Energy 120503


Published on

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Energy 120503

  1. 1. Global StrategyEquity Research Asia Oil & Gas Sector StrategyMay 3, 2012 1Q12: Upstream in Sweet SpotS&P 2012 GDP ESTIMATES:China: 7.7%-8.2% PetroChina and CNOOC Ltd clear 1Q12 winners. Since CNOOC Ltd kicked winners .Hong Kong: 2.5%-3.0% off the 1Q12 earnings season for the Chinese energy players on April 24,India: 6.8%-7.3% both the company and PetroChina have outperformed, gaining 5.1% andIndonesia: 6.0%-6.5% 4.5% respectively, vs. the HSIs 3.1% gain over the same period. Sinopec, onJapan: 1.5%-2.0% the other hand, only gained 2.5%, as investors piled into the more upstream-Korea: 2.8%-3.3% centric counters.Malaysia: 4.4%-4.9%Singapore: 2.0%-2.5% Strong upstream performance in the mainland.. . Both PetroChina and mainland... Sinopec reported strong upstream gains in 1Q12. PetroChina saw a 6.1%Taiwan: 2.3%-2.8% YoY increase in output, matching the pace it set in 4Q11, which is the fastestThailand: 3.5%-4.0% pace since 3Q08. Much of PetroChina’s increased output 1Q12 was driven byU.S.: 2.1% gas production, which increased by 11.2% YoY. Taking a cue from 4Q11, theEurozone: 0.0% bulk of PetroChina’s oil equivalent output growth was from its mainland operations (+19 mmboe QoQ), while overseas production, mainly from its2012 INDEX TARGETS: Iraqi Rumaila and Halfaya projects, grew by 3 mmboe QoQ. Sinopec,S&P 500: 1,450 meanwhile, saw a strong 4.2% YoY production growth for its crude oil, whileS&P Euro 350: 1,170 gas production was up by 11.8% YoY. Again, mainland production was a bigS&P Asia 50: 3,500 contributor to production growth; in Sinopec’s case, more than 60% of its QoQ production growth was from domestic sources. … while offshore production contract ed (again) . CNOOC Ltd, China’s only contracted (again). offshore E&P operator, reported its fifth straight QoQ decline in production, due to the continued shutdown of China’s largest offshore oilfield, Penglai (PL) 19-3. With its crude being benchmarked to Asian crudes Tapis, MinasEnergy and Duri, which saw its spread vs. Brent widen significantly in 1Q12 due to supply disruptions from Sudan & Australia (both major suppliers to Asian markets), it was no surprise that CNOOC Ltd maintained a +3.7% YoYOil & Gas unaudited revenue growth despite the contraction in production. CNOOC Ltd’s crude oil price premium vs. PetroChina and Sinopec widened toOverweight USD14-USD15/bbl, vs. historical range of USD4-USD8/bbl. We expect PL19-3 to resume production in 2H12, which will, in part, help push production back into positive growth territory especially in 2H12. According to operator ConocoPhillips’ April 5 statement, production at PL19- 3 has restarted at 40kbpd under an “approved interim reservoir management Halim,Ahmad Halim, CFA plan”. We also view the recent CNY2.28 bln settlement by both CNOOC LtdEquity Analyst and ConocoPhillips under an agreement with China’s State Oceanic Administration as positive steps toward a resolution of the oil spill incident and the eventual resumption in activities. Shifting preference to upstream . Following 1Q12 results, we have affirmed our preference for the upstream-centric companies, by raising our call on CNOOC Ltd to 5-STARS (Buy), with a higher 12-month target price of HKD20, while we have also cut Sinopec a notch to 3-STARS (Hold), with a lower target price of HKD9. Our call and 12-month target price for PetroChina remains unchanged at 4-STARS (Buy) and HKD13, respectively. This report is for information purposes and should not be considered a solicitation to buy or sell any security.Standard & Poor’s Neither Standard & Poor’s nor any other party guarantees its accuracy or makes warranties regarding resultsEquity Research Services from its usage. Redistribution is prohibited without written permission. Copyright © 2012. All required17th Floor, Prudential Tower d i s c l o s ur e s a nd an a l y st c er t if i c a t io n ap p e ar s o n t he la s t 3 p a g e s of t h i s r epo r t . A dd i t io n a l i nf or m a t io n i s30 Cecil Street, Singapore a v a i l a b le on r eq u e st .
  2. 2. May 3, 2012 Global Strat egy Select Integrated Oil & Gas and E&P Performance and Key Capital IQ Consensus Ratios as at May 2, 2012 2, 2 Price Performance PER (x) PAT Growth Trading Share Market Cap Company Name CIQ Ticker Ccy Price (USD mln) 1 Mth 3 Mths 6 Mths FY2012 FY2013 FY2012 FY2013 Mth Integrated O&G Exxon Mobil Corporation NYSE:XOM USD 86.20 405,352 -1.0% 3.2% 11.4% 10.4x 9.7x -6.4% 4.5% PetroChina Co. Ltd. SEHK:857 HKD 11.72 291,996 6.9% 0.9% 16.7% 11.1x 10.4x 9.6% 3.7% Royal Dutch Shell plc LSE:RDSA GBP 21.76 227,235 -1.9% -3.9% 0.5% 7.7x 7.2x -12.4% 7.1% Chevron Corporation NYSE:CVX USD 107.03 211,135 -1.2% 3.2% 2.4% 8.0x 7.8x -1.8% 1.9% BP plc LSE:BP. GBP 4.34 133,375 -8.0% -9.2% -4.2% 6.4x 6.0x -20.4% 4.9% China Petroleum & Chemical Corp. SEHK:386 HKD 8.34 99,486 -1.0% -13.4% 10.9% 7.7x 7.0x 1.0% 15.7% ConocoPhillips NYSE:COP USD 54.59 69,858 -29.0% -21.9% -21.0% 6.9x 6.6x -24.3% 0.2% PTT Public Co. Ltd. SET:PTT THB 359.00 33,212 0.6% 5.0% 20.5% 8.7x 7.7x 11.2% 14.0% Average -4.32% -4.53% 4.66% 8.4x 7.8x -5.4% 6.5% Exploration & Production (E&P) CNOOC Ltd. SEHK:883 HKD 16.78 96,568 5.8% 0.8% 11.3% 8.7x 8.7x -0.4% 0.7% Statoil ASA OB:STL NOK 152.20 84,241 -2.7% 2.1% 8.6% 8.5x 8.0x -29.8% 4.2% Suncor Energy Inc. TSX:SU CAD 32.24 50,817 -2.9% -5.9% 1.4% 9.4x 8.7x 22.7% 13.7% Apache Corp. NYSE:APA USD 95.54 36,730 -5.4% -4.0% -2.9% 7.6x 6.8x 10.7% 15.8% Anadarko Petroleum Corporation NYSE:APC USD 72.90 36,418 -7.8% -11.3% -9.8% 16.6x 13.5x NM 23.8% Woodside Petroleum Ltd. ASX:WPL AUD 36.66 31,111 3.7% 7.3% 0.8% 15.9x 13.5x 26.7% 20.3% PTT E&P Public Company Limited SET:PTTEP THB 179.00 19,248 1.4% 1.7% 15.1% 10.9x 8.9x 18.3% 24.4% Hess Corporation NYSE:HES USD 54.04 18,240 -9.3% -6.5% -10.6% 8.3x 6.8x 28.9% 25.2% Average -2.15% -1.96% 1.74% 10.7x 8.8x 11.0% 16.0% EV/EBITDA PBV ROE Gross Margin Div Yield Company Name FY2012 FY2013 FY2012 FY2013 FY2012 FY2013 FY2012 FY2013 FY2012 FY2013 Integrated O&G Exxon Mobil Corporation NYSE:XOM 4.7x 4.5x 2.4x 2.2x 22.6% 21.5% 42.70% 44.30% 2.43% 2.62% PetroChina Co. Ltd. SEHK:857 6.0x 5.6x 1.6x 1.5x 14.5% 14.4% 37.40% 47.05% 4.03% 4.32% Royal Dutch Shell plc LSE:RDSA 3.9x 3.7x 1.2x 1.1x 15.9% 15.3% NA NA 4.84% 5.00% Chevron Corporation NYSE:CVX 3.3x 3.2x 1.5x 1.4x 20.4% 18.8% 44.30% 45.90% 3.23% 3.35% BP plc LSE:BP. 3.6x 3.7x 1.1x 1.0x 17.5% 16.9% 18.80% 19.70% 4.63% 5.10% China Petroleum & Chemical Corp. SEHK:386 4.8x 4.3x 1.1x 1.0x 15.7% 15.0% 16.89% 17.28% 3.93% 4.23% ConocoPhillips NYSE:COP 3.5x 3.4x 1.2x 1.1x 14.3% 15.2% 27.30% 28.60% 5.00% 5.39% PTT Public Co. Ltd. SET:PTT 6.0x 5.3x 1.6x 1.4x 19.7% 19.6% 9.42% 10.28% 3.93% 4.39% Average 4.5x 4.2x 1.5x 1.3x 17.6% 17.1% 28.11% 30.44% 4.00% 4.00% 4.30% Exploration & Production (E&P) CNOOC Ltd. SEHK:883 4.3x 4.3x 2.0x 1.7x 24.6% 21.1% 62.67% 61.45% 3.62% 3.75% Statoil ASA OB:STL 2.1x 2.1x 1.6x 1.4x 18.8% 18.0% 47.33% 45.93% 4.45% 4.68% Suncor Energy Inc. TSX:SU 4.8x 4.3x 1.2x 1.0x 13.5% 12.6% 60.80% 62.60% 1.47% 1.58% Apache Corp. NYSE:APA 3.3x 3.0x 1.1x 1.0x 15.8% 15.4% 79.30% NA 0.68% 0.69% Anadarko Petroleum Corporation NYSE:APC 5.2x 4.7x 1.7x 1.5x 12.5% 12.2% 71.30% NA 0.50% 0.50% Woodside Petroleum Ltd. ASX:WPL 8.7x 7.5x 2.1x 1.9x 14.5% 16.1% 74.25% 74.30% 3.36% 3.79% PTT E&P Public Company Limited SET:PTTEP 4.9x 4.0x 2.4x 2.1x 24.3% 24.9% 52.42% 52.44% 3.56% 4.36% Hess Corporation NYSE:HES 3.2x 2.9x 0.9x 0.8x 11.3% 11.7% 36.30% 37.60% 0.77% 0.77% Average 4.6x 4.6 x 4.1x 1.6x 1.4x 16.9% 16.5% 60.55% 55.72% 2.30% 2.51% Source: S&P Capital IQ Standard & Poor’s Equity Research
  3. 3. May 3, 2012 Global Strat egy S&P 12 Month Target Price – The S&P Capital IQ equity analyst’s projection of theGlossary market price a given security will command 12 months hence, based on a combination of intrinsic, relative, and private market valuation metrics, including 3 S&P Fair Value.S&P STARS - Since January 1, 1987, S&P Capital IQ Equity Research has ranked a S&P Capital IQ Equity Research – S&P Capital IQ Equity Research U.S. includesuniverse of U.S. common stocks, ADRs (American Depositary Receipts), and ADSs Standard & Poor’s Investment Advisory Services LLC; Standard & Poor’s Equity(American Depositary Shares) based on a given equity’s potential for future Research Services Europe includes McGraw-Hill Financial Research Europe Limitedperformance. Similarly, S&P Capital IQ Equity Research has used STARS® trading as Standard & Poor’s; Standard & Poor’s Equity Research Services Asiamethodology to rank Asian and European equities since June 30, 2002. Under includes McGraw-Hill Financial Singapore Pte. Limited’s offices in Singapore,proprietary STARS (STock Appreciation Ranking System), S&P equity analysts rank Standard & Poor’s Investment Advisory Services (HK) Limited in Hong Kong,equities according to their individual forecast of an equity’s future total return Standard & Poor’s Malaysia Sdn Bhd, and Standard & Poor’s Information Servicespotential versus the expected total return of a relevant benchmark (e.g., a regional (Australia) Pty Ltd.index (S&P Asia 50 Index, S&P Europe 350® Index or S&P 500® Index)), based on a12-month time horizon. STARS was designed to meet the needs of investors looking Abbreviations Used in S&P Capital IQ Equity Research Reportsto put their investment decisions in perspective. Data used to assist in determining CAGR- Compound Annual Growth Ratethe STARS ranking may be the result of the analyst’s own models as well as internal CAPEX- Capital Expendituresproprietary models resulting from dynamic data inputs. CY- Calendar Year DCF- Discounted Cash FlowS&P Quality Rankings (also known as S&P Earnings & Dividend Rankings)- Growth EBIT- Earnings Before Interest and Taxesand stability of earnings and dividends are deemed key elements in establishing EBITDA- Earnings Before Interest, Taxes, Depreciation and AmortizationS&P’s earnings and dividend rankings for common stocks, which are designed to EPS- Earnings Per Sharecapsulize the nature of this record in a single symbol. It should be noted, however, EV- Enterprise Valuethat the process also takes into consideration certain adjustments and modifications FCF- Free Cash Flowdeemed desirable in establishing such rankings. The final score for each stock is FFO- Funds From Operationsmeasured against a scoring matrix determined by analysis of the scores of a large FY- Fiscal Yearand representative sample of stocks. The range of scores in the array of this sample P/E- Price/Earningshas been aligned with the following ladder of rankings: PEG Ratio- P/E-to-Growth RatioA+ Highest B- Lower PV- Present ValueA High C Lowest R&D- Research & DevelopmentA- Above Average D In Reorganization ROE- Return on EquityB+ Average NR Not Ranked ROI- Return on InvestmentB Below Average ROIC- Return on Invested Capital ROA- Return on AssetsS&P Issuer Credit Rating - A Standard & Poor’s Issuer Credit Rating is a current SG&A- Selling, General & Administrative Expensesopinion of an obligor’s overall financial capacity (its creditworthiness) to pay its WACC- Weighted Average Cost of Capitalfinancial obligations. This opinion focuses on the obligor’s capacity and willingnessto meet its financial commitments as they come due. It does not apply to any specific Dividends on American Depository Receipts (ADRs) and American Depositoryfinancial obligation, as it does not take into account the nature of and provisions of Shares (ADSs) are net of taxes (paid in the country of origin).the obligation, its standing in bankruptcy or liquidation, statutory preferences, or thelegality and enforceability of the obligation. In addition, it does not take into accountthe creditworthiness of the guarantors, insurers, or other forms of credit Disclosures/Disclaimers Disclosures/ Disclaimersenhancement on the obligation.S&P Capital IQ EPS Estimates – S&P Capital IQ earnings per share (EPS) estimatesreflect analyst projections of future EPS from continuing operations, and generally Required Disclosuresexclude various items that are viewed as special, non-recurring, or extraordinary. In contrast to the qualitative STARS recommendations covered in this report, whichAlso, S&P Capital IQ EPS estimates reflect either forecasts of S&P Capital IQ equity are determined and assigned by S&P Capital IQ equity analysts, S&P’s quantitativeanalysts; or, the consensus (average) EPS estimate, which are independently evaluations are derived from S&P’s proprietary Fair Value quantitative model. Incompiled by Capital IQ, a data provider to S&P Capital IQ Equity Research. Among particular, the Fair Value Ranking methodology is a relative ranking methodology,the items typically excluded from EPS estimates are asset sale gains; impairment, whereas the STARS methodology is not. Because the Fair Value model and therestructuring or merger-related charges; legal and insurance settlements; in process STARS methodology reflect different criteria, assumptions and analytical methods,research and development expenses; gains or losses on the extinguishment of debt; quantitative evaluations may at times differ from (or even contradict) an equitythe cumulative effect of accounting changes; and earnings related to operations that analyst’s STARS recommendations. As a quantitative model, Fair Value relies onhave been classified by the company as discontinued. The inclusion of some items, history and consensus estimates and does not introduce an element of subjectivitysuch as stock option expense and recurring types of other charges, may vary, and as can be the case with equity analysts in assigning STARS recommendations.depend on such factors as industry practice, analyst judgment, and the extent towhich some types of data is disclosed by companies. S&P Global STARS DistributionS&P Core Earnings – S&P Capital IQ Core Earnings is a uniform methodology for In North Americaadjusting operating earnings by focusing on a companys after-tax earnings As of March 31, 2012, research analysts at S&P Capital IQ Equity Research Northgenerated from its principal businesses. Included in the S&P Capital IQ definition are America recommended 34.5% of issuers with buy recommendations, 57.9% withemployee stock option grant expenses, pension costs, restructuring charges from hold recommendations and 7.6% with sell recommendations.ongoing operations, write-downs of depreciable or amortizable operating assets,purchased research and development, M&A related expenses and unrealized In Europegains/losses from hedging activities. Excluded from the definition are pension gains, As of March 31, 2012, research analysts at S&P Capital IQ Equity Research Europeimpairment of goodwill charges, gains or losses from asset sales, reversal of prior- recommended 30.1% of issuers with buy recommendations, 49.4% with holdyear charges and provision from litigation or insurance settlements. recommendations and 20.5% with sell recommendations. In Asia Standard & Poor’s Equity Research
  4. 4. May 3, 2012 Global Strat egyAs of March 31, 2012, research analysts at S&P Capital IQ Equity Research Asia S&P Capital IQ, its affiliates, and any third-party providers, as well as their directors,recommended 35.9% of issuers with buy recommendations, 54.3% with hold officers, shareholders, employees or agents (collectively S&P Parties) do not 4recommendations and 9.8% with sell recommendations. guarantee the accuracy, completeness or adequacy of this material, and S&P Parties shall have no liability for any errors, omissions, or interruptions therein,Globally regardless of the cause, or for the results obtained from the use of the informationAs of March 31, 2012, research analysts at S&P Capital IQ Equity Research globally provided by the S&P Parties. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS ORrecommended 34.0% of issuers with buy recommendations, 56.3% with hold IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OFrecommendations and 9.7% with sell recommendations. MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall S&P Parties be liable to any party for any direct, indirect,Additional information is available upon request. incidental, exemplary, compensatory, punitive, special or consequential damages,Other Disclosures costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the informationThis report has been prepared and issued by S&P Capital IQ and/or one of its contained in this document even if advised of the possibility of such damages.affiliates. In the United States, research reports are prepared by Standard & Poor’s Capital IQ is a business of S&P Capital IQ.Investment Advisory Services LLC (“SPIAS”). In the United States, research reports Ratings from Standard & Poor’s Ratings Services are statements of opinion as ofare issued by Standard & Poor’s (“S&P”); in the United Kingdom by McGraw-Hill the date they are expressed and not statements of fact or recommendations toFinancial Research Europe Limited, which is authorized and regulated by the purchase, hold, or sell any securities or to make any investment decisions.Financial Services Authority and trades as Standard & Poor’s; in Hong Kong by Standard & Poor’s assumes no obligation to update its opinions followingStandard & Poor’s Investment Advisory Services (HK) Limited, which is regulated by publication in any form or format. Standard & Poor’s ratings should not be reliedthe Hong Kong Securities Futures Commission; in Singapore by McGraw-Hill on and are not substitutes for the skill, judgment and experience of the user, itsFinancial Singapore Pte. Limited (MHFSPL), which is regulated by the Monetary management, employees, advisors and/or clients when making investment andAuthority of Singapore; in Malaysia by Standard & Poor’s Malaysia Sdn Bhd other business decisions. Standard & Poor’s rating opinions do not address the(“S&PM”), which is regulated by the Securities Commission; in Australia by Standard suitability of any security. Standard & Poor’s does not act as a fiduciary. While& Poor’s Information Services (Australia) Pty Ltd (“SPIS”), which is regulated by the Standard & Poor’s has obtained information from sources it believes to be reliable,Australian Securities & Investments Commission; and in Korea by SPIAS, which is Standard & Poor’s does not perform an audit and undertakes no duty of duealso registered in Korea as a cross-border investment advisory company. diligence or independent verification of any information it receives.The research and analytical services performed by SPIAS, McGraw-Hill Financial S&P Capital IQ keeps certain activities of its business units separate from eachResearch Europe Limited, MHFSPL, S&PM, and SPIS are each conducted separately other in order to preserve the independence and objectivity of their respectivefrom any other analytical activity of S&P Capital IQ. activities. As a result, certain business units of S&P Capital IQ may haveS&P Capital IQ or an affiliate may license certain intellectual property or provide information that is not available to other S&P Capital IQ business units. S&P Capitalpricing or other services to, or otherwise have a financial interest in, certain issuers of IQ has established policies and procedures to maintain the confidentiality of certainsecurities, including exchange-traded investments whose investment objective is to non-public information received in connection with each analytical process.substantially replicate the returns of a proprietary Standard & Poors index, such as Standard & Poor’s Ratings Services did not participate in the development of thisthe S&P 500. In cases where S&P Capital IQ or an affiliate is paid fees that are tied to report. Standard & Poor’s may receive compensation for its ratings and certainthe amount of assets that are invested in the fund or the volume of trading activity in credit-related analyses, normally from issuers or underwriters of securities or fromthe fund, investment in the fund will generally result in S&P Capital IQ or an affiliate obligors. Standard & Poor’s reserves the right to disseminate its opinions andearning compensation in addition to the subscription fees or other compensation for analyses. Standard & Poor’s public ratings and analyses are made available on itsservices rendered by S&P Capital IQ. A reference to a particular investment or Web sites, (free of charge), andsecurity by S&P Capital IQ and/or one of its affiliates is not a recommendation to buy, and (subscription), and maysell, or hold such investment or security, nor is it considered to be investment advice. be distributed through other means, including via Standard & Poor’s publicationsIndexes are unmanaged, statistical composites and their returns do not include and third-party redistributors. Additional information about our ratings fees ispayment of any sales charges or fees an investor would pay to purchase the available at they represent. Such costs would lower performance. It is not possible to This material is not intended as an offer or solicitation for the purchase or sale ofinvest directly in an index. any security or other financial instrument. Securities, financial instruments orS&P Capital IQ and its affiliates provide a wide range of services to, or relating to, strategies mentioned herein may not be suitable for all investors. Any opinionsmany organizations, including issuers of securities, investment advisers, broker- expressed herein are given in good faith, are subject to change without notice, anddealers, investment banks, other financial institutions and financial intermediaries, are only current as of the stated date of their issue. Prices, values, or income fromand accordingly may receive fees or other economic benefits from those any securities or investments mentioned in this report may fall against the interestsorganizations, including organizations whose securities or services they may of the investor and the investor may get back less than the amount invested. Whererecommend, rate, include in model portfolios, evaluate or otherwise address. an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment mayFor a list of companies mentioned in this report with whom S&P Capital IQ and/or fluctuate. Where an investment or security is denominated in a different currency toone of its affiliates has had business relationships within the past year, please go to: the investor’s currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to theservices/articles/en/us/?assetID=1245187982940 investor. The information contained in this report does not constitute advice on the tax consequences of making any particular investment decision. This material is not intended for any specific investor and does not take into account your particularDisclaimers investment objectives, financial situations or needs and is not intended as a recommendation of particular securities, financial instruments or strategies to you.With respect to reports issued to clients in Japan and in the case of inconsistencies Before acting on any recommendation in this material, you should considerbetween the English and Japanese version of a report, the English version prevails. whether it is suitable for your particular circumstances and, if necessary, seekWith respect to reports issued to clients in German and in the case of inconsistencies professional advice.between the English and German version of a report, the English version prevails.Neither S&P Capital IQ nor its affiliates guarantee the accuracy of the translation. This document does not constitute an offer of services in jurisdictions where S&PAssumptions, opinions and estimates constitute our judgment as of the date of this Capital IQ or its affiliates do not have the necessary licenses.material and are subject to change without notice. Past performance is notnecessarily indicative of future results. For residents of the U.K. - This report is only directed at and should only be relied on by persons outside of the United Kingdom or persons who are inside the United Standard & Poor’s Equity Research
  5. 5. May 3, 2012 Global Strat egyKingdom and who have professional experience in matters relating to investments orwho are high net worth persons, as defined in Article 19(5) or Article 49(2) (a) to (d) of 5the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005,respectively.For residents of Singapore - Anything herein that may be construed as arecommendation is intended for general circulation and does not take into accountthe specific investment objectives, financial situation or particular needs of anyparticular person. Advice should be sought from a financial adviser regarding thesuitability of an investment, taking into account the specific investment objectives,financial situation or particular needs of any person in receipt of therecommendation, before the person makes a commitment to purchase theinvestment product.For residents of Malaysia - All queries in relation to this report should be referred toChing Wah Tam and Ahmad Halim.For residents of Indonesia - This research report does not constitute an offeringdocument and it should not be construed as an offer of securities in Indonesia, andthat any such securities will only be offered or sold through a financial institution.For residents of the Philippines - The securities being offered or sold have not beenregistered with the Securities and Exchange Commission under the SecuritiesRegulation Code of the Philippines. Any future offer or sale thereof is subject toregistration requirements under the Code unless such offer or sale qualifies as anexempt transaction.Canadian investors should be aware that any specific securities discussed in thisresearch report can only be purchased in Canada through a Canadian registereddealer and, if such securities are not available in the secondary market, they can onlybe purchased by eligible private placement purchasers on a basis that is exempt fromthe prospectus requirements of Canadian securities law and will be subject to resalerestrictions.For residents of Australia – This report is distributed by Standard & Poor’sInformation Services (Australia) Pty Ltd (“SPIS”) in Australia.Any express or implied opinion contained in this report is limited to "General Advice"and based solely on consideration of the investment merits of the financial product(s)alone. The information in this report has not been prepared for use by retail investorsand has been prepared without taking account of any particular persons financial orinvestment objectives, financial situation or needs. Before acting on any advice, anyperson using the advice should consider its appropriateness having regard to theirown or their clients objectives, financial situation and needs. You should obtain aProduct Disclosure Statement relating to the product and consider the statementbefore making any decision or recommendation about whether to acquire theproduct. Each opinion must be weighed solely as one factor in any investmentdecision made by or on behalf of any adviser and any such adviser must accordinglymake their own assessment taking into account an individuals particularcircumstances.SPIS holds an Australian Financial Services Licence Number 258896. Please refer tothe SPIS Financial Services Guide for more information & POOR’S, S&P, S&P 500, S&P Europe 350 and STARS Financialare registered trademarks of Standard & Poor’s Financia l ServicesLLC. Standard & Poor’s Equity Research
  6. 6. May 3, 2012 Global Strat egy This page intentionally left blank 6 Standard & Poor’s Equity Research