WWW.GLOBAL-EQUITIES.

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26-Feb-09 FEEL GOOD

The Fed and Treasury released key details of its bank stress-test plan. Officials will assess potential losses at banks and estimated
resources to absorb those losses. Capital provided under the plan will come in the form of preferred stock that is convertible into common
equity at a 10% discount to the price prevailing prior to Feb. 9. Securities under the plan will carry a 9% dividend yield and will be
convertible at the issuer's option. The plan essentially backstops financial institutions, though the banks receiving capital will be required
to submit monthly reports on their lending and will be subject to restrictions on paying quarterly common stock dividends, repurchasing
shares, and pursuing cash acquisitions. Financial stocks gave ground in the wake of the announcement, but eventually rallied to a 3.8%
gain. Financials finished the session with a 0.5% loss as sellers pushed back, but that was still better than the 6.5% loss that financials
traded with at their session lows. At least the banks will be working as banks back again, which is welcome for the economy
School holidays a bit everywhere in Europe might end in a possible boost for next week if we manage to get at last a bit of
stability from the equity indices by then. The US officials will manage to bring some transparency on the financial sector, and so should
soon reach the real economy with their huge stimulus, such as what happened in China, while Japan will be buying shares in order to
avoid a downside spiral which is hurting the economy even more.
In the meantime the drop back in the number of existing home in January is just entertaining the bad news flow, making the
current dark mood difficult to reverse. Equity indices chose to read the bad side of the report once more. Yes existing-home sales in
January fell 5.3%, a faster pace than forecast, while prices fell to near six-year lows. The one potentially encouraging trend in the
otherwise dismal report is another monthly drop in supply from year-ago levels. We'll have to see if that trend continues. Inventory is
already down sharply in the new home market, and if the existing home market can follow suit, it will eventually help stabilize housing.
When sales stabilize there will be fewer available homes to purchase, quickening the pace of an economic turnaround.
Indeed, some big institutional fund managers did proceed to some nice purchases in Europe here yesterday, but some stronger
behaviour from indices probably suffering from the de leverage still would be required in order to get some more confidence and turn
things into a virtuous spiral. The sharp drop of the S&P at the European lunch hour was very eloquent. Opening up, just shoot it and it will
safely make money. Some strong measures from all front is needed, and why not do same as Japan, buy some shares in addition to what
is already put in place so much we are facing a head wind lately through this redemption effect, which is worsening the macro background
in lowering net asset funds from corporate.
Prosperity may not be just around the corner, but statistical evidence is mounting to suggest that the worst of this recession
may soon be past. The Conference Board's index of leading economic indicators has risen for two months in a row. Producer prices
have increased for two straight months. Consumer prices rose in January -- the first monthly gain in six months. The Baltic Dry Index,
which measures the cost of shipping key raw materials like copper, steel and iron, has more than doubled from its recent lows. Pending
home sales went up in December. Builders' confidence inched up this month. Thanks to lower interest rates, applications for both new
mortgages and refinancing of existing mortgages are rising. Real hourly earnings rose 4.5% in December following a 3.3% increase in
November. Retail sales shot up by 1% in January -- the first monthly rise since June. The decline in consumer credit moderated in the
latest month. New orders for consumer and non military capital goods went up in January. The ISM index of manufacturing went up last
month. The ISM index of services rose last month for the second month in a row. The money supply is soaring, a sign that there's plenty
of liquidity in the economy. The 3-month London interbank offered rate, a measure of banks' willingness to lend to each other, has
dropped to 1.2% from close to 5% a number of weeks ago. Other measures of the state of the financial markets, like the TED spread and
the 2-year swap spread are down, as well. Prices of credit default swaps for banks have fallen from their peaks. The corporate-bond
markets are thawing out, too; some $127 billion in dollar-denominated debt was issued in January, the most for any month since last May.
Some securities on banks' books are starting to recover in value. And also time is passing-by, with the Lehman bankruptcy now 5 months
behind, and the increasing measures from the US officials should do the rest and bring the US in a recovery by the year-end.
Quiet day ahead
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 42,7 1,2707 97,69 2,90 2,99 -2,14 -0,77 -0,75 -1,87 -0,08 0,99 -2,52 -0,97 3,00 -1,07 -1,14 -1,09 US
Perf 1d % 7,35 -0,13 -0,30 -2,19 bp 0,5 bp -1,25 -1,19 -3,36 -1,58 -1,15 -0,62 -2,60 -0,66 -0,48 -1,61 -1,58 -1,75 Europe
ECONOMIC DATA with impact
Durable Orders (13h30 gmt) expected –2.5% from previous –3% / ex transport –2.2% from –3.9% / volatile data / minor
Jobless Claims (13h30 gmt) expected +625k from previous 627k / minor as weekly data and will be bad
New Home Sales (15h gmt) expected 324k from previous 331k / minor
POSITIVE IMPACTS
NATIXIS / Agricole : Credit Agricole said it’s in exclusive talks to buy control of stock custodian Caceis from Natixis for €595M
RBS / LLOYDS : The UK government is to guarantee £600bn of toxic bank assets to help stabilise RBS & Lloyds Banking (Times)
RWE: 08 sales €48.95bn (47.29e) / 08 EBITDA €8.31bn (8.37e) / 08 Op pft €6.83bn (6.84e) / 08 Net €2.56bn (2.67e) /Raises Mid term
earnings targets
ABERTIS : 08 Net pft €618M ( 638e) / To propose extra div 0.3shr / Sees positive 09 outlook
TELEFONICA :2008 Rev €57.95bn (57.94 e) / 08 Net €7.59bn (7.40-7.57e) / Q4 Sales €14.8bn (14.7e)/ 08 OIBDA €22.60 (in line) /
Maintains 2010 growth tgt /
RBS: FY Rev £21.2bn (22.73e) / FY net loss £24.1bn (25.9e) / Will pay a participation fee of £6.5bn to the treasury .
VALLOUREC : Q4 Sales €1.82Bn (1.688 e) / Q4 Net € 275.4M (267 e) / Fy Rev € 6.44bn (6.35 e)/FY Oper pft € 1.52bn (in line) / FY Net
€ 967M (954.5 e) /Sees difficult environment in 09 but eyes good resistance in Q1 / sees 5% drop in Q1 sales / Div discussed April 6
CENTRICA : FY Revenue £21.3bn (£18.4bn exp) / FY net pft £903mln (£914mln exp) / FY Dividend 12.2p / UK and North American
operating performance in line / 2009 could be difficult for many customers
REPSOL : Q4 Adj EBIT ex invent€1.05bn (€990mln exp) / Q4 replacement cost pft €549M(€465e) / says to pay total dividend €1.05(=) /
Ecuador will not confiscate the assets Repsol and France's Perenco over pending debts (government official)
VOLKSWAGEN: plans to double its vehicle sales in the Greater China area to 2 M units by 2018 …
BANKS: A. Merkel said in a speech on Wednesday she wants to see an international ban on bonus payments to bad bankers
GERMAN RETAIL : The German state of North Rhine-Westphalia is considering giving a loan guarantee to department store
chain Hertie, a move which HDE German retail association said could mark the first state intervention in the industry.
NEGATIVE IMPACTS
DEUTSCHE POST : Q4 Rev €14.02 bn (14.05e) / Q4 EBIT loss 2.7bn (2.79e) /08 net loss €1.69bn (1.43e) / Slashes DIV to €0.60
(0.90 e) / Does not provide concret outlook for 2009 but sees 09 underlying earnings to decline /
DEXIA 08 Net loss €3.326bn (3.0e )due to €300M impairment for US RMBS portfolio / Confirms no DIV for 08 / Tier1 Ratio 10.6%/
 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

26-Feb-09 FEEL GOOD

ALLIANZ : Q4 total rev €23bn (€22.2bn exp) / Q4 operating profit €956mln (€1.02bn exp) / Q4 net loss €3.11bn (€-2.6bn exp) / Q4
CR 95.8% / 2008 op pft €7.43bn (€7.50bn exp) / 2008 net loss including Dresdner at €1.86bn / took €6.4bn charge on Dresdner sale in
2008 / propose €3.50 DIV 5in line) / Reliable 2009 pft forecasts not possible / Difficult conditions in Cap makets to continue in 2009
COMMERZBANK : sees some pb at Dresdner / Dresdner 08 Op loss of €5.6bn / Dresdner core Cap ration 4%
BASF: Q4 sales €14.3bn (13.6e) / Q4 EBIT €292M (318e) / Q4 net loss €313M (-32M e) / To accelerate restructuring pgm / Plans to
keep DIV stable for 2009 , Proposes 08 DIV 1.95 (in line) / Expects sales to drop in 09 & Op pft worse than sales decline …
UBS : Luxembourg's financial market watchdog CSSF gave UBS 3 months on Wed to make changes to its Luxembourg custodian bank
in the wake of the arrest of Madoff./ Separatly UBS appoints Oswald J as group CEO with immediate effect.
RESULTS DIVIDENDS EVENTS
Allianz (BMO) / BASF (BMO) / Acciona / Endesa / Gamesa / Eiffage / RWE
(BMO) / Repsol / Centrica / British American Tobacco / Abertis / TIM / Lockheed Martin ($0.57) / Mc Do ($0.50) / Sara Lee
Today JP Morgan investor day
Telecom Italia / Dexia / Deutsche Post / Geophysique / Thales / Nicox / ($0.11)
Dell / Sulzer / Safeway / GAP / AIG
Friday Acerinox / Aviva / Deutsche Tel / Gruppo Ferovial /Gamesa / Holcim / GM Novartis (CHF 2.00) / Haliliburton ($0.09)
Vivendi / HSBC / Havas sales / Ahold / Aguas de Barcelona / Allied Irish Morgan Stanley tech conf /
Monday
Banks / Vallehermoso Deutsche Bank Telecom conf
US car sales / Vinci / Bayer / Bouygues / Mun Re / Standard Chartered /
Tuesday Xstrata rights Issue (2 per 1) TMT conf at Chevreux
Beiersdorf
British Land rights Issue 2 per 3 / Diageo (GBp
Credit Agricole/ Adecco / Adidas / France Tel / Arkema / Scor / Swisscom /
Wednesday 15.4444) / Thomas Cook (GBp 7,222222) / Bank of
Holcim
America ($0.01) / Pepsi ($0.425)
TRADING IDEAS
BUY Eurostoxx, CAC and Dax to play double bottom / sell the Bund very toppish
BUY the dollar to play US will manage a recovery sooner than Europe (and obvioulsy S&P and Dow building round boottom)
BUY DEUTSCHE TEL / AEGON / DAIMLER / LUFTHANSA / AIR FRANCE / METRO / L OREAL / VEOLIA on double bottom possibility
BUY SAP / MUNICH RE / PERNOD on island possibility
BUY DEUTSCHE BANK / ING / RENAULT to play recovery + charts looking good now
BUY CARREFOUR on reversal Head & Shoulder possibility

BUY TOTAL / SELL ENI // BUY SIEMENS / SELL ALSTOM // BUY METRO / SELL AHOLD // BUY DANONE / SELL UNILEVER
BROKER METEOROLOGY
CARREFOUR ..............................RAISED TO NEUTRAL FROM UNDERWEIGHT ...................................................... BY JPMORGAN
ABENGOA....................................RAISED TO NEUTRAL FROM SELL ........................................................... BY GOLDMAN SACHS
PHILLIPS .....................................RAISED TO NEUTRAL ........................................................................................................ BY HSBC
KINGFISHER................................RAISED TO NEUTRAL FROM UNDERWEIGHT ................................................................. BY HSBC

EADS ............................................ REMOVED TO CONVICTION SELL LIST .................................................... BY GOLDMAN SACHS

SAINT GOBAIN ...........................CUT TO HOLD FROM BUY ...................................................................................... BY CITIGROUP
ALLIED IRISH BANKS ................CUT TO SELL FROM HOLD ..................................................................................... BY CITIGROUP
BANK OF IRELAND ....................CUT TO SELL FROM HOLD ..................................................................................... BY CITIGROUP
ANGLO AMERICAN ....................CUT TO UNDERWEIGHT FROM NEUTRAL ............................................................ BY JPMORGAN

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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

26-Feb-09 FEEL GOOD

CHART OF THE DAY

US existing home sales
since 1999

7,5

6,5

5,5

4,5

4
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source : National association of realtors

After rising in November and in December at respectively 4.54 million and 4.74 million American existing home sales declined to an
historical low since the statistic creation in 1999 at 4.49 million in January. The December rise was clearly led by the rise in sales of
foreclosed properties. January slump of existing U.S. home sales showed that we have now reached a new cycle low. Indeed the
sales are now about 40% below their peak and 8.2% below the level seen this time last year.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
07.00 GMT Germany ILO unemployment rate January 7,3% 7,2%
07.10 GMT Germany GfK consumer confidence March 2,0% 2,2%
08.30 GMT Italy Business confidence February 66,0 65,5
08.55 GMT Germany Unemployment rate February 8% 7,9% 7,8%
10.00 GMT Zone euro Business climate indicator February -3,20 -3,16
10.00 GMT Zone euro Consumer confidence February -31 -31
10.00 GMT Zone euro Economic confidence February 68,5 67,1
10.00 GMT Zone euro Industry confidence February -34 -34
10.00 GMT Zone euro Services confidence February -22 -22
13.30 GMT Etats Unis Durable goods orders January -2,6% -3,0%
13.30 GMT Etats Unis Durable goods orders ( excluding transportation ) January -3,6% -3,9%
13.30 GMT Etats Unis Initial jobless claims 21th February 625 000 627 000
13.30 GMT Etats Unis Continuing claims 14 th February 5 024 000 4 987 000
Germany Consumer price index ( preliminary) February 0,3%, + 0,8% YoY -0,5%, + 0,9% YoY
15.00 GMT Etats Unis New home sales January 324 000 331 000
15.00 GMT Etats Unis New home sales (MoM) January -2,1% MoM -14,7 % MoM

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

DJIA 7270,9 - 3,69% - 17,15% EUR/USD 1,2699 0,27% -9,04%
S&P 500 764,9 - 2,87% - 15,32% EUR/JPY 124,19 -3,86% -2,04%
Nas daq 1425,4 - 2,88% - 9,61% USD/JPY 97,79 -3,61% 7,24%
CA C 40 2696,9 - 6,13% - 16,19% Oil Price % 5 Days Ytd
DA X 3846,2 - 8,53% - 20,04% Brent $/b 43,8 6,13% 4,96%
Eur os tox x 50 1965,3 - 7,22% - 19,71% Gold Price % 5 Days Ytd
DJ 600 172,3 - 5,98% - 13,13% Gold $/oz 946,4 -2,82% 7,38%
FTSE 100 3849,0 - 3,82% - 13,20% Rates USA Euro Japan
Nikkei 7457,9 - 0,90% - 15,82% Central Banks* 0,25 2,00 0,11
Shanghai Comp 2200,4 - 0,15% 20,85% Overnight 0,15 1,05 0,11
Sens ex ( India) 8841,4 - 1,47% - 8,35% 3 Months 0,30 0,93 0,26
MICEX ( Rus s ia) 632,8 - 1,92% 2,14% 10 Y ears** 2,91 2,99 1,29
Bov es pa ( Bras il) 38231,6 - 8,63% 1,81% *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

26-Feb-09 FEEL GOOD

Economic data preview

Watch in the United-States the release of the durable goods orders for January due at 13.30 GMT, expected decrease again but at a
slower pace as the new orders of the manufacturing ISM increased 33.2 in January.

Watch in Germany the release of the Unemployment rate for February due at 08.55 GMT ,expected to increase as the global economic
downturn is humping the demand for German’s goods abroad generating sharp jobs cut Watch in the Euro Area the release of the
economic confidence for February due at 10.00 GMT expected to remains stable as it already reached a very low level in January./JB

ate

ECONOMY

UNITED- STATES : EXISTING HOME SALES DROPPED TO A LOW RECORD IN JANUARY AND MBA MORTGAGE APPLICATIONS SHARPLY DECLINED
After rising in November and in December at respectively 4.54 million and 4.74 million American existing home sales declined to an
historical low since the statistic creation in 1999 at 4.49 million in January. The December rise was clearly led by the rise in sales of
foreclosed properties. January slump of existing U.S. home sales showed that we have now reached a new cycle low. Indeed the sales are
now about 40% below their peak and 8.2% below the level seen this time last year. In the mean time the U.S. mortgage application for
purchases dropped to 250.5 last week from 257.3 the week before or from 45.7% to -15.1% . The spike in applications seen after the
sharp fall in mortgage rates around the end of last year has now been reversed.

GERMANY : THE GDP CONTRACTED THE MOST IN 22 YEARS AT THE FOURTH QUARTER
The final release of the German Gross Domestic Product confirmed the slumped at the fourth quarter (-2.1%,-1.7% YoY) .This is the third
consecutive quarterly drop and the biggest since the first three months of 1987.This drop is mainly led by the slump of exports of 7.3%
from the previous quarter and the decline of 4.9% in company investment in plant and machinery. Germany is facing its worst recession
ever, companies are scaling back production as demand for German’s goods abroad are humped by the global downturn . As a
consequence companies are cutting jobs , hitting the household purchase power and the domestic demand which is as a matter of fact not
tacking over.

UNITED KINGDOM : THE ECONOMY SHRINKED THE MOST FOR 29 YEARS

The preliminary release of the United Kingdom GDP confirm the sharpest contraction since 1980 at the fourth quarter (-1.5%,-1.9% YoY).
Indeed in the United Kingdom is hit by a financial, economic and construction crisis. If we look into the breakdown , consumer spending
dropped 0.7% and fixed investment dropped 2.3%. As 50% of the GDP is led by the finance and all what is correlated to it ( insurance…)
this figures showed that private consumption is not taking over. The United Kingdom is hit by a terrible recession and as inflation is on a
lasting down trend , the country will be shortly facing a deflation situation putting more pressure on the Bank of England to sharply
decrease its leading rate./JB
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26-Feb-09 FEEL GOOD

VIXindex: impliedvolatility onthe 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
26/02/2007 26/08/2007 26/02/2008 26/08/2008 26/02/2009 26/02/2007 26/08/2007 26/02/2008 26/08/2008 26/02/2009
Source : Bloomberg Source : Bloomberg

UnitedStates : 10-year Treasury yield 10-year Treasury spreadUSA-Eurozone

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
26/02/2007 26/08/2007 26/02/2008 26/08/2008 26/02/2009 26/02/2007 26/08/2007 26/02/2008 26/08/2008 26/02/2009
Source : Bloomberg Source : Bloomberg

Oil : Brent ($/b) Forex: Eurovs 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
26/02/2007 26/08/2007 26/02/2008 26/08/2008 26/02/2009 26/02/2007 26/08/2007 26/02/2008 26/08/2008 26/02/2009
Source : Bloomberg Source : Bloomberg