Rbs - Round Up - 180809

This material has been produced by RBS sales and trading staff and should not be considered independent.

The Round Up 18 August 2009 Issue No. 157 The Round Up is a comprehensive daily note produced by the RBS Warrants team providing an overview of market movements along with quality ideas for warrant traders and investors.

In today’s issue Global Market Action

Scoreboard, commentary

Aussie Market Action

SPI Comment, Events & Dividends

CBA (CBAWZQ)

Trading Sell – CBA continues pullback

SUN (SUNKZM)

MINI Trading Buy – Value in insurance

TLS (TLSSZX)

Self Funding Buy – Buy for the dividend

Round Up Corner

Stocks reporting this week

Equities Move ASX 200

Last -72.6

% Move

Range

Volume

4388.4

-1.6%

-73 to +

$4.9 bn(A)

SPI - yesterday

-63.0

4362.0

-1.4%

-70 to -8.u.c

28,785(A)

Dow Jones

-186.1

9135.3

-2.0%

-205 to -8

Low

S&P 500

-24.4

979.7

-2.4%

-26 to -6

Avg

Nasdaq

-54.7

1930.8

-2.8%

-56 to -36

Low

FTSE

-69.0

4645.0

-1.5%

-104 to u.c

Low

Commodities Move

Last

% Today

% Past Month

Oil-WTI spot

-0.80

66.71

-1.2%

+5.0%

Gold Spot

-14.65

933.90

-1.5%

-0.4%

Nickel (LME)

-19.78

865.37

-2.2%

+18.9%

Aluminium (LME)

-1.42

87.36

-1.6%

+14.6%

Copper (LME)

-8.91

274.63

-3.1%

+14.0%

Zinc (LME)

-2.51

79.08

-3.1%

+9.2%

Silver

-0.73

14.00

-4.9%

+4.2%

Sugar

-0.15

21.83

-0.7%

+26.2%

Dual Listed Companies (DLC’s) Move

%Move

Last

AUD Terms

NWS (US)

-0.54

-4.2%

12.23

RIO (UK)

-110.5 p

-4.7%

BLT (BHP UK)

-49.0 p

-3.2%

BXB (UK)

-17.5 p

-5.1%

£3.288

Diff to Aus

14.89

-31.3 c

£22.46

44.67

-1243.1 c

£15.040

29.92

-721.1 c

6.54

-12.0 c

American Depository Receipts (ADR’s) Move

%Move

Last

BHP (US)

-2.75

-4.4%

AWC (US)

-0.55

-9.3%

TLS (US)

-0.29

-1.9%

ANZ (US)

-0.64

-3.7%

WBC (US)

-4.09

-4.0%

NAB (US)

-1.19

LGL (US)

-0.89

AUD Terms 60.20

Diff to Aus

36.64

-49.1 c

5.36

1.63

-5.9 c

14.63

3.56

-4.8 c

16.48

20.06

-19.0 c

97.15

23.65

-22.9 c

-5.2%

21.81

26.55

-53.2 c

-4.1%

20.64

2.51

-4.8 c

RMD (US)

-0.43

-0.9%

45.18

5.50

-6.0 c

JHX (US)

+1.05

+4.6%

24.15

5.88

+9.9 c

PDN (CAN)

-0.19

-4.5%

3.99

4.38

-12.6 c

Overnight Commentary United States Commentary Resource shares led the US indices lower overnight as investors worried that the rally in riskier assets had outpaced prospects for economic growth. The concerns were enough to offset the first expansionary Empire Manufacturing data, seeing the Dow off 186pts Resources - Base metals and crude fell for the second session as inventories expanded and concerns mounted that a near doubling of prices since January no longer reflects the demand outlook. Alcoa was the worst of the Dow components, down 6.5%, and Caterpillar lost 4.5% as the CRB index fell 1.6% Financials - Bank of America led financials lower, down 4.8% after it released its latest forecast for losses and delinquencies, saying that the portion of credit card loans it deems unlikely to be repaid at 13.81% in July, almost unchanged from the 13.86% in June. Retail - Lowe's Co fell 10.3% after the world's second-largest home improvement retailer reported net earnings down 19.1 percent, cut their store growth forecasts for 2010 on lower demand expectations and waning consumer spending. Home Depot also lost 3.8%. Eco - Empire Manufacturing reported its first expansion since April 2008, at +12.08 for August, vs forecasts of 3.0, and from -0.55 previously. The NAHB Housing Market Index improved slightly in Aug to 18, from 17 in July, although inline with expectations. Steel - Steel stocks got caught up in the resource and riskier asset sell-off. AK Steel fell 8.1%, US Steel lost 8.3% and Nuccor off 4.7%

United Kingdom & Europe Commentary The FTSE 100 fell 1.5% or 69pts as investors booked profits from recent gains amid concerns of the strength of the economic recovery. The FTSE Eurofirst 300 was down 2%, the CAC was also off 2% and the DAX dropped 2.2%. UK Banks - Banks were also lower as investors cut back on risky positions. HSBC, Lloyds, Barclays and Standard Chartered were down between 1.9% and 4.5%. RBS shed 2.7% after the lender said Britain's financial regulator has launched a supervisory review of the Scottish bank's takeover of ABN Amro. Euro Banks - Profit taking across the region affected the sector. UBS and Credit Suisse of 3.7% and 3.8% respectively, Deutsche Bank fell 1.2%, Commerzbank was off 1.85%, UniCredit dropped 3.8% whilst BNP and SocGen fell 1.9% and 2.1% respectively. Auto - Economic growth concerns saw the carmakers lower. Peugeot dropped 2.3%, Renault was 2.7% lower, Fiat ended down 2.8%, BMW fell 2.25%, Daimler was off 3.3% and VW sank 9.9% after also suffering from a broker downgrade. Pharma - Defensive pharmaceutical stocks Shire, up 2.2%, and GlaxoSmithKline, up 0.8%, attracted investors shying away from riskier issues. Shire was also subject to bid speculation from Teva Pharmaceuticals.

Resources Commentary Miners - Weaker metal prices saw the sector lower. BHP fell 3.2%, Vedanta dropped 4.2% and Anglo and Xstrata dropped 5.6% and 5.5% respectively after Xstrata was reported to have redoubled its attempt to win over the investors of its rival and merger-target Anglo American, the Guardian newspaper said on Monday. Iron Ore - Rio fell 4.7% ahead of 1H results on Thursday with the group also expected to announce the sale of its packaging unit to Amcor. The China Iron and Steel Association (CISA) said it would negotiate with the three top iron ore miners using a price it agreed with Australian miner Fortescue Metals Group as a reference. Analysts doubted that an agreement signed by Fortescue Metals would break the seven-month impasse between ore producers and Chinese steel mills. Energy - Crude headed toward $65 per barrel leading the majors lower. BP fell 1%, Shell was off 0.5%, BG Group dropped 1.1% and Tullow ended down 2.2%. In Europe Total fell 2.2%, Statoil was off 2.4% and Repsol dropped 2.5%.

SPI Commentary The SPI traded down 63pts or 1.42% to 4362. Open at 4391 with a high of 4417 and a low of 4355. Volume 31,310. Overnight the SPI trading down 45pts to 4317.

SPI Intraday

SPI Daily

*SPI report taken from the 9:50am open to the 4:30pm close on the previous trading day. Charts taken from IRESS

Upcoming Economic Events for the Week Monday

Tuesday

Wednesday

AUS US

NY Fed Empire PMI

AUS

RBA Board Minutes

US

NAHB Survey, PPI, housing starts

AUS

RBA Asst Gov Edey& Lowe speak

US Thursday

AUS

Imports, RBA Bulletin, RBA’s Richards speaks

US Friday

AUS US

Leading index, Philadelphia Fed index, existing home sales

*Dates are indicative only and may change

Upcoming Dividends ExDivDate

Security

Description

Div (c)

Yield

Frk(%)

PayDate

18-Aug-09

CCL

Coca Cola Amatil

18.5

4.37%

100

6-Oct-09

18-Aug-09

CPU

Computershare

11

2.14%

50

23-Sep-09

24-Aug-09

TLS

Telstra Corporation

14

14

100

25-Sep-09

27-Aug-09

BEN

Bendigo & Adelaide Bank

15

4.93%

100

30-Sep-09

28-Aug-09

COH

Cochlear

95

2.92%

100

24-Sep-09

31-Aug-09

BHP

BHP Billiton

50.07

3.01%

100

25-Sep-09

3-Sep-09

NWS

News Corp

6

0.9%

0

14-Oct-09

Trading Sell: Commonwealth Bank (CBAWZQ) – CBA continues pullback CBA reported last week and rallied ~10% in 3 days before pulling back Friday afternoon. The stock went ex dividend, $1.15, yesterday and gave up all of the dividend and more. While the result demonstrates that we may be within six months of seeing a peak in BDDs, the stock looks overbought and may be set for a pullback post dividend. RBS Research prefer NAB and ANZ. Expect more weakenss today following the moves offshore. Look to cover shorts around $43. Play a pullback in CBA thorugh CBAWZQ.

Source: IRESS

• • • • • • • • •

CBA’s cash NPAT of A$4,415m was cA$150m ahead of RBS forecasts driven by a lower tax rate partially offset by higher BDDs CBA declared a final dividend of A$1.15ps in line with guidance provided at their 3Q update. The total dividend of A$2.28ps was 14% below FY08. The key positive surprise was the strength in revenue and, in particular, in fee income. The key negative was the benefit from the artificially low tax rate which is expected to normalise to c27% going forward. The tier-1 capital position of 8.07% is looking a bit thin, though is likely to be addressed by the issue of hybrid equity adding c24bp. The outlook was understandably cautious given headwinds still exist around credit growth and unemployment and in the absence of similar fee growth to pcp. RBS valuation becomes A$41.88 CBA set to go ex dividend today Play a pullback thorugh CBAWZQ

RBS MINIs over CBA

Security CBAKZK

ExPrc

Stop Loss

1936.76

2126

CP

ConvFac Long

1

Delta

Description 1

MINI Long

CBAKZN

2775.8

3047

Long

1

1

MINI Long

CBAKZO

2401.61

2636

Long

1

1

MINI Long

CBAKZT

5155.27

4871

Short

1

1

MINI Short

CBAKZZ

5497.42

5226

Short

1

1

MINI Short

RBS Warrants over CBA Security

ExDate

ExPrice

CP

ConvFac

Delta

Description

CBASZW

4-Feb-19

1866.78

Call

1

0

Self Funding Instalment

CBASZX

4-Feb-19

1444.23

Call

1

0

Self Funding Instalment

CBAVZA

27-Aug-09

3600

Call

5

0.2

Trading Call Warrant

CBAVZB

24-Sep-09

3800

Call

5

0.1942

Trading Call Warrant

CBAVZC

24-Sep-09

4000

Call

5

0.1847

Trading Call Warrant

CBAVZD

29-Oct-09

4200

Call

5

0.1599

Trading Call Warrant

CBAVZE

29-Oct-09

4400

Call

5

0.1386

Trading Call Warrant

CBAVZF

26-Nov-09

4800

Call

5

0.0949

Trading Call Warrant

CBAVZG

26-Nov-09

4500

Call

5

0.1263

Trading Call Warrant

CBAWZQ

27-Aug-09

4500

Put

5

-0.0426

Trading Put Warrant

CBAWZR

24-Sep-09

3500

Put

5

-0.0001

Trading Put Warrant

CBAWZS

29-Oct-09

3800

Put

5

-0.0067

Trading Put Warrant

CBAWZT

29-Oct-09

4000

Put

5

-0.0164

Trading Put Warrant

CBAWZU

26-Nov-09

3600

Put

5

-0.0055

Trading Put Warrant

CBAWZV

26-Nov-09

4200

Put

5

-0.04

Trading Put Warrant

MINI Trading Update: Suncorp Metway (SUNKZM) – Value in insurance SUN has continued to rally yesterday reaching a high of $8.31 after breaking $8 last week. There has been talk of selling its banking assets, which RBS Research believe could unlock additional value for shareholders. SUN has announced its expected results with the key takeaway being that bad debts did not deteriorate further, which has positive implications for a potential divestment of SUN’s banking operations. While Insurance and Life were behind RBS Research expectations, the negative surprises were largely oneoff in nature. RBS Research believe there is further upside from here and retain Buy call with a new target price of $8.80. Buy SUNKZM

Source: IRESS

Early release of FY09 result • The key positive from the result was the narrowing of the bad debt guidance from 125-145bp to 125-135bp which has lifted banking NAPT expectations • Insurance suffered from the negative impact of marking-to-market the bond portfolio which was was greater than RBS Research had anticipated and the insurance margin guidance of 7.5-8% was also behind expectations. • The weakness in Life insurance was mainly due to the rapid unwinding of discount rate changes and is largely oneoff so not of particular concern. • The outlook for bad debts in Australia appears to be improving along with the macroeconomic situation. As a result, RBS Research have nudged up banking valuation multiple from 0.9x book value to 1.0x, which still only implies a PE of 6.4x in FY11F. • RBS price target increases from $7.38 to $8.80

RBS MINIs over SUN Security SUNKZL

ExPrc

Stop Loss 396.47

436

CP

ConvFac

Delta

Description

Long

1

1

MINI Long

SUNKZM

459.67

505

Long

1

1

MINI Long

SUNKZP

1094.16

985

Short

1

1

MINI Short

SUNKZQ

893.17

843

Short

1

1

MINI Short

Self Funding Instalment Buy: Telstra Corporation (TLSSZX) – Buy for the dividend TLS is set to go ex-dividend on the 24th August 2009. The dividend is $0.14 which will be fully franked. This represents a ~3.9% yield on the stock for the half year which can be leveraged up and enhanced through an RBS self funding instalment warrant. Buying TLSSZX for a dividend play will yield approximately 10.7% on a standstill return basis and a 45 day holding period including franking credits

Source: IRESS

Telstra Result points and fundamentals • • • • • • •

Broadband ARPU increased 6.5% to A$57.70. MBB SIOs doubled to 1.05m, helping lift mobile ARPU 4.8% to A$51.84. Sales of IP-based products also increased at double-digit rates. With the rate of PSTN erosion reducing in 2H09 (cf 1H09) the speed-driven revenue lines helped keep total revenue growth at 2.7%, a good rate given the economic slowdown. Maintaining comparable revenue growth in FY10 may be harder as unemployment rises, the A$ strengthens and Sensis sales face a tougher business environment. The company says achieving its FY10 targets ‘would give us significant excess free cashflow, and all the flexibility that brings’. We think there is enough flexibility to contribute to NBN Co, on the right terms, and still pay an extra 2cps in dividends fully franked. RBS Research valuation $4.85 with a target price of $4.30, which is 12.0x FY10F EPS of 35.6c. Key downside risks include further margin contraction, tougher regulation and lower access prices. Upside risks include faster sales recovery, better cost control and higher access prices. Regulatory issues may be clearer when proposed legislation is tabled, we think by September.

KEY BENEFITS of the new RBS self funding instalments include: * NO PUT PROTECTION COST * Simple, transparent and Cost-effective with a low interest rate of 7.51% per annum * 1 for 1 movement with the underlying share (delta 1) * No margin calls * Non-recourse loan - You can never lose more than your initial outlay * ATO product rulings - Perfectly suitable to be used in SMSF's * Listed - Can be sold at anytime * Can be exercised at any time - simply by paying back loan amount * RBS are the only product issuer in the market who can offer this product * Dividends and franking credit benefits as well as interest deductibility

Trading strategy Lets take a look at how you can enhance your exposure to the TLS dividend in August through an RBS self funding instalment. The table below shows the potential returns from a dividend play in TLSSZX on a standstill return basis (share price remains at the purchase price). TLSSZX yields ~10.7% on a standstill return basis and a 45 day holding period Warrant Code

TLSSZX

Current Price (Warrant/stock)

$1.70

$3.64

Strike

Delta

$1.94

1

Expiry

4-Feb-19

Average Theta Per Day

$0.0004

Total Theta Cost

$0.02

Dividend

Grossed Up

Net Standstill

Standstill Return

$0.14

$0.20

$0.18

10.71%

RBS MINIs over TLS Security

ExPrc

Stop Loss

CP

ConvFac

Delta

Description

TLSKZC

260.58

274

Long

1

1

MINI Long

TLSKZD

289.16

306

Long

1

1

MINI Long

TLSKZP

449.9

405

Short

1

1

MINI Short

RBS Warrants over TLS Security TLSJZB

ExDate

ExPrice

CP

ConvFac

Delta

Description

29-Oct-09

250

Call

1

0.88

HOT Instalment

TLSIZA

28-Jan-10

250

Call

1

0.95

HOT Instalment

TLSIZQ

14-Jun-10

250

Call

1

1

Rolling Instalment

TLSIZR

14-Jun-10

225

Call

1

1

Rolling Instalment

TLSSZX

4-Feb-19

193.88

Call

1

1

Self Funding Instalment

TLSSZZ

30-Jun-17

255.18

Call

1

1

Self Funding Instalment

RBS Round Up Corner: Stocks Reporting This Week Reporting season is well underway as we enter week three. RBS Research are expecting company results to come in line or slightly ahead of expectations due to the long downgrade cycle over the past six months. RBS MINIs are a great way to trade company results this reporting season, from both a long or short view. Date

Code

Company

Y/E

17 Aug BSL BlueScope Steel Jun 17 Aug NCM Newcrest Mining Jun 18 Aug UGL United Group Jun 18 Aug RIO Rio Tinto Dec 19 Aug AMC Amcor Jun 19 Aug BLD Boral Jun 19 Aug CSL CSL Ltd Jun 19 Aug ORG Origin Energy Jun 19 Aug QAN Qantas Airways Jun 19 Aug WPL Woodside Petroleum Dec 20 Aug AGK AGL Energy Jun 20 Aug ASX Aust Securities Exch Jun 20 Aug BXB Brambles Jun 20 Aug LLC Lend Lease Jun 20 Aug WES Wesfarmers Jun 20 Aug AMP AMP Ltd Dec 20 Aug QBE QBE Insurance Dec 20 Aug STO Santos Dec 21 Aug BBG Billabong Int Jun 21 Aug IAG Insurance Australia Jun *Figures in table based on RBS Research forecasts

NPAT (pre abs)

(Abs)

Div

EPS

2H div

Long Product

Short Product

60.0 464.1 147.5 2681 365.0 107.8 1021 523.7 268.0 363.7 381.6 328.4 456.9 293.7 1482 307.0 791.0 60.8 161.5 277.6

-87.0 -200.6 5.0 407.0 -58.9 0.0 -80.0 6386 -184.8 0.0 1462 0.0 -95.7 -862.3 0.0

5.0c 10.0c 63.0c 0.0c 34.0c 11.0c 61.0c 75.0c 6.0c 20.0c 53.0c 171.7c 23.7c 45.0c 75.0c 13.8c 126c 22.0c 56.5c 10.5c

5.3c 99.1c 88.8c 297.6c 43.4c 18.4c 173.0c 59.9c 12.9c 191.8c 85.7c 191.3c 32.9c 65.7c 151.5c 33.1c 171.0c 30.6c 64.1c 14.1c

0.0c 10.0c 34.0c 27.0c 17.0c 3.5c 31.0c

BSLKZI NCMKZG UGLKZC RIOKZE

BSLKZS NCMKZT

AUD AUD AUD USD AUD AUD AUD AUD AUD AUD AUD AUD USD AUD AUD AUD AUD AUD AUD AUD

0.0 0.0 0.0 93.0

0.0c 96.0c

10.0c 20.0c 35.0c 27.9c 126.0c 42.0c 25.0c

BLDKZD CSLKZG ORGKZC QANKZJ WPLKZJ AGKKZE ASXKZI BXBKZG LLCKZJ WESKZG AMPKZH QBEKZF STOKZD BBGKZB IAGKZF

RIOKZQ AMCKZQ CSLKZW ORGKZP QANKZQ WPLKZX AGKKZP ASXKZS BXBKZP LLCKZQ WESKZT AMPKZQ QBEKZS STOKZT IAGKZP

Monday Bluescope Steel (BSL) - underlying NPAT of a $56m was in line with RBS expectations, with management guiding for a small loss at the reported level in 1H10. Whist RBS remain positive on the near-term, we are weary of the impacts of a rising A$ and increasing reliance on a rally in export markets. The steel market recovery may be at hand, with BSL holding the best leverage, however we expect a normalisation to earnings is still some distance away.

Newcrest Mining (NCM) - reported FY09 statutory profit of A$248m versus RBS Research forecast of A$252m and an underlying profit of A$483m vs RBS Research forecast of A$464m and Reuters consensus of A$472m. EPS was 103.2cps. A dividend of 15c was declared, compared to 10c in pcp.

Tuesday United Group (UGL) - Looking for guidance on FY10 that may be softer than previous forecasts, due to lower earnings expectations from Rail. Rio Tinto (RIO) - (USD) Focus on costs and additional writedowns.

Wednesday Amcor Limited (AMC) - Expect focus to be on clarification of potential Rio Alcan packaging transaction. Boral Limited (BLD) - Expect a result in line with guidance, with some positive macro commentary, but we caution on the strength recovery and succession planning issues.

CSL Limited (CSL) - Looking for a strong result given ongoing strength of plasma demand and pricing. Origin Energy (ORG) - FY10 guidance will be key. Qantas Airways (QAN) - Expect a weak result. Focus will be on outlook commentary surrounding demand and yields. Woodside Petroleum (WPL) - Focus will be on gas for Pluto 2.

Thursday AGL Energy (AGK) - Strong TIPS performance means surprise risk is positive. Australian Securities Exchange (ASX) - Focus will be on volumes and market outlook. Brambles (BXB) - (USD) Focus will be on extent of margin decline and commentary on progress of the CHEP US review. Lend Lease Corp (LLC) - Expect some upside surprise from strength in cost-down programme, and beneficiary of capital light financing model. Wesfarmers (WES) - We anticipate modest margin expansion in F&L and record Resources. Store rollout format and timetable of key interest. AMP Limited (AMP) - Focus will be on fund flow levels, regulation commentary and acquisitions update. QBE Insurance (QBE) - Focus will be on insurance margins and reserving strength. Santos Limited (STO) - Focus will be on latest capital management plans.

Friday Billabong (BBG) - Continued tough economic conditions in US and weak sales performance by competitors suggest downside risk to BBG, which is unlikely to be offset by the Australian stimulus package.

Insurance Australia Group (IAG) - Focus will be on underlying insurance margin improvements and commentary on the commercial rating cycle.

MINIs approaching stop loss

MINI Type

Strike

Stop Loss

Share Price

Approx. MINI Value

Share: Stop Loss

Underlying

MINI Code

COH

COHKZQ

Short

69

63

$

61.15

$

8.29

2.3%

NAB

NABKZT

Short

$31.10

$28.00

$

27.08

$

4.02

3.4%

JHX

JHXKZR

Short

$6.35

$6.03

$

5.78

$

0.57

4.3%

SUN

SUNKZQ

Short

$8.93

$8.43

$

8.07

$

0.86

4.5%

CPU

CPUKZP

Short

$11.91

$10.72

$

10.21

$

1.70

5.0%

For further information please do not hesitate to contact us on the details below

Contact Equities Structured Products & Warrants Toll free

1800 450 005

www.rbs.com.au/warrants

Ben Smoker

02 8259 2085

[email protected]

Robbie Taylor

02 8259 2018

[email protected]

Ryan Corrigan

02 8259 2425

[email protected]

Elizabeth Tian

02 8259 2017

[email protected]

Tania Smyth

02 8259 2023

[email protected]

Robert Deutsch

02 8259 2065

[email protected]

Mark Tisdell

02 8259 6951

[email protected]

Trading Products Team

Investment Products Team

Disclaimer: The information contained in this report has been prepared by RBS Equities (Australia) Limited (“RBS”) (ABN 84 002 768 701) (AFS Licence No 240530) (“RBS Equities”) and has been taken from sources believed to be reliable. RBS Equities does not make representations that the information is accurate or complete and it should not be relied on as such. Any opinions, forecasts and estimates contained in this report are the views of RBS Equities at the date of issue and are subject to change without notice. RBS Equities and its affiliated companies may make markets in the securities discussed. RBS Equities, its affiliated companies and their employees from time to time may hold shares, options, rights and warrants on any issue contained in this report and may, as principal or agent, sell such securities. RBS Equities may have acted as manager or co-manager of a public offering of any such securities in the past three years. RBS Equities’ affiliates may provide, or have provided banking services or corporate finance to the companies referred to in this report. The knowledge of affiliates concerning such services may not be reflected in this report. This report does not constitute an offer or invitation to purchase any securities and should not be relied upon in connection with any contract or commitment. RBS Equities, in preparing this report, has not taken into account an individual client’s investment objectives, financial situation or particular needs. Before a client makes an investment decision, a client should, with or without RBS Equities’ assistance, consider whether any advice contained in this report is appropriate in light of their particular investment needs, objectives and financial circumstances. It is unreasonable to rely on any recommendation without first having consulted with your adviser for a personal securities recommendation. This information contained in this report is general advice only. RBS Equities, its officers, directors, employees and agents accept no liability for any loss or damage arising out of the use of all or any part of the information contained in this report. This Information is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. If you are located outside Australia and use this Information, you are responsible for compliance with applicable local laws and regulation. This report may not be taken or distributed, directly or indirectly into the United States, or to any U.S. person (as defined in Regulation S under the U.S. Securities Act of 1993, as amended. The warrants contained in this report are issued by RBS Group (Australia) Pty Limited (ABN 78 000 862 797, AFS Licence No. 247013). The Product Disclosure Statements relating to these warrants are available upon request from RBS Equities or on our website www.rbs.com.au/warrants © Copyright 2009. RBS Equities. A Participant of the ASX Group.

Explanation of Warrant Tables: Security – refers to the code ascribed to the warrant, ExDate – refers to the date on which the warrant expires or is reset, ExPrc – refers to the exercise price, or second instalment payment, CP – tells you whether the warrant is a call or a put, ConvFac – the conversion factor of the warrant which tells you how many warrants you need to exercise in order to take possession of 1 share, Delta – tells you how much the warrant will move for a 1c move in the underlying security, Description – Tells you the type of warrant. All charts taken from IRESS unless indicated otherwise