Vous êtes sur la page 1sur 8

Emerging markets outlook

Emerging Markets FX
Provides advice, analysis and foreign exchange products to
clients within emerging markets.
For further information, call +46 8 700 90 20
Analyst: Hans Gustafson +46 8 700 91 47
Emerging markets outlook
Is published four times a year and is forecasting
currency developments for selected emerging market
countries with a time horizon of 3 months.
Fundamentals and markets diverge
Emerging markets analysis July 8, 2014
Economic growth decelerated during the spring in most of the
emerging markets we follow. In the short term the Chinese
economy has stabilized at the same time that its political
transition toward more balanced, sustainable growth means that
China has downshifted to a slower growth path. Investment is
the weakest since late 2001. We are seeing the effects of Chinas
lower demand on its major trade partners such as Brazil and
South Korea. Exports are generally weak, even for countries
with undervalued currencies. The decline in the Purchasing
Managers Index (PMI) in recent months confrms this. Despite
slow economic activity, emerging market currencies have been
strong since the beginning of February.
The driver, again, is the big interest rate differential between
several emerging currencies and currencies in the West. This
situation appears to be continuing this summer. Defation
impulses are strong in the developed world and trouble many
central banks. The European Central Bank (ECB) has signaled
that another stimulus is in the works. The US is in the process of
tapering the Federal Reserves (Fed) bond buying, but monetary
signals are still dovish. With a zero interest rate policy continuing
in the West and Japan, global capital once again is blindly
fowing into emerging markets. As a whole, we see currency
developments in emerging markets as a balance between weak
fundamentals and high global liquidity. As a result, we are
neutral to most emerging currencies this summer. We see the
biggest risk as being on the negative side, however, especially
if US economic data continue to surprise on the upside and
expectations as to the timing of an initial interest rate hike by
the Fed are pushed forward.
We have a negative view of the Russian ruble. The economy
is weak and turbulence in Ukraine continues. The threat of
economic sanctions from the West persists. In India, the nearly
six- week-long election concluded with a major victory for the
BJP and its leader, Narendra Modi. The party won a majority in
the lower house of parliament and is now beginning the arduous
process of instituting reforms to promote growth. Political
conditions are the best in some time, because of which we have
maintained our positive view of the rupee since last autumn.
Brazil is struggling with weaker growth, high infation and dual
defcits (budget and current account), a challenge leading up to
the presidential election this autumn.
We remain positive on the US dollar vs. the euro on the back of
increasing growth differences . Fed and ECB are also at different
stages regarding monetary policy, where ECB is expected to
ease more whereas Feds next step is to hike rate.
FX/FI research Swedbank Large Corporates & Institutions Page 2 of 8
Emerging markets outlook
Forecast EUR/RUB in 3 months 48.28 (today 45.69) Forecast EUR/PLN in 3 months 4.15 (today 4.14)
Currency forecast vs. the euro Currency forecast vs. the euro
We remain neutral to the zloty going forward. The Polish
economy is strong, but appears to be losing momentum in the
months ahead. Due to weak infation pressures, short-term
interest rates will remain low for some time with the risk of
further rate cuts, as highlighted by central bank governor
Marek Belka.
Growth in Poland has been driven by strong domestic demand
this year. The Polish economy grew by 3.4% in the frst quarter
at an annual rate. The contribution from domestic demand was
2.9%, with investment accounting for most of the increase.
Weaker exports to Russia and Ukraine were more than offset
by higher exports to Western Europe. The downside risks
associated with the crisis between Russia and Ukraine seem
to have diminished slightly after the recent conciliation
between Russia and Ukraine. The situation for households has
gradually improved since the beginning of 2013. Real wages
rose by 3.5% at an annual rate in March, the strongest growth
since early 2009. The low interest rate level has also reduced
interest expenses for households. These factors have raised
consumer confdence to the highest level since 2010. This
is refected in strong retail sales, which rose by 8.9% at an
annual rate in April. Industrial activity, on the other hand, has
slowed and the PMI has fallen for four consecutive months to
the lowest level in 12 months. The infation rate was only 0.2%
in May, putting it below the central banks lower tolerance limit
of 1.5% since February 2013. We therefore expect the central
bank to maintain its benchmark rate at 2.5% for the rest of
the year.
Poland
Strong recovery
Low short-term rates
Russia
High short term rates
Weak growth and risk of sanctions
The ruble is supported by high short-term rates and political
successes domestically. The situation in Ukraine, on the other
hand, is far from resolved and we have long been negative to
the ruble on structural grounds against the backdrop of the
negative business climate and weak investment.
The ruble has appreciated signifcantly in the last quarter.
Russias tone vis--vis Ukraine was less aggressive leading up
to the Ukrainian presidential election and President Vladimir
Putin seems to be trying to avoid economic sanctions from
the US and EU. The election was held without major incident,
with Petro Poroshenko as the winner, but the confict is far
from resolved and turmoil in the region is likely to continue.
In May Russia signed a 30-year deal to supply gas to China, a
major political success for Putin at home, although the details
of the agreement havent been made public. Polls show that
confdence in Putin has further increased and is now the
highest in over fve years. The economy is struggling with
stagfation. GDP growth was 0.9% on an annual basis during
the frst quarter. The infation rate of 7.6% is the highest since
autumn 2011, reducing the purchasing power of households,
as refected by retail sales, which are the weakest in over four
years. Households are also being weighed down by higher loan
rates. The central bank raised the benchmark rate by 50 bps at
its April meeting and the governor of the central bank, Elvira
Nabiullina, announced that interest rates wont be cut until
the central bank is convinced that the infation target of 4%
is within reach.
FX/FI research Swedbank Large Corporates & Institutions Page 3 of 8
Emerging markets outlook
Forecast EUR/TRY in 3 months 2.95 (today 2.89) Forecast EUR/ZAR in 3months 14.90 (today 14.57)
Currency forecast vs. the euro
Currency forecast vs. the euro
After trending downward for about three years, the South
African rand is now undervalued in terms of its real effective
exchange rate. This hasnt had an appreciable effect on
economic activity, however. Due to weak growth, the problems
in the mining industry and South Africas lower credit rating,
we are maintaining our negative view of the rand.
Pressure on the lira decreased signifcantly during the spring
thanks to continued expansive monetary policy in the West,
a smaller current account defcit and a generally positive
climate in the fnancial markets. We are negative to the Turkish
currency heading into the presidential election in August,
but the lira has support as long as the Fed doesnt tighten
monetary policy.
Tensions in the mining industry and lower demand from China
have hurt South Africas economy in the last two years. GDP
rose by 1.6% on an annual basis in the frst quarter. The PMI
has fallen substantially and hit 46.6 in June, largely due to the
heavy spring rains, which damaged the countrys coal-fred
electricity generation and disrupted manufacturing. Exports
fell during the spring and grew only 1.5% on an annual rate in
April, resulting in a record-high trade defcit on a rolling annual
basis. Chinas lower demand for commodities has dealt a stiff
blow to South Africas exports, since China is its main export
destination. Furthermore, growth is being weighed down by
weak household spending and sluggish investment activity.
Consumer confdence has declined, partly due to rising interest
rates. Credit growth has continuously fallen since late 2012
and rose by 4.6% on an annual basis in April, the lowest rate
since 2010. Infation accelerated in May to 6.8% (highest since
2009), hurting retail sales, which gained a modest 1.6% on
an annual basis by in April. The current account defcit has
shrunk in the last year but still remains a major market risk, as
evidenced by S&Ps downgrade of South Africas credit rating
to BBB-.
Economic growth in Turkey has been surprisingly stable in the
last year considering the turbulence in the fnancial markets.
GDP grew during the frst quarter by 4.3% at an annual rate, in
line with average growth for the last four quarters. However,
we expect weaker growth going forward. The PMI has trended
downward since March and fell signifcantly in June to 48.8. In
contrast, the infation rate has increased every month in 2014
and in May consumer prices increased by 9.6% compared to
the same month one year ago. In spite of this, the central bank
has cut the benchmark rate on two occasions by a total of 125
bps to 8.75% since a major rate hike in January. Because of the
high infation, the real interest rate is now negative. Actions
by the government continue to undermine confdence in
Turkish monetary policy and the central banks independence,
especially ahead of the presidential election in August. For its
part, the central bank feels that monetary policy is tight, since
it expects lower infation going forward. They also point out
the improvement in the trade balance. The current account
defcit has shrunk, largely due to very weak imports, which fell
by 10.3%, while exports rose by 3.6% on an annual basis in
May.
South Africa
Low exchange rate
Lower credit ratings and weak external balance
Turkey
High short-term rates
Low political confdence
FX/FI research Swedbank Large Corporates & Institutions Page 4 of 8
Emerging markets outlook
Forecast EUR/MXN in 3 months 17.29 (today 17.67) Forecast EUR/BRL in 3 months 3.06 (today 3.03)
Currency forecast vs. the euro Currency forecast vs. the euro
We are positive long-term to the Mexican peso based on
these growth-oriented reforms and stronger demand from
the US. In the short term the peso is being weighed down by
weaker terms of trade and less interest rate support after the
unexpected rate cut by the central bank. We therefore remain
neutral to the peso against the dollar, which, given our dollar
outlook, means a stronger peso against the euro.
GDP rose by 1.8% on an annual basis in the frst quarter,
pointing to a revival in the Mexican economy after fve
quarters of below-average growth. Industrial production has
recovered this year after seeing negative annual growth for
much of 2013. The second quarter has begun on a positive
note. Auto production accelerated during the spring after a
weak period in 2013 and in May reached a new peak of over
300 million cars on an annual basis. The latest signals from
purchasing managers in June were a disappointment, however,
with the PMI falling from 52.6 to 50.3. Mexicos central bank
surprised the market by cutting its benchmark rate by 50
bps to a record-low 3% on June 6. The decision was made
against a backdrop of weaker frst-quarter growth compared
with the central banks forecast from its May infation report.
Retail sales have been weak since new taxes on consumer
goods were introduced at the beginning of the year. The
recent improvement in consumer confdence may be a signal,
however, that the negative impact of the tax hikes is tapering
off.
The Brazilian real has been the biggest gainer among the
emerging currencies we follow despite the economys weak
performance. Sluggish growth, a large current account defcit
and loose budget policy are negative factors for the real. They
are partly offset by continued currency interventions from
the central bank. As a whole, we expect the real to be slightly
weaker this summer.
The Brazilian real has strengthened in the last quarter. The
main reasons are high interest rates, the central banks
currency interventions and the zero interest rate policy in
the US. The fundamentals have worsened during the same
period, with growth continuing to disappoint. The economy
grew only 1.9% on an annual basis in the frst quarter. Exports
have continued to decline, reporting a negative annual growth
rate in the last three months. As a result, the current account
defcit has again swelled. Manufacturing shrunk by 5.8% at
an annual rate in April and the outlook is gloomy based on the
latest signals from purchasing managers. The June PMI fell
to 48.7. Infation is stuck at high levels despite rate hikes by
the central bank totaling 375 bps in the last 12 months. We
expect tight monetary policy to continue, since consumer
prices rose by 6.4% at an annual rate in May, just below the
central banks upper tolerance limit of 6.5%. Lending rates
have risen from 34% at the beginning of 2013 to 42.5%. The
high infation rate and high interest rates are a challenge for
already strained households. The situation in the labor market
is weak and consumer confdence has dropped precipitously to
levels last seen during the fnancial crisis in 2009.
Brazil
High policy rate and central bank interventions
Weak growth and dual defcits
Mexico
Growth-oriented reforms on the way
Weak growth
FX/FI research Swedbank Large Corporates & Institutions Page 5 of 8
Emerging markets outlook
Forecast EUR/IDR in 3 months 15827 (today 15860) Forecast EUR/KRW in 3 months 1369.90 (today 1376.00)
Currency forecast vs. the euro Currency forecast vs. the euro
We feel that the risk of a correction in the won has risen after
its signifcant appreciation in recent months. We are now
seeing more signs that the strong won has begun to impede
growth. We expect the won to weaken slightly against the
dollar before then trading sideways in the next quarter. The
forecast vis--vis the euro is neutral.
The Indonesian rupiah has depreciated in recent months
ahead of the presidential election on 9 July. The favorite,
Joko Widodo, has seen his lead shrink against former general
Prabowo Subianto, according to the latest polls. There is also
considerable uncertainty what kind of policies will be put into
place. We are neutral to the currency leading up to the election.
The South Korean won has appreciated by over 11% measured
as the real effective exchange rate in the last 12 months. The
reason for the increase is South Koreas strong fundamentals,
including a current account surplus of over 6% of GDP. On the
downside, the strong won has hurt South Korea competitively
and has now begun to impact economic data. Growth was
certainly strong during the frst quarter, with GDP rising by
3.9%. Manufacturing, on the other hand, has seen little or
no growth in the last two years and fell by 0.7% at an annual
rate in May. The PMI fell in June till 48.4, suggesting continued
weakness in industrial production in the months ahead. The
strong won also means very low infation pressures. Consumer
prices rose by 1.7% at an annual rate in June. As a result,
infation has stayed below the central banks lower tolerance
limit of 2% in the last 20 months. We therefore expect it to
leave the benchmark rate unchanged for the rest of the year.
One factor that could reduce the pressure on the won is if
the ongoing talks with China pave the way for direct trade
between the won and yuan. China is South Koreas biggest
trade partner and around 90% of trade between them is in US
dollar.
Economic growth in Indonesia has gradually slowed since
2011 and rose by 5.2% in the frst quarter. This is the lowest
growth rate since the third quarter of 2009. Manufacturing
has recovered slightly since bottoming out last December, but
exports fell by 8.1% at an annual rate in May. As a result, the
rupiah has not given Indonesia enough of a competitive boost
to rouse exports, despite that the currency has weakened over
16% against the dollar in the last 12 months. On the other
hand, the latest PMI shows a signifcantly improved outlook
for manufacturing. The PMI rose in June to a new record level
of 52.7. Infation has declined slightly after peaking at 8.1% in
January and was 6.7% in June. Prices at the wholesale level are
even stronger, rising by 11.7% at an annual rate in April, the
highest infation rate since 2008. We therefore expect the
central bank to maintain its benchmark rate at 7.5% to ensure
they have infation under control. Currency reserves have
been partly restored since the turbulence last summer and
total around USD 100bn, equivalent to the value of 6.4 months
of imports. The current account defcit is a risk, however, if
capital markets should falter again.
South Korea
Large reserves and strong current account
Weak economic momentum
Indonesia
Strong PMI and hopes of new policies after election
Weak growth and high infation
FX/FI research Swedbank Large Corporates & Institutions Page 6 of 8
Emerging markets outlook
Forecast EUR/INR in 3 months 78.47 (today 81.15) Forecast EUR/CNY in 3 months 8.23 (today 8.43)
Currency forecast vs. the euro Currency forecast vs. the euro
Economic data in China have continued to point to a slowdown
in activity in recent months. GDP rose by 7.4% at an annual
rate in the frst quarter. Investment is the weakest since the
end of 2001. Falling steel prices indicate that investment
demand remains low. Steel prices have dropped about 15%
this year alone. Growth in retail and industrial production is
the weakest since the fnancial crisis in 2008-2009. Exports,
in contrast, turned higher during the spring and rose by 7% at
an annual rate in May. Moreover, the latest PMI shows that the
slowdown has leveled off. Over a three-month period ending in
June the PMI rose to 51.0 with the support of the latest fscal
stimulus. Real estate activity has slowed in 2014 and prices of
new homes rose by 5.6% at an annual rate in May, down from
9.9% in December 2013. Surveys suggest falling confdence in
the property market. Credit growth was 17.8% at an annual
rate in May, a signifcant decline from levels of around 25%
twelve months ago. Credit growth in the banking sector is
relatively stable, which means that most of the changes have
been in the shadow banking sector. In general, the Chinese
economy seems to be developing in line with the political shift
toward lower structural growth.
Indias nearly six-week-long election concluded with a major
victory for the Hindu nationalist party BJP and its leader
Narendra Modi. The party has secured its own majority in
the lower house of parliament and is now beginning the
painstaking process of instituting growth-oriented reforms.
The latest proposals for greater openness, predictability
and an improved business climate are important steps on
the road to increasing investor confdence. The challenges
are great and we dont expect any rapid changes. The trade
balance has steadily improved in the last year largely thanks
to weak imports, but lately with increased support from
stronger export growth. In the process, the current account
balance has rapidly improved compared with a year ago. The
defcit has shrunk from around 5% to about 1.7% of GDP. The
manufacturing growth rate has fuctuated around zero since
late 2011, but accelerated in April, rising by 3.4 on an annual
basis. Signals from purchasing managers point to a continued
modest improvement in industrial production. Economic
growth is still low. GDP grew by 4.6% at an annual rate in
the frst quarter, the average growth rate since mid-2012.
The central banks hard-line policies have quickly reduced the
infation rate from double digits in 2013 to 8.3% in May.
The yuan has fallen about 2.4% against the US dollar and by
1.0% against the euro. We expect the yuan to strengthen
in the medium term, but see continued fuctuations going
forward to counter new speculative fows. We are positive to
the yuan against the euro given that we anticipate a stronger
dollar.
The rupee has performed strongly since hitting bottom last
autumn, but is still low measured in terms of its real effective
exchange rate. Political conditions in India are the best in some
time. Because of this, coupled with a smaller current account
defcit and a high short-term interest rate, we are maintaining
our positive view of the rupee from last autumn.
China
New reforms facilitate more sustainable growth
Weaker yuan allowed to reduce speculative fows
India
New government and stronger trade balance
Weak domestic consumption
FX/FI research Swedbank Large Corporates & Institutions Page 7 of 8
Emerging markets outlook
Contact information
Swedbank Large Corporates & Institutions
Landsvgen 42
105 34 Stockholm
https://research.swedbank.se
Sales
FX Emerging markets
Martin Sderlund Tel: +46 8 700 90 20
e-mail: martin.soderlund@swedbank.s
Peter Granqvist Tel: +46 8 700 97 86
e-mail: peter.granqvist@swedbank.se
FX and Fixed Income Gothenburg
Hans Boman Tel: +46 31 739 88 44
e-mail: hans.boman@swedbank.se
FX and Fixed Income Malm
Zandra Trulsson Tel: +46 40 24 21 91
e-mail: zandra.trulsson@swedbank.se
FX and Fixed Income Stockholm
Lena Jonnerberg Tel: +46 8 700 94 30
e-post: lena.jonnerberg@swedbank.se
FX and Fixed Income Helsinki
Jan-Peter Laaksonen Tel: +358 207 469164
e-mail: jan-peter.laaksonen@swedbank.f
FX and Fixed Income Oslo
Mattis Lund Tel: +47 23116278
e-mail: mattis.lund@swedbank.se
FX and Fixed Income Tallinn
Maarika Liivapuu Tel: +372 6133042
e-mail: maarika.liivapuu@swedbank.ee
FX and Fixed Income Riga
Imants Svilns Tel: +371 67444134
e-mail: imants.svilans@swedbank.lv
FX and Fixed Income Vilnius
Andrius Bakanas Tel: +370 85 2582535
e-mail: andrius.bakanas@swedbank.lt
Research
Macro
Chief economist
Anna Fellnder Tel: +46 8 700 99 64
e-mail: anna.fellander@swedbank.se
Magnus AlvessonTel: +46 8 5859 3341
e-mail: magnus.alvesson@swedbank.se
Anna Breman Tel: +46 70 314 95 87
e-mail: anna.breman@swedbank.se
Cathrine Danin Tel: +46 8 5859 3492
e-mail: cathrine.danin@swedbank.se
ke Gustafsson Tel: +46 8 700 91 45
e-mail: ake.gustafsson@swedbank.se
Knut Hallberg Tel: 46 8 700 93 17
e-mail: knut.hallberg@swedbank.se
Jrgen Kennemar Tel: 46 8 700 98 04
e-mail: jorgen.kennemar@swedbank.se
FX
Anders Eklf Tel: 46 8 700 91 38
e-mail: anders.eklof@swedbank.se
Emerging markets
Hans Gustafson Tel: 46 8 700 9147
e-mail: hans.gustafson@swedbank.se
Fixed Income
Jerk Matero Tel: 46 8 700 99 76
e-mail: jerk.matero@swedbank.se
This research report has been compiled by Swedbank Large Corporations & Institutions, a division of Swedbank AB (publ). The document is not advisory and is
merely intended to serve as information to a limited amount of qualifed investors. The information in this document has been compiled from sources believed to be
reliable. We accept however no responsibility for correctness or completeness. It is recommended that recipients of this document supplement the basis for their
decision-making with any material that might be considered necessary. Opinions and recommendations contained in this document represent our present opinions
but may change. Swedbank Large Corporations & Institutions accepts no liability whatsoever for any direct or consequential loss or injury of any kind arising from
the use of this document. Recipients should be aware that Swedbank AB and its subsidiaries from time to time may have positions or holdings in securities of such
companies or issuers directly or indirectly referred to herein or may be providing or seeking to provide corporate fnance and dept capital markets services to such
companies or issuers. This document must not be published or distributed in the United States or to other countries or persons to which publication or distribution
is prohibited. The material may not be reproduced without the consent of Swedbank AB. Reproduced by Swedbank Large Corporations & Institutions, Swedbank AB
(publ), Stockholm 2009.
Fixed income and foreign
exchange
Head
Jan Peter Larsson Tel: +46 8 585 97736
e-mail: jan.peter.larsson@swedbank.se
Global Corporate Sales
Acting head
Klas Sandesj Tel: +46 73 094 50 07
e-mail: klas,sandesjo@swedbank.se
Global Institutional Sales
Head
Claes Gthman Tel: +46 8 700 92 80
e-post: claes.gothman@swedbank.se
Research
Head
Angelique Angervall Tel: +46 70343 5506
e-post: angelique.angervall@swedbank.se
Research Macro
Head
Olof Manner Tel: +46 70 567 93 12
e-mail: olof.manner@swedbank.se
Strategy
Head
Ott Jalakas Tel: +46 8 700 99 12
e-mail: ott.jalakas@swedbank.se
Pictures from Stock.XCHNG, iStockphoto and Getty Images.
FX/FI research Swedbank Large Corporates & Institutions Page 8 of 8
Emerging markets outlook
Information to the customer
Analysts certifcation
The analyst(s) responsible for the content of this report hereby confrm that notwithstanding the existence of any such potential conficts of
interest referred to herein, the views expressed in this report accurately refect their personal views about the market covered. The analyst(s)
further confrm not to have been, nor are or will be, receiving direct or indirect compensation in exchange for expressing any of the views or the
specifc recommendation contained in the report.
Issuer, distribution & recipients
This report by Swedbank Large Corporates & Institutions FX Fixed Income Research, is issued by the Swedbank Large Corporates & Institutions
business area within Swedbank AB (publ) (Swedbank).
Swedbank is under the supervision of the Swedish Financial Supervisory Authority (Finansinspektionen) and other fnancial supervisory bodies
where Swedbank and Large Corporates & Institutions have branches.
This report is distributed by Swedbanks branches. In no instance is this report altered by the distributor before distribution.
In Estonia this report is distributed by Swedbank AS, which is under the supervision of the Estonian Financial Supervisory Authority
(Finantsinspektsioon).
In Lithuania this report is distributed by Swedbank AB, which is under the supervision of the Central Bank of the Republic of Lithuania (Lietuvos
Respublikos centrinis bankas).
In Latvia this report is distributed by Swedbank AS, which is under the supervision of The Financial and Capital Market Commission (Finanu un
kapitla tirgus komisija).
Limitation of liability
All information, including statements of fact, contained in this research report has been obtained and compiled in good faith from sources believed
to be reliable. However, no representation or warranty, express or implied, is made by Swedbank with respect to the completeness or accuracy
of its contents, and it is not to be relied upon as authoritative and should not be taken in substitution for the exercise of reasoned, independent
judgment by you.
Be aware that investments in capital markets - such as in this document - carry economic risks and that statements regarding future assessments
are comprehended with uncertainty. You are responsible for such risks alone and we recommend that you supplement your decision-making with
that material which is assessed to be necessary, including (but not limited to) knowledge of the fnancial instruments in question and the prevailing
requirements as regards trading in fnancial instruments.
Opinions contained in the report represent the analysts present opinion only and may be subject to change. In the event that the analysts opinion
should change or a new analyst with a different opinion becomes responsible for our coverage of the market covered, we shall endeavour (but do
not undertake) to disseminate any such change, within the constraints of any regulations, applicable laws, internal procedures within Swedbank,
or other circumstances
This research report is produced for general distribution to eligible recipients and Swedbank is not advising nor soliciting any action based upon it.
If you are not a client of ours, you are not entitled to this research report. This report is not, and should not be construed as, an offer to sell or as a
solicitation of an offer to buy any securities.
To the extent permitted by applicable law, no liability whatsoever is accepted by Swedbank for any direct or consequential loss arising from the
use of this report.
Confict of interest
In Swedbank Large Corporates & Institutions, internal guidelines are implemented in order to ensure the integrity and independence of the research
analysts.
The guidelines include rules regarding, but not limited to: contacts with the companies covered; personal involvement in the companies covered;
participation in investment banking activities and supervision and review of research reports. For example:
The Research department is separated from the rest of Swedbanks activities by a Chinese wall.
Research reports are independent and based solely on publicly available information.
The remuneration of staff within the Research department may include discretionary awards based on the frms total earnings, including
investment banking income. However, no such staff shall receive remuneration based upon specifc investment banking transactions.
Swedbank AB shall not receive compensation from the company being analysed for making an investment recommendation or enter into an
agreement with the said company to make an investment recommendation.

Company-specifc disclosures & potential conficts of interest
You should note that it may happen that Swedbank, its directors, its employees or its subsidiary companies at various times have had, or have
sought, positions; advisory assignments in connection with corporate fnance transactions; investment or merchant banking assignments and/or
lending as regards companies and/or fnancial instruments covered by this report.
It may also occur that Swedbank Large Corporates & Institutions may act as a sponsor in trading with fnancial instruments covered by this report.
Reproduction & dissemination
This material may not be reproduced without permission from Swedbank Large Corporates & Institutions. The report may not be disseminated
to physical or legal persons who are citizens of, or have domicile in, a country in which dissemination is not permitted according to applicable
legislation or other decisions.
Reproduced by Swedbank Large Corporates & Institutions, Stockholm 2011.
Address
Swedbank LC&I, Swedbank AB (publ), SE-105 34 Stockholm.
Visiting address: Regeringsgatan 13, Stockholm.