WWW.GLOBAL-EQUITIES.

COM / DEL SARTE / + 33 (0) 1 44 43 33 24

23-Feb-09 DOUBLE
Interesting week ahead with hopefully some further action from the Obama government which should be more friendly than the
impact of a possible Nationalization from Citi and Bank of America which made investors once more run away from banks, and equity
business as a whole. Financials rallied all the way back into positive ground on Friday from their 9% initial decline after word surfaced that
the White House believes the correct way to run the bank system is through private ownership, which likely helped calm fears of bank
nationalization. There is also speculation Treasury will soon release further details of its financial stability plan, though a spokesperson
wouldn't comment. Obama's Housing plan will undoubtedly help on the margin, which is a good thing, but the market's lukewarm
response to the plan indicates participants are refraining from giving the benefit of the doubt to government rescue plans since they have
been multiple times bitten now and are twice shy.
The different plans will be efficient. The TALF was one of the four main components of the Treasury’s recently announced Financial
Stability Plan (FSP), which aims to expand the scope of the original Troubled Asset Relief Program (TARP). The FSP also allocated the
second $350bn tranche of the original TARP funds for fresh capital injections into banks, avoiding mortgage foreclosures and the creation
of a “Public-Private Investment Fund”, or bad bank, which will buy up to $1trn of toxic assets. Although we understand the concern about
the lack of detail surrounding the bad bank plan and we are not convinced the FSP will do much to prevent mortgage foreclosures (more
on that later). However, the TALF could be very helpful in kick-starting the securitisation market back into life and lowering consumer
borrowing rates, in the same way as the funding facility for commercial paper lowered the cost of borrowing for many firms . As the plan
stands now, the Treasury will invest $100bn in the TALF and the Fed will use that initial seed capital as the basis for buying up to $1trn of
recently issued securities linked principally to consumer loans. If this plan is successfully implemented it will increase the chances that the
economy can yet avoid a protracted slump. However, it will be the middle of the year before we can judge whether this new facility is a
success or not.
The economic calendar is on the light side, but it features the Existing Home Sales report on Wednesday, the Durable Goods Orders
report on Thursday, and the revised Q4 GDP report on Friday. The big event of the week is Fed Chairman Bernanke's semi-annual
monetary policy report on Tuesday . Retailers will be in focus, with Gap (GPS), Kohl's (KSS), Macy's (M), Nordstrom (JWN), Sears
Holdings (SHLD) and Target (TGT) among others, scheduled to report. Given the slowdown in consumer spending and weak holiday
sales, earnings reports are expected to be grim. Investors will also find out if Dell (DELL) has been able to gain traction with its latest
turnaround plan when it reports earnings after Thursday's close.
The CPI report on Friday was good news. The 0.3% m/m rebound in consumer prices in January was enough to prevent the annual
headline inflation rate from dipping into negative territory. The 0.2% m/m rise in core prices last month suggests that there might still be
some life on core inflation, however, which only dipped to 1.7% y/y, from 1.8%. Core prices stagnated over the final quarter of last year,
raising the possibility that the slump in demand was rapidly pushing the economy into a potentially pernicious deflation. Accordingly, the
monthly pick-up in core prices is a very welcome development.
This week the focus will remain on what steps the policymakers are taking to deal with the worsening financial and economic
crisis. Things need o be more clear, and the Geithner team, although doing a great job, need to be more sharp and clear with the way it
will be dealing with the banks troubles which are always worsening every week a bit more, pushing equity markets even lower with
investors keeping on losing faith. The economic return can not happen if banks are not back to business. Should be soon cured, on way
or the other.
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 40,5 1,2896 93,05 2,81 3,01 -0,33 -2,47 -0,65 -1,16 0,11 1,91 -1,77 -2,64 0,61 -1,14 -0,11 -1,34 US
Perf 1d % 4,74 0,55 0,32 1,99 bp -6,6 bp -2,51 -3,17 -5,11 -1,42 -0,76 0,94 -3,01 -2,49 -0,22 -2,22 -0,83 -2,04 Europe
ECONOMIC DATA with impact
Atlanta Fed President Lockhart (17h40 gmt) speaks on U.S. economy
Dallas Fed President Fisher (23h gmt) speaks at Harvard University on financial crisis
POSITIVE IMPACTS
ENDESA: Enel agreed to buy a 25% stake in Endesa from Aciona for €1.1 bn / Acciona will receive €9.6bn from Enel, with the remaining
€1.5 bn paid through an early DIV by Endesa (Co) / Enel is targeting €1bn of cost savings & additional rev from the purchase (It. press)
ENEL – EDF are ready to extend their nuclear partnership to Italian plants (JV 60% owned by Enel)/ Enel may also bid to manage a
second EPR plant in France (Il Sole 24 Ore)
ST GOBAIN:Rating unch by rights issues(S&P)/ Wendel to take part in Kal increase& to use sale of warrants, to have ~30% voting rights
LAFARGE : had it’s credit outlook increased to stable from negative by Standard & Poor’s
BBVA : increased its stake in CITIC to 10.07% from 4.83 % (as annouced last year).
ISP : bank will study the Italian government’s offer to buy bank bonds as soon as they are made available. Rumors of a capital increase
by Intesa are “unfounded” , Intesa will still be profitable this year (Chairman)
ING may consider seeking support from the U.S. after studying the impact state aid is having on the North Am. operations (spokesman)
GENERALI/ ALLEANZA : The 2 boards are due to meet to approve Generali’s buyout of its life-insurance unit Alleanza(Il Sole 24 Ore)
UNICREDIT : CEO said he is “confident” that bank will report 2008 profit close to its target of €4bn/ UniCredit would consider making use
of the Italian govt's bond scheme.
PRUDENTIAL has been approached by C. Cowdery (founder of Resolution) on the possible sale of its U.K. insu biz (SundayTelegraph)
RBS plans to cut costs by more than £1bn partly by scaling back investment banking (Source)
FORTIS: BNP will have to improve its offer for parts of fortis ‘s Belgian banking & insu units before negotiations can succeed (Le Soir)
NATIXIS : The French government could inject around €5bn and take a 15-20% stake in the mutual bank created by a merger of Banque
Populaire and Caisses d'Epargne. The deal should be annouced on Thursday (Source)
CNP Assurances : Groupe Caisse d’Epargne’s stake in CNP is likely to be included in a tie-up with Groupe Banque Populaire (Source)
UBS : U.S. efforts to force Co to disclose the names of 52k US custo wud require the bank to violate Swiss sovereignty & criminal law
FIAT : will get a €1bn revolving loan ISP, UniCredit and Calyon (law firm Allen & Overy LLP, which advised the bank said)
CONTINENTAL : is close to getting a 4 billion euro loan guarantee from the regional state of Bavaria (unspecified sources) / German
Labor Minister opposes gov aid fror the Scheaffler group (€11bn debt after buying Conti) ( Tagesspeigel)
VODAFONE plans to cut hundreds of U.K. jobs to reduce costs and protect earnings amid the economic slowdown (source)
TELENET plans to pay out 50 cents a share to investors this year through a reimbursement of capital
TELECOM ITALIA : Board member Tarak ben Ammar said he was not convinced by the idea of spinning off the fixed-line network
SWISSCOM:Fastweb (82% Swiiscom) will announce its 1st net pft & positive free cash flow when it publishes results for 2008 (Il Sole)
EADS denied a report on Sunday that its A400M military aircraft project had been pushed back by another year / Airbus said the order
book for the A380 is in “good shape.” Co hasn’t received any cancellations from airlines in the Gulf./ Airbus' Middle East president said
France's move to provide $6.3 bn in aid to support airplane purchases was not enough and he expected other Euro countries to follow
 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

23-Feb-09 DOUBLE
TECHNIP :A state-owned Iraqi firm has awarded Technip the engineering & design contract for a planned 140k barrels per day refinery.
GERMAN BANKS : German Fin Minister said in an interview on Sunday that establishing a European supervisor for the banking sector
made sense and that he had no objections if the ECB took on this role

CITIGROUP : The U.S. government may end up with as much as 40% of Citi's common stock, though Citigroup executives are hoping the
talks will result in a stake closer to 25% (WSJ Said)
NEGATIVE IMPACTS
RENAULT : Long term ratings cut to junk by Moody’s
SOLVAY : Aliancebernstein cut stake in Solvay to 4.98% from 8.14%
SANTANDER put on hold a sale of €1 bn of bonds after sounding out investors last week (Expansion)
HSBC hasn’t ruled out asking investors for new capital amid speculation the bank is considering a $20bn rights issue (the Independent)
HYPO REAL ESTATE : would need further state guarantees even if it were taken over by the German govt, & its credit rating would not
improve significantly from such a step (S&P)
RWE : German cities in the western are considering breaking their ties with RWE and competing with the supplier (Die Welt)/ Separatly
The venture capital arm of RWE's renewable energy unit plans to build up a portfolio of shareholdings in promising Cos worth €100m
E.ON has lost the currently only seriously interested party in its Thuega unit as local utilities including MVV and Rheinenergie, which had
formed a consortium, have fallen out with each other ( Handelsblatt )
REPSOL - SACYR : Spanish insurer Mutual Madrilena plans to sell its 2% of Repsol and 5% of Sacyr as it divests its invesment portfolio,
taking a capital loss (Expansion)
DAIMLER has scrapped its mid-term growth tgts of an avg sales growth of 5% annually but is keeping its margin tgts (Automobilwoche)
INFINEON: 2 U.S. of Qimonda filed for Chapter 11 bankruptcy protection in the US on Friday
RESULTS DIVIDENDS EVENTS
Today ACS / Maroc Telecom ST Micro ($0.09)
Tuesday Akzo Nobel / Corio / Deutsche Boerse / Theolia / OZ Minerals / Heinz / Home Depot / Novartis AGM
Accor / CNP / Vallourec / Heinkel / ASM International / OMV / Telekom Austria / BHP Biliton ($0.455556) / Reckitt
Wednesday Apple AGM
Cadbury Benckiser (GBp 53,3333)
Allianz (BMO) / BASF (BMO) / Acciona / RWE (BMO) / Repsol / Centrica / British
Thursday American Tobacco / TIM / Telecom Italia / Dexia / Deutsche Post / Eiffage / Thales / JP Morgan investor day
Nicox / Dell / Sulzer / Safeway / GAP / AIG
Friday Acerinox / Aviva / Deutsche Tel / Gruppo Ferovial /Gamesa / Holcim / GM Novartis (CHF 2.00)
TRADING IDEAS
BUY DANONE / ROCHE / DT BOERSE on double bottom possibility
BUY CARREFOUR / on reversal Head & Shoulder possibility

BUY FRANCE TEL / SELL DTE // BUY DANONE / SELL UNILEVER // BUY LVMH / SELL PPR // BUY BOUYGUES / SELL VINCI
BROKER METEOROLOGY
SWISS LIFE .................................RAISED TO BUY FROM HOLD ................................................................................. BY CITIGROUP
SWISS LIFE .................................RAISED TO NEUTRAL FROM SELL .................................................................................... BY UBS

ANTENA 3 ...................................CUT TO SELL FROM HOLD ..................................................................................... BY CITIGROUP

STATOILHYDRO .........................CUT TO NEUTRAL FROM OVERWEIGHT .............................................................. BY JPMORGAN
ARCELORMITTAL .......................CUT TO NEUTRAL FROM BUY ............................................................................................ BY UBS
IBERDROLA ................................CUT TO NEUTRAL FROM BUY ............................................................................................ BY UBS
SSAB ...........................................CUT SELL FROM NEUTRAL ................................................................................................ BY UBS
PORTUGAL TELECOM ..............CUT TO SELL FROM HOLD ....................................................................................................BY ING

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

23-Feb-09 DOUBLE
CHART OF THE DAY
US Consumer Prices Index (YoY)
since 1950

16

14

12

10

-2

-4
50 53 56 59 62 65 68 71 74 77 80 83 86 89 92 95 98 01 04 07

Source : Bureau of Labor Statistics

The consumer price index was unchanged at 0.0% on an annual basis for the first time since 1955 underlining the fact
that the inflation should drop below zero next month creating a deflation situation. Deflation will be the worst situation for
the U.S. economy as it reflect a global offer over crossing the global demand and creating more job cuts and more
bankruptcies generating a drop of the demand and a rise of the deflation as a vicious circle. Nevertheless the yearly
inflation rate should plummet to the middle of the year before tuning positive mainly due to a “base effect”.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
05.00 GMT Japan Supermarket sales January -2,8 % YoY
23-25 February Germany Wholesale price index January -2,0%,-6,3% YoY -3,0%,-3,3% YoY
23-27 February Unite-Kingdom Nat'wide house prices February -1,3%,-16,6% YoY
09.00 GMT Italy Consumer price index ( incl. Tobacco) final January -0,1%,+1,6% YoY -0,1%,+1,6% YoY
15.30 GMT United-States Dallas Fed Manufacturing activity February -50,5%

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

DJIA 7365,7 - 6,97% - 16,07% EUR/USD 1,2916 0,95% -7,51%
S&P 500 770,1 - 7,67% - 14,75% EUR/JPY 120,14 -2,25% -5,45%
Nas daq 1441,2 - 6,46% - 8,61% USD/JPY 93,02 -1,35% 2,52%
CA C 40 2750,6 - 8,23% - 14,53% Oil Price % 5 Days Ytd
DA X 4014,7 - 9,04% - 16,54% Brent $/b 41,4 -2,01% -0,79%
Eur os tox x 50 2011,7 - 9,71% - 17,81% Gold Price % 5 Days Ytd
DJ 600 176,9 - 7,41% - 10,80% Gold $/oz 988,7 4,94% 12,04%
FTSE 100 3889,1 - 6,90% - 12,29% Rates USA Euro Japan
Nikkei 7376,2 - 4,66% - 16,74% Central Banks* 0,25 2,00 0,11
Shanghai Comp 2306,4 - 2,56% 26,67% Overnight 0,20 1,10 0,11
Sens ex ( India) 8843,2 - 8,19% - 8,34% 3 Months 0,27 0,97 0,24
MICEX ( Rus s ia) 631,7 - 13,73% 1,96% 10 Y ears** 2,81 3,01 1,28
Bov es pa ( Bras il) 38714,6 - 7,10% 3,10% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

23-Feb-09 DOUBLE
Economic data preview

No major economic data due in United-States

Watch in the United-Kingdom the final release of the consumer price index for February due at 09.00 GMT, and expected to decrease
led down by the global economic slowdown and by the drop of energy prices. The United-Kingdom as the United-States will shortly face a
deflation situation/JB

ate

ECONOMY

UNITED- STATES : INFLATION DROPPED TO ITS LOWEST LEVEL FOR 54 YEARS FROM A YEAR AGO
As forecast by the labour department U.S. inflation rebound for the first time in 6 months to 0.3% in January from -0.7% in December. This
price increase was partly a consequence of the 6.0% rebound in gasoline prices last month. Nevertheless the sharp drop of raw foodstuffs
in the second half of the year should lead back the consumer prices in the coming months. The core prices ( excluding food and
energy)rise 0.2% in February due to autos, clothing and medical care. The consumer price index was unchanged at 0.0% on an annual
basis for the first time since 1955 underlining the fact that the inflation should drop below zero next month creating a deflation situation.
Deflation will be the worst situation for the U.S. economy as it reflect a global offer over crossing the global demand and creating more job
cuts and more bankruptcies generating a drop of the demand and a rise of the deflation as a vicious circle. Nevertheless the yearly
inflation rate should plummet to the middle of the year before tuning positive mainly due to a “base effect”.

FRANCE : FRANCE’S INFLATION DECREASED IN JANUARY AND THE BUSINESS CONFIDENCE INDICATOR DROPPED TO AN HISTORICAL LOW IN FEBRUARY
After a six month decrease in a row the consumer price index dropped again of 0.4% in January and increased 0.7% from a year ago its
lowest level since September 1999. This drop is mainly due to the sales (prices dropped 7% in the shoes and clothing sector) and to the
lasting drop trend of the energy prices (-2.2%). This decrease of the French inflation appears despite the increase of the “public transport
prices” and of the price of fresh products (+ 4.7%). Despite these increase the core consumer price index ( excluding food and energy) was
stable in January reaching 1.7% from a year ago. This means that the weak prices and the risk of a deflation situation are not only due to
an “oil effect” but are much more deeper. On the other hand after a rebound in January the industry INSEE survey for February was
terrible. Indeed after a slight rebound of the production outlook and of the order books dropped in February on all activities and reaching
record low levels . As a consequence the business confidence indicator dropped of 5 points to reach 68 its lowest level since the creation
of the statistic in 1976.

EURO-ZONE : THE PMI MANUFACTURING SHRINK AT RECORD PACE IN FEBRUARY

Europe manufacturing contacted at a record pace to reach 33.6 in February. If we look to the breakdown all the component of the indicator
went down and employment as well as new orders are particularly affected. The PMI service and the PMI composite dropped as well at
respectively 38.9 and 36.2 . These figures confirm that recession is deepening in the euro area putting more pressure on the need for a
sharp cut of the European Central Bank’s leading rate and to a coordinate action of the euro area members. /JB
 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

23-Feb-09 DOUBLE

VIX index : implied volatility on the S&P 500 $Libor - 3-Month(InterbankRate)

6
85
80 5,5
75
5
70
65 4,5
60
55 4
50
3,5
45
40 3
35
30 2,5
25
20 2
15 1,5
10
5 1
23/02/2007 23/08/2007 23/02/2008 23/08/2008 23/02/2009 23/02/2007 23/08/2007 23/02/2008 23/08/2008 23/02/2009
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
23/02/2007 23/08/2007 23/02/2008 23/08/2008 23/02/2009 23/02/2007 23/08/2007 23/02/2008 23/08/2008 23/02/2009
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
23/02/2007 23/08/2007 23/02/2008 23/08/2008 23/02/2009 23/02/2007 23/08/2007 23/02/2008 23/08/2008 23/02/2009
Source : Bloomberg Source : Bloomberg
WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

23-Feb-09 DOUBLE
WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

23-Feb-09 DOUBLE