Daily Letter | 1

6 August 2010

Manulife Financial Corp. Mario Mendonca, CA, CFA 1.416.869.7270

MFC : TSX : C$14.20 HOLD mmendonca@canaccordgenuity.com

Owen Ko, MBA, CFA, CPA 1.416.869.7319
MFC : NYSE Target: C$17.00 ↓ oko@canaccordgenuity.com

COMPANY STATISTICS:
52-week Range: C$13.74 - 25.25
Financials -- Insurance
Current Dividend:
Current Dividend Yield %:
C$0.52
3.7
BOOK VALUE PER SHARE COULD
Forecast Return %:
Shares Out (M):
23.4
1,766
SINK BELOW $13.00
Market Cap (M): C$25,077 MFC reported a loss per share of $1.36 versus our estimate of a loss of
Bk Value /shr: C$14.89 $0.27 and consensus of a loss of $0.60. Relative to our estimate, the
P/Bk Value (x): 0.95 equity market charge and interest rate charge were far greater than
EARNINGS SUMMARY: expected. MFC’s earnings sensitivity appears to be greater than we
FYE Dec 2009A 2010E 2011E originally understood it to be. The company raised guidance as to the
EPS: C$0.81 C$(2.09) C$1.68 sensitivity of earnings and capital to the macro factors. Interest rate
P/E (x): 17.5 -6.8 8.5
sensitivity increased significantly.
Relative to The Group %: nm -54 91
ROE %: 4.9 -14.8 12.6 While we fully expected MFC to conduct an assumption review in Q3/10
SHARE PRICE PERFORMANCE: and take material charges associated with morbidity and even the URR,
based on management’s comments, we suspect that the charge could be
$1.7 billion. Combined with a goodwill charge of approximately $2.0
billion and the strength of the C$, we could see MFC’s book value per
share sink below $13.00 per share by the end of 2010.

COMPANY SUMMARY:
Manulife Financial is a leading Canadian-based financial
services group operating in 22 countries and territories
worldwide. Funds under management by Manulife
Financial and its subsidiaries were Cdn$454 billion
(US$428 billion) as at June 30, 2010.
All amounts in C$ unless otherwise noted.
With the S&P 500 up 9% since the end of last quarter, in theory, MFC’s
MCCSR could be as high as 230% (a 10% increase in equity markets
increases the MCCSR by 8 points). However, as discussed above, charges
associated with the URR, morbidity and other factors could push the
MCCSR still lower. A decline in equity markets from current levels of
10%-20%, combined with the charges discussed above, could take the
MCCSR to 200% or less. We would not rule out another capital raise.
Our estimates suggest MFC can generate an ROE of 12.0-12.5% in 2011.
We believe an ROE at this level warrants a P/B of 1.3x. Applying a P/B
target multiple of 1.3x to MFC’s book value per share 12-month forward
of $13.26 generates a target price of C$17.00 (down from C$18.00) and
implies a total return of 20%. While a 20% return is attractive, our HOLD
rating continues to reflect the company’s extreme earnings volatility,
regulatory risk (potential OSFI changes), lack of momentum in P&D and
the potential for another capital raise

Canaccord Genuity is the global capital markets group of Canaccord Financial Inc. (CF : TSX | CF. : AIM)
The recommendations and opinions expressed
expressed in this Investment Research accurately reflect the Investment Analyst’s personal,
independent and objective views about any and all the Designated Investments and Relevant Issuers discussed herein. For important
information, please see the Important Disclosures section in the appendix of this document or visit Canaccord Genuity’s Online Disclosure
Database.
 Daily Letter | 2
6 August 2010

EARNINGS IN THE QUARTER

MFC reported a loss per share of $1.36 versus our estimate of a loss of $0.27 and
consensus of a loss of $0.60.

Figure 1: Summary model Q2/10 ($mm)

Sources of Earnings Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q2/10E
Expected profit from in-force business 871 876 838 810 801 817
Impact of new business (strain) (55) (143) (119) (142) (158) (121)
Experience gains 925 (572) 439 555 (4,155) (1,412)
Management actions and changes in assumptions (46) (1,081) (232) (20) 94 -
Earnings on surplus funds (21) 156 15 151 61 153
Other 11 29 63 (7) 8 -
Income before taxes 1,685 (735) 1,004 1,347 (3,349) (562)
Income taxes 89 563 (136) (207) 971 101
Net income attributed to shareholders 1,774 (172) 868 1,140 (2,378) (461)
Preferred share dividends (16) (21) (20) (20) (20) (20)
Net income available to common shareholders 1,758 (193) 848 1,120 (2,398) (481)
Net income avail. to common S/Hs adjusted for items of note 710 688 658 649 601 644

Items of note related to the crisis (after tax):

Credit losses and equity impairments (215) (111) (222) (9) (16) (25)
Equity market charges 2,619 1,268 492 351 (1,686) (1,000)
Interest rates (1,130) (1,222) 110 - (1,479) (300)
Impact of changes in assumption (87) (783) (147) - - -
Favourable fixed income investing activities - - 188 132 200
Other gains (charges) (139) (33) (43) (59) 50 -
Total 1,048 (881) 190 471 (2,999) (1,125)

Weighted average shares outstanding (f.d.) 1,616 1,615 1,673 1,763 1,762 1,766
EPS (f.d.) 1.09 (0.12) 0.51 0.64 (1.36) (0.27)
EPS (f.d.) adjusted for items of note 0.44 0.43 0.39 0.37 0.34 0.36

Return on equity 27.2% (3.0%) 13.0% 16.2% (35.5%) (6.9%)

ROE adjusted for items of note 11.0% 10.8% 10.1% 9.4% 8.9% 9.2%
Book value per share 16.23 15.30 15.59 15.79 14.89 15.84

YoY growth
Expected Profit 8% 6% 4% (9%) (8%) (6%)
Earnings on surplus (108%) 41% (115%) (203%) (390%) (829%)
EPS adjusted for items of note (34%) (40%) (30%) (21%) (22%) (17%)
Average AUM 3% 9% 11% 9% 9% 8%
Premiums and deposits (excluding Corporate segment) 2% (2%) (12%) (10%) (10%) (7%)
Expected profit & earnings on surplus to Income before taxes 50% (140%) 85% 71% (26%) (173%)

Average AUM 413,165 428,756 438,099 443,037 450,189 447,937

Expected profit to average AUM 0.84% 0.82% 0.77% 0.73% 0.71% 0.73%
Premiums & deposits (excluding Corporate segment) 17,653 16,103 16,827 16,959 15,877 16,386
Strain to premiums & deposits (including Corporate segment) (0.28%) (0.85%) (0.69%) (0.80%) (0.93%) (0.70%)
Ending common shareholders' equity 26,198 24,833 27,405 27,816 26,291 27,896
Earnings on surplus to common S/Hs' equity prior quarter (0.3%) 2.4% 0.2% 2.2% 0.9% 2.2%
Tax rate (5%) 77% 14% 15% 29% 18%

Source: Company reports, Canaccord Genuity

 Daily Letter | 3
6 August 2010

Relative to our estimate:

• The equity market charge of $1.7 billion was materially higher than our estimate of
$1.0 billion and reflected greater equity market sensitivity than the company’s
guidance suggested. With equity markets down a blended 10% in the quarter, we
expected the company to take a $1.0 billion charge. Management indicated that hedge
ineffectiveness resulted in a further $300 million charge and that the decline in the
TOPIX is actually more relevant to blended market performance than the S&P/TSX.
The TOPIX was down 14% in the quarter.

• The sharp decline in interest rates reduced earnings by $1.5 billion versus our
estimate of $300 million. We anticipated a much smaller effect primarily because we
expected the increase in credit spreads to offset much of the impact of lower interest
rates. Management indicated that this did not benefit earnings this quarter because
the company applies a more conservative view of credit spreads when they are beyond
long-term averages, and because the company uses an “expected investable” universe
of bonds rather than observable rates. The difference from our estimate further calls
into question the market’s capacity to forecast MFC’s earnings in any given quarter.

• Earnings benefited from favourable fixed income investing activities ($116 million)
versus our estimate of $200 million and $188 million last quarter.

Excluding the items discussed above, we put the core number at $0.34, slightly below our
estimate of $0.36. Our outlook on the core number of $0.34 is different from what
management characterizes as adjusted ($0.36) for the following reasons:

• MFC uses a $1.16 C$/US$ exchange rate for the purposes of calculating the
adjusted number. This added $48 million ($0.02-$0.03 per share) to MFC’s
adjusted EPS.

• MFC adjusts for higher than expected morbidity and lapse experience in long-term
care. We do not treat policyholder experience as unusual. This added $11 million
(>$0.01 per share) to MFC’s adjusted EPS.

On an adjusted basis, the modest $0.02 difference from our estimate ($0.34 versus $0.36)
primarily relates to slightly weaker asset growth, weaker expected profit margins and
lower earnings on surplus. Weaker earnings on surplus related to the absence of AFS
securities gains. Management guided to higher AFS securities gains in the second half of
2010. Management will stop providing adjusted earnings guidance at the end of 2010.

We look at the following key issues in this report:

• Revising 2011E EPS down; reducing book value per share estimate significantly

• Q3/10 assumption review

• Sensitivity to equity markets moves higher

• Interest rate sensitivity moves much higher

• MCCSR declined as expected; capital raise plausible

• Regulatory and accounting risk remains high for MFC and the insurers

• P&D remains soft; but lapping very weak quarters

 Daily Letter | 4
6 August 2010

Revising 2011E EPS down; reducing book value per share estimate significantly
Reflecting lower normalized earnings (primarily lower earnings on surplus) and all of the
Q3/10 assumption review charges discussed below as well as a goodwill charge of $2.0
billion in Q4/10, we are revising our 2010E EPS to a loss per share of $2.09 (from EPS of
$1.14). We reduced our 2011E EPS to $1.68 from $1.80 reflecting the strength in the
Canadian dollar relative to the U.S. dollar, weak P&D growth and lower expected profit
(mostly associated with the cost of hedging the VA business).

The decline in our expected profit forecast in part reflects management’s comments
regarding the costs of hedging and our expectation that MFC will continue to hedge more
inforce VA business. Management has not hedged additional VA inforce business since
Q1/10. We estimate the cost of taking the hedging to 70% (from 51% currently) to be an
additional $50 million after tax annually.

Below we layout the anticipated effect of the assumption review and goodwill charge on
book value per share. By the end of the year, we could see book value decline to below
$13.00 per share. Looking out 12 months (Q2/11) we estimate book value to be
approximately $13.26.

Our estimates suggest MFC can generate an ROE of 12.0-12.5% in 2011. We believe an
ROE at this level warrants a P/B of 1.3x (we use 1.3x for SLF consistent with the
company’s expected ROE). Applying a P/B target multiple of 1.3x to MFC’s book value per
share 12-month forward of $13.26 generates a target price of $17.00 (down from $18.00)
and implies a total return of 20%.

While a 20% return is attractive, our HOLD rating continues to reflect the company’s
extreme earnings volatility, regulatory risk (potential OSFI changes), lack of momentum in
P&D and the potential for another capital raise (discussed below). We favour SLF over MFC
on valuation, lower tail risk and better business momentum.

Q3/10 assumption review

While we fully expected MFC to conduct an assumption review in Q3/10 and take material
charges associated with morbidity and even the URR (ultimate reinvestment rate), based
on management’s comments, we suspect that the charge could be approximately $1.7
billion. Management suggested that the morbidity charge could exceed adjusted earnings
in the quarter. This quarter adjusted earnings were $658 million. This suggests to us that
the pricing increases which were supposed to reduce the magnitude of the charge, may not
be as important to the equation as originally believed. We now believe the morbidity
charge could be upwards of $800 million. Additionally, if the loss is not tax deductible (as
suggested by management), the charge could well top $1.0 billion. We built in a $1.0
billion charge into our reported (but not adjusted) EPS estimate for Q3/10.

Management also suggested that because of the interest rate charges, there is a large
deferred tax asset in the U.S. that may not be entirely recoverable if losses continue to
mount. We are not building in a valuation charge on the deferred tax asset at this time.
The deferred tax asset is $700 million.

Management suggested that they may lower the ultimate reinvestment rate assumption
(URR). The company’s sensitivity is such that a decline in the URR results in a charge of
$1.9 billion. We would not be surprised if MFC lowers the URR by 10-20 bps or $300
million.
 Daily Letter | 5
6 August 2010

Finally, management stated that higher volatility, could impact segregated fund reserves.
At Q2/10 management indicated that a 100 bps change in equity volatility assumption for
stochastic segregated fund modeling would reduce earnings by $300 million. We build in a
charge of $400 million.

While we have not incorporated charges for changes in expected returns for public equities
($1.0 billion charge for 100 bps reduction) and non fixed income assets including
commercial real estate, timber and agricultural real estate, oil gas and private equities
($2.8 billion charge for 100 bps reduction), given the volatility in asset returns, it is
plausible that management feels the need to adjust these non-fixed income asset return
expectations as well.

While management did not lay out a goodwill charge in the manner SLF did, the CFO did
suggest that the charge could be as high as $2.0 billion. With $7.2 billion in goodwill, most
of which relates to the U.S., a goodwill charge of $2.0 billion is entirely plausible. Unlike
SLF that indicated the charge would be to opening retained earnings on January 1, 2011,
MFC suggested the charge could go through earnings in the second half of 2010. We built
in a $2.0 billion charge into Q4/10 reported earnings.

Figure 2: Change in book value based on forecasted charges

$ millions Per share Available Required MCCSR
Shareholders' equity Q2/10E 26,291 14.89 25,500 11,526 221%
Core earnings Q3/10 and Q4/10 1,327 1,327 346
Dividends in Q3/10 and Q4/10 (459) (459)
Currency impact in Q3/10 (C$ up significantly) (978) (978) (489)
S&P 500 performs in line with expectations - - -
L.T. interest rates stable - -
Morbidity charges (1,000) (1,000)
URR charge (300) (300)
Revise market volatility assumption (400) (400)
Goodwill charge (2,000) -
Shareholders' equity Q4/10 22,481 12.73 23,690 11,383 208%

Source: Company reports, Canaccord Genuity

Applying these charges, the appreciation in the C$ since Q2/10, normalized earnings and
expected dividends, we can see book value per share declining to $12.50-$13.00 by Q4/10
or January 1, 2011 (the implementation of IFRS Phase I) and an MCCSR of 200%-210%. In
more normal circumstances, an MCCSR of 210% is entirely acceptable, however, given
market volatility and MFC’s outsized sensitivity to the macro factors, an equity offering is
entirely plausible.

Although management stated that there are several other contingencies the company
would turn to before raising capital (hybrids, preferred shares, reinsurance) we believe
that the only thing that would satisfy rating agencies is if MFC raised common equity.

Standard & Poor’s downgraded MFC’s operating subsidiaries and Moody’s placed MFC’s
most important operating subsidiaries on review for possible downgrade.

Sensitivity to equity markets moves higher

The decline in equity markets increased MFC’s earnings sensitivity to a 10% change in
equity markets to $1.3 billion from $1.1 billion. The amount at risk on the variable
 Daily Letter | 6
6 August 2010

annuities was $11.4 billion (up from $8.1 billion last quarter) reflecting the decline in
equity markets. In the quarter the company did not hedge any of the variable annuity
exposure.

The company guided to hedging at least 70% of the book by the end of 2012, but reiterated
the view that it is only appropriate to hedge when the guarantees are at or out of the
money. Importantly however, management indicated that even at the 70% hedged level,
earnings sensitivity would still be only 15% lower than it is currently – implying a $1.1
billion. This comment solidifies are view that only materially higher equity markets
(beyond 1300 on the S&P 500) would the company’s sensitivity to equity markets decline
materially.

We estimate that an additional 20% of hedging would likely cost another $50 million
annually. This is in addition to the $120 million after tax annually from hedging the $22
billion since Q2/09.

Figure 3: MFC’s sensitivity to equity markets

2.0 As the amount at risk started to increase

Q1/09 exponentially when the S&P 500 dropped
1.8
below 1300-1400, we suspect that the
Q4/08 sensitivity to equity markets will start to
1.6
decline more abruptly once the S&P 500
Q2/09 Q2/10
Earnings sensitivity ($bn)

1.4 breaks through 1300.

Q3/09
1.2 Q4/09

1.0 Q1/10

0.8

0.6

0.4 Q4/07: $350 mm for 10% change in

equity markets when S&P was at
0.2 1468

-
700

750

800

850

900

950

1000

1050

1100

1150

1200

1250

1300

1350

1400

1450

1500

S&P 500

Source: Company reports, Canaccord Genuity

With markets up significantly this quarter, we could see MFC take an $800 million gain on
equity markets in Q3/10 if markets hold on to gains. We continue to believe that this level
of market sensitivity hurts MFC’s valuation.

Interest rate sensitivity moves much higher

As discussed above, the company reported a surprisingly large charge of$1.5 billion with
the decline in interest rates and the company’s sensitivity to change in interest rates
spiked. A 100 bps decline in interest rates (long-dated U.S. government bonds particularly)
would drive a $2.7 billion charge (up from $2.2 billion last quarter). The increase reflects
this quarter’s decline in rates, the long-term nature of the company’s liabilities, and the
 Daily Letter | 7
6 August 2010

interest rate guarantees that are included in much of the company’s U.S. individual life
insurance business.

While this does speak to significant earnings volatility, we are inclined to believe that a 100
bps change (in a quarter) in interest rates is not highly probable. Management’s intention
is to try to hedge interest rate risk, but like the equity market guarantees, hedging of the
interest rate guarantees is only likely to play-out once rates increase, leaving the company
exposed to significant swings in earnings.

Looking out to Q3/10, interest rates are mixed and have changed only modestly.

Figure 4: changes in long-term interest rates

1.0

0.5

(0.5)

(1.0) Cad - A, 20y U.S. - A, 20y Cad - A, 10y

U.S. - A, 10y Cad - BBB, 10y U.S. - BBB, 10y

(1.5)
Q4/07

Q1/08

Q2/08

Q3/08

Q4/08

Q1/09

Q2/09

Q3/09

Q4/09

Q1/10

Q2/10

5-Aug

Source: Bloomberg, Canaccord Genuity

Given the complexity of this issue and the company-specific internal methodologies
involved in calculating interest rate risk reserves, we do not expect to accurately forecast
interest rate charges and therefore earnings in quarters when interest rates are volatile.
We believe this will also constrain valuation.

MCCSR declined as expected; capital raise plausible

MLI’s MCCSR declined to 221% from 250% last quarter reflecting the loss in the quarter
and higher required capital associated with lower equity markets and interest rates. The
company’s MCCSR remains highly sensitive to changes in the macro factors. The MCCSR
declines by 13 points for a 10% change in equity markets. This compares to 10 points for
10% change in equity markets last quarter.

With the S&P 500 up 9% since the end of last quarter, in theory, MFC’s MCCSR could be as
high as 230% (a 10% increase in equity markets increases the MCCSR by 8 points).
However, as discussed above, charges associated with the URR, morbidity and other
factors could push the MCCSR still lower. A decline in equity markets from current levels of
 Daily Letter | 8
6 August 2010

10%-20%, combined with the charges discussed above, could take the MCCSR to 200% or
less. We would not rule out another capital raise.

Regulatory and accounting risk remains high for MFC and the insurers
While the company’s MCCSR appears strong today, we continue to view MFC as having
greater regulatory risk than its insurance and banking peers. Specifically, while SLF and
GWO have contingent capital at the holding companies, MFC has down-streamed all of the
capital to MLI. Accordingly, any new punitive holding company requirements could impact
MFC.

Importantly, however, as the new capital standards for segregated funds will only apply to
new business, one important overhang has been lifted. At this juncture it is unclear just
how punitive the new rules will be, but we can say is that MFC’s and SLF’s sales of new
variable annuities in the U.S. could suffer if the regulators impose capital standards that
are significantly more onerous than those faced by the U.S. insurers.

While we do not believe that the higher standards will cause the insurers to raise capital at
the holding company, we believe the potential for changes will keep the insurers on the
sidelines as it relates to dividend increases and buy backs, perhaps for longer than
Canada’s banks.

Additionally, we do not expect any of the insurers to make large acquisitions until it is
perfectly clear how the U.S. subsidiaries will be treated under Canada’s MCCSR guidelines.

We remain concerned that IFRS could result in significant earnings volatility for MFC (less
so for the other insurers) if in fact the link between investments and the reserves they
support is broken under IFRS. See our Financial’s Weekly report released on Monday for a
detailed discussion of the possible implications of IFRS.

P&D remains soft; lapping very weak quarters

P&D of $15.9 billion (excludes bank deposits and institutional advisory accounts) declined
10% YoY (down 7% YoY on a constant currency basis) and were lower than our estimate of
$16.4 billion.
 Daily Letter | 9
6 August 2010

Figure 5: Segmented P&D ($mm)

Q2 10 Q2 10
Premiums and Deposits Q2 09 Q1 10 Q2 10 Q2 09 Q1 10 Q2 10E
U.S. Individual Life 1,253 1,149 1,210 (3%) 5% 1,316
U.S. Long-term Care 429 487 517 21% 6% 463
U.S. Variable Annuities 1,738 702 744 (57%) 6% 750
U.S. Retirement Services 2,555 3,346 2,820 10% (16%) 2,862
U.S. Mutual Funds 1,555 2,485 2,352 51% (5%) 1,866
U.S. Fixed Products 969 620 758 (22%) 22% 969
Asia - Hong Kong 647 694 704 9% 1% 679
Asia - Other Territories 704 522 863 23% 65% 669
Japan - General & Segregated Funds 771 1,114 718 (7%) (36%) 1,048
Reinsurance 250 237 234 (6%) (1%) 224
Total in US$ 10,871 11,356 10,920 0% (4%) 10,846
Exchange Rate 1.1668 1.0401 1.0276 (12%) (1%) 1.0282
Total in C$ 12,684 11,811 11,221 (12%) (5%) 11,152
Canada Individual Life 639 615 669 5% 9% 697
Canada Individual Life Premium Equivalents 13 12 14 8% 17% 13
Canada Individual Savings 1,305 1,371 1,065 (18%) (22%) 1,370
Canada Group Businesses 2,359 2,482 2,243 (5%) (10%) 2,505
Canada - ASO and Premium Equivalents 649 664 659 2% (1%) 649
Recurring P&D (C$ millions) 17,649 16,955 15,871 (10%) (6%) 16,386
Recurring constant currency P&D 16,462 (7%) (3%) 16,953

Note (excludes):
Corporate - Institutional advisory accounts 2,193 847 1,060 847
Total P&D including Corporate (C$ millions) 19,842 17,802 16,931 (15%) (5%) 17,233

Source: Company reports, Canaccord Genuity

Lower than expected P&D relates almost entirely to Canadian and Japanese segregated
fund sales. U.S. mutual funds, where flows improved to $2.4 billion, were up 57% over
last year and almost $500 million higher than our estimate.

The weakness in the MFC P&D story remains U.S. VA sales where sales declined 57% YoY.
While we do not expect VA sales to recover, as Q3/09 was the first very weak quarter of
U.S. VA sales, we expect P&D growth to improve slightly next quarter. Importantly,
however, with the company deemphasizing products with market guarantee risk and
interest rate risk, we do not see MFC delivering anything more than low single digit P&D
growth for the next 12-18 months.
 Daily Letter | 10
6 August 2010

Figure 6: Summary Forecast Model ($mm)

Sources of Earnings 2007 2008 2009 2010E 2011E

Expected profit from in-force business 3,249 3,220 3,475 3,233 3,538
Impact of new business (strain) (286) (326) (424) (550) (444)
Experience gains 1,485 (3,302) (1,721) (3,453) 500
Management actions and changes in assumptions 99 500 (1,593) (2,193) -
Earnings on surplus funds 1,251 562 4 464 464
Other (13) (57) 89 (2,666) -
Income before taxes 5,785 597 (170) (5,166) 4,057
Income taxes (1,414) (80) 1,572 1,555 (1,014)
Net income attributed to shareholders 4,371 517 1,402 (3,611) 3,043
Preferred share dividends (30) (30) (64) (80) (80)
Net income available to common shareholders 4,341 487 1,338 (3,691) 2,963
Net income avail. to common S/Hs adjusted for items of note 3,224 4,051 2,811 2,577 2,963

Items of note related to the crisis (after tax):

Credit losses and equity impairments - (381) (741) (65) -
Equity market charges - (4,400) 3,019 (1,335) -
Interest rates - 578 (2,242) (1,479) -
Impact of changes in assumption - - (1,017) (1,700) -
Favourable fixed income investing activities - - - 320 -
Other gains (charges) - 639 (492) (2,009) -
Total 1,117 (3,564) (1,473) (6,268) -

Weighted average shares outstanding (f.d.) 1,536.4 1,466.5 1,656.9 1,775.4 1,766.0
EPS (f.d.) 2.83 0.33 0.81 (2.09) 1.68
EPS (f.d.) adjusted for items of note 2.10 2.68 1.73 1.46 1.68

Return on equity 17.7% 2.1% 4.9% -14.8% 12.6%

ROE adjusted for items of note 17.7% 16.1% 10.4% 10.3% 12.6%
Book value per share 15.73 16.62 15.59 12.71 13.87

Average AUM 405,636 400,424 422,058 449,916 482,908

Expected profit to average AUM 0.80% 0.80% 0.82% 0.72% 0.73%
Premiums & deposits (excluding Corporate segment) 77,154 70,572 69,360 66,470 69,782
Strain to premiums & deposits (including Corporate segment) (0.37%) (0.43%) (0.57%) (0.78%) (0.60%)
Average common shareholders' equity 24,081 24,246 25,185 27,080 24,923
Average AUM to average common shareholders' equity 16.8x 16.5x 16.8x 16.6x 19.4x
Earnings on surplus to average common shareholders' equity 5.2% 2.3% 0.0% 1.7% 1.9%
Tax rate 24% 13% nm 30% 25%

YoY growth
Expected Profit 6% (1%) 8% (7%) 9%
Earnings on surplus 23% (55%) (99%) nm (0%)
EPS 14% (88%) 143% (359%) (180%)
EPS adjusted for items of note (15%) 28% (36%) (15%) 15%
Average AUM 3% (1%) 5% 7% 7%
Premiums & deposits (excluding Corporate segment) 8% (9%) (2%) (4%) 5%
Expected profit & earnings on surplus to income before taxes 78% 634% nm -72% 99%

Source: Company reports, Canaccord Genuity

 Daily Letter | 11
6 August 2010

Investment risks
Investment risks associated with financial services and insurance companies include but
are not limited to: credit, market, liquidity, interest rate, operational, reputational,
insurance, strategic, foreign exchange, regulatory, legal risks; general business and
economic conditions in the countries which the companies operate, as well as the effect of
changes in monetary and economic policies, changes in supervisory expectations or
requirements of those jurisdictions.
 Daily Letter | 12
6 August 2010

APPENDIX: IMPORTANT DISCLOSURES

Analyst Certification: Each authoring analyst of Canaccord Genuity whose name appears on the front page of this investment
research hereby certifies that (i) the recommendations and opinions expressed in this investment research
accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the
designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage
universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly,
related to the specific recommendations or views expressed by the authoring analyst in the investment
research.

Site Visit: An analyst has not visited Manulife Financial Corp.'s material operations.

Price Chart:*

Distribution of Ratings: Coverage Universe IB Clients

Global Stock Ratings Rating # % %
(as of 2 July 2010) Buy 424 61.0% 36.8%
Speculative Buy 75 10.8% 62.7%
Hold 184 26.5% 20.1%
Sell 12 1.7% 0.0%
695 100.0%

Canaccord Ratings BUY: The stock is expected to generate risk-adjusted returns of over 10% during the next 12 months.
System: HOLD: The stock is expected to generate risk-adjusted returns of 0-10% during the next 12 months.
SELL: The stock is expected to generate negative risk-adjusted returns during the next 12 months.
NOT RATED: Canaccord Genuity does not provide research coverage of the relevant issuer.

“Risk-adjusted return” refers to the expected return in relation to the amount of risk associated with the
designated investment or the relevant issuer.

Risk Qualifier: SPECULATIVE: Stocks bear significantly higher risk that typically cannot be valued by normal fundamental
criteria. Investments in the stock may result in material loss.

Canaccord Research Disclosures as of 6 August 2010

Company Disclosure
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6 August 2010

Manulife Financial Corp. 1A, 2, 7, 13

1 The relevant issuer currently is, or in the past 12 months was, a client of Canaccord Genuity or its affiliated
companies. During this period, Canaccord Genuity or its affiliated companies provided the following services
to the relevant issuer:
A. investment banking services.
B. non-investment banking securities-related services.
C. non-securities related services.
2 In the past 12 months, Canaccord Genuity or its affiliated companies have received compensation for
Corporate Finance/Investment Banking services from the relevant issuer.
3 In the past 12 months, Canaccord Genuity or any of its affiliated companies have been lead manager, co-lead
manager or co-manager of a public offering of securities of the relevant issuer or any publicly disclosed offer
of securities of the relevant issuer or in any related derivatives.
4 Canaccord Genuity acts as corporate broker for the relevant issuer and/or Canaccord Genuity or any of its
affiliated companies may have an agreement with the relevant issuer relating to the provision of Corporate
Finance/Investment Banking services.
5 Canaccord Genuity or any of its affiliated companies is a market maker or liquidity provider in the securities
of the relevant issuer or in any related derivatives.
6 In the past 12 months, Canaccord Genuity, its partners, affiliated companies, officers or directors, or any
authoring analyst involved in the preparation of this investment research has provided services to the
relevant issuer for remuneration, other than normal course investment advisory or trade execution services.
7 Canaccord Genuity intends to seek or expects to receive compensation for Corporate Finance/Investment
Banking services from the relevant issuer in the next six months.
8 The authoring analyst, a member of the authoring analyst’s household, or any individual directly involved in
the preparation of this investment research, has a long position in the shares or derivatives, or has any other
financial interest in the relevant issuer, the value of which increases as the value of the underlying equity
increases.
9 The authoring analyst, a member of the authoring analyst’s household, or any individual directly involved in
the preparation of this investment research, has a short position in the shares or derivatives, or has any
other financial interest in the relevant issuer, the value of which increases as the value of the underlying
equity decreases.
10 Those persons identified as the author(s) of this investment research, or any individual involved in the
preparation of this investment research, have purchased/received shares in the relevant issuer prior to a
public offering of those shares, and such person’s name and details are disclosed above.
11 A partner, director, officer, employee or agent of Canaccord Genuity and its affiliated companies, or a
member of his/her household, is an officer, or director, or serves as an advisor or board member of the
relevant issuer and/or one of its subsidiaries, and such person’s name is disclosed above.
12 As of the month end immediately preceding the date of publication of this investment research, or the prior
month end if publication is within 10 days following a month end, Canaccord Genuity or its affiliate
companies, in the aggregate, beneficially owned 1% or more of any class of the total issued share capital or
other common equity securities of the relevant issuer or held any other financial interests in the relevant
issuer which are significant in relation to the investment research (as disclosed above).
13 As of the month end immediately preceding the date of publication of this investment research, or the prior
month end if publication is within 10 days following a month end, the relevant issuer owned 1% or more of
any class of the total issued share capital in Canaccord Genuity or any of its affiliated companies.
14 Other specific disclosures as described above.

Canaccord Genuity is the business name used by certain subsidiaries of Canaccord Financial Inc., including
Canaccord Genuity Inc., Canaccord Genuity Limited, and Canaccord Genuity Corp.
The authoring analysts who are responsible for the preparation of this investment research are employed by
Canaccord Genuity Corp. a Canadian broker-dealer with principal offices located in Vancouver, Calgary,
Toronto, Montreal, or Canaccord Genuity Inc., a US broker-dealer with principal offices located in Boston,
New York, San Francisco and Houston or Canaccord Genuity Limited., a UK broker-dealer with principal
offices located in London and Edinburgh (UK).
In the event that this is compendium investment research (covering six or more relevant issuers), Canaccord
Genuity and its affiliated companies may choose to provide specific disclosures of the subject companies by
reference, as well as its policies and procedures regarding the dissemination of investment research. To
access this material or for more information, please send a request to Canaccord Genuity Research, Attn:
Disclosures, P.O. Box 10337 Pacific Centre, 2200-609 Granville Street, Vancouver, BC, Canada V7Y 1H2 or
disclosures@canaccordgenuity.com.
 Daily Letter | 14
6 August 2010

The authoring analysts who are responsible for the preparation of this investment research have received (or
will receive) compensation based upon (among other factors) the Corporate Finance/Investment Banking
revenues and general profits of Canaccord Genuity. However, such authoring analysts have not received, and
will not receive, compensation that is directly based upon or linked to one or more specific Corporate
Finance/Investment Banking activities, or to recommendations contained in the investment research.
Canaccord Genuity and its affiliated companies may have a Corporate Finance/Investment Banking or other
relationship with the company that is the subject of this investment research and may trade in any of the
designated investments mentioned herein either for their own account or the accounts of their customers, in
good faith or in the normal course of market making. Accordingly, Canaccord Genuity or their affiliated
companies, principals or employees (other than the authoring analyst(s) who prepared this investment
research) may at any time have a long or short position in any such designated investments, related
designated investments or in options, futures or other derivative instruments based thereon.
Some regulators require that a firm must establish, implement and make available a policy for managing
conflicts of interest arising as a result of publication or distribution of investment research. This investment
research has been prepared in accordance with Canaccord Genuity’s policy on managing conflicts of interest,
and information barriers or firewalls have been used where appropriate. Canaccord Genuity’s policy is
available upon request.
The information contained in this investment research has been compiled by Canaccord Genuity from sources
believed to be reliable, but (with the exception of the information about Canaccord Genuity) no representation
or warranty, express or implied, is made by Canaccord Genuity, its affiliated companies or any other person
as to its fairness, accuracy, completeness or correctness. Canaccord Genuity has not independently verified
the facts, assumptions, and estimates contained herein. All estimates, opinions and other information
contained in this investment research constitute Canaccord Genuity’s judgement as of the date of this
investment research, are subject to change without notice and are provided in good faith but without legal
responsibility or liability.
Canaccord Genuity’s salespeople, traders, and other professionals may provide oral or written market
commentary or trading strategies to our clients and our proprietary trading desk that reflect opinions that are
contrary to the opinions expressed in this investment research. Canaccord Genuity’s affiliates, principal
trading desk, and investing businesses may make investment decisions that are inconsistent with the
recommendations or views expressed in this investment research.
This investment research is provided for information purposes only and does not constitute an offer or
solicitation to buy or sell any designated investments discussed herein in any jurisdiction where such offer or
solicitation would be prohibited. As a result, the designated investments discussed in this investment
research may not be eligible for sale in some jurisdictions. This investment research is not, and under no
circumstances should be construed as, a solicitation to act as a securities broker or dealer in any jurisdiction
by any person or company that is not legally permitted to carry on the business of a securities broker or
dealer in that jurisdiction. This material is prepared for general circulation to clients and does not have
regard to the investment objectives, financial situation or particular needs of any particular person. Investors
should obtain advice based on their own individual circumstances before making an investment decision. To
the fullest extent permitted by law, none of Canaccord Genuity, its affiliated companies or any other person
accepts any liability whatsoever for any direct or consequential loss arising from or relating to any use of the
information contained in this investment research.

For Canadian Residents: This Investment Research has been approved by Canaccord Genuity Corp., which accepts sole responsibility
for this Investment Research and its dissemination in Canada. Canadian clients wishing to effect transactions
in any Designated Investment discussed should do so through a qualified salesperson of Canaccord Genuity
Corp. in their particular jurisdiction.

For United Kingdom This investment research is distributed in the United Kingdom, as third party research by Canaccord Genuity
Residents: Limited, which is authorized and regulated by the Financial Services Authority. This research is for
distribution only to persons who are Eligible Counterparties or Professional Clients only and is exempt from
the general restrictions in section 21 of the Financial Services and Markets Act 2000 on the communication of
invitations or inducements to engage in investment activity on the grounds that it is being distributed in the
United Kingdom only to persons of a kind described in Article 19(5) (Investment Professionals) and 49(2)
(High Net Worth companies, unincorporated associations etc) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (as amended). It is not intended to be distributed or passed on, directly or
indirectly, to any other class of persons. This material is not for distribution in the United Kingdom to retail
clients, as defined under the rules of the Financial Services Authority.

For United States Canaccord Genuity Inc., a US registered broker-dealer, accepts responsibility for this Investment Research
Residents: and its dissemination in the United States. This Investment Research is intended for distribution in the United
States only to certain US institutional investors. US clients wishing to effect transactions in any Designated
Investment discussed should do so through a qualified salesperson of Canaccord Genuity Inc. Analyst(s)
preparing this report that are not employed by Canaccord Genuity Inc are resident outside the United States
 Daily Letter | 15
6 August 2010

and are not associated persons or employees of any US regulated broker-dealer. Such analyst(s) may not be
subject to Rule 2711 restrictions on communications with a subject company, public appearances and trading
securities held by a research analyst account.

For European Residents: If this Investment Research is intended for disclosure in any jurisdiction other than the United Kingdom, the
US or Canada, then the relevant rules and regulatory requirements of that jurisdiction will apply.

Additional information is available on request.

Copyright © Canaccord Genuity Corp. 2010. – Member IIROC/Canadian Investor Protection Fund
Copyright © Canaccord Genuity Limited 2010. – Member LSE, authorized and regulated by the Financial
Services Authority.
Copyright © Canaccord Genuity Inc. 2010. – Member FINRA/SIPC
All rights reserved. All material presented in this document, unless specifically indicated otherwise, is under
copyright to Canaccord Genuity Corp., Canaccord Genuity Limited, and Canaccord Genuity Inc. None of the
material, nor its content, nor any copy of it, may be altered in any way, or transmitted to or distributed to any
other party, without the prior express written permission of the entities listed above.