Rbs - Round Up - 190809

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

The Round Up 19 August 2009 Issue No. 158 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

BSL (BSLKZI)

MINI Trading Buy – Buy the dips

TLS (TLSSZX)

Self Funding Buy – Buy for the dividend

Round Up Corner

Stocks reporting this week

Equities Move ASX 200

Last -6.8

SPI - yesterday Dow Jones

% Move 4381.6

Range

Volume

-0.2%

-36 to +10

$5.1 bn(A)

-7.0

4355.0

-0.2%

-47 to +7

33,485(A)

+82.6

9217.9

+0.9%

-1 to +98

Low

S&P 500

+9.9

989.7

+1.0%

+1 to +11

Avg

Nasdaq

unch

1955.9

unch

uc to uc

Avg

FTSE

+40.8

4685.8

+0.9%

u.c to +43

Low

Commodities Move Oil-WTI spot

Last

% Today

% Past Month

+0.04

69.94

+0.1%

+9.1%

Gold Spot

+4.10

938.65

+0.4%

+0.1%

Nickel (LME)

-13.29

852.08

-1.5%

+17.1%

Aluminium (LME)

+2.02

89.38

+2.3%

+17.2%

Copper (LME)

+1.38

276.01

+0.5%

+14.5%

Zinc (LME)

+1.11

80.20

+1.4%

+10.7%

Silver

-0.01

14.00

-0.0%

+4.2%

Sugar

-0.05

21.78

-0.2%

+25.9%

Dual Listed Companies (DLC’s) Move

%Move

Last

NWS (US)

+0.28

+2.3%

RIO (UK)

+37.0 p

BLT (BHP UK)

+6.5 p

BXB (UK)

+9.8 p

AUD Terms

Diff to Aus

12.51

15.13

+10.3 c

+1.6%

£22.83

45.73

-1117.5 c

+0.4%

£15.105

30.26

-700.0 c

+3.0%

£3.385

6.78

-1.9 c

American Depository Receipts (ADR’s) Move

%Move

Last

BHP (US)

+1.63

+2.7%

AWC (US)

+0.19

+3.5%

TLS (US)

+0.37

+2.5%

ANZ (US)

+0.60

+3.6%

WBC (US)

+2.06

+2.1%

NAB (US)

+0.71

LGL (US)

+0.33

AUD Terms 61.83

Diff to Aus

37.40

+13.8 c

5.55

1.68

+3.8 c

15.00

3.63

-2.1 c

17.08

20.66

+29.2 c

99.21

24.00

+26.3 c

+3.3%

22.52

27.24

+17.2 c

+1.6%

20.97

2.54

-0.3 c

RMD (US)

-0.11

-0.2%

45.07

5.45

+3.2 c

JHX (US)

+5.53

+22.9%

29.68

7.18

+11.1 c

PDN (CAN)

+0.18

+4.5%

4.15

4.56

+10.8 c

Overnight Commentary United States Commentary Some better results from retail names, upgrades to financial names and resource names recovering part of the previous session falls saw the US indices rise. The Dow Jones index rose 82.6 pts or 0.9%, while S&P 500 gained 1.0%. Eco - Housing Starts were barely changed from previous at 581k but below forecasts of 599k, while Buildig Permits slipped slightly to 560k from 570k, and against forecasts of 577k. Producer Price Index for July showed wholesale prices slipped -0.9% after being +1.8% in June, and vs forecasts of -0.3%, taking the annualised level to -6.8% from -4.6% previously. Financials - American Express rose 4.3% to top Dow performers after an upgrade to 'outperform' from a broker citing 'improving trends in credit'. CIT Group added 5.9% after posting a quarterlyloss that narrowed from a year earlier. Goldman Sachs also added 1.2% after it was raised to a 'buy'. Retail - Home Depot Inc, Target Corp, and Saks Inc all reported second-quarter results that beat analysts estimates after reducing operating expenses, sending the retail sector higher. Home Depot gained 3.1%, Target rose 7.1%, and Saks up 6.9%. Homebuilders - Toll Brothers Inc, the largest luxury homebuilder, gained 3.3% after it reported third-quarter revenue that exceeded analysts estimates. New-home contracts rose over the same quarter a year ago for the first tme since 2005. Pulte Homes Inc, has now completed it's $1.3bn purchase of Centex Corp, creating the biggest US homebuilder. Resources - Commodity based stocks recovered some of their losses from the previous session, Aloca put on 4.2%, US Steel added 3.2% and Caterpillar put on 2.6%.

United Kingdom & Europe Commentary The FTSE 100 rose 0.9% or 41pts as inflation data held steady and banks and miners recovered from yesterdays losses. The FTSE Eurofirst 300 was up 1.4%, the DAX climbed 0.9% and the CAC also added 0.9%. UK Banks - The sector added the most points to the index with broker upgrades helping. HSBC jumped 2.8% after it was upgraded to buy and had its price target increased and Standard Chartered rose 2.1% after its price target was increased. Lloyds and RBS were up 1.9% and 2.9% respectively but Barclays dropped 0.1%. Euro Banks - Swedbank bounced 12.6% following a broker upgrade after announcing a buyback the previous session. UBS rose 2.55%, Credit Suisse jumped 3.5%, Deutsche Bank rose 2.5%, Commerzbank was up 1.55%, BNP added 1.3%, SocGen ended 0.5% higher and UniCredit climbed 3.4%.

Eco - British inflation unexpectedly held steady in July at 1.8%, but economists predict big falls in the annual rate this year and monetary policy to stay loose for some time. Real Estate - British Land fell 2.7% after the CEO dampened speculation the company was a takeover target as it posted a smallerthan-expected 9% fall in first-quarter net asset value. Peers Land Securities lost 0.4%, while Liberty International was flat.

Resources Commentary Miners - Rio climbed 1.7% after the company said it agreed to sell Alcan. BHP rose 0.4%, Anglo added 0.6%, Xstrata was up 2.2% but Vedanta fell 1.8% after it was outbid for bankrupt US copper miner, Asarco. Energy - Crude rose above $67 per barrel but the sector was mixed. Tullow jumped 2.5% helped by deal speculation from Eni, up 1%. BP rose 0.5%, BG Group added 1.8% but Shell fell 0.3%. In Europe Total rose 1.4%, Statoil was 1% higher and Repsol climbed 0.8%. Oil services and engineering group AMEC jumped 4.4%, the biggest gainer on the index, after a broker lifted the company's price target on an optimistic view on its margins.

SPI Commentary The SPI traded down 8pts or 0.18% to 4354. Open at 4320 with a low of 4315 and a high of 4369. Volume 34,175. Overnight the SPI traded up 23pts to 4378.

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

AUS US

NY Fed Empire PMI

Tuesday

AUS

RBA Board Minutes

US

NAHB Survey, PPI, housing starts

Wednesday

AUS

RBA Asst Gov Edey& Lowe speak

Thursday

AUS

Friday

AUS

US Imports, RBA Bulletin, RBA’s Richards speaks

US

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

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 Buy: Bluescope Steel (BSLKZI) – Buy the pullback We believe the recent pullback in BSL is a buying opportunity. BSL FY09 reported NPAT loss of A$66m, closing the books on a very challenging six months. Whilst we expect continued uncertainty in demand, a return to profit in 2Q10 appears likely as domestic prices and production levels recover and this is what the market is beginning to focus on. We think earnings leverage and long-term value are both appealing. RBS Research has a buy recommendation with $3.55 target price. Buy BSLKZI..

Source: IRESS

Result well-guided, with cost savings a highlight The FY09 reported NPAT loss was A$66m with underlying NPAT of A$56m which was in line with RBS expectations. Also, the lack of a dividend for 2H09 should not have surprised, and we think a distribution is unlikely to be paid until at least 2H10 as earnings levels firm. Despite this, RBS Research believe news of achieved permanent cost savings of A$132m set the tone for the earnings recovery story to come into focus. Management forecasting small NPAT loss for 1H10 BSL has guided for a small reported NPAT loss in 1H10. However, with domestic price increases likely to be announced for 1 October, and the Port Kembla mills running at ~75% utilisation, we anticipate BSL returning to profit in 2Q10, with economic indicators stabilising RBS Research find the stock appealing at these levels given its earnings leverage to a steel market recovery and a reasonable 0.97x P/B (FY10F). RBS maintain Buy recommendation and target price of $3.55

RBS MINIs over BSL Security

ExPrc

Stop Loss

CP

ConvFac

Delta

Description

BSLKZI

160.84

193

Long

1

1

MINI Long

BSLKZS

474.35

403

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 19 Aug RIO Rio Tinto Dec 18 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) - UGL delivered underlying NPAT of A$150.3m (RBS A$147.5m) and an FY09 dividend of 64c (RBS 63c) with operating cash flow a feature, reflecting sustained working capital discipline. With guidance for an effectively flat underlying NPAT in FY10, we expect a return to double-digit growth in FY11 as resources spend grows, especially around LNG, and government-sponsored infrastructure spending picks up the slack created in a credit constrained private sector

Amcor Limited (AMC) - AMC reported adjusted FY09 NPAT of A$360.5m (-2.3%). This was marginally below RBS Research forecast of A$365m. EPS was 43.1c, which was in line with RBS forecast of 43.4c. EPS rose by 0.5% as growth benefited from the effect of the share buyback.

Wednesday Rio Tinto (RIO) - (USD) Focus on costs and additional writedowns. 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.

New MINIs listing today Security

ExPrc

ANZKZW

$

Stop Loss 28.00

CP

ConvFac

Delta

Description

25.20

Short

1

1

MINI Short

BLDKZR

$

8.00

7.20

Short

1

1

MINI Short

MQGKZY

$

57.00

51.30

Short

1

1

MINI Short

WBCKZX

$

26.55

Short

1

1

MINI Short

4655.00

Short

2500

1

Index MINI Short

XJOKZX

29.50 4,900

MINIs approaching stop loss Underlying COH WES NAB BXB SUN

MINI Code COHKZQ WESKZT NABKZT BXBKZP SUNKZQ

MINI Type Short Short Short Short Short

Strike $69.43 $30.24 $31.10 $7.90 $8.93

Stop Loss $62.55 $27.24 $28.00 $7.11 $8.43

Share Price

Approx. MINI Value

$ $ $ $ $

$ $ $ $ $

60.94 26.52 26.99 6.83 7.93

8.49 3.72 4.11 1.07 1.00

Share: Stop Loss 2.6% 2.7% 3.7% 4.1% 6.3%

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