Fincor- Sociedade Corretora, S.A. provides brokerage services including receiving, executing, and transmitting orders, but the document does not constitute investment advice. Germany's constitutional court approved further funding for the ESM bailout fund up to €190 billion, requiring parliamentary approval for higher amounts. Greece needs to implement additional austerity measures of €11.5 billion to receive further aid from the Troika.

1. Weekly
September 17th, 2012
.
Fincor- Sociedade Corretora, S.A. provides services of reception, execution, and transmission of orders. The contents mentioned in this document do not
constitute (nor should they be interpreted as to form) any kind of counseling, or investment recommendation, or a record of our trading prices, or an
offer or solicitation to trade in any financial instrument. Fincor- Sociedade Corretora, S.A. will not accept any responsibility resulting from any use referring to
said content or about any resulting effect that could have occurred.

2. Germany’s Constitutional Commitment – a word missing
Court the Greek dictionary
-The Court approved the participation of the -Greece needs to implement additional austerity
country on the funding of ESM, with a limit of measures of €11.5B. The Troika is evaluating its
€190B. efforts and policies. Without its approval, Greece
won’t receive the next aid.
-For a bigger amount, it will have to approved on
the Parliament. -Negotiations aren’t over about the measures to
take, as the Hellenic Government wants to smooth
them.

3. Spain – a Bailout will be A Banking Union in Europe?
needed to the Public Sector Guess who is opposing…
-A previous bailout was asked for its Banking -The Finance Ministers of the Regions met in
System. Now, Spain is expecting the results of the Nicosia, where the issue was discussed. The main
audits to the Banks. divergences comes from France VS Germany –
where the first intends to give permission to the
-For the public sector the Government hasn’t took a Bailout Funds to rescue banks.
decision. The Government is trying to gain time
while the costs of funding are falling, due to the
announcement of the OMT by the ECB.
2Y Bond Yields: Spain
7,00%
6,64%
6,00%
5,00%
4,00%
3,00%
2,00%
Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12

4. QE3 – I’m back!
-The FED announced that its Committee
approved QE3 in an 11-1 vote.
-$40B of Mortgage Backed Securities (MBS) will
be bought monthly and on indefinitely period,
until the economy starts giving signs of
recovering.
-FED’s Mandates are price stability and
maximum employment. Due to that it will
follow closely the latter. More boost measures
can be applied if the economy continues
growing at a slow pace.
-Interest Rates will be maintained at these low
levels until at least 2015. TWIST operation will
continue at the same time of MBS.

5. US – Mixed economic data from the country
U. Michigan Consumer Confidence Industrial Production MoM
85 0,86% 0,82%
0,59% 0,68%
80 0,48% 0,54%
74,3 0,21% 0,19% 0,14%
75 0,03%
70
65
60 -0,60%
55
-1,16%
50

6. Innovation = Apple
-The company launched last Wednesday in San Francisco the iPhone 5. A taller, thinner, with a faster chip
then the previous. Better features on your camera, a longer battery life and a 4G LTE will increase the data
functioning of the phone. Will this launch be enough to sustain new rises on the stock’s price.

7. Rest of the world- Geopolitical tensions are rising
-In the Arab World protests are growing against
the US. The ambassador of the country in Libya
was assassinate.
-Israel Prime Minister said Iran’s efforts to
develop a nuclear weapon is now at a “Red
Zone”.
-Territorial dispute over the Senkaku Islands is
increasing tensions between China and Japan.

8. Portugal
Troika Mission in the country was concluded:
- Real GDP remains in line with projections. Real GDP should decline 3% in 2012 and 1% in 2013.
- Exports are performing better than expected.
- The deficit targets were revised to 5% of GDP (2012), 4,5% of GDP (2013) and 2,5% of GDP (2014), in
order to ease the economic and social cost of fiscal adjustment.
- Additional consolidation efforts are required
The Government presented new austerity measures. Some of them were:
- Employees' social security contributions will increase from 11% to 18%.
- An increase in corporate taxes for large corporations and on the tax burden for wealthy individuals (No
details).
- An increase in the taxation over capital gains, from 25% to 26,5%.
BCP Rights Issue:
- The Rights started trading last Friday, and will continue until September 24th.

9. Weekly Preview
Europe From Europe we should continue be focused
on the sovereign crisis in the region. We are
still waiting for a report from Troika about
Greece while it is negotiating measures of
€11,5B. Spain is another important issue,
while we markets expect that the country will
have to ask for a bailout and we wait for the
Audit Results to the Banking Sector. In
Germany will be published the ZEW and PMI
Manufacturing.
US We should follow closely the Markets
performance after the QE3. S&P500 is S&P500
already at levels unseen since 2007. Will this 1800
program bring any consequences to the 1600
Financial Markets? Manufacturing and real- 1400
1200
estate data will be published during the
1000
week. 800
Rest of From China, we are still expecting new 600
400
the stimulus measures for the economy. We 200
should follow closely the disputes between
World the country and Japan and the Middle East.
0
J-93
J-95
J-97
J-98
J-99
J-01
J-02
J-03
J-05
J-06
J-07
J-09
J-10
J-11
J-92
J-94
J-96
J-00
J-04
J-08
J-12

10. Weekly Preview
Market view
ECB and FED actions reduced market risk premium, we remain positive for risk asset. Altough central banks
are doing their jobs, there are still several risks for the markets that can prompt risk assets to fall. As PIMCO’s
El-Erian said, a Geopolitical conflict, the Fiscal Cliff in US, the sovereign crisis from Europe and an economic
slowdown from China are the major risks.
Vicious Cycle of Europe. We are currently on level 2.
Put Call Ratio CBOE 2Y Government Bond Yields
1,2 7,00%
1 6,00%
5,00%
0,8
4,00%
0,6 Sprea d of
3,00%
Spain over
0,4 Germa ny
2,00%
0,2
1,00%
0
1-3-12 2-3-12 3-3-12 4-3-12 5-3-12 6-3-12 7-3-12 8-3-12 9-3-12

11. Weekly Preview
i) Ideas for the week: Portugal
BES vs BCP: Reasons to buy:
-Operations: BCP is the bank with the biggest retail operations in Portugal. As the Government presents new
austerity measures and the outlook of the economy continues to deteriorate, the Bank should continue to
be pressed by the NPLs increase.
Balance Sheet Ratios
BCP BES
Q1 2012 Q2 2012 Q1 2012 Q2 2012
NPL / Total Loans 9,3% 10,9% 6,8% 7,5%
Source: Bloomberg
-In a multiple valuation, BES continues to be more attractive then BCP, having an estimate Price-to-Book of
0,3 for 2013 while BCP has 0,52.
-Technical’s gives us a buy signal for BES and a sell for BCP.
-Capital Increase: BES was the only Portuguese Bank that didn’t have to resort to a capital injection from the
state. There is the risk in BCP of the State becoming a reference Shareholder on the back of the capital
increase (less likely) or CoCos (more likely). There is a lot of uncertainty in BCP regarding the current
shareholder structure and who is going to the capital increase. We think that it will be needed a strong
investment from retail s or eventually new reference shareholders to fulfill the capital increase, which will
place a downward pressure over the rights price.