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Stock Market Overview.

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  • 1. From Bernhard Tschanz INTERNET ADDRESS Phone +41 (1) 334 56 27 http://www.cspb.com/research/ Fax +41 (1) 334 56 96 E-mail bernhard.tschanz@cspb.com INTRANET ADDRESS FOR CREDIT SUISSE GROUP EMPLOYEES Date 18 November 2002 http://my.csintra.net/research/ Stock Market Overview. Weekly update (incl. Fixed Income & Forex Strategy). Christine Frey, phone +41 (1) 334 56 43 • THE CHARTIST’S OPINION: S&P 500, CRB INDEX AND CRUDE OIL FUTURE. • ECB EXPECTED TO CUT RATES – THE MARKETS ARE PREPARED. • CORPORATE BONDS: 3Q02 RESULTS AND OUTLOOK FOR ENEL AND REPSOL. • SWISSCOM: SOLID EARNINGS, BUT WEAK GROWTH EXPECTED. • BAYER: POSITIVE CHANGE OF PHARMA STRATEGY. • BANKING SECTOR: NO IMPROVEMENT IN OPERATING ENVIRONMENT. • CHINA: H-SHARES AND RED CHIPS FAVORED. TAB. 1: AT A GLANCE: COUNTRY, SECTOR AND STOCK PREFERENCES EUROPE SWITZERLAND NORTH AMERICA JAPAN ASIA EXCL. JAPAN COUNTRIES France Korea China (H-shares) SECTORS (regional) Utilities Health Care Health Care Health Care Utilities Basic materials Precision Goods Transport Capital Goods Automobile SECTORS (global) Airline / Transportation (-) China Southern Airlines Automotive (0) Peugeot Nissan Motor Banking (0) UBS Wells Fargo & Co Kookmin Bank Basic Materials (0) Alcoa Chemicals (0) Dow Chemicals Construction (0) Consumer Products (0) The Swatch Group B Kao, Shiseido Energy (0) ENI ChevronTexaco Mechanical and electrical (0) MAN Lockheed Martin engineering BAE Systems Deere Beverage (-) / Food (0) Néstle B Coca-Cola Tobacco (0) Brit Amer Tobacco (BAT) Insurance (0) IT Services / Software (-) Cisco Media (-) Healthcare (+) Aventis Novartis/Serono Johnson & Johnson Takeda Chemical Centerpulse Colgate-Palmolive Pulp & Paper (0) Real Estate (0) Wharf Holdings Ltd. Retail (-) Wal-Mart Technology Hardware (0) Dell Computer Corp. Sony Semiconductor (0) Samsung Electr. Telecom Suppliers (0) Telecomm. Services (0) Utilities (+) RWE Huaneng Power Other (-) Adecco Nintendo RECOMMENDED INVESTMENTS FUNDS: Mellon Asian Equity Pfl A USD, CS EF Global Pharma, Cordius Inv Euro Corp Bonds, ING (L) Renta Fd Corp USD P Cap 1 Further funds are available under: www.fundlab.com mid and small caps Source: CSPB
  • 2. 18 November 2002 THE CHARTIST’S OPINION Sigisbert Koch, phone +41 (1) 333 94 64 FIG. 1: S&P 500 INDEX As Figure 1 indicates, the S&P 500 is still below the 200-day moving average, which, like the trend, is 1600 heading south – in contrast to the momentum, which is 1400 approaching the 0-mark. There is no question of a 1200 long-term change in trend unless the 200-day line is 1000 broken and is in an upward movement. It is highly likely 800 that the upward movement since October is only a re- covery. 600 Outlook: Corrections should be selectively used to buy, Momentum oscillator 50 but investors should be aware of any fall below 830/835, which would lead us to expect the old low of 0 770. -50 1999 2000 2001 2002 Source: Datastream FIG. 2: COMMODITY RESEARCH BUREAU INDEX The Commodity Research Bureau (CRB) Index displays a clear example of an upward trend. Supported by the 240 rising 200-day moving average, there has been one 230 high after another. Nevertheless, signs of a correction 220 are discernible in the daily chart. Figure 2 indicates a 210 forthcoming weakness in momentum, which is negative 200 relative to price performance. A fall below 223 would 190 suggest 219. Below 219, we would expect 212.50. 180 Outlook: As long as 230 is not surpassed, the short- Momentum oscillator 20 term picture remains prone to correction. Buy-oriented investors should wait for the downturn, and buy at 219 0 and 213 with a stop at 211, or with a 5% stop if 230 is -20 broken. 1999 2000 2001 2002 Source: Datastream FIG. 3: CRUDE OIL FUTURE It is plain to see from the Crude Oil Future chart to the left that a correction has set in, reaching the rising 200- 40 35 day moving average. Momentum looks frail and, sup- 30 ported by the divergence, is just about to reach the 0- 25 line. Sales pressure may persist for a time and if the in- 20 dex falls towards 24 could increase demand, which 15 would add support. If, against expectations, the index falls below 24, 22 would then be expected. 10 Outlook: Investors should wait for 24 in order to in- Momentum oscillator 100 crease exposure. We recommend placing a stop at 50 23.20. If 28.30 should unexpectedly be reached first, 0 -50 the buy limit should be placed at 28.60 with a 5% stop. -100 1999 2000 2001 2002 Source: Datastream Stock Market Overview – Weekly Update. CREDIT SUISSE PRIVATE BANKING 2
  • 3. 18 November 2002 FIXED INCOME/FOREX STRATEGY ECB PREPARES MARKETS FOR AN INTEREST-RATE CUT Dr. Anja Hochberg, Fixed Income & Forex Research, phone +41 (1) 333 52 06 First chief economist Ottmar Issing was sent in to bat. The dynamic ECB hawk surprised the markets on Tuesday with an unexpectedly clear statement: the decision to keep key interest rates at their current level in November was one of the most difficult in the European Central Bank’s (ECB) 4-year history. Throughout the week, various members of the Bank’s board reinforced this message in no uncertain terms: Welteke, Liebscher, Haemaelaeinen and even ECB president Duisenberg unanimously emphasised both decreasing inflationary risks and growth- associated risks which have to be closely monitored. On Thursday, the last skeptics were presented with black- and-white proof of a near-term rate cut by the ECB, in the form of the Bank’s monthly report. In the editorial, the pros and cons of a rate cut were prominently discussed - something which had not been seen before. In addition to the factors mentioned above, namely the dwindling risk of inflation and a weaker than expected economic up- turn, the “currency guardians” also made reference to the temporary rise in prices in the euro zone towards year- end (oil price, indirect taxes, base effects). The ECB has learnt its lesson: it is unlikely that analysts will now as- sume that an inflation rate just outside the target range provides a reason against an interest-rate cut. The financial markets got the message. As Figure 1 illustrates, the ECB’s comments have led to a further flatten- ing of the short end of the risk-free yield curve. The markets (or at least interest rate futures) seem to have reached agreement: The ECB is going to cut rates before year-end. The extent of the cut is less certain: most market analysts are predicting that the ECB will at first lower the rate only by a cautious 25 basis points (bp). We, on the other hand, would go further (as was the case with our forecast of a rate-cut by the Fed in November); the clarity of the ECB’s statements and its actions to date (rates have always been cut in 50 bp steps) lead us to fore- cast a 50 bp cut in key interest rates. Although such a step would be unlikely to surprise the financial markets, it would create additional price potential both at the short and long end. In order to profit from this market environ- ment, a barbell strategy is advisable for the European government bond market until the first week of December 2002. FIG. 1: MARKETS HEED ECB’S COMMENTS Yield curve for government bonds, yield in % 5.5 5.0 4.5 4.0 3.5 3.0 2.5 3m 6m 9m 1y 2y 5y 7y 10y Bunds 01.01.02 Bunds 07.11.02 Bunds 14.10.02 Bunds 14.11.02 Source: Bloomberg, CSPB Stock Market Overview – Weekly Update. CREDIT SUISSE PRIVATE BANKING 3
  • 4. 18 November 2002 CORPORATE BONDS Q3 2002 RESULTS FOR ENEL AND REPSOL Dr. Jeremy Field, Bond Research, phone +41 (1) 334 56 29 ENEL (A1, STABLE/A+, STABLE) WEAKER 3Q EARNINGS, DISPOSAL OF EUR 874M WORTH OF ASSETS Enel is the largest generator and distributor of electricity in Italy, also owning telecom assets. Enel is 68% owned by the Italian government. Enel’s net profit for the 9 months was EUR 1.4bn, down 9% on a pro forma basis, hit by a reduction in tariffs and higher taxes. Italy has the highest electricity prices in Europe. Enel has written down its WIND telecom assets by EUR 1.5bn to EUR 8.0bn. We believe that WIND is likely to be divested when it be- comes financially independent in 3 years. Management said that dividend payout ratios will not change and there are no immediate plans to start the share buy-back. Enel bonds are not particularly cheap, but safer than the rating indicates in our opinion. ENEL BONDS BLOOM- ISSUE ASK SPREAD MODIFIED SEC. NO. BERG CURRENCY RATING COUPON (M) PRICE MATURITY YTM BP DURATION 1242703 ENEL EUR A1 / A+ 5.00% 2’000 102.50 07.06.04 3.30% 27 1.45 yrs 956128 ENEL EUR NA / NA 4.50% 1’000 100.95 13.10.08 4.31 40 5.07 yrs Source: Bloomberg REPSOL (Baa2, NEGATIVE/BBB, NEGATIVE) 3Q RESULTS AHEAD OF EXPECTATIONS BUT DIFFICULTIES IN ARGENTINA REMAIN Repsol announced adjusted 3Q net income of EUR 358m, ahead of expectations, but still down 11% on 3Q 2001. Cash flow was down 19% year-on-year, reflecting continuing difficulties in Argentina. Repsol’s sale of half of its interest in Gas Natural in May 2002, together with reduced capex and a dividend reduction, have allowed it to reduce its net debt by EUR 8bn. Net debt remains high, however, at EUR 9.5bn plus preference shares of EUR 3.25bn. Leverage is high at 44% net debt/capital employed and additional asset disposals may be required. Around EUR 2bn of Repsol’s cash flow is generated in Argentina and there is an ongoing risk regarding govern- ment intervention. Repsol bonds remain high risk, as the ratings and outlooks indicate. REPSOL BONDS BLOOM- ISSUE ASK SPREAD MODIFIED SEC. NO. BERG CURRENCY RATING COUPON (M) PRICE MATURITY YTM BP DURATION 147717 REP EUR Baa2/BBB 3.75% 1’725 98.28 23.02.04 5.18% 214 1.16 yrs 1073780 REP EUR Baa2/BBB 6.00% 1’175 93.34 05.05.10 7.17% 306 5.58 yrs Source: Bloomberg Stock Market Overview – Weekly Update. CREDIT SUISSE PRIVATE BANKING 4
  • 5. 18 November 2002 KEY IDEAS SWISSCOM: SOLID EARNINGS, BUT WEAK GROWTH EXPECTED Uwe Neumann, CEFA, phone +41 (1) 334 56 45 STOCK SEC.NO./BLOOMBERG RATING PRICE 14.11.02 52-WEEK H/L EPS 02E/03E P/E 02E/03E • Swisscom 874251/SCMN VX BUY CHF 446 509.78/360 28.00/30.18 15.93/14.78 On Thursday, Swisscom will present its 9-month results, the last European telecoms services provider to do so. Detailed information concerning our sales, EBITDA and net profit forecasts for the company can be found in the Key Events Europe section. Here we concentrate on the outlook for the individual divisions and the signs they pro- vide as to the group’s future performance. • The mobile telephone business is likely to be the group’s only growth-driver. As witnessed in the reports made by other European mobile phone companies, the trend toward rising margins (at Swisscom, 48.8% to date) and increasing revenue per user (ARPU CHF 85 to date) should also be apparent at Swisscom, albeit it to a lesser extent due to the limited size of the company’s domestic market. In other words, it is possible that the results in the mobile segment could be slightly more positive than market consensus. • The fixed-network figures are likely to be less pleasing; we expect a downturn in both sales and EBITDA. However, the effects of the recently introduced pre-selection program within local exchange areas should still be relatively limited; we doubt that a negative trend, leading to market-share losses in local networks, will al- ready be discernible. It is thus possible that the recent cost-cutting measures could have a stronger impact than the market expects. • In the enterprise solutions division, only the corporate communication solutions business is likely to show a better performance than the prior year. Data sales will be in decline and the domestic telephony business will be negatively impacted by the introduction of the uniform national tariff on 1 May 2002. However, given that these divisions make a limited contribution to overall sales, their performance should not have a significant ef- fect on the company’s valuation. • The performance of debitel is of greater significance. The mobile telephony provider was in surprisingly good shape at the half-year mark, despite stagnating sales. It is possible that the operating margin (2.7% at half- year) could fall further. Higher costs and customer-related expenses and the integration of acquisitions could lead to higher than expected investment costs (outlay). Overall, Swisscom’s balance sheet remains very sound. The company should again impress in the coming fiscal year with its ability to generate a secure and high level of cash flow. It is therefore possible that a share buy-back or reduction in nominal value, and thus an “extra distribution”, will take place in 2003, making Swisscom stock at- tractive for income-oriented investors. For this reason, we rate the stock a BUY. On the other hand, the share has little to offer growth-oriented investors. Restructuring and cost-cutting measures alone will not lead to a significant rise in the share price. Stock Market Overview – Weekly Update. CREDIT SUISSE PRIVATE BANKING 5
  • 6. 18 November 2002 BAYER: MANAGEMENT SOFTENS STANCE ON PHARMA PARTNERSHIP Dr. Maria Custer, phone +41 (1) 332 11 27 STOCK SEC.NO./BLOOMBERG RATING PRICE 14.11.02 52-WEEK H/L EPS 02E/03E P/E 02E/03E • Bayer 324230/BAY GR BUY CHF 21.92 40.90/17.03 1.51/1.96 14.52/11.18 CHANGE IN PHARMA STRATEGY: MAJORITY CONTROL IN A PHARMACEUTICALS PARTNERSHIP NO LONGER A PRIORITY The most interesting issue to come out of Bayer’s 3Q results was that management is now considering a solution for pharmaceuticals that does not necessarily imply a majority position in a partnership. In our view, this could be a first step towards a deal which could lead to a positive reassessment of Bayer stock. Additional positives from the 3Q results were: • The operational performance was better than our estimate: Bayer reported 3Q underlying EBIT of EUR 54m, ahead of our estimate of EUR 33m. • Balance-sheet improvements: Net debt was EUR 10.1bn at the end of the first nine months of 2002. We es- timate a further reduction to EUR 8.7bn by year-end on the back of further proceeds due by that time. VALUATION On our estimates, Bayer trades at an EV/EBITDA 2003E of 5.3x and EV/EBITDA 2004E of 4.7x. In our view, Bayer represents an interesting restructuring play in the sector. We reiterate our BUY rating. FIG. 1: BAYER’S SHARE-PRICE PERFORMANCE 60 55 50 45 40 35 30 25 20 15 1998 1999 2000 2001 2002 Share price Share price relative to the DAX 30 Source: Datastream Stock Market Overview – Weekly Update. CREDIT SUISSE PRIVATE BANKING 6
  • 7. 18 November 2002 BANKING SECTOR: OPERATIVE ENVIRONMENT STILL DIFFICULT Christine Frey, CFA, phone +41 (1) 334 56 43 STOCK SEC.NO./BLOOMBERG RATING PRICE 14.11.02 52-WEEK H/L EPS 02E/03E P/E 02E/03E • UBS 1203203/UBSN VX BUY CHF 69.5 87.7/50.0 3.58/4.89 19.41/14.21 • Banco Popular 1019417/POP SM BUY EUR 42.0 47.9/35.5 2.97/3.45 14.14/12.17 • Royal Bank of Scotland 403197/RBOS LN BUY GBP 14.99 20.81/11.52 0.95/1.27 15.77/11.80 TAB. 1: FACTORS OF IMPACT BY BANKING SUBSEGMENT INVESTMENT BANKING WHOLESALE BANKING RETAIL BANKING Depressed primary market. Burdened by large corporate loan losses. Unemployment determines borrowers’ cash flow. Secondary market hit by low volumes. Credit cycle: European development behind USA. Rise in property prices -> correction. Cost savings are necessary. Low level of provisions for non-performing loans. Re-mortgaging stimulates consumption. Borrowers’ high gearing presents risk. Mortgage growth expected to weaken. Borrowers’ cash flow presents risk. Falling rates put pressure on margins. Source: CSPB Investment banking continues to be burdened by a depressed primary market and low volumes in the secondary market, which make further cost savings necessary. Since the markets’ high, Wall Street companies have cut 61000 jobs, according to the US Bureau of Labor Statistics. Wholesale banking continues to be negatively im- pacted by loan losses. In 3Q02, most of the burden came from the US business, in particular from the energy and (again) telecoms sectors. In the last 12 months (3Q01 – 3Q02), from total loan losses of USD 130.7bn, USD 106.7bn (from 85 companies) was from the USA. According to Standard and Poor’s, only 16 bankruptcies were declared in Europe over the same time period, representing losses of USD 8.7bn. It remains to be seen if Europe is simply lagging behind the USA, which would imply further increases in loan provisions for European banks. Un- employment – e.g. disposable household income – is the critical factor in the retail banking segment. A lack of regular income presents risks in terms of credit payments, even if interest rates are low. We expect an interest- rate cut of 50 basis point in Europe, but falling rates put further pressure on interest income and thus margins. Most affected by this will be Italian banks due to their cheap refinancing through deposits, but French and German banks would also be negatively impacted on an operating level. We would advise against investments in Italian and German banks in the current economic environment. The oper- ating earnings capability of German banks is burdened by loan losses and provisions, losses on investment portfo- lios and structural difficulties. The Italian economy is weakening faster than expected; the uncertainty surrounding Fiat and a potential interest-rate cut put pressure on Italian banks. We continue to recommend a selective selection of defensive stocks with a decent equity situation (tier-1 ratio), positive FCF (free cash flow), a defensive loan strategy and secure dividends: UBS, Banco Popular or Royal Bank of Scotland (the latter could come under short-term pressure if its stake in BSCH reduces its state n RBOS). Stock Market Overview – Weekly Update. CREDIT SUISSE PRIVATE BANKING 7
  • 8. 18 November 2002 CHINESE MARKETS NOW EVEN MORE ACCESSIBLE Julien Lippmann, phone +41 (1) 334 56 46 A-SHARES FOR INTERNATIONAL INVESTORS As per 1 December 2002, China will allow selected institutions to invest in Remimbi-denominated A-shares in Shanghai and Shenzhen which were previously restricted to domestic investors. In the past, foreign investors could only purchase the low liquidity B-shares or the so-called H-shares and Red Chips listed in Hong Kong. With this opening of the A-markets (combined market capitalisation of approx. USD 510bn), the authorities aim to attract more foreign direct investment and to stimulate stagnating local stock markets. In order to qualify for the so-called Qualified Foreign Institutional Investor (QFII) program, the following conditions must be fulfilled: • Minimum of USD 10bn under management. • Minimum of 5 years operational experience in the investment business. • Insurance companies and securities companies must have 30 years experience and a minimum share capital of USD 1bn. • Banks must be among the world’s 100 largest banking institutions. In addition to the above provisions are regulations restricting the repatriation of funds. Closed investment funds may only withdraw capital after a period of 3 years (!), open funds after one year. Furthermore, at least 70% of all investments must be in shares. The upper limit for an equity participation by an individual foreign investor is 10% of the share capital. Foreigners may control no more than 20% of a company. A-MARKETS LESS ATTRACTIVE In our opinion, this opening will only attract funds very slowly. A solution for the administrative difficulties as well as the issue of the repatriation of funds can hardly be expected at such short notice. Given the valuation of the indi- vidual markets, foreign investors are most likely to show constraint (please see our Investment Idea of 13 Novem- ber for further information). Some H-shares are also listed in Shanghai or Shenzhen and show considerably lower valuations. The reason for this is that Chinese investors are not permitted to make foreign investments and have thus vastly pushed up the value of those stocks to which they do have access. This rule might be redressed by the QDII program under discussion, but this will require some time. First of all, however, important questions such as the exodus of capital and the convertibility of the Chinese currency must be resolved. H-SHARES AND RED CHIPS MORE ATTRACTIVE The QDII-Programme could trigger a flow of investments out of the A-shares and into the low-priced H-shares and Red Chips. For this reason we continue to favor selected stocks from these categories. We have recently downgraded our country rating to neutral due to the change in leadership and accompanying uncertainty with re- spect to the path of reform. For further information, please see our Investment Idea of 4 November, “China's 16th Communist Party Congress”. Stock Market Overview – Weekly Update. CREDIT SUISSE PRIVATE BANKING 8
  • 9. 18 November 2002 STRUCTURED PRODUCTS Derivatives & Structured Products NEW TORERO (TITLE OR EXTRA RETURN) CERTIFICATE ON NOKIA OYJ BEARER SHARE SEC. NO. UNDERLYING CURRENCY REDEMPTION SPOT PRICE ISSUE PRICE MAX. RETURN CAP LEVEL 1518219 Nokia OYJ EUR June 4, 2003 EUR 15.841 EUR 15.841 39%1 EUR 18.931 TORERO (TITLE OR EXTRA RETURN OPTION) is a structured product issued by Credit Suisse First Boston. It is attractive for investors looking for an alternative to a direct investment in equities and who expect a positive per- formance by the underlying share. Depending on the closing level at maturity, the investor may receive the shares, and is thus exposed to the underlying share risk. The TORERO is based on the performance of the underlying Nokia OYJ Bearer Share. If the underlying share closes above EUR 15.841 at maturity, the return will be double the positive performance of the underlying share, but only to the cap level. If the underlying share closes above EUR 18.931 at maturity, no additional return will be earned. The underlying share must rise above EUR 21.751 in order that a direct investment in the Credit Suisse Group reg. share would achieve a better performance. Subscriptions to the TORERO can be made until 22 November 2002. The conditions of the TORERO will be set on 22 November 2002, after the end of the subscription period. 1 The conditions are indicative FIG. 1: PAYOFF AT MATURITY: CERTIFICATE VS. SHARE CHF 10 Cap level 8 Performance 2:1 6 Break-even: 4 CHF 15.84 Outperformance point 2 CHF 21.75 0 -2 -4 12 14 16 18 20 22 24 CHF Source: CSPB Stock Market Overview – Weekly Update. CREDIT SUISSE PRIVATE BANKING 9
  • 10. 18 November 2002 KEY EVENTS 18.–22.11.2002 EUROPE COMPANY DATE EVENT COMMENT • Air France 18.11 1H02 For the first half-year (April-September), we expect an operating profit (EBIT) of EUR Sec. no. 62461 earnings 232m (-13% yoy). Air France remains our Top Pick in the airline sector. BUY Bloomberg AF FP • MAN 19.11 3Q02 The ongoing weakness in the commercial vehicles business in Europe should have a Sec. no. 340813 sales negative impact on MAN’s figures. Important factors: outlook for the entire year, fore- Bloomberg MAN GR cast performance for commercial vehicles, printers 2003, information concerning mar- gin performance. BUY • mmO2 19.11 1H02 Forecast: sales + 6.7% to GBP 2.32bn, EBITDA +22.1% to GBP 364m, net loss of Sec. no. 1292397 GBP 489m. Growth in client base of 3.3% to 18.04m, ARPU: increase of between Bloomberg 00M LN 2% in Ireland und 4.7% in the UK. The performance in Germany should be of particu- lar interest. Breaking even in terms of EBITDA would be a very positive sign. BUY • TotalFinaElf 19.11 3Q02 Consensus net income and operating income range is between EUR 1.5 – 1.7bn and Sec. no. 524773 EUR 2.7 – 3.2bn respectively. Reflecting the significant decline in refining margins and Bloomberg FP FP exchange rate variances, we would expect downstream earnings to fall between 40% - 50%. Overall, earnings should be strong when compared to sector peers. BUY • Technip-Coflexip 20.11 3Q02 This will be the first time that the company reports on a quarterly basis. For this reason Sec. no. 289911 there will be limited data allowing for yoy comparisons. Sequentially, we would expect Bloomberg TEC FP to see stronger reported net income. HOLD • Swisscom 21.11 3Q02 We do not expect any significant surprises. 9-month forecast: sales + 2.2% to CHF Sec. no. 874251 10.8bn (Q3 +2% yoy to CHF 3.69bn); EBITDA +/- 0% to CHF 3.43bn (Q3 + 4.8% Bloomberg SCMN VX qoq to CHF 1.15bn); lower goodwill amortisation should lead to an above-average in- crease in EBIT (+5.3% to CHF 1.94bn), net profit – 78.7% to CHF 1.22bn. BUY • ING 21.11 3Q02 Q3 2002: net profit: EUR 950m; EPS: EUR 0.49. Sec. no. 1256533 9M 2002: net profit: EUR 3.3bn; EPS: EUR 1.71. Bloomberg INGA NA We will reassess our rating when the company publishes its quarterly results. BUY • Fortis 22.11 3Q02 Q3 2002: net profit: EUR 470m; EPS: EUR 0.10. Sec. no. 1313410 9M 2002: net profit: EUR 1.6bn; EPS: EUR 1.24. Bloomberg FORB BB We will reassess our rating when the company publishes its quarterly results. BUY USA COMPANY DATE EVENT COMMENT • Medtronic Inc. 18.11 2Q02 Expect 34 cents vs. 29 cents. Sec. no. 950980 Bloomberg MDT US • Deere & Co. 19.11 4Q02 Expect 14 cents vs. 45 cents loss. Sec. no. 924235 Bloomberg DE US • Home Depot Inc. 19.11 3Q02 Expect 40 vs. 33 cents. Sec. no. 939360 Bloomberg HD US • Hewlett-Packard 20.11 4Q02 Expect 22 vs. 8 cents. Sec. no. 938718 Bloomberg HPQ US Stock Market Overview – Weekly Update. CREDIT SUISSE PRIVATE BANKING 10
  • 11. 18 November 2002 RATING CHANGES (SEIT 04.10.2002) STOCK SECURITY NUMBER NEW RATING OLD RATING DATE OF CHANGE TELEFONICA 826858 HOLD BUY 15.11.2002 DEUTSCHE TELEKOM 1026592 HOLD BUY 15.11.2002 BALLARD POWER SYS 90037 HOLD BUY 13.11.2002 CABLE & WIRELESS 102157 SELL HOLD 13.11.2002 AXA 486352 HOLD BUY 12.11.2002 KELLOG 944624 BUY HOLD 12.11.2002 SONERA 955149 SELL HOLD 11.11.2002 BON APPETIT GRP R 1222130 HOLD BUY 11.11.2002 VALORA 208897 BUY HOLD 11.11.2002 AGF 201655 HOLD BUY 08.11.2002 KPN 1076509 HOLD BUY 07.11.2002 DIAGEO 837159 BUY HOLD 07.11.2002 TDC 811010 BUY HOLD 07.11.2002 BRITISH AIRWAYS 374255 SELL HOLD 06.11.2002 TOYOTA MOTOR CORP. 763969 BUY HOLD 05.11.2002 SHIRE PHARMA GRP 434895 SELL HOLD 04.11.2002 ATLAS COPCO 613220 HOLD BUY 01.11.2002 GOODYEAR T. & RUBBER 935430 SELL HOLD 01.11.2002 DEUTSCHE POST R 1124244 SELL HOLD 01.11.2002 VOLKSWAGEN 352780 HOLD BUY 30.10.2002 QUALCOMM 964930 SELL HOLD 28.10.2002 JDS UNIPHASE 827665 SELL HOLD 28.10.2002 INCO LTD 690803 BUY HOLD 25.10.2002 HCA 1088772 BUY HOLD 25.10.2002 AGUAS DE BARCELONA 830287 HOLD BUY 24.10.2002 CLARIANT R 1214263 SELL HOLD 23.10.2002 SMEDVIG -A- 599242 SELL HOLD 23.10.2002 MUNICH RE 341960 HOLD BUY 23.10.2002 TAIWAN SEMICON 279330 HOLD BUY 23.10.2002 EMC 926696 HOLD BUY 22.10.2002 AKZO NOBEL 857349 BUY HOLD 21.10.2002 EMS CHEM. HLD. AG 50 158703 SELL HOLD 21.10.2002 BAYER 324230 BUY HOLD 21.10.2002 FORD MOTOR 1106820 HOLD BUY 18.10.2002 TXU 1085401 SELL HOLD 17.10.2002 LOCKHEED MARTIN 351011 BUY HOLD 17.10.2002 GUCCI GROUP NV 416902 HOLD BUY 16.10.2002 ASTRAZENECA 982352 HOLD SELL 14.10.2002 ALTANA 322750 BUY HOLD 14.10.2002 UNITED PARCEL SVC-B 1016553 HOLD BUY 11.10.2002 AMR CORP. 907616 HOLD BUY 11.10.2002 ABN AMRO 603768 HOLD BUY 11.10.2002 BNP PARIBAS 123397 HOLD BUY 11.10.2002 SOCIETE GENERALE 519928 HOLD BUY 11.10.2002 BT GROUP 1292393 HOLD BUY 10.10.2002 MONTE PASCHI SIENA 812797 HOLD BUY 10.10.2002 SULZER R 237645 SELL HOLD 08.10.2002 SKANDIA FOERSAEKRI. 613808 SELL HOLD 04.10.2002 INVENSYS 405440 SELL HOLD 04.10.2002 ABB 1222171 HOLD BUY 04.10.2002 ALSTOM 915027 SELL HOLD 04.10.2002 MANULIFE 1002859 HOLD BUY 04.10.2002 ROYAL BANK OF CANADA 699232 HOLD BUY 04.10.2002 SUN LIFE FINANCIAL 1053952 HOLD BUY 04.10.2002 SOURCES Ratings: CS Group Prices: Telekurs, Bloomberg Charts: Datastream, Bloomberg Earnings estimates: CS Group/IBES Stock Market Overview – Weekly Update. CREDIT SUISSE PRIVATE BANKING 11
  • 12. 18 November 2002 BEST PERFORMERS OF THE WEEK (AS OF 14.11.2002) SECTORS PRICE PERF. PERF. PERF. PERF. P/E P/E P/B USD 1W 1M 3M 1Y 01 02 LATEST MSCI The World Index / Household & Personal Product89.20 -1.37 -3.54 -4.53 1.77 27.19 24.51 6.81 MSCI The World Index / Retailing -IG 80.93 -2.00 3.00 2.61 -15.35 20.20 17.75 3.33 MSCI The World Index / Real Estate -IG 84.63 -2.27 1.62 -6.63 -10.80 17.17 16.20 0.97 MSCI The World Index / Food Beverage & Tobacco -IG 79.74 -2.67 -2.71 -7.56 -6.90 17.47 15.70 3.85 MSCI The World Index / Transportation -IG 77.62 -2.73 2.13 -3.69 -3.65 18.89 15.13 1.80 COUNTRIES PRICE PERF. PERF. PERF. PERF. P/E P/E P/B USD 1W 1M 3M 1Y 01 02 LATEST MSCI Argentina 400.78 4.56 3.24 6.41 111.43 #NV 8.13 #NV MSCI Turkey 128.78 4.13 34.44 21.12 17.29 9.09 5.29 #NV MSCI Russia 275.22 2.63 5.04 7.72 19.33 6.62 6.69 #NV MSCI Peru 163.15 2.22 9.35 9.54 25.27 6.87 5.78 #NV MSCI Poland 343.41 0.65 6.79 10.73 -9.85 15.39 10.79 #NV SECURITIES WORLD PRICE PERF. PERF. PERF. PERF. P/E P/E P/B COUNTRY USD 1W 1M 3M 1Y 01 02 LATEST ERICSSON(LM)TEL SWEDEN 1.05 25.21 124.06 61.02 -71.77 #NV #NV 1.52 BAXTER INTERNATIONAL INC UNITED STATES 29.98 16.43 2.18 -15.55 -37.54 15.07 13.32 4.78 CISCO SYSTEMS INC UNITED STATES 14.00 13.36 40.14 -2.44 -29.61 25.45 22.58 3.40 VODAFONE GROUP UNITED KINGDOM 1.84 12.93 23.67 26.70 -29.53 #NV #NV 0.61 HOUSEHOLD INTERNATIONA UNITED STATES 27.50 12.66 -2.00 -27.80 -54.84 6.17 6.38 1.41 SECURITIES EUROPE PRICE PERF. PERF. PERF. PERF. P/E P/E P/B COUNTRY EUR 1W 1M 3M 1Y 01 02 LATEST RIVERDEEP GROUP IRELAND 1.25 47.06 19.05 -60.32 -70.79 #NV #NV 1.25 GEN CONSTR COMPANY GREECE 4.98 33.16 51.83 -5.32 -43.15 8.16 7.01 1.14 ERICSSON(LM)TEL SWEDEN 1.05 25.66 124.10 63.83 -75.16 #NV #NV 1.52 ASPIS PRONIA GEN I GREECE 1.43 15.32 16.26 -26.29 -72.71 #NV #NV 0.59 HOLCIM SWITZERLAND 181.39 13.36 23.09 -2.95 -20.70 13.85 11.76 1.36 WORST PERFORMERS OF THE WEEK (AS OF 14.11.2002) SECTORS PRICE PERF. PERF. PERF. PERF. P/E P/E P/B USD 1W 1M 3M 1Y 01 02 LATEST MSCI The World Index / Consumer Durables & Apparel 76.22 -7.33 1.56 -10.81 -15.64 18.59 15.24 1.54 MSCI The World Index / Diversified Financials -IG 90.80 -6.85 8.11 -3.91 -27.48 12.27 10.46 1.95 MSCI The World Index / Capital Goods -IG 78.11 -5.75 3.57 -12.62 -26.88 15.91 14.03 2.04 MSCI The World Index / Insurance -IG 62.20 -5.74 4.30 -5.52 -32.26 15.28 11.35 1.47 MSCI The World Index / Commercial Services & Supplie71.31 -5.33 3.48 -7.52 -24.71 18.59 16.00 3.15 COUNTRIES PRICE PERF. PERF. PERF. PERF. P/E P/E P/B USD 1W 1M 3M 1Y 01 02 LATEST MSCI Germany 737.79 -6.67 4.96 -16.08 -37.47 17.64 12.33 1.18 MSCI Netherlands 1254.23 -5.75 1.22 -10.04 -33.05 15.35 12.76 2.18 MSCI Japan 1553.45 -5.60 -1.61 -12.55 -16.71 23.71 18.55 1.34 MSCI France 871.03 -5.29 3.85 -9.43 -32.29 18.66 13.92 1.82 MSCI North America 884.29 -4.55 5.79 -0.61 -22.94 17.96 15.34 2.55 SECURITIES WORLD PRICE PERF. PERF. PERF. PERF. P/E P/E P/B COUNTRY USD 1W 1M 3M 1Y 01 02 LATEST TENET HEALTHCARE CORP UNITED STATES 15.56 -44.33 -68.25 -67.38 -59.48 5.24 4.51 1.22 UFJ HOLDINGS JAPAN 930.16 -34.41 -38.80 -57.41 -74.12 11.23 5.25 0.56 MIZUHO HLDGS JAPAN 1013.20 -32.85 -29.89 -51.97 -58.79 21.15 10.80 0.41 MURATA MFG CO JAPAN 37.37 -27.24 -16.67 -33.23 -41.81 27.90 22.50 1.51 SUMITOMO MITSUI BK JAPAN 3.01 -22.08 -30.12 -40.46 -42.25 37.32 13.12 1.28 SECURITIES EUROPE PRICE PERF. PERF. PERF. PERF. P/E P/E P/B COUNTRY EUR 1W 1M 3M 1Y 01 02 LATEST CABLE & WIRELESS UNITED KINGDOM 1.17 -46.47 -41.95 -48.68 -80.10 #NV #NV 0.20 CORUS GROUP UNITED KINGDOM 0.43 -43.06 -33.10 -46.04 -55.25 #NV 3.10 0.30 PAN FISH ASA NORWAY 0.17 -31.60 -57.87 -69.42 -92.91 #NV 1.75 0.18 INVENSYS UNITED KINGDOM 0.74 -31.47 -17.47 -26.54 -42.95 15.33 9.18 11.36 NUMICO (KON) NV NETHERLANDS 12.07 -21.42 -3.13 -44.12 -52.44 28.74 16.76 0.88 Source: IBES, FactSet Stock Market Overview – Weekly Update. CREDIT SUISSE PRIVATE BANKING 12
  • 13. 18 November 2002 GENERAL DISCLAIMER This document may not be made available or distributed in the United States, in certain other jurisdictions the distribution may be restricted by local law or regulation. This document was produced by and the opinions expressed are those of CREDIT SUISSE PRIVATE BANKING (CSPB) as of the date of writ- ing and are subject to change. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of CSPB to any person to buy or sell any security. Any reference to past performance is not necessarily a guide to the future. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable but CSPB does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof. The issuer of the securities re- ferred herein or a CSG company may have acted upon the information and analysis contained in this publication before being made available to clients of CSPB. A CSG company may, to the extent permitted by law, participate or invest in other financing transactions with the issuer of the securities referred herein, perform services or solicit business from such issuers, and/or have a position or effect transactions in the securities or options thereof. Derivative or structured products are complex instruments, typically involve a high degree of risk and are intended for sale only to investors who are capable of understanding and assuming the risks involved. Investments in Emerging Markets are speculative and considerably more volatile than investments in es- tablished markets. Some of the main risks are Political Risks, Economic Risks, Credit Risks and Market Risks. If you like to know more about those risks please ask your personal advisor. This document may not be reproduced either in whole, or in part, without the written permission of CSPB.  2002, CSPB Stock Market Overview – Weekly Update. CREDIT SUISSE PRIVATE BANKING 13

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