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25-Feb-09 ELLIOTT CALL

Elliott Wave specialists such as Prechter start to say shorts should be covered and initiating long positions would be a good
idea, and would better be early than late, predicting a “sharp and scary rally” from an equity market which he calls “compressed”. The
truth being that this chartist model is very efficient whenever the market is in a trend, and it proved to be warning of the top before the
August collapse, as well a ahead of the Black Monday from October 87. This theory is also showing that the bear market initially started in
2000, with a bottom reached on March 2003 for the Eurostox, Dec 2002 for the US indices, with some rebound which ended in July 2007
to resume a downside trend which should end anytime from now within the next two weeks. The S&P and the Dow already broke their
lows from the past, while the Eurostoxx is still playing on higher levels (1847 cash index). The idea from Prechter we guess, being familiar
th
with the Elliott theory here, being that the last little 4 (small rebound) and 5 wave from the last big 5 downside wave is dangerous to play
as it often abort such as it did in 2003 before climbing for a big B retracing wave, ahead of the current last C downside one ending soon.
Meanwhile, Fed Chairman Ben Bernanke's semi-annual testimony to the Senate threw up few surprises. He acknowledged that
the economy was enduring a "severe contraction", that "the downside risks probably outweigh those on the upside" and that any recovery
depends on the Fed/Treasury being successful in restoring some stability to financial markets. Bernanke once again suggested that the
Term Asset-backed Securities Loan Facility (TALF) would be up and running "soon". Once again there was no mention of the possibility
of the Fed buying Treasury securities, suggesting that plan is on the back-burner for the foreseeable future.
Let’s keep fingers crossed, although unfortunately the news that the stress test involving the banks will last two years is not that
welcome. Financial markets need to rely on solid base with the banks passing through the huge stimulus from government which aims at
bailing out the banks, and reach the real economy. Top job facing government is restoring financial stability to system. Next year could be
one for recovery, said Bernanke. Hopefully the investors chose to listen to some cleaning process from the banks, and felt secured
enough by the Obama process to jump back in at last.
Today’s existing home sales data for January should be encouraging. Admittedly, the recent rise in the pending home sales index
suggests that the number of existing home sales in January may build on the rise from 4,450,000 to 4,740,000 seen in December. And
after having fallen by 75% from their peak to just 331,000 in December, the number of new homes sales (due Thursday) might be nearing
a floor. In any one month, there are a certain number of households who have to move regardless of prevailing market conditions. With
the activity indicators no longer falling off a cliff, there is a good chance that the rate of prices decline will slow from here. The
government’s new housing plan is also likely to prevent at least some foreclosures.
Nice session from the US with a boost from both Banks (up 11%) feeling confident things will get sorted out, and Retailers up
4.6% ignoring the poor Consumer Confidence data with some better earnings from Home Depot (up 10%), Heinz (up 5%) and Macy’s (up
10%) although Target was lower (-2%)
China back on track, Japanese financial minister comments that they will be buying shares directly in the market to prevent
tumbling equity prices from inflicting further pain to the economy, Obama speech after the close saying confidence will return
and economy will recover, "We cannot consign ourselves to an open-ended recession," he says. Stiffer regulations get nod, though
bank deposits and insurance are called secure. It looks like the end of the current drama might happen soon with the worldwide
commitment from officials passing through households confidence, at least in “leveraged countries” (amazing Retail Sales data out from
the UK for January). Up big today
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 39,6 1,2832 97,20 2,82 2,99 4,45 4,71 10,24 2,02 3,51 3,11 3,59 3,21 5,28 4,01 3,90 3,32 US
Perf 1d % 3,84 -0,11 -0,57 1,99 bp -2,6 bp 0,95 2,18 1,87 1,00 1,22 1,36 0,93 1,12 2,86 1,30 1,46 1,03 Europe
ECONOMIC DATA with impact
Mortgage Applications (12h gmt) / the higher the better / minor as weekly and erratic data
Cyprien release (14h French time), film directed by a supposed to be young and up coming talent , brother of one of our faithful customer
Existing Home Sales (15h gmt) expected 4.8 mn from previous 4.74 mn / the hihghest the better / minor as focus banks and news to
rescue them
Crude Inventories (15h35 gmt)
POSITIVE IMPACTS
HENKEL : Q4 sales €3.54bn (3.6e) / Q4 adj EBIT €379M (365e) / Q4 adj Net €249M (197e) / Keeps pfd shrs div at €0.57 /Sees organic
sales growth highre than mkt in 2009
TELEKOM AUSTRIA : Q4 Rev €1.309Bn (1.302e)/ Q4 EBITDA B4 charges €420M (410e) / Q4 net loss €438M (in line) / Reiterates
2009 EBITDA & sales targets / Will pay a DIV of at least €0.75 (in line) / Introduces DIV floor of €0.75 2009-12
VOESTALPINE: Q3 EBIT €196.2M(171e)/FY 08/09 EBIT to fall to €1bn (in line)/ To report “a clearly positive operating result” for 2009/10
RHODIA : Q4 Rev €1.13bn (1.07e) / Q4Recurring EBITDA €141M (134.5e) / Q4 net loss €28M (23.5e) / withold DIV for 2008
VALEO : France’s sovereign wealth fund plans to take a minority stake in the auto-parts maker (Reuters citing two sources)
DUTCH FINANCIALS : Dutch securities regulator extended restrictions on short sales in financial stocks until June 1 from Feb. 28. The
restrictions will be lifted as soon as market conditions normalize, AFM said.
KBC said it will pay the coupons on both of KBC Bank NV’s 8% perpetual debt securities as planned, on May 14 and June 27
GENERALI – ALLEANZA : Standard & Poor's & Moody’s said their ratings remains unaffected by Co.'s announced intention to merge .
NATIXIS : The French state will subscribe to preference shares without voting rights in the company formed by the merger of Banque
Populaire and Groupe Caisse d'Epargne and will hold 20% of the capital
LLOYDS is expected to sign a legally binding agreement to increase lending to small businesses and households by at least £20bn (The
Guardian) / RBS may agree to a similar deal
ING ‘s CEO said “Nationalisation would not improve situation”, “ING receives €1bn in savings per week”…”comparison with Fortis
breakup unjustified”
POSTBANK: Germany's cartel office gave its clearance to DBK 's plans to acquire a majority stake in POSTBANK (reuters)
MEDIOBANCA will not be taking advantage of the Italian government's bond offer for banks, Chief Executive said
CNP ASSURANCES says solvability ratio of 115% / maintains dividend at €2.85 / Webcast at 10:00 UKT
SANOFI : has succeeded in buying Zentiva holding 94% of the Czech generic drugmaker's share capital
Q-CELLS secured financing through the end of this year and said demand for its products should recover in the second quarter as solar-
park planners regain bank funding.
NEGATIVE IMPACTS
DEUTSCHE BOERSE : Q4 Revenues €609m (€630m exp) / EBITDA €322.5m (€356m exp) / Net Income €222.4m (€209m exp) /
Propose 2008 Div €2.1 (€2.60 exp) / Wil decide on SBB in the current financial year
ACCOR :08 Rev €7.74bn (7.62e)/2008 Net pft €575M (594.2 e)/ Proposes 08 DIV €1.65 (unch)/No Guid for 09 “environment is difficult”
 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

25-Feb-09 ELLIOTT CALL

CADBURY : FY Rev £5.38bn (5.74e)/ FY pretax pft £559m (567e) / FY net income £364M (390e) / FY DIV 16.4P /Sees good progress
om margin goal .
VERBUND FY08 Sales €3.74bn (€3.67bn exp) / EBIT €1.138bn ( €1.164bn exp) / Net Profit €687m (€742m exp) / div to €1.05 (€1.15
exp) / Wants to stick to existing div policy / Conf call at 9:30 UKT
NOVARTIS said first-quarter results will be “severely impacted” because of currency swings
RIO TINTO said its two iron ore rail lines in Australia remain closed because of flooding
OMV: Q4 clean EBIT €301M (351e) / Plans DIV €1(1.25e) for 08 / Sees oil & gas prod increase in 2009
SWISS RE turned to Warren Buffett for a “quick solution” to a need for capital that otherwise could “only be diminished overtime” (CFO)
RESULTS DIVIDENDS EVENTS
BHP Biliton ($0.455556) / Reckitt Benckiser (GBp
Accor / CNP / Vallourec / Heinkel / ASM International / Deutsche Boerse / 53,3333) / British Land ( GBp 9,375) / Ladbrokes
Today Apple AGM
OMV / Telekom Austria / Cadbury (GBp 10.05556) / Qualcomm ($0.16) / Time Warner
($0.0625)
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
Thursday 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
Tuesday Vinci / Bayer / Bouygues / Mun Re / Standard Chartered / Beiersdorf Xstrata rights Issue (2 per 1)
TRADING IDEAS
BUY SAP / MUNICH RE / ALLIANZ / AEGON / CREDIT SUISSE / ERICSSON / PERNOD / REPSOL (results Tomorrow) on island possibility
BUY DEUTSCHE BANK / ING / RENAULT to play recovery + charts looking good now
BUY LUFTHANSA / AIR FRANCE / BASF & RWE (results Tomorrow) / L OREAL / VEOLIA / ENEL on double bottom possibility
BUY CARREFOUR on reversal Head & Shoulder possibility

BUY DAIMLER / SELL BMW // BUY SIEMENS / SELL ALSTOM // BUY FTE / SELL DTE // BUY METRO / SELL AHOLD // BUY RWE / SELL VEOLIA //
BUY DANONE / SELL UNILEVER
BROKER METEOROLOGY
THOMSON REUTERS .................RAISED TO HOLD FROM SELL ............................................................................................ BY RBS
ROLLS ROYCE GROUP ..............RAISED TO NEUTRAL FROM SELL .................................................................................... BY UBS

SWEDBANK ................................CUT TO SELL FROM NEUTRAL ........................................................................................... BY UBS

ALSTOM ......................................CUT TO NEUTRAL FROM OVERWEIGHT .............................................................. BY JPMORGAN
NORSK HYDRO ..........................CUT TO UNDERWEIGHT FROM OVERWEIGHT .................................................... BY JPMORGAN
BELGACOM .................................CUT TO NEUTRAL OVERWEIGHT .......................................................................... BY JPMORGAN
SWISS RE ....................................CUT TO HOLD FROM BUY ................................................................................................... BY RBS
ALLEANZA ...................................................CUT TO NEUTRAL FROM OVERWEIGHT ........................................................ BY HSBC

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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

25-Feb-09 ELLIOTT CALL

CHART OF THE DAY

US Consumer Confidence and US unemployment rate
since 1967

160 11

140 10

9
120
8
100
7
80
6
60
5

40 4

20 3
1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007

consumer confidence unemployment rate

Source : Conference Board, Bureau of Labor Statistics

On a down trend since December 2008 the confidence among U.S. consumers plunged to a record low in February at 25 (prior 37.4)
way below the forecast (35.0). This is the lowest level since the creation of this statistic in 1967 underlining the fact that recession is
deepening in the United-States. Indeed the sharp rise of the unemployment (unemployment rate of 7.6% in January and massive job
destruction each week) and the credit crunch are strongly humping household purchase power which are still very pessimistic despite
the decline of energy and commodity prices, the drop of interest rates and the rescue plans

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
23.50 GMT Japan Merchandise trade balance total January yen - 1200,0 billion yen - 320,7 billion
05.00 GMT Japan Small business confidence February 23,8 24,8
07.00 GMT Germany Gross Domestic Product (final) fourth quarter -2,1%,-1,7% YoY -2,1%,-1,7% YoY -2,1%,-1,7% YoY
09.00 GMT Italy Retail sales December 0,0%,-1,7% YoY -0,2%,-3,0%YoY
09.30 GMT United Kingdom Gross Domestic Product (preliminary) fourth quarter -1,5%,-1,8% YoY -1,6%,-1,9% YoY -1,5%,-1,8% YoY
12.00 GMT United States MBA mortgage applications 20 th February 45,7%
15.00 GMT United States Existing home sales January 1,3% 6,5%

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

DJIA 7350,9 - 2,50% - 16,24% EUR/USD 1,2825 2,38% -8,18%
S&P 500 773,1 - 1,92% - 14,41% EUR/JPY 124,53 -5,62% -1,78%
Nas daq 1441,8 - 1,95% - 8,57% USD/JPY 97,10 -3,36% 6,60%
CA C 40 2708,1 - 5,79% - 15,85% Oil Price % 5 Days Ytd
DA X 3895,8 - 7,61% - 19,01% Brent $/b 41,4 5,81% -0,98%
Eur os tox x 50 1977,5 - 6,71% - 19,21% Gold Price % 5 Days Ytd
DJ 600 172,9 - 5,95% - 12,86% Gold $/oz 957,8 -2,70% 8,65%
FTSE 100 3816,4 - 5,12% - 13,93% Rates USA Euro Japan
Nikkei 7461,2 - 4,86% - 15,78% Central Banks* 0,25 2,00 0,11
Shanghai Comp 2177,1 - 5,12% 19,57% Overnight 0,20 1,05 0,11
Sens ex ( India) 8975,4 - 5,17% - 6,97% 3 Months 0,30 0,94 0,25
MICEX ( Rus s ia) 629,3 - 11,61% 1,58% 10 Y ears** 2,81 2,99 1,31
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

25-Feb-09 ELLIOTT CALL

Economic data preview

Watch in the United-States the release of the existing home sales for January due at 15.00 GMT, expected to increase as prices are
plummeting and led by refinancing.

Watch in Germany the final release of the Gross Domestic Product for the fourth quarter due at 07.00 GMT ,confirming the preliminary
figures and the deepening recession in Germany strongly hit by the global downturn cutting demand for German’s goods abroad. Watch in
the United Kingdom the release of the Gross Domestic Product ( preliminary) for the fourth quarter due at 09.30 GMT confirming the
advanced figures and the sharp recession in the United Kingdom hit by a financial, economic and construction crisis ./JB

ate

ECONOMY

UNITED- STATES : CONSUMER CONFIDENCE COLLAPSED TO A RECORD LOW IN FEBRUARY AND HOME VALUES DROPPED IN DECEMBER
On a down trend since December 2008 the confidence among U.S. consumers plunged to a record low in February at 25 (prior 37.4) way
below the forecast (35.0). This is the lowest level since the creation of this statistic in 1967 underlining the fact that recession is deepening
in the United-States. Indeed the sharp rise of the unemployment (unemployment rate of 7.6% in January and massive job destruction each
week) and the credit crunch are strongly humping household purchase power which are still very pessimistic despite the decline of energy
and commodity prices, the drop of interest rates and the rescue plans. On the other hand and this is not a surprise the home values
dropped from -2.0% at the third quarter to -3.4% at the fourth quarter confirming the lasting down trend of the real estate sector from which
the subprime crisis began

FRANCE : CONSUMER CONFIDENCE DECLINED IN FEBRUARY AND CONSUMER SPENDING ROSE IN JANUARY
The release of the French consumer spending for February was rather exceptional according to the gloomy economic outlook in France.
Indeed the consumer spending increased to 1.8 % in January from - 0.9% in December. If we look at the breakdown the consumption
increased of 4.7% for textiles / leather, 3% for Household goods and 2.8% for cars. If we look to the same breakdown but from a year ago
the increases were respectively +3.3%,+5.2% and +7.8% and the global consumer spending rose to 1.8% from -2.1%. Obviously we are
very far away the catastrophic result expected for all these sectors a few weeks ago. If of course the January sales had a positive impact,
three main reasons explained this increase of the French consumer spending: firstly the drop of the energy and commodity prices, even if
its not totally transferred on the buying prices, will necessary boost the household purchase power, second as the interest rates on savings
are weak household had an “enjoy” behaviour, thirdly the drop of the manufactured prices will boost the consumption. Indeed these last
years the prices increased too much in comparison to the reality of the incomes. Consequently the drop of the prices is absolutely
necessary to rebuild the household purchase power. On the other hand the consumer confidence indicator dropped to - 43 in February
from -42 in January showing that the rebound of the consumer spending do not overshadow the very sharp recession hitting France and
unfortunately the consumer spending should declined in February and in the next few months.

GERMANY : IFO BUSINESS CLIMATE DROPPED TO AN HISTORICAL LOW IN FEBRUARY

After a slight rebound in January at 83.0, the German’s IFO business climate unfortunately declined in February at 82.6 reaching a new
historical low. This means that despite the drop of the interest rates and despite the decline of the commodities the German’s industrials
are still very pessimistic. Nevertheless they do not panic as showed by the IFO expectations which already rose 2.6% in January and rose
again of 1.4% in February at a level of 80.9 close to its October release. German’s industry is going to reach a bottom and will slowly
rebound the second half of 2009 and more significantly at the end of the year due to the rescue plans and the drop of the interest rates as
well as of the energy prices./JB
 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

25-Feb-09 ELLIOTT CALL

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