is expected to rise 0.1 % MoM (+1.8 % YoY).
US Industrial production (13.15 GMT) is expected to decrease by 0.6 % in April, with Capacity Utilization still at an historical record
low, well below 70 % (68.8 % expected).
US University of Michigan consumer confidence preliminary index (14.00 GMT) expected to grow to 67.0 vs. 65.1 (lowest at 55.3 in
November 08).
German preliminary Q1 GDP (06.00 GMT) should decrease by 3.0 % QoQ
French Q1 GDP is expected to decrease by 1.3 % QoQ (06.45 GMT).
POSITIVE IMPACTS
VIVENDI : Q1 revenue €6.5bn, in line / Ebitda €1.39bn (1.38bn exp) / Confirmed it still forecasts strong growth in adj. EBIT this year
EIFFAGE : Q1 revenue €3.04bn (2.8bn exp) / Energy division +33% / Order book €10.5 bn on April 1 (+4%) / No 2009 guidance
H&M : April same-store sales +8% (+7.5% exp) / Total April sales +19% (+17% exp)
RIO TINTO up 7% in Australia / It said it remains committed to a planned $19.5 bn tie-up with Chinalco / Separately, Chinalco would be
considering changing the terms of convertible notes that form part of its deal with Rio (The Australian Financial Review)
ROCHE : A study showed that Tarceva was significantly better than a placebo + Avastin, when added to oral or infused chemotherapies
singificantly increased the time patients with advanced breast cancer live without the disease worsening
BARCLAYS is in talks to sell Asset Management Unit (WSJ) / AM arm could be valued at more than $12bn
ARCANDOR is set to ask the German government for up to €700m in loan guarantees / Supervisory board is exp. for an extraordinary
meeting on Sunday to discuss financing issues and the implementation of the latest restructuring programme…
SWISS LIFE and Helvetia confirmed they were in exclusive talks regarding the sale of Swiss Life's non-core transport insurance
company CEAT in France / The unit has premiums of about €30m
LUFTHANSA : EU antitrust authorities approved Lufthansa's takeover of British Midland
GDF-SUEZ’s Brazil hydroelectric project will get a full environmental license next week (Environment Minister)
STEEL SECTOR : Taiwan's China Steel Corp. said its orders for the Q2 are better than expected / Separately, Brazilian integrated
steelmaker CSN has been selling iron ore at a discount since the end of 2008 (Mining director) / He added that steel production in China
is on the rebound, while Europe, the U.S. and Japan remain mired in the economic slowdown.
GAMESA : Q1 Sales €800m (€740m exp) / EBITDA €105m (€94m exp) / Confirms 2009 Target
IRISH LIFE : Trading Statement : Keeps Net Interest margin views / Says remains well capitalized with liquidity improving in recent
weeks / Sees weak lending for FY & Loan book decline through 2009
UBS : (As rumoured Yest) The Swiss govt wants to rapidly exit its investment in UBS but will only do it when the bank is stable and
market conditions are favorable (Fin Min) / UBS shares would have to rise at least to CHF18 before the govt would consider selling
DEUTSCHE BANK : Deutsche Post has cut its stake in DBK to less than 5%, as planned / This 25m DBK shares placement gave an
additional cash inflow exceeding the originally agreed price by around €100m
KBC : S&P's has affirmed its 'A/A-1' LT & ST counterparty credit ratings on KBC Bank, the 'A' insurer financial strength rating on KBC
Insurance., and the 'A-/A-2' counterparty credit ratings on holding company KBC
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15-May-09 THE WEALTHLESS OF NATIONS…

NEGATIVE IMPACTS
BELGACOM : Q1 revenue €1.49bn (1.47bn exp) / Ebitda €492m (502m exp) / Repeated FY guidance for about 1% revenue decline,
EBITDA margin of 32-33% and CAPEX of 10-11% of group revenue in 2009
THALES : Q1 rev. €2.3 bn, in line but orders fell 22% / Kept FY guidance for org. rev. gwth of 3-5%, EBIT margin at least = to 2008
ADIDAS : Nike said it will slash 5% of its 35,000 global workforce & repeated that sales declined in its most recent quarter, especially in
Europe with quarterly margins also under pressure…
INTESA - CREDIT AGRICOLE - GENERALI : Italy launched an inquiry into CASA's investment in ISP which could bring fines for ISP &
mean CASA has to write down its €1.5bn

SEVERSTAL : Q1 revenues fall 30.4% qoq to $2.80 bn ($2.63bn exp) but Ebitda $ -158m (+$123m exp) / No Q1 dividend / No plans
for FY 2009 dividend / No 2009 guidance until "market visibility" improves
US CAR MARKET : VOLKSWAGEN sees no recovery in demand for U.S. vehicles before the end of the year with industrywide sales at
risk of dropping below 10 m units
RESULTS DIVIDENDS EVENTS
Total AGM / STM analyst meeting / Commerzbank
Terna / Thales / Belgacom / Gazprom / Havas sales / AGM / Ingenico AGM / Michelin AGM / Total AGM /
Today BMW (€0.30)
Ladbrokes Linde AGM / AngloGold AGM / Ladbrokes AGM /
Standard Life AGM
Alleanza Assicurazioni (€0.30) / Assicurazioni
Generali (€0.15) / Atlantia (€0.37) / Banca Monte
dei Paschi di Siena (€0.013) / Banca popolare di
TMT conf at JP Morgan / Healthcare conf at
Monday Nordjyske bank milano (€0.10) / ENI (€0.65) / Finmeccanica
Deutsche Bank / Schering Plough AGM
(€0.41) / Fondiaria-Sai (€0.70) / Linde (€1.80) /
Mediaset (€0.38) / OMV (€1.00) / Saipem (€0.55)
/ SBM Offshore ($0.465) / Unilever (€0.51)
SAP AGM / Power and Utility conf at Goldman
Air France / Corio / Fortis / TUI Travel / HP (AMC) / Sachs / Omnicom AGM / StatoilHydro AGM / Credit
Tuesday
Vodafone / Home Depot / Campbell Soup Agricole AGM / Biotech and Medical Devices at
Merrill Lynch / Casino AGM
Accor (€1.65) / BNP Paribas (€1.00) / Groupo
Telefonica AGM / Rhodia AGM / Deutsche Boers
Ferrovial (€1.50) / Home Retail (€ GBp
AGM / Gas Natural AGM / GlaxoSmithKline AGM /
Wednesday London Stock Exchange 11.11111) / LVMH (€1.25) / SAP (€0.50) / Statoil
Zurich Financial investor day / Telekom Austria
Hydro (NOK 4.40) / Swatch (CHF 4.25) /
AGM
Unilever (GBp 44.65556)
Henkel AG (€0.53) / L'Oreal (€1.44) / Portugal
Thursday Cable & Wireless / Dell Telecom (€0.575) / Premier Oil Rights issue 4 Telefonica AGM / Gas Natural AGM
for 9
TRADING IDEAS
BUY ASML / ERICSSON on double bottom possibility.
BUY NOKIA / SIEMENS / CAP / SAP / EON / BAYER / ADIDAS / SANOFI / GLAXO / DANONE to play eco recovery + looking good
BUY AXA / ST GOBAIN / EDF / FTE / DTE / MERCK / NESTLE / VIVENDI on reversal Head & Shoulder possibility

BUY ST GOBAIN / SELL LAFARGE // BUY REPSOL / SELL ENI // BUY AHOLD / SELL UNILEVER // BUY RDSA / SELL TOTAL
BROKER METEOROLOGY
ERICSSON ................................ RAISED TO NEUTRAL FROM SELL ...................................................................................... BY UBS
ENDESA .................................... RAISED TO BUY FROM NEUTRAL ....................................................................................... BY UBS
SUEZ ENVIRONNEMENT ......... RAISED TO BUY FROM NEUTRAL .............................................................................BY GOLDMAN
VEOLIA ENVIRONNEMENT ..... RAISED TO BUY FROM NEUTRAL .............................................................................BY GOLDMAN
ACCIONA .................................. ADDED TO CONVICTION BUY LIST ...........................................................................BY GOLDMAN
FIAT ........................................... ADDED TO THE MOST PREFERRED LIST................................................................... BY MERRILL
INTERNATIONAL POWER ....... RAISED TO NEUTRAL FROM SELL............................................................................ BY GOLDMAN

SBM OFFSHORE ....................... CUT TO NEUTRAL FROM BUY ............................................................................................. BY UBS

NATIXIS ..................................... CUT TO HOLD FROM BUY ............................................................................................................ING
OMV ........................................... CUT TO NEUTRAL FROM OVERWEIGHT .......................................................................... BY HSBC
STATOILHYDRO ....................... CUT TO NEUTRAL FROM OVERWEIGHT .......................................................................... BY HSBC
RWE .......................................... CUT TO SELL FROM HOLD ....................................................................................................BY S&P
CGG VERITAS .......................... CUT TO SELL FROM NEUTRAL ............................................................................................ BY UBS
DAIMLER.................................... REMOVED FROM THE MOST PREFERRED LIST ....................................................... BY MERRILL

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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15-May-09 THE WEALTHLESS OF NATIONS…

CHART OF THE DAY
US continuing jobless claims and ADP employment report
Since 2001

40 0 7 000

6 500
20 0
6 000

5 500
0
5 000

-200 4 500

4 000
-400
3 500

3 000
-600
2 500

-800 2 000
01 02 03 04 05 06 07 08 09

Emploi dans le secteur privé, ADP survey (000's, monthly)

Nombre de chômeurs indemnisés, continuous claims (000's monthly)
Source : Department of Labor
Continuing claims in the United-States reached a new historical high at 6 560 000 showing that companies are still frozen hiring process.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
0.50 GMT Japan Machine orders March -4,6%,-27,7%YoY 1,4%,-30,1%YoY
7.00 GMT Germany Gross Domestic Product (preliminary) First quarter -2,2%QoQ -3,0%,-6,0%YoY -2,1%,-1,7%YoY
7.45 GMT France Gross Domestic Product (preliminary) First quarter -1,5%QoQ -1,3%,-2,5%YoY -1,1%,-0,9%YoY
9.00 GMT Euro zone Gross Domestic Product (preliminary) First quarter -2,0%,-4,1%YoY -1,6%,-1,5%YoY
10.00 GMT Euro zone Consumer price index April 0,4%,+0,6%YoY 0,4%,+0,6%YoY
10.00 GMT Euro zone Consumer price index core ( ex food and energy) April 1,6%YoY 1,5%YoY
13.30 GMT United-States Consumer price index April 0,1%,-0,5%YoY 0,0%,-0,6%YoY -0,1%,-0,4%YoY
13.30 GMT United-States Consumer price index core ( ex food and energy) April 0,2%,+1,8%YoY 0,1%,+1,8%YoY 0,2%,+1,8%YoY
13.30 GMT United-States Empire Manufacturing May -12,00 - 14,65
14.15 GMT United-States Industrial production April +0,5% -0,6% -1,5%
14.15 GMT United-States Capacity utilization April 69,5% 68,8% 69,3%
15.00 GMT United-States University of Michigan (préliminairy) May 67,0 65,1

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

DJIA 8331,3 - 0,79% - 5,07% EUR/USD 1,3628 -0,01% -2,42%
S&P 500 893,1 - 1,48% - 1,13% EUR/JPY 130,64 2,74% 3,02%
Nas daq 1689,2 - 1,55% 7,11% USD/JPY 95,86 2,74% 5,42%
CA C 40 3156,3 - 2,44% - 1,92% Oil Price % 5 Days Ytd
DA X 4738,5 - 1,37% - 1,49% Brent $/b 57,6 -0,28% 37,84%
Eur os tox x 50 2353,5 - 1,76% - 3,84% Gold Price % 5 Days Ytd
DJ 600 201,7 - 1,95% 1,69% Gold $/oz 926,9 1,11% 5,07%
FTSE 100 4362,6 - 0,63% - 1,62% Rates USA Euro Japan
Nikkei 9246,1 - 3,11% 4,36% Central Banks* 0,25 1,00 0,10
Shanghai Comp 2635,3 1,64% 44,73% Overnight 0,15 0,45 0,10
Sens ex ( India) 12083,4 - 2,01% 25,25% 3 Months 0,16 0,60 0,20
MICEX ( Rus s ia) 1000,6 2,80% 61,51% 10 Y ears** 3,09 3,31 1,44
Bov es pa ( Bras il) 49446,0 - 1,22% 31,68% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
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15-May-09 THE WEALTHLESS OF NATIONS…

ECONOMIC DATA PREVIEW
Watch in the United-States the release of the consumer price index for April due at 13.30 GMT, consumer prices are expected to
slightly rise since March but from a year ago inflation should decrease and remained negative. Looking to the core index we expect a
stabilization of the inflation, watch as well . the release of the industrial production and of the capacity utilization, for April due at 14.15
GMT respectively expected to rise of 0.5% and to remain stable.

Watch in the euro area the release of the growth domestic product for the first quarter of 2009 due at 10.00 GMT expected to reach
an historical low, watch as well the release of the consumer price index for April due at 13.30 GMT, expected to remain stable at a
level close to a deflation situation./JB

ECONOMY
UNITED-STATES : PRODUCER PRICES ROSE IN APRIL
After dropping of 1.2% in March producer price in the United-States rose more than forecast to reach 0.3% in April. This increase was
mainly led by a rise of 2.6% in gasoline prices and of 1.5% in food prices. Nevertheless core prices (excluding food and energy) rose as
well of 0.1% lead by a 0.4% increase in consumer goods prices and by the sharp increase of light motor prices. From a year ago
producer prices declined of 3.7% as expected and core prices rose of 3.4% showing the drop of energy prices since the peak of the
barrel at $147 in July 2008. Nevertheless as oil and commodity prices should rise further as the activity is slowly recovering, producer
prices should rise in the coming months even if they will remained in negative territory on a year on year basis.

UNITED-STATES: INITIAL JOBLESS CLAIMS ROSE AND CONTINUING CLAIMS REACHED A NEW HISTORICAL HIGH
After decreasing from 635 000 to 605 000 Initial jobless claims rose last week to reach 637 000. Nevertheless claims remain below
May’s peak of 674 000 showing that the worst might be over and we should shortly seen employment figures matching closer the
economic fundamentals. Indeed we can say that around 40% of the job destruction are not linked to the slowdown of the activity but
represent anticipations as companies are fearing the consequences of a gloomy economic outlook. Meanwhile continuing claims
reached a new historical high at 6 560 000 showing that companies are still frozen hiring process./JB
 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

15-May-09 THE WEALTHLESS OF NATIONS…

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
15/05/2007 15/11/2007 15/05/2008 15/11/2008 15/05/2009 15/05/2007 15/11/2007 15/05/2008 15/11/2008 15/05/2009
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
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
15/05/2007 15/11/2007 15/05/2008 15/11/2008 15/05/2009 15/05/2007 15/11/2007 15/05/2008 15/11/2008 15/05/2009
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
80
1,4

70 1,35
60
1,3
50
40
1,25

30 1,2
15/05/2007 15/11/2007 15/05/2008 15/11/2008 15/05/2009 15/05/2007 15/11/2007 15/05/2008 15/11/2008 15/05/2009
Source : Bloomberg Source : Bloomberg