JP Morgan Outlook Devepment Countries

Emerging Markets Equity Research 3 July 2008
Emerging Markets Strategy Dashboards

Emerging Markets Equity Strategy Team Adrian MowatAC Deanne Gordon Ben Laidler Peter Westin Rajiv Batra Rohan Ghalla Emerging Markets South Africa Latin America Russia Emerging Markets Emerging Markets adrian.mowat@jpmorgan.com deanne.gordon@jpmorgan.com ben.m.laidler@jpmchase.com peter.westin@jpmorgan.com rajiv.j.batra@jpmorgan.com rohan.d.ghalla@jpmorgan.com (852) 2800 - 8599 (27-21) 712 0875 (562) 425 5407 (7-495) 967-1771 (91-22) 6695-3224 (91-22) 6719-8289 J.P.Morgan Securities (Asia Pacific ) Limited J.P.Morgan Equities Ltd. Inversiones y Asesorias Chase Manhattan Ltda J.P. Morgan Bank International LLC J.P. Morgan India Private Limited J.P. Morgan India Private Limited Underweight Brazil, Korea, Turkey, Poland, India, South Africa joyce.chang@jpmorgan.com (1-212) 834-4203 J.P. Morgan Securities Inc.
Country Recommendation
Overweight China, Mexico, Taiwan, Thailand, The Philippines
Global Emerging Markets Research, Foreign Exchange, and Commodities Joyce Chang Global Emerging Markets
Key Changes
Market performance to 2 July 2008 Year to date: MSCI Emerging Markets -15.1% underperforming MSCI World by 1.5% Top market YTD in US$ terms: Argentina, Morocco and Israel Bottom three markets YTD in US$ terms: Turkey, Philippines and India JPMorgan's revisions to 2008 Real GDP growth forecasts for the US Full year : 1.7% [1.6%] 2Q08 : 2.0% [1.0%] 3Q08 : 1.0% [1.5%] JPMorgan's revisions to 2009 Real GDP growth forecasts Negative: Latin America 3.9%[4.0%], Brazil 3.8% [4.0%]
Index
Market Performance Market Drivers 2008 Index Targets Cross-section Earnings Growth Earnings Revisions Regional Valuation Sector-Country PE Matrix Valuation Distribution Equities relative to Bonds Economic Momentum Policy Rates Forecast Currency Forecasts Credit Risk Emerging Market Balance Sheets Emerging Market in Perspective Emerging Capital Market Index Weightings
Page #
2 3 4 5 6,7 8 9 10 11 12 13 14,15 16 17 18 19 20
Valuations MSCI China is currently trading at a 12m fwd PE of 12.8x, which is a premium of 6.7% to MSCI EM, as compared to a premium of 42% at the beginning of the year. JPMorgan's revisions to official interest rate forecasts MSCI India is currently trading at a 12m fwd PE of 13.6x, which is a premium of 13.3% to Turkey: Next move 17 Jul 08 +50bp [3Q08 +50bp ] ; Dec 08 level 17.25% [16.75%] MSCI EM, as compared to a premium of 64% at the beginning of the year. Peru: Next move 10 Jul 08 +25bp [4Q08 +25bp] ; Dec 08 level 6.25% [6.00%]
See page 21 for analyst certification and important disclosures, including non-US analyst disclosures. JPMorgan does and seeks to do business with the companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
J.P. Morgan Securities (Asia Pacific) Limited
http://mm.jpmorgan.com
Emerging Markets Equity Strategy Research J.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , adrian.mowat@jpmorgan.com J.P.Morgan Equities Limited: Deanne Gordon (27-21) 712 0875, deanne.gordon@jpmorgan.com
July 3, 2008
Market Performance: MSCI AC Performance by Regions, Countries and Sectors

Philippines EMF Latin America Indonesia EMF Asia EMF Asia Malaysia Thailand Global Japan EMEA Korea China India 2008 Year to Date Consumer Discretionary Consumer Staples Energy Financials Healthcare Industrials Information Technology Materials Telecoms Utilities Region / Country Benchmark Change vs dollar Pakistan 3.3% -27.6% 6.2% -59.3% -12.5% -12.3% 4.5% 74.3% 13.0% 0.2% Jordan North America Europe Taiwan -15.4% -8.3% -18.0% 1.7% -10.1% -19.8% -14.9% 9.6% -14.4% 6.2% EMF -19.6% -9.6% -4.3% -24.9% -1.9% -32.2% -12.0% -3.5% -18.9% -12.9% -15.1%
-19.4% -11.9% 3.6% -25.6% -9.6% -16.6% -13.9% -0.4% -18.1% -7.2% -13.6%
-17.4% -8.3% 7.9% -28.0% -12.6% -16.0% -13.6% 3.7% -20.0% -4.2% -12.4%
-25.6% -17.8% -1.2% -26.6% -4.7% -19.3% -24.4% 0.1% -18.5% -9.9% -16.1%
-17.1% -12.0% -7.4% -12.8% -9.7% -6.1% -12.7% -17.9% -14.2% -7.0% -12.4% 5.0%
-22.7% -13.8% -23.0% -27.5% -5.3% -36.1% -12.3% -24.0% -23.7% -33.6% -24.0%
-6.4% 1.1% 14.7% -7.6% -20.0% 12.2% 7.1% -8.2% 11.5% 2.1%
-31.0% -24.9% -0.4% -27.8% 1.1% -25.0% -6.6% 17.3% -22.4% 6.0% -8.9%
-22.7% -13.8% -23.0% -27.5% -5.3% -36.1% -12.3% -24.0% -23.7% -33.6% -24.0%
-2.2% -8.9% -32.1% -19.5% -27.3% 4.6% -8.1% -16.6% -16.9% -13.5% -10.9%
-39.4% -12.6% -25.4% -26.0% -37.7% -37.6% -39.0% -25.6% -34.6% -28.7% 6.1%
-37.6% -15.0% -26.3% -48.8% 6.3% -50.6% -2.6% -40.7% -46.0% -46.8% -35.4% -9.6%
-26.2% -5.5% -19.5% -25.2% -30.0% -34.9% -14.6% -18.9% -22.1% 1.2%
-18.9% -3.5% -10.0% -13.5% -31.7% -17.2% -7.9% -18.9% -12.9% -11.9% Czech Republic
-28.4% -3.1% 37.5% -26.9% -9.4% -32.1% -24.5% -14.0% -11.6% 1.9%
-34.6%
-40.4% -34.3%
-26.3% -39.5% -35.5% -9.7%
EMF Latin America
Argentina
Colombia
EMEA
South Africa
Consumer Discretionary Consumer Staples Energy Financials Healthcare Industrials Information Technology Materials Telecoms Utilities Region / Country Benchmark Change vs dollar
-6.4% 1.1% 14.7% -7.6% -20.0% 12.2% 7.1% -8.2% 11.5% 2.1%
-12.6% -1.2% 10.9% -8.3% -23.3% 12.2% 9.1% 6.9% 15.8% 3.9% 9.5%
0.2% 9.8% 3.8% -1.8% -5.3% -11.4% -4.2% 4.7%
-16.8% -26.0% -20.4% -30.7% 35.0% -17.8% 0.1% -7.8% -3.9% 19.4% -33.3% 34.0% 4.0% 0.7% -16.2% 18.7% -0.6% 11.8% 57.3% -30.0% 8.7% -12.1%
2.5% 1.8%
-31.0% -24.9% -0.4% -27.8% 1.1% -25.0% -6.6% 17.3% -22.4% 6.0% -8.9%
-14.8% -17.3% 31.6% -26.2% -26.0% -20.0% -32.9% 18.0% -6.9% -2.1% -14.3%
-13.1% -23.8% 1.3% -26.6% 1.3%
-34.7% -24.7% -6.0% 1.3% -16.9% -4.3% 54.7% 9.4% 6.1% 15.2%
-51.6% -22.5% -23.4% -52.2% -37.2% 9.5% -42.4% -41.2% -5.9%
-34.6% -35.9% -27.9% -45.4% -33.4% -26.0% -7.8% -3.2% -25.9% 14.5% -17.1% -30.6% -21.7%
-37.0%
Egypt
Brazil
Israel
Chile
Peru
2008 Year to Date
26.8%
-22.4% 14.9%
-8.8% 18.2%
8.0% 14.9%
10.7% -29.3% -6.6% 5.1%
-20.1% -24.5% 14.1%
-27.4% -10.8% 1.8% -7.9% 17.4%
23.4% -23.2% -5.7% 3.8%
29.7% 20.5% 6.7%
Notes Source: Bloomberg, MSCI. Regional headings first sorted by regional weights in the MSCI EMF and then country headings from left to right by relative weights within the MSCI EMF Indices: Regions in US$ and countries in local currency. Local currency movements against the dollar : appreciation / (depreciation) Country and sector cross sections in italic blue have outperformed their indices by more than 2%. Shaded areas have underperformed their indices by more than 2%.
Updated as of Jul 2
Morocco
Hungary
Mexico
Poland
Russia
Turkey
Outlook: Market Drivers

Global and developed market drivers
Country Global US Europe UK Japan Australia Hong Kong Singapore
Source: JPMorgan.
Positive Equities discounting US recession Abating recession fears, fiscal package stimulating consumer spending Steepening yield curve, cheap valuations, stabilizing credit markets Valuations cheap, currency weakness, wage growth under control Corporate pricing power, rising asset prices, new credit cycle, reasonable valuations, interest rate rise Strong terms of trade, consumer tax cuts on the way, corporate pricing power China macro (currency revaluation, possible policy loosening), low real rates, reflation continues, strong corporate earnings growth, China investment flows Return of 'safe haven' status for Singapore, Banks stocks re-rating from better volume / margins, Property launches leading to real estate run up
Negative Recession like dynamics, credit crunch, inflation, risk aversion, high oil prices Sub-prime & housing issues, slower earnings growth, high oil prices and inflation Weakening growth indicators, negative earnings revisions, currency headwinds, high inflation and potential rate hike Potentially weaker consumer, slowdown in housing Cyclical earnings, recent weak manufacturing and yen volatility Strong currency headwinds for earnings, weak housing, bank funding costs and asset quality issues, commodity price risk, slowdown in economic activity post rate hikes, high inflation Property price increases concentrated in luxury end of the market, weak US equity outlook Higher food/fuel inflation, tightening policy, significant growth slowdown
Emerging Market Drivers

Country China Positive Headline CPI trending down in 2H08, resumption of RMB appreciation, potential switch in policy focus from inflation to growth, reform & liberalization on track, lower corporate tax rate, strong domestic demand, strong earnings growth, QDII flows, potential eased loan growth control, liberalization in oil price Long term economic growth, demographics, cash positions with mutual funds and insurance companies, rising wage levels High soft commodity prices New government potentially pro-growth and possibilities for deregulations in property sector Strong domestic demand, strong ringgit, soft commodity play, 9MP pump priming Fast growing economy, peaking interest rates, cheap valuations, strong ROEs, M&A, privatizations Fiscal consolidation, OFW remittances and BPO sector to see continued strength, investment cycle upturn Pro-growth initiatives by new government, closer cross-straits relationships, investment positioning (consensus UW position among FIs) Earnings growth premium, falling real rates, fiscal stimulus, recovering domestic demand, cheap valuations Strong reserve position, twin surpluses, counter-cyclical monetary policy,structural change in many sectors driving growth and equity market deepening. Domestic demand-led GDP growth Easing of macro fears, bond spread compression Economy resilient to US slowdown, Domestic demand strong, Fiscal spending supportive, Reform agenda ongoing, De rated market. Fixed investment growth, high household income Abundant domestic liquidity, consumer boom, commodity prices, fixed investment growth, potential oil tax reform SA not over owned by foreigners, infrastructure investment, valuations Valuations Negative Potential further macro tightening, social stability issues, soaring crude oil price, broader and deeper US/global recession, policy mis-step risks, recent weather disruptions
India Indonesia Korea Malaysia Pakistan Philippines Taiwan Thailand Brazil Czech Republic Hungary Mexico Poland Russia South Africa Turkey
Source: JPMorgan.
High inflation, widening current account deficit, depreciating Rupee, politics, expensive valuations, US slowdown impact on Indian IT Crowded carry trade, limited policy flexibility, high inflation trending upwards, increase in bond issuance to meet subsidies, interest rate tightening, higher real interest rates High inflation with slower economic growth, low domestic investment and consumption, fading positive impact from depreciation of KRW on export names Near term political uncertainty, limited GLC reform, accounting scandals, delays in 9 MP infrastructure projects Political risk, infrastructure issues, power deficit, fiscal and current account deficits, high inflation, interest rate tightening Global risks to affect risk appetite on emerging economies, food inflation, low liquidity, political noise, Middle east unrest, interest rate tightening High emerging market inflation to drag growth, high valuations across non-tech space Uncertainty on macro economic policy, politics, inflation Consensus overweight, fiscal relaxation, economy growing above potential, limited reform agenda, equity market heavy commodity concentration, Rate hike, Inflation Rich valuations. Political uncertainty, inflation HUF becoming more crowded. Lack of real buy-in on reform by Socialist party Still vulnerable to the US cycle and Inflation Rising input cost, margin pressure, hawkish central bank, local mutual fund redemptions Heavily skewed to commodity exposure, cost and wage growth, interest rate tightening Rand exchange rate wildcard, viewed as commodity play, tightening monetary policy, electricity outage, political uncertainity, cash flush SA corporate balance sheets Politics, central bank easing fully priced in to equity markets, declining earnings expectations, rising inflation expectations, large current account deficit
Updated as of Jul 2008
July 3, 2008
Outlook: December 2008 Index Targets

Local Market Index 2-Jul-08 Target Return MSCI Local Index 2-Jul-08 Target Return 2-Jul-08 Forex Target Return MSCI US $ Index Dividend US $ Total Yield ## Returns Returns Valuations (PE) Target Index Current Index Level 07E EPS 08E EPS 08E EPS
Emerging Market Indices

China (H Share)# India (Sensex) Indonesia (JCI) Korea (KOSPI) Malaysia (KLCI) Pakistan (KSE100) Philippines (PCI) Taiwan (TWSE) Thailand (SET) South Africa (JSE) Brazil (Bovespa) Mexico (Bolsa) Chile Poland Russia (RTS) Turkey Emerging Markets*** 11609 13665 2378 1624 1154 12126 2394 7354 760 29304 61106 28681 2840 40420 2255 33566 18500 18500 2800 1970 1500 16500 3400 11000 970 30100 78000 38200 3200 65000 2700 49000 59 35 18 21 30 36 42 50 28 3 28 33 13 61 20 46 61 553 3411 447 423 392 465 286 314 698 246162 26562 3688 1735 1390 508332 43381 96 760 4040 550 560 525 670 425 410 750 320000 36450 4200 2800 1700 750000 58244 58 38 18 23 33 34 44 49 30 7 30 37 14 61 22 48 34 7.8 43.2 9215 1037 3.3 69.2 45.2 30.4 33.4 7.82 1.60 10.4 516 2.11 23.5 1.24 7.8 45.0 9200 1020 3.1 63.6~ 45.0 29.0 33.0 8.00 1.85 10.9 500 2.19 23.4 1.23 0 -4 0 2 6 8 0 5 1 -2 -16 -5 3 -4 0^ 1 -2.7 1.4 0.7 1.5 0.9 1.7 3.1 2.5 2.4 1.9 1.9 1.3 1.6 1.4 2.0 0.9 2.1 1.4 58 32 19 25 41 46 45 56 32 5 12 31 17 56 22 49 31 59 33 20 26 43 49 47 58 34 7 14 32 19 58 23 51 33 16.0 17.3 16.2 12.4 13.7 11.7 12.6 13.0 12.8 14.2 15.4 15.0 19.3 11.2 12.9 7.6 15.1 14.0 14.7 14.0 10.7 12.6 10.0 11.6 12.6 10.9 11.4 13.5 14.1 17.0 11.4 10.3 7.5 14.7 22.0 20.2 16.6 13.2 16.7 13.4 16.8 18.8 14.2 12.2 17.5 19.3 19.4 18.3 12.6 11.0 19.7
Other Indices
Developed Markets Australia Singapore Hong Kong US UK Japan** MSCI Europe MSCI EMU Index used ASX 200 STI HSI S&P 500 FTSE 100 TOPIX MSCI Europe MSCI EMU 2-Jul-08 5095 2906 21704 1262 5426 1301 1218 183
Index Target 5900 3800 31500 1450 6400 1301 1410 216
Return 16 31 45 15 18 0 16 18
2-Jul-08 0.96 1.36 7.8 1.0 1.99 106 1.59* 1.59*
Forex Target 0.93 1.33 7.8 1.0 1.86 110 1.50* 1.50*
Return -3 2 0 0 -7 -4 -6 -6
Dividend Yield ## 2.4 2.0 1.7 1.1 2.0 0.8 2.0 2.0
US $ Returns 11 35 38 15 10 -4 9 11
Total Returns 13 37 39 16 12 -3 12 13 Updated as of Jul 2
Source: MSCI, Datastream, JPMorgan estimates Note: Local Index used shown in brackets. Index targets for US from JPMorgan's US Equity Strategy team and for UK, MSCI Europe and MSCI EMU from JPMorgan's European Equity Strategy team. # Note that we have not included the forecast 10% move in the Renminbi in the MSCI China forecast. ## Dividend yield is time-weighted to arrive at expected 2006 total USD returns. * Euro used for forex in MSCI Europe and MSCI EMU. ~ Consensus forecast is used for Pakistan Rupee ** No index target. The number herein refers to current index level. *** Emerging Market index target derived based on weighted calculations of individual countries' target returns ^ Forex return for Russia is zero as shares are traded in US$.
Emerging Markets Equity Strategy Research J.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , adrian.mowat@jpmorgan.com J.P.Morgan Equities Limited: Deanne Gordon (27-21) 712 0875, deanne.gordon@jpmorgan.com July 3, 2008
Profit Outlook: Earnings Forecasts Matrix for Countries and Sectors

EM Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities Weight (%) 100.0 4.7 4.2 19.3 20.8 1.5 7.9 11.1 16.8 10.8 3.0 Weight (%) 100.0 7.9 6.5 31.7 19.0 0.0 4.3 0.0 6.8 18.4 5.4 Weight (%) 100.0 2.7 0.0 0.0 44.5 0.0 9.9 0.0 0.0 33.5 9.5 Weight (%) 100.0 6.9 3.5 15.5 20.3 0.9 5.1 0.5 33.0 14.3 0.0 Weight (%) 100.0 0.8 0.5 62.9 9.7 0.5 0.0 0.0 14.9 10.8 0.0 Median 2008 Median 2008 Median 12.1 12.1 NA NA 9.9 NA 5.1 NA NA 13.3 37.5 2008 8.2 12.1 NA NA -0.1 NA 8.4 NA NA 12.6 19.1 Median 20.3 20.3 56.4 93.9 8.5 NA 317.3 NA 6.7 -12.8 69.9 2008 15.7 20.3 55.8 21.9 14.2 NA 126.0 NA -12.0 -9.5 69.9 Median 2008 EPS Growth JPMorgan Consensus 2009 Median 2008 2009 14.2 14.0 15.6 18.3 24.3 19.8 18.1 1.0 17.1 16.9 23.9 12.3 10.1 9.5 18.6 12.8 -5.4 16.8 17.5 12.7 18.9 4.7 17.5 10.5 15.8 10.7 14.1 11.3 11.9 15.5 1.3 1.4 20.2 EPS Growth JPMorgan Consensus 2009 Median 2008 2009 38.0 22.0 19.5 24.6 10.2 21.0 21.0 13.0 13.5 27.6 36.6 16.1 119.3 62.2 13.2 58.6 13.7 22.0 20.9 17.2 NA NA NA NA 26.2 311.9 112.9 32.7 NA NA NA NA -15.1 12.8 -10.3 -6.2 16.5 9.3 8.2 12.4 57.8 105.3 105.3 46.6 EPS Growth JPMorgan Consensus 2009 Median 2008 2009 15.7 9.9 5.1 12.8 17.6 2.5 2.5 15.7 NA NA NA NA NA NA NA NA 26.2 9.9 -2.7 19.9 NA NA NA NA 22.1 7.8 12.1 10.2 NA NA NA NA NA NA NA NA 14.4 10.4 9.8 12.1 -21.8 38.6 9.0 -9.0 EPS Growth JPMorgan Consensus 2009 Median 2008 2009 16.4 25.0 21.8 9.9 10.6 20.2 19.2 23.0 15.6 37.8 37.8 15.0 4.1 4.8 15.0 11.3 10.6 26.5 20.3 21.3 21.3 53.8 53.8 12.9 73.6 62.7 34.4 11.6 15.3 21.6 NA NA NA EPS Growth JPMorgan Consensus 2009 Median 2008 2009 23.5 25.3 12.0 NA NA NA 44.7 44.7 32.7 16.1 28.7 11.4 34.0 34.0 24.2 NA NA NA NA NA NA NA NA NA 59.8 6.6 6.8 22.6 28.6 16.9 NA NA NA China Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities Weight (%) 100.0 3.3 2.5 20.5 31.4 0.0 10.8 2.6 5.6 21.4 1.9 Weight (%) 100.0 9.8 5.9 2.7 18.2 0.0 20.8 24.3 12.3 3.9 2.2 Weight (%) 100.0 2.2 1.5 0.9 18.4 0.0 3.4 54.2 14.5 5.0 0.0 Weight (%) 100.0 3.3 4.3 28.3 18.6 0.0 2.9 0.8 32.4 4.3 5.0 Weight (%) 100.0 4.3 0.0 14.9 51.6 0.9 5.4 2.3 9.6 11.0 0.0 Median 2008 Median 2008 Median -1.2 -3.3 22.7 -24.6 15.7 NA 5.4 -6.5 -1.8 17.1 NA 2008 2.6 -1.6 22.7 -24.6 4.0 NA 3.2 3.6 -3.0 22.9 NA Median 11.9 22.0 17.4 35.5 4.3 NA 12.7 47.9 20.0 11.2 -36.5 2008 15.8 49.9 17.1 129.5 -5.6 NA 5.5 46.4 16.7 -11.2 -58.8 Median 29.4 28.3 32.4 40.5 32.4 NA 14.2 42.2 35.6 1.1 -8.1 2008 14.7 5.6 31.2 -0.9 24.4 NA 7.5 44.8 20.2 23.5 -11.1 EPS Growth JPMorgan Consensus 2009 Median 2008 2009 19.3 21.2 16.6 18.3 21.5 22.3 5.0 21.4 24.8 27.6 29.6 25.1 18.8 38.0 15.6 14.1 21.9 18.5 21.0 24.1 NA NA NA NA 9.9 12.6 2.6 14.2 40.5 38.5 33.7 23.6 24.2 26.1 15.2 17.8 17.4 19.2 24.6 15.1 19.8 -5.6 -6.9 20.5 EPS Growth JPMorgan Consensus 2009 Median 2008 2009 17.1 13.2 14.6 15.6 6.6 17.3 49.6 11.9 10.6 14.0 13.8 13.5 9.5 35.5 61.0 7.2 13.7 5.1 -1.0 7.4 NA NA NA NA 27.3 13.0 7.2 28.1 29.8 33.6 39.7 18.9 7.1 20.0 16.5 4.9 17.8 6.8 -13.2 21.1 -33.8 -35.6 -58.7 131.5 EPS Growth JPMorgan Consensus 2009 Median 2008 2009 8.1 1.4 2.5 12.3 18.6 1.3 0.6 15.8 11.5 18.3 18.3 11.3 3.4 -24.6 -24.6 3.4 12.9 17.1 11.8 24.1 NA NA NA NA 11.1 5.4 -10.8 13.3 11.2 -3.3 1.4 14.3 -6.9 1.6 1.0 -1.3 9.3 9.4 17.8 7.8 NA NA NA NA EPS Growth JPMorgan Consensus 2009 Median 2008 2009 23.2 14.5 17.8 100.7 75.8 49.7 10.7 21.4 26.8 44.3 44.3 8.5 28.7 16.3 19.4 NA NA NA 37.4 73.0 18.0 34.6 34.6 20.4 -5.5 -4.1 21.2 10.8 4.1 16.0 8.4 7.0 7.7 EPS Growth JPMorgan Consensus 2009 Median 2008 2009 10.7 -1.4 14.8 17.7 30.9 16.0 NA NA NA -15.0 -12.5 0.7 10.7 4.4 31.3 68.8 68.8 48.2 38.9 61.2 30.4 4.8 4.8 6.5 -14.5 -14.5 -11.1 9.0 9.0 5.1 NA NA NA India Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities Weight (%) 100 2.8 5.3 22.7 22.5 4.2 8.4 15.8 9.5 3.7 5.1 Weight (%) 100.0 11.5 18.8 3.0 27.9 0.0 19.9 0.0 1.1 6.8 10.9 Weight (%) 100.0 2.6 1.6 44.8 32.2 0.0 1.4 0.0 7.4 8.0 2.0 Weight (%) 100.0 12.1 18.5 0.0 6.4 0.0 5.3 0.0 18.5 39.2 0.0 Weight (%) 100.0 4.7 10.9 6.4 41.6 0.0 13.2 0.0 9.1 14.1 0.0 Median 2008 Median 2008 Median 20.2 21.2 0.9 1.0 14.9 NA 136.7 NA -7.9 55.5 13.8 2008 17.1 21.3 0.9 13.7 30.0 NA 136.7 NA -13.5 41.2 13.1 Median 13.5 -9.8 38.7 53.6 14.9 NA 18.1 NA 583.5 -13.8 5.2 2008 8.5 -15.8 31.3 53.9 9.6 NA 21.8 NA 151.8 -7.0 -2.2 Median 21.3 6.4 17.9 22.3 35.5 26.9 23.8 21.0 12.9 90.3 10.7 2008 18.2 0.6 12.2 10.9 26.3 27.7 21.7 25.5 18.8 32.9 11.2
EPS Growth JPMorgan Consensus 2009 Median 2008 2009 17.6 17.0 16.7 22.0 13.5 7.0 9.3 14.8 14.1 14.1 9.1 14.6 11.9 19.1 20.8 35.5 27.8 30.6 26.9 27.0 -4.0 13.0 14.3 12.5 24.2 23.8 11.5 28.3 23.9 17.3 18.4 15.9 13.7 11.2 13.7 9.5 12.4 91.5 25.1 21.7 8.1 3.3 -8.3 10.8 EPS Growth JPMorgan Consensus 2009 Median 2008 2009 12.4 11.4 2.8 10.3 4.8 9.5 -8.2 8.7 10.3 35.4 26.8 6.7 31.1 52.5 50.9 32.8 16.8 15.0 2.1 9.7 NA NA NA NA 18.3 10.7 16.3 17.8 NA NA NA NA 16.3 583.5 151.8 16.3 12.1 -29.2 -39.7 8.2 -2.1 -6.0 -8.7 0.6 EPS Growth JPMorgan Consensus 2009 Median 2008 2009 9.8 16.8 114.3 8.7 11.1 23.0 23.3 12.2 8.2 70.6 70.6 40.3 15.7 2.5 11.0 7.9 13.4 15.1 -301.2 14.9 NA NA NA NA -22.7 136.7 136.7 -22.7 NA NA NA NA -12.2 -8.4 -13.7 -3.4 -7.0 35.7 25.1 6.9 -7.8 6.9 6.1 -6.0 EPS Growth JPMorgan Consensus 2009 Median 2008 2009 7.1 6.3 13.2 20.6 13.7 18.1 5.5 -1.9 14.8 NA NA NA -5.4 1.8 18.3 NA NA NA -4.1 4.8 -4.0 NA NA NA 16.5 10.3 9.0 2.4 5.6 16.0 NA NA NA EPS Growth JPMorgan Consensus 2009 Median 2008 2009 17.3 2.1 19.1 15.2 -27.0 22.7 20.0 16.7 23.9 -17.2 -17.2 5.3 15.6 1.4 19.5 NA NA NA 2.9 -6.7 15.7 NA NA NA 43.0 39.3 40.0 39.6 39.6 9.6 NA NA NA Updated as Jul 2008
Indonesia Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities
Korea Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities
Malaysia Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities
Philippines Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities
Taiwan Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities
Thailand Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities
South Africa Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities
Brazil Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities
Mexico Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities
Russia Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities
Poland Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities
Turkey Total Market Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities
Source: I/B/E/S, MSCI, JPMorgan. Note: Average earnings growth calculated based on earnings aggregate of MSCI contituents. Consensus numbers are used for stocks not covered by JPMorgan under JPMorgan forecasts calculation. Median numbers are for the year 2008.
Emerging Markets Equity Strategy
J.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , adrian.mowat@jpmorgan.com J.P.Morgan Equities Limited: Deanne Gordon (27-21) 712 0875, deanne.gordon@jpmorgan.com
July 3, 2008
Profit Outlook: Changes in 2008 and 2009 EPS Forecasts

World 120 115 110 105 100 95 Feb-07 2008 2009 130 125 120 115 110 105 100 Jun-07 Oct-07 Feb-08 Jun-08 95 Feb-07 Jun-07 Oct-07 Korea 120 2009 115 110 2008 115 105 95 Feb-07 105 2008 100 95 Feb-07 100 90 Jun-07 Oct-07 Feb-08 Jun-08 80 Feb-07 2008 2009 140 130 120 110 2009 Feb-08 Jun-08 2008 Emerging Markets (EM) 2009 129 124 119 114 109 104 99 Feb-07 2008 EM Asia 2009 144 2009 136 128 120 112 104 96 Feb-07 2008 EM Europe
Jun-07
Oct-07 Taiwan
Feb-08
Jun-08
Jun-07
Oct-07 China
Feb-08
Jun-08
EM Latin America 145 135 125
155 145 135 125 115 105 95 Feb-07
2009
2008
Jun-07
Oct-07
Feb-08
Jun-08
Jun-07
Oct-07
Feb-08
Jun-08
Jun-07
Oct-07
Feb-08
Jun-08
Brazil 120 115 110 105 2008 100 95 90 Feb-07 110 100 90 Feb-07 2009 150 140 130 120
Russia 140 2009
South Africa 130 2009 130 120 110 120 100 2008 110 2008 90 80 Feb-07
Mexico
2009
2008
Jun-07
Oct-07
Feb-08
Jun-08
Jun-07
Oct-07
Feb-08
Jun-08
100 Feb-07
Jun-07
Oct-07
Feb-08
Jun-08
Jun-07
Oct-07
Feb-08
Jun-08
Updated as of Jul 2
Source: I/B/E/S Notes: The dashboard aims to show changes in earnings expectations. All year ends are for December. EPS figures are normalized, starting at 100 on base date Feb 2007 for ease of comparison. These numbers are directly from IBES aggregate and may differ from those in the growth expectations pages where adjustments are made for exceptional items.
Emerging Markets Equity Strategy
July 3, 2008
Profit Outlook: Changes in 2008 and 2009 EPS Forecasts

India 140 134 128 122 116 110 104 98 92 Feb-07 Jun-07 Oct-07 Chile 135 2009 125 115 105 95 Feb-07 2008 120 2008 101 100 98 95 Feb-07 130 Feb-08 Jun-08 2008 110 105 100 Feb-07 2009 125 120 115 Malaysia 2009 140 130 120 2008 110 100 90 Feb-07 2008 Israel 2009 125 120 115 110 105 100 95 90 Feb-07 Jun-07 Oct-07 Feb-08 Jun-08 2008 2009 Poland
Jun-07
Oct-07 Turkey
Feb-08
Jun-08
Jun-07
Oct-07
Feb-08
Jun-08
Thailand 2009 110 107 104 2008 2009 155 145 135 125 115 105 95 Feb-07
Indonesia
2009 2008
110
Jun-07
Oct-07
Feb-08
Jun-08
90 Feb-07
Jun-07
Oct-07
Feb-08
Jun-08
Jun-07
Oct-07
Feb-08
Jun-08
Jun-07
Oct-07
Feb-08
Jun-08
Hungary 112 110 108 106 104 102 100 98 96 Feb-07 Jun-07 Oct-07 Feb-08 Jun-08 95 Feb-07 Jun-07 2008 2009 120 115
Czech. Republic 158 138 2009 110 105 2008 100 118 98
Argentina 130 2009 120 110
Philippines
2009
2008 100
78 58 38 Feb-07 2008 90 80 Feb-07
Oct-07
Feb-08
Jun-08
Jun-07
Oct-07
Feb-08
Jun-08
Jun-07
Oct-07
Feb-08
Jun-08
Updated as of Jul 2
Source: I/B/E/S Notes: The dashboard aims to show changes in earnings expectations. All year ends are for December. EPS figures are normalized, starting at 100 on base date Feb 2006 for ease of comparison. These numbers are directly from IBES aggregate and may differ from those in the growth expectations pages where adjustments are made for exceptional items.
Emerging Markets Equity Strategy Research J.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599,adrian.mowat@jpmorgan.com J.P.Morgan Equities Limited: Deanne Gordon (27-21) 712 0875, deanne.gordon@jpmorgan.com
July 3, 2008
Value: Regional and Countries Valuations

P/E (x) 2-Jul-08 MSCI Index Global* USA* Europe* Japan* EMF Asia EMF LATAM* EMF EMEA* Emerging Markets* Korea Taiwan China Brazil* Russia* South Africa* Mexico* India Malaysia Israel* Poland* Chile* Turkey* Thailand Indonesia Hungary* Egypt* Czech Republic* Argentina* Philippines Pakistan 361 1,204 1,218 823 565 7,247,048 470 43,381 447 286 61 246,162 1,390 698 26,562 553 423 480 1,735 3,688 508,332 314 3,411 1,312 1,966 497 23,156,220 465 392 Avg. 2006 16.0 16.5 13.6 15.7 13.7 12.2 13.6 12.9 11.4 16.7 14.6 10.8 13.2 13.9 13.8 19.9 14.3 16.2 14.5 21.2 14.2 10.2 15.0 10.2 14.8 20.5 18.3 14.2 11.7 Current Trailing 13.8 15.4 11.3 16.6 14.6 14.5 12.0 13.8 11.6 12.8 15.0 14.5 11.6 12.8 14.5 16.0 13.2 13.6 11.3 18.1 7.5 11.8 15.1 9.2 15.1 16.7 10.3 12.1 10.9 12m Fwd 12.5 13.7 10.5 15.7 12.9 12.7 10.1 12.0 9.9 12.2 12.8 12.5 9.8 10.4 13.2 13.6 11.9 12.1 10.6 15.4 6.9 10.4 12.1 8.6 12.8 14.5 10.1 10.8 9.5 2007 14.2 16.0 11.5 16.8 15.4 15.4 13.0 14.7 12.4 13.0 16.0 15.4 12.9 14.2 15.0 17.3 13.7 14.5 11.2 19.3 7.6 12.8 16.2 9.6 16.3 18.0 10.1 12.6 11.7 Prospective 2008E 13.3 14.7 11.1 16.4 13.8 13.6 11.0 12.9 10.7 12.6 14.0 13.5 10.3 11.4 14.1 14.7 12.6 12.8 11.4 17.0 7.5 10.9 14.0 8.8 13.9 15.4 10.6 11.6 10.0 2009E 11.7 12.7 10.0 15.0 12.0 11.7 9.3 11.1 9.2 11.7 11.7 11.4 9.2 9.3 12.4 12.5 11.2 11.5 9.9 13.9 6.3 9.9 10.1 8.3 11.8 13.5 9.7 10.1 8.9 Avg. 2006 2.4 2.2 3.1 1.1 2.5 2.7 3.0 2.9 1.8 3.7 2.6 4.8 1.2 3.2 1.4 1.4 3.4 2.8 4.8 5.1 2.3 4.0 3.2 2.8 5.2 9.1 1.3 3.2 4.9 Current Trailing 2.8 2.2 3.9 1.6 2.6 2.6 2.7 2.6 1.7 4.7 2.6 2.5 1.4 3.3 3.0 1.3 3.4 3.4 4.4 2.7 4.4 3.7 3.2 3.9 2.4 2.2 2.4 5.0 5.6 2007 2.8 2.3 3.8 1.6 2.4 2.4 2.4 2.3 1.7 4.4 2.4 2.2 1.1 2.9 2.8 1.3 3.4 3.5 4.8 2.7 4.7 3.6 3.3 3.9 1.9 0.8 1.2 4.9 5.1 Div. Yield (%) Prospective 2008E 2.8 2.2 4.0 1.7 2.8 2.8 3.0 2.8 1.7 4.9 2.8 2.7 1.7 3.8 3.3 1.4 3.5 3.3 4.0 2.8 4.2 3.8 3.1 3.9 2.8 3.6 3.6 5.0 6.2 2009E 3.1 2.3 4.4 1.8 2.9 3.5 3.5 3.2 2.0 5.0 3.4 3.4 2.0 4.6 4.1 1.4 3.8 4.0 4.3 3.5 5.2 4.1 3.6 4.3 4.1 4.1 4.1 5.6 7.1 Avg. 2006 2.5 2.8 2.1 2.0 2.0 2.7 2.2 2.1 1.6 2.0 2.3 2.5 2.0 2.6 4.4 4.2 1.9 2.1 2.2 1.6 1.8 2.0 2.9 2.3 4.3 2.3 3.1 2.0 4.1 Current Trailing 2.1 2.5 1.8 1.6 2.3 2.9 2.2 2.4 1.6 1.8 2.6 2.9 2.3 2.3 3.3 3.2 2.0 2.2 1.8 1.9 1.4 2.0 4.4 1.9 2.6 3.0 2.0 1.9 2.7 2007 2.1 2.6 1.7 1.7 2.4 2.8 2.4 2.4 1.7 1.9 2.7 2.8 2.4 2.7 2.9 3.6 2.1 2.3 1.9 2.0 1.4 2.1 4.7 1.9 2.1 3.1 2.6 1.9 2.9 P/BV (x) Prospective 2008E 2.1 2.4 1.8 1.5 2.2 3.1 2.0 2.3 1.5 1.8 2.4 3.0 2.1 1.9 3.7 2.9 1.9 2.1 1.8 1.9 1.4 1.9 4.0 1.8 3.0 2.9 1.5 1.8 2.5 2009E 1.9 2.2 1.6 1.4 2.0 2.7 1.7 2.1 1.3 1.7 2.1 2.6 1.8 1.6 3.4 2.3 1.7 1.8 1.7 1.8 1.2 1.7 3.2 1.6 2.6 2.6 1.2 1.7 2.2 2006 17.0 17.8 16.9 10.6 15.2 24.3 17.7 17.1 14.1 12.5 17.4 25.0 17.1 22.5 34.7 23.0 14.3 14.5 16.5 8.7 14.3 16.7 20.9 24.9 30.5 12.8 28.2 15.0 34.8 2007 15.0 16.2 15.3 9.7 15.1 15.3 18.2 16.0 13.9 14.5 18.7 20.2 18.2 19.7 22.0 23.0 15.4 16.7 16.5 10.5 18.3 16.2 27.7 19.6 19.3 17.4 32.9 14.9 27.0 2008E 15.7 17.0 15.9 9.9 16.6 17.4 19.7 18.3 14.7 14.3 18.5 21.6 21.9 19.5 23.2 21.9 15.7 17.4 16.3 11.4 18.9 18.3 31.1 21.0 18.0 19.3 17.8 16.1 26.7 2009E 16.7 18.0 17.2 9.9 17.3 24.4 20.1 19.7 15.3 14.6 19.3 24.4 21.2 18.8 28.8 20.7 16.3 17.0 17.7 13.2 20.3 18.4 31.1 20.0 23.9 20.0 13.9 17.3 26.6 ROE (%)
Source: I/B/E/S, MSCI, JPMorgan * Market forecast numbers are derived from bottom-up calculations of each individual MSCI constituents using I/B/E/S estimates. IBES Estimates are not available for Morocco, Jordan, Peru and Colombia. For all other markets, forecast numbers are derived from bottom-up calculations of each individual MSCI constituents using JPM estimates for covered stocks and I/B/E/S estimates for the rest.
Updated as of Jul 2
Emerging Markets Equity Strategy Research J.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599,adrian.mowat@jpmorgan.com J.P.Morgan Equities Limited: Deanne Gordon (27-21) 712 0875, deanne.gordon@jpmorgan.com July 3, 2008
Value: PE Matrix for Countries and Sectors

EMF LATAM Philippines EMF EMEA Indonesia Emerging Markets EMF Asia Malaysia Thailand 12-month forward PE Pakistan Taiwan Korea China India USA
Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities Market Aggregate Sector Neutral*
15.3 15.8 11.4 11.7 13.3 14.2 16.8 14.8 14.3 15.4 13.7 13.7
12.2 16.9 10.6 11.3 16.2 13.5 12.4 11.2 13.8 14.4 12.0 12.0
10.2 12.9 9.1 8.4 14.6 12.5 13.3 11.1 13.3 14.3 10.1 10.9
16.4 17.8 12.6 11.6 NA 14.4 20.2 11.4 12.9 12.6 12.7 13.6
12.4 19.2 14.6 13.9 23.3 15.4 15.4 11.6 17.6 16.2 14.6 14.7
8.1 16.4 6.4 8.5 NA 11.4 10.5 9.3 9.9 40.2 9.9 10.2
12.2 19.0 13.6 15.8 NA 12.9 11.6 10.4 13.6 NA 12.2 13.5
14.3 14.6 12.9 12.1 NA 11.1 23.1 10.7 14.4 15.5 12.8 13.8
12.5 19.4 14.1 13.5 19.4 17.5 14.6 8.0 15.7 13.1 13.6 13.6
Czech Republic
12.4 16.5 13.1 9.5 NA 12.0 NA 13.5 14.5 11.2 11.9 12.5
9.5 13.9 13.6 11.3 NA 11.2 NA 10.8 12.5 18.7 12.1 12.2
16.8 31.3 9.3 11.3 NA 14.6 NA 9.8 13.2 8.9 10.4 12.3
11.3 NA NA 11.2 NA 12.1 NA NA 10.2 10.6 10.8 11.5
NA NA 8.8 9.6 NA NA NA 8.5 14.6 NA 9.4 11.1
South Africa
EMF LATAM
EMF EMEA
12-month forward PE
Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecommunication Services Utilities Market Aggregate Sector Neutral*
10.2 12.9 9.1 8.4 14.6 12.5 13.3 11.1 13.3 14.3 10.1 10.9
NA 23.8 8.9 12.0 NA NA NA 10.4 14.4 NA 9.8 12.2
9.0 10.9 10.6 7.5 10.8 10.8 8.0 12.2 13.5 NA 10.3 10.3
10.6 NA NA 8.6 NA 12.3 14.7 12.9 11.9 NA 12.2 11.8
14.8 NA 9.3 11.2 22.0 18.0 16.6 6.7 11.5 NA 10.6 11.9
7.2 14.7 7.0 5.0 NA 10.7 NA 9.1 8.8 NA 6.8 8.7
NA NA 9.8 7.1 13.6 NA NA NA 9.6 NA 8.6 10.6
NA NA NA 10.8 NA 16.8 NA 9.5 13.7 NA 12.8 12.0
19.9 NA NA 12.7 18.5 NA NA 11.5 14.3 14.3 14.4 12.9
16.4 17.8 12.6 11.6 NA 14.4 20.2 11.4 12.9 12.6 12.7 13.6
19.2 17.7 12.9 11.4 NA 14.1 20.2 12.0 11.1 10.9 12.5 13.6
14.5 18.4 NA 15.4 NA 15.4 NA 8.8 13.7 NA 13.2 12.9
16.6 14.7 NA NA NA 14.2 NA 12.5 12.8 20.1 15.4 12.6
NA NA 10.9 7.6 NA NA NA 6.3 10.0 NA 10.1 10.2

Updated as of Jul 2
Source: IBES, MSCI, JPMorgan. Note: PEs are derived from bottom-up calculations of each individual MSCI constituents using JPM estimates for covered stocks and IBES estimates for the rest. *Sector neutral PE are calcuated by using sector weights of MSCI EM and sector PE of respective markets (MSCI EM sector PE used where country sector does not exist)
Argentina
Hungary
Mexico
Poland
Russia
Turkey
Egypt
Brazil
Israel
Chile
Emerging Markets Equity Strategy Research J.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599,adrian.mowat@jpmorgan.com J.P.Morgan Equities Limited: Deanne Gordon (27-21) 712 0875, deanne.gordon@jpmorgan.com July 3, 2008
Value: Distribution Tables for PE, PBR, DY and RoE

2008E: Price to Earnings Ratio (x)
Global* USA* Europe* Japan* Emerging Markets* Korea Taiwan China Brazil* Russia* South Africa* Mexico* India Malaysia Israel* Poland* Chile* Turkey* Thailand Indonesia Hungary* Egypt* Czech Republic* Argentina* Philippines Pakistan* Weighted Average 13.3 14.7 11.1 16.4 12.9 10.7 12.6 14.0 13.5 10.3 11.4 14.1 14.7 12.6 12.8 11.4 17.0 7.5 10.9 14.0 8.8 13.9 15.4 10.6 11.6 10.0 Min 0.0 4.3 2.2 7.0 0.0 4.5 4.5 5.2 7.1 3.5 4.9 8.6 5.3 5.7 5.8 5.6 11.4 3.3 0.0 7.5 7.5 8.7 11.5 5.7 5.7 6.2 Lower 11.4 12.5 9.6 14.3 10.4 8.3 10.1 10.5 11.7 8.5 8.0 13.5 11.0 10.7 10.4 12.0 14.9 6.7 8.3 10.5 9.0 9.3 13.5 8.2 10.0 7.4 Quartiles Median 14.7 15.5 12.5 17.6 13.5 10.9 12.9 13.4 15.5 11.1 10.9 15.7 16.1 12.3 13.1 13.6 16.9 7.7 11.1 13.0 9.7 11.8 15.0 9.0 12.3 9.1 Higher 19.1 19.9 16.2 22.2 18.6 17.0 14.9 20.5 23.5 14.9 12.5 17.9 23.0 15.9 17.7 16.4 18.4 14.5 15.3 18.6 11.1 12.9 19.1 10.8 14.2 9.9 Max 282.6 257.4 158.1 282.6 124.1 44.1 41.8 56.5 105.6 67.2 115.0 34.4 124.1 99.1 41.2 26.8 45.3 32.6 33.3 77.1 14.7 20.0 23.2 11.8 23.6 19.4
2008E: Price to Book Value Ratio (x)

Global* USA* Europe* Japan* Emerging Markets* Korea Taiwan China Brazil* Russia* South Africa* Mexico* India Malaysia Israel* Poland* Chile* Turkey* Thailand Indonesia Hungary* Egypt* Czech Republic* Argentina* Philippines Pakistan* Weighted Average 2.1 2.4 1.8 1.5 2.3 1.5 1.8 2.4 3.0 2.1 1.9 3.7 2.9 1.9 2.1 1.8 1.9 1.4 1.9 4.0 1.8 3.0 2.9 1.5 1.8 2.5 Min 0.2 0.2 0.2 0.6 0.4 0.4 0.6 0.8 0.4 0.5 1.2 0.7 0.7 0.6 0.8 0.6 0.9 0.5 0.8 1.7 1.5 0.9 1.1 1.5 0.7 1.0 Lower 1.3 1.5 1.2 1.1 1.5 1.1 1.1 1.4 1.9 1.8 1.6 2.2 2.2 1.2 1.2 1.5 1.8 0.9 1.3 2.6 1.6 2.0 2.2 1.5 1.4 1.6 Quartiles Median 2.0 2.4 2.0 1.5 2.2 1.5 1.7 2.1 2.6 2.4 2.9 2.6 3.0 1.6 2.6 1.9 2.1 1.5 1.6 3.3 1.6 3.5 2.8 1.5 1.8 2.2 Higher 3.3 3.9 3.4 2.0 3.4 2.3 2.3 3.3 4.2 4.9 4.4 3.7 4.8 2.6 4.2 2.8 2.5 2.2 3.0 6.0 1.8 3.6 3.2 1.5 2.5 3.8 Max 137.2 137.2 75.0 12.0 57.4 9.9 7.5 13.3 29.8 16.5 32.8 9.8 31.4 29.2 57.4 4.4 3.7 10.8 7.0 15.2 2.3 8.4 3.6 1.5 3.9 4.8
2008E: Dividend Yield (%)

Weighted Average Min Lower Quartiles Median Higher Max
2008E: Return on Equity (%)

Weighted Average Min Lower Quartiles Median Higher Max
Global* USA* Europe* Japan* Emerging Markets* Korea Taiwan China Brazil* Russia* South Africa* Mexico* India Malaysia Israel* Poland* Chile* Turkey* Thailand Indonesia Hungary* Egypt* Czech Republic* Argentina* Philippines Pakistan*
2.8 2.2 4.0 1.7 2.8 1.7 4.9 2.8 2.7 1.7 3.8 3.3 1.4 3.5 3.3 4.0 2.8 4.2 3.8 3.1 3.9 2.8 3.6 3.6 5.0 6.2
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.5 0.3 0.0 0.0 0.0 0.9 0.0 0.0 0.0 0.0 0.0 1.7 0.1 0.0 3.6 1.0 3.3
1.2 0.3 2.2 1.1 1.3 0.9 2.5 1.1 1.3 0.9 2.8 0.3 0.6 1.7 2.1 0.1 1.7 1.5 2.9 1.7 3.1 1.4 1.5 3.6 2.1 4.6
2.2 1.5 3.5 1.5 2.6 1.4 4.3 2.1 2.8 2.1 5.1 1.2 1.2 3.4 4.7 1.3 2.2 3.6 3.9 3.4 3.7 2.4 3.6 3.6 2.6 5.2
4.0 3.0 5.0 2.0 4.3 2.6 5.9 3.5 4.0 3.2 6.6 3.3 1.9 5.1 7.1 2.7 3.0 5.4 5.3 4.1 5.2 3.9 4.1 3.6 4.8 8.9
17.8 17.8 16.5 5.8 15.5 5.8 10.3 7.0 8.6 5.3 11.6 5.6 5.3 9.7 15.5 9.8 13.3 10.3 10.6 8.8 9.4 8.2 9.0 3.6 8.6 11.0
Global* USA* Europe* Japan* Emerging Markets* Korea Taiwan China Brazil* Russia* South Africa* Mexico* India Malaysia Israel* Poland* Chile* Turkey* Thailand Indonesia Hungary* Egypt* Czech Republic* Argentina* Philippines Pakistan*
15.7 17.0 15.9 9.9 18.3 14.7 14.3 18.5 21.6 21.9 19.5 23.2 21.9 15.7 17.4 16.3 11.4 18.9 18.3 31.1 21.0 18.0 19.3 17.8 16.1 26.7
0.4 0.6 3.0 0.4 0.4 1.6 2.9 1.6 2.0 6.4 0.4 4.9 1.3 4.3 6.2 6.4 5.1 3.5 7.3 4.4 11.4 7.0 9.8 18.0 9.3 8.7
9.5 10.3 11.7 6.0 11.6 10.1 8.3 12.7 12.3 15.3 19.2 11.7 14.0 11.7 12.2 9.1 10.6 10.7 13.5 20.0 14.1 16.7 12.9 18.0 10.7 17.2
15.1 16.4 16.3 8.8 16.8 14.4 14.6 16.1 18.4 25.0 25.9 14.8 20.5 14.1 18.7 16.3 11.3 17.3 16.8 27.8 18.3 26.1 14.7 18.0 13.1 23.8
22.2 23.3 24.0 12.2 24.2 20.8 19.6 21.9 26.8 32.6 37.3 23.0 26.0 20.1 32.9 21.0 17.5 24.7 23.2 46.4 22.2 29.0 19.8 18.0 18.1 40.9
509.8 509.8 505.4 107.8 422.9 45.8 51.5 44.6 134.8 91.3 97.6 64.3 133.4 191.0 422.9 31.5 21.3 52.5 38.4 72.8 24.1 77.8 23.6 18.0 34.5 53.4
Updated as of Jul 2
Source: Datastream, IBES, MSCI, JPMorgan. Note: Weighted average numbers based on aggregate of MSCI contituents. Consensus numbers are used for stocks not covered by JPMorgan. * only consensus numbers are used
10
July 3, 2008
Value: Equities relative to Bonds

Relative outperformance of equities versus bonds by country (%) Country Brazil Chile China Colombia Czech Hungary India Indonesia Malaysia Mexico Peru Poland Russia South Africa Thailand Turkey 1-month
-7.3 -5.7 -14.4 -2.5 -2.6 -9.4 -10.1 0.8 -6.6 -7.1 0.2 -10.9 -10.9 -7.3 -3.4 -14.7
3-month
4.8 1.9 -9.3 9.4 8.3 -10.5 -8.4 6.5 -6.3 -6.5 2.4 -12.8 3.6 1.2 -1.7 -16.7
6-month
3.7 -2.3 -29.5 0.2 -5.8 -20.8 -31.7 1.0 -19.3 -4.9 7.2 -23.9 -9.9 3.5 -4.7 -37.3
12-month
32.1 -15.6 -4.3 5.9 3.9 -31.4 -8.4 36.0 -13.5 -14.5 18.5 -32.0 11.7 5.0 5.1 -38.0
36-month
NA 45.6 148.4 80.2 89.2 0.5 90.7 131.1 39.5 91.3 NA 22.4 162.2 96.4 32.2 9.5
36-month annualised
NA 13.3 35.4 21.7 23.7 0.2 24.0 32.2 11.7 24.1 NA 7.0 37.9 25.2 9.7 3.1 JPMorgan's GBI - EM bond indices track local currency government bonds issued by emerging economies. The indices are easily replicable and represent the local bond portfolio that can be accessed by an international investor. For more information on these indices please visit www.morganmarkets.com or contact Gloria Kim at gloria.m.kim@jpmorgan.com The table shows the difference between the MSCI equity benchmark returns in local currency and the GBI - EM benchmark returns for each country. Positive numbers indicate outperformance by equities.
Country Brazil Chile China Colombia Czech Hungary India Indonesia Malaysia Mexico Peru Poland Russia South Africa Thailand Turkey
Generic 10 years
15.6 8.0 4.6 10.8 5.1 8.5 8.8 13.3 4.8 9.2 7.3 6.7 6.2 10.7 5.9 20.6
Relative value of equities versus bonds by country Bond Maturity Bond Yield To Earnings Yield (years) Maturity
13.5 5.5 5.2 9.4 6.3 4.9 11.0 11.4 6.3 8.6 15.8 5.3 2.8 7.8 7.5 2.0 13.0 3.0 4.2 12.9 5.0 9.0 9.2 13.2 4.5 9.1 7.5 6.8 6.3 10.8 6.0 21.6 8.0 6.5 7.8 3.7 6.9 11.7 7.4 8.3 8.4 7.6 6.3 9.4 10.2 9.7 9.6 14.6
Dividend Yield
3.0 3.2 3.1 2.5 3.9 4.1 1.4 3.4 3.6 3.7 3.6 4.1 1.9 4.2 4.0 4.7
DDM Implied Growth

16.9 9.2 5.8 12.3 5.5 8.5 11.4 14.2 5.4 9.9 7.7 6.7 8.4 10.9 6.1 20.4
For 'DDM Implied Growth', we use a dividend discount model based on expected payout ratios for 2008 (except Colombia and Peru where we use current trailing payout ratio) Perpetual Implied Growth Rates are calculated based on the Gordon Growth Model: G= R - D/V G= Implied Growth Rate R= Required Growth Rate (Risk free rate + Equity Risk Premium) D= Index Dividend V= Index Value Note: Equity risk premium of 4%. Risk free rates are 10year benchmark or nearest equivalent.
Source: Bloomberg, JPMorgan, DataStream, MSCI, IBES Note: GBI-EM Bond Maturity and Yield to Maturity are used for each country.
Updated as of Jul 2
11
July 3, 2008
Economic Forecasts: Changes in Real GDP Forecasts

S Korea Taiwan China Brazil Russia South Africa Mexico India Malaysia Israel Poland Chile Turkey Thailand Indonesia Hungary Egypt Czech Republic Argentina Peru Philippines Morocco Colombia Pakistan Jordan Real GDP Growth (% Y/Y) JPM Consensus 2008E 2009E 2008E 2009E 4.4 5.0 4.6 5.0 4.3 5.0 4.4 5.0 10.5 9.8 10.0 9.5 4.4 3.8 4.7 4.0 7.8 7.0 7.1 6.5 3.3 3.5 3.7 3.9 2.6 4.0 2.5 3.1 7.0 8.0 7.7 8.0 5.2 5.5 5.8 5.8 na na 4.5 4.5 5.8 5.2 5.3 5.0 3.5 3.5 4.2 4.7 3.8 5.2 3.8 4.8 4.6 5.0 5.0 5.2 5.3 5.2 5.9 6.1 2.0 2.8 2.0 2.8 na na 5.2 na 5.0 4.5 4.6 4.9 6.5 3.0 6.2 3.5 8.5 6.0 7.7 6.4 4.0 4.5 5.5 6.1 na na 4.4 na 5.0 5.0 5.5 5.1 5.5 5.5 6.3 5.9 na na 5.0 na 2008E GDP Growth: JPM Minus Consensus
1.0 0.0 -1.0 -2.0 Czech Republic Hungary Turkey Philippines Indonesia Colombia S Korea Taiwan China South Africa Argentina Poland Thailand Malaysia Mexico Russia Brazil Chile Peru India 1.0 0.6 0.2 -0.2 -0.6 -1.0 Czech Republic Hungary Philippines Indonesia Colombia S Korea Taiwan Argentina Thailand Malaysia Poland Mexico Turkey Chile Peru China Russia South Africa Brazil India
Change in Forecasts Past 3 months (%) JPM Consensus 2008E 2009E 2008E 2009E 0.0 0.0 -0.1 0.1 0.8 0.5 0.5 0.4 0.0 0.0 -0.1 0.0 0.0 -0.2 0.2 0.0 0.7 0.7 0.3 0.0 -0.5 -0.5 -0.7 -0.6 0.0 -0.5 -0.4 -0.6 0.0 0.0 -0.4 -0.2 0.5 0.2 0.2 0.0 na na 0.0 0.0 0.2 -0.1 -0.2 0.0 0.0 -1.5 -0.1 -0.2 -0.6 -0.8 -1.1 -0.5 0.0 0.0 0.2 0.2 0.3 0.0 -0.2 -0.1 0.0 0.0 -0.3 -0.1 na na na na 0.0 -0.3 -0.2 0.0 0.0 0.0 0.2 -1.0 0.8 0.0 0.7 0.0 0.0 0.0 -0.4 0.4 na na na na 0.0 0.0 0.0 0.1 -1.5 na 0.0 0.0 na na na na
2Q 08E 2.5 0.5 10.8 3.0 10.5 3.8 1.0 6.4 2.4 na 5.0 5.0 0.0 3.0 5.0 3.0 na 5.1 8.2 7.4 2.0 na 5.9 na na
Economic Momentum GDP SAAR 3Q 08E 4Q 08E 3.5 4.5 5.8 6.5 11.7 10.2 4.0 4.0 3.0 16.0 1.5 1.1 2.0 3.0 6.0 5.6 2.0 2.4 na na 4.5 5.5 1.0 5.0 -1.2 6.6 5.0 6.0 3.0 4.5 2.8 2.9 na na 5.0 5.0 2.8 6.1 5.9 4.8 4.0 4.0 na na 5.5 5.1 na na na na
1Q 09E 5.5 4.8 9.1 3.8 0.0 4.5 4.9 5.9 7.4 na 5.3 4.0 8.2 4.5 5.0 2.8 na 4.2 2.8 6.5 4.0 na 4.5 na na
Inflation (% Y/Y) 2008E 2009E 4.3 3.4 3.4 3.0 7.0 5.0 5.9 6.0 13.9 11.5 11.9 9.2 4.5 3.5 8.3 5.8 5.8 4.7 na na 4.3 3.6 7.6 3.8 10.5 8.2 6.1 5.0 11.2 9.0 6.7 4.4 na na 6.8 3.4 9.0 9.4 5.1 3.0 7.7 4.8 na na 6.1 4.3 12.5 8.5 na na
Change in Consensus Forecasts for 2008E GDP over last 3 months (%)
Source: JPMorgan estimates, Bloomberg Note: Consensus estimates for Jordan, Egypt, Pakistan and Israel sourced from WES and Morocco from EIU
Updated as of Jul 2
12
July 3, 2008
Economic Forecasts: Policy Rate Trend and Forecasts

Country Developed Markets United States Euro Area Japan Latin America Brazil Mexico Chile Czech Republic Hungary Poland Russia South Africa Turkey EM Asia China Korea Indonesia India Malaysia Philippines Thailand Taiwan 1-year working capital Overnight call rate BI rate Repo rate Overnight policy rate Reverse repo rate 1-day repo rate Official discount rate 7.29 5.00 8.25 7.75 3.50 6.00 3.25 3.25 7.47 5.00 8.00 7.75 3.50 5.25 3.25 3.38 7.47 5.00 8.00 7.75 3.50 5.00 3.25 3.50 7.47 5.00 8.50 8.50 3.50 5.25 3.25 3.63 7.47 5.00 8.50 8.50 3.50 5.25 3.25 3.63 7.47 5.00 9.00 8.75 4.00 5.50 3.75 3.75 7.74 5.00 9.25 9.00 4.00 5.75 4.25 3.88 8.01 5.00 9.50 9.00 4.00 5.75 4.25 4.00 20 Dec 07 (+18bp) 9 Aug 07 (+25bp) 5 Jun 08 (+25bp) 24 Jun 08 (+50bp) 26 Apr 06 (+25bp) 5 Jun 08 (+25bp) 18 July 07 (-25bp) 26 Jun 08 (+12.5bp) 4Q 08 (+27bp) 2Q 09 (+25bp) 3 Jul 08 (+25bp) 29 Jul 08 (+25bp) 25 Jul 08 (+25bp) 17 Jul 08 (+25bp) 16 Jul 08 (+25bp) Sep 08 (+12.5bp) SELIC overnight rate Repo rate Discount rate 2-week repo rate 2-week deposit rate 7-day intervention rate 1-week deposit rate Repo rate O/n borrowing rate 11.25 7.25 5.75 3.25 7.50 4.75 3.25 10.00 17.25 11.25 7.50 6.00 3.50 7.50 5.00 3.25 11.00 15.75 11.25 7.50 6.25 3.75 7.75 5.75 3.50 11.00 15.25 12.25 7.75 6.75 3.75 8.50 6.00 4.00 12.00 16.25 12.25 7.75 6.75 3.75 8.50 6.00 4.00 12.00 16.25 13.25 8.00 7.50 4.00 8.75 6.25 4.25 12.50 17.25 14.25 8.00 7.50 4.00 9.00 6.25 4.50 12.50 17.25 14.75 8.00 7.50 3.75 9.00 6.25 4.75 12.50 17.25 4 Jun 08 (+50bp) 20 Jun 08 (+25bp) 10 Jun 08 (+50bp) 7 Feb 08 (+25bp) 26 May 08 (+25bp) 25 Jun 08 (+25bp) 9 Jun 08 (+25bp) 12 Jun 08 (+50bp) 16 Jun 08 (+50bp) 23 Jul 08 (+50bp) 15 Aug 08 (+25bp) 10 Jul 08 (+50bp) 25 Sep 08 (+25bp) 25 Aug 08 (+25bp) 24 Sep 08 (+25bp) Aug 08 (+25bp) 14 Aug 08 (+50bp) 17 Jul 08 (+50bp) Federal funds rate Refi Rate Overnight Call Rate 4.75 4.00 0.50 4.25 4.00 0.50 2.25 4.00 0.50 2.00 4.00 0.50 2.00 4.00 0.50 2.25 4.25 0.50 2.25 4.25 0.50 2.50 4.25 0.50 30 Apr 08 (-25bp) 6 Jun 07 (+25bp) 21 Feb 07 (+25bp) 16 Sep 08 (+25bp) 3 Jul 08 (+25bp) Jun 09 (+25bp) Official interest rate 3Q'07 4Q'07 1Q'08 Current 2Q'08F 3Q'08F 4Q'08F 1Q'09F Last Change Policy Rate Next Change
Europe, Middle East and Africa
Change in policy rates

S Africa Chile Poland Russia Indonesia Czech Mexico Thailand Taiwan Hungary Brazil Malaysia India China EU Japan Korea Philippine Turkey USA
-400
Emerging Markets policy rate

22 18 14
Change from Aug 07 Forecast change from now to Q4 08
Nominal Policy Rate

10 6 2 -2
Real Rate
-300
-200
-100
100
200
98
99
00
01
02
03
04
05
06
07
08
Source: JPMorgan Economics, Bloomberg. Bold figures on next column indicates tightening
Updated as of Jul 2
13
July 3, 2008
Economic Forecasts: Currency Movements and Forecasts

Euro (EUR) 1.62 1.52 1.42 1.32 1.22 1.12 Dec 04 JPMorgan forecast: end Sep 08: 1.55 end Dec 08: 1.50 end Mar 09: 1.45 Consensus 124 120 116 JPMorgan 112 108 104 100 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09 96 Dec 04 JPMorgan forecast: end Sep 08: 108 end Dec 08: 110 end Mar 09: 112 Nov 05 Oct 06 Sep 07 Jul 08 JPMorgan Japansese Yen (JPY) 1,080 1,040 1,000 960 920 Consensus Jun 09 880 Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09 Consensus South Korean Won (KRW) JPMorgan forecast: end Sep 08:1000 end Dec 08: 1020 end Mar 09:1040 JPMorgan 34 33 32 31 30 29 28 27 26 Dec 04 JPMorgan forecast: end Sep 08: 29.5 end Dec 08: 29.0 end Mar 09: 28.5 Nov 05 Oct 06 Sep 07 Consensus Taiwan Dollar (TWD)
JPMorgan Jul 08 Jun 09
Chinese Yuan Renminbi (CNY) 8.4 8.0 7.6 7.2 6.8 6.4 6.0 Dec 04 JPMorgan forecast: end Sep 08: 6.68 end Dec 08: 6.50 end Mar 09: 6.30 Nov 05 Oct 06 Consensus 2.9 2.7 2.5 2.3 2.1 1.9 JPMorgan Sep 07 Jul 08 Jun 09 1.7 1.5 Dec 04 Nov 05
Brazilian Real (BRL) JPMorgan forecast: end Sep 08: 1.72 end Dec 08: 1.75 end Mar 09: 1.77 29 28 27 26 Consensus JPMorgan Oct 06 Sep 07 Jul 08 Jun 09 25 24
Russian Rouble (RUB) 9.0 8.5 8.0 7.5 JPMorgan forecast: end Sep 08: 23.5 end Dec 08: 23.7 end Mar 09: 24.0 Nov 05 Consensus 7.0 6.5 6.0 JPMorgan Oct 06 Sep 07 Jul 08 Jun 09 5.5 Dec 04
South African Rand (ZAR) JPMorgan forecast: end Sep 08: 8.60 end Dec 08: 8.30 end Mar 09: 8.00 JPMorgan
Consensus
23 Dec 04
Nov 05
Oct 06
Sep 07
Jul 08
Jun 09
Mexican Peso (MXN) 11.7 11.4 11.1 10.8 10.5 JPMorgan 10.2 Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09 JPMorgan forecast: end Sep 08: 10.6 end Dec 08: 10.6 end Mar 09: 10.6 Consensus 48 46 44 42 40 38
Indian Rupee (INR) 3.8 JPMorgan 3.7 3.6 3.5 3.4 JPMorgan forecast: end Sep 08: 44.0 end Dec 08: 45.0 end Mar 09: 44.0 Nov 05 Oct 06 Sep 07 3.3 3.2 Consensus 3.1 3.0 Jun 09 2.9 Dec 04
Malaysian Ringgit (MYR) 4.8 4.6 4.4 Consensus JPMorgan forecast: end Sep 08: 3.15 end Dec 08: 3.08 end Mar 09: 3.00 4.2 4.0 3.8 3.6 JPMorgan Sep 07 Jul 08 Jun 09 3.4
Israeli New Shekel (ILS)
JPMorgan forecast: end Sep 08: 3.60 end Dec 08: 3.65 end Mar 09: 3.70
JPMorgan
36 Dec 04
Consensus Oct 06 Sep 07 Jul 08 Jun 09
Jul 08
Nov 05
Oct 06
3.2 Dec 04
Nov 05
Polish Zloty (PLN) 3.7 3.5 3.3 3.1 2.9 2.7 2.5 2.3 2.1 1.9 Dec 04 Nov 05 JPMorgan Oct 06 Sep 07 Jul 08 Jun 09 JPMorgan forecast: end Sep 08: 2.13 end Dec 08: 2.23 end Mar 09: 2.34 600 575 550 525 Consensus 500 475 450 425 Dec 04
Chilean Peso (CLP) 1.8 1.7 JPMorgan JPMorgan forecast: end Sep 08: 520 end Dec 08: 520 end Mar 09: 520 Nov 05 Oct 06 Sep 07 1.6 1.5 1.4 Consensus 1.3 1.2 Jul 08 Jun 09 1.1 Dec 04 Nov 05
Turkish Lira (TRL) JPMorgan forecast: end Sep 08: 1.30 end Dec 08: 1.27 end Mar 09: 1.24 44 42 40 38 36 Consensus 34 32 JPMorgan Oct 06 Sep 07 Jul 08 Jun 09 30 28 Dec 04 Nov 05
Thai Baht (THB) JPMorgan forecast: end Sep 08: 34.0 end Dec 08: 33.0 end Mar 09: 32.0 JPMorgan
Consensus Oct 06 Sep 07 Jul 08 Jun 09
Source: Datastream, JPMorgan estimates, Bloomberg. 14
July 3, 2008
Economic Forecasts: Currency Movements and Forecasts

Indonesian Rupiah (IDR)
11,000 10,500 10,000 9,500 9,000 8,500 Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09 Consensus JPMorgan forecast: end Sep 08: 9400 end Dec 08: 9200 end Mar 09: 9100 JPMorgan 230 220 210 200 190 180 170 160 150 Dec 04 Nov 05 Oct 06 Sep 07 JPMorgan Jul 08 Jun 09 Consensus
Hungarian Forint (HUF)

JPMorgan forecast: end Sep 08: 158 end Dec 08: 160 end Mar 09: 166 26 24 22 20 18 16 14 Dec 04
Czech Koruna (CZK)

3.5 3.4 3.3 3.2 JPMorgan forecast: end Sep 08: 15.2 end Dec 08: 15.3 end Mar 09: 15.5 Nov 05 Oct 06 Consensus 3.1 3.0 JPMorgan Sep 07 Jul 08 Jun 09 2.9 2.8 Dec 04
Argentinian Peso (ARS)

JPMorgan forecast: end Sep 08: 3.20 end Dec 08: 3.25 end Mar 09: 3.30 JPMorgan
Consensus
Nov 05
Oct 06
Sep 07
Jul 08
Jun 09
Peruvian Nuevo Sol (PEN)

3.8 3.5 3.3 JPMorgan 3.0 2.8 2.5 Dec 04 Nov 05 Oct 06 Consensus Sep 07 Jul 08 Jun 09 JPMorgan forecast: end Sep 08: 2.80 end Dec 08: 2.75 end Mar 09: 2.75 60 56 52 48 44 40 36 Dec 04
Philippine Peso (PHP)

3,000 2,800 2,600 JPMorgan JPMorgan forecast: end Sep 08: 45.8 end Dec 08: 45.0 end Mar 09: 44.0 Nov 05 Oct 06 Sep 07 2,400 2,200 2,000 Consensus Jul 08 Jun 09 1,800 1,600 Dec 04
Colombian Peso(COP)
JPMorgan forecast: end Sep 08: 1700 end Dec 08: 1750 end Mar 09: 1775
Consensus JPMorgan Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
Expected % Gain vs USD till December 2008 (JPM)

9 8 6 5 3 2 0 MYR TWD CNY IDR PHP THB COP -8 -4 0
Expected % Loss vs USD till December 2008 (JPM)
-12 EUR ZAR MXN RUB PLN INR KRW ARS CZK CLP JPY HUF ILS
Source: Datastream, JPMorgan estimates
Source: Datastream, JPMorgan estimates
Source: Datastream, JPMorgan estimates, Bloomberg.
Updated as of Jul 2
15
BRL
TRL
July 3, 2008
Economic Forecasts: Credit Risk

Foreign Reserves (US$bil) 262.4 277.8 1589.8 192.9 476.7 30.2 81.4 291.3 116.3 26.2 72.5 17.2 117.7 97.8 57.1 24.5 17.2 37.0 49.3 32.3 36.0 13.6 21.8 10.8 5.3 External (2008E) External Debt Current Account 2008F** 2008F** %GDP (US$bil) %GDP -0.6 293.3 29.4 9.1 62.0 14.6 7.2 368.2 8.8 -1.3 217.5 13.8 2.2 433.3 25.9 -6.7 65.9 22.5 -1.9 165.0 17.5 -1.7 203.8 15.0 12.0 52.1 23.6 2.1 na na -5.7 206.3 39.7 0.2 44.8 21.9 -5.4 237.4 29.7 1.1 52.0 18.1 1.2 124.8 26.6 -5.3 139.9 85.6 -0.4 na na -1.9 84.4 36.9 4.2 115.9 38.0 0.2 26.5 19.9 3.3 52.3 29.3 -0.9 na na -3.8 45.6 22.0 -3.0 na na -14.4 na na Fiscal Position Fiscal Deficit Public Sector Debt 2008F** 2009F** 2008F** 2009F** % GDP % GDP % GDP % GDP 1.0 0.5 30.0 31.7 -1.0 -1.0 37.0 37.5 -0.8 -1.0 26.4 26.5 -2.2 -2.0 67.8 69.0 3.5 2.0 5.5 5.2 0.3 0.4 24.8 22.7 0.0 0.0 26.3 26.1 -3.0 -3.3 64.9 64.1 -3.3 -3.1 57.3 55.8 na na na na -3.2 -3.2 47.7 48.1 5.0 3.0 13.6 11.9 -1.7 -1.0 39.2 37.2 -1.8 -1.8 29.1 31.2 -2.0 -2.0 29.5 30.0 -4.5 -3.8 66.2 65.8 na na na na -2.0 -2.5 na na 1.3 1.1 48.6 45.7 0.6 0.5 22.3 21.4 -0.2 -0.3 57.0 50.4 na na na na -1.6 -2.5 47.6 47.6 na na 46.6 44.5 na na na na Sovereign Ratings (Long Term Foreign Debt) Moody's Action Upgrade, stable Affirmed, stable Upgrade, stable Upgraded, O/L stable Upgrade, stable O/L changed to (+) Upgrade, stable Upgrade, stable Upgrade, stable O/L changed to (+) Affirmed, stable Upgrade, stable Affirmed, stable Affirmed, stable Upgrade, stable Downgrade, stable Affirmed, stable Affirmed, O/L changed to (+) O/L changed to (+) O/L changed to stable O/L changed to (+), Affirmed O/L changed to stable O/L Changed to (+) O/L changed to (-), Affirmed O/L changed to stable S&P Action Affirmed, stable Affirmed, O/L (-) Upgrade, stable Afirmed, O/L (+) Affirmed, O/L stable Affirmed, stable Upgrade, O/L stable Upgrade, O/L stable O/L changed to (+), Affirmed Upgrade, O/L (+) Upgrade, O/L stable Upgrade, O/L stable Affirmed, O/L stable Affirmed, O/L stable Affirmed, O/L stable Affirmed, O/L stable Affirmed, O/L stable Upgrade, O/L stable Affirmed, O/L stable O/L changed to (+), Affirmed Affirmed, O/L stable O/L changed to (+), Affirmed Upgrade, O/L stable O/L changed to (-), Affirmed Affirmed, stable Rating A2 Aa3 A1 Ba1 Baa2 Baa1 Baa1 Baa3 A3 A2 A2 A2 Ba3 Baa1 Ba3 A2 Ba1 A1 B3 Ba2 B1 Ba1 Ba2 B1 Ba2 Date 25-Jul-07 24-Jan-02 26-Jul-07 23-Aug-07 25-Oct-05 05-Jun-07 06-Jan-05 22-Jan-04 16-Dec-04 10-May-06 18-Sep-03 07-Jul-06 09-May-07 20-Sep-06 18-Oct-07 22-Dec-06 13-May-99 30-Mar-06 16-Jan-07 16-Jul-07 25-Jan-08 18-Jun-03 25-Jun-07 05-Nov-07 08-Jan-07 Rating A AAA BB+ BBB+ BBB+ BBB+ BBBAA AA+ BBBBB+ BBBBB+ BB+ A B+ BB+ BBBB+ BB+ B+ BB Date 12-Oct-07 15-Nov-07 27-Jul-06 21-Dec-07 21-Aug-07 12-Jul-07 08-Oct-07 30-Jan-07 31-Jul-07 27-Nov-07 29-Mar-07 18-Dec-07 29-Aug-07 10-Jul-07 24-Sep-07 24-Sep-07 10-Dec-07 02-Oct-07 25-Sep-07 23-Jul-07 14-Sep-07 26-Mar-07 05-Mar-07 06-Nov-07 28-Nov-06
Korea Taiwan China Brazil Russia South Africa Mexico India Malaysia Israel* Poland Chile Turkey Thailand Indonesia Hungary Egypt* Czech Republic Argentina Peru Philippines Morocco* Colombia Pakistan* Jordan*
EMBI Global Spreads and Yields

400 350 300 250 200 150 100 Jun-06 Mar-07 Spread (L) Oct-07 Yield 8.0 7.5 7.0 6.5 6.0 5.5 5.0 Jul-08 200 150 100 Jun-06 350 300 250
EMBI Asia Spreads and Yields

8 7 7 6 6 5 Jul-08 Yield 300 280 260 240 220 200 180 160 140 120 100 Jun-06
EMBI Europe Spreads and Yields

8.5 400 350 7.5 300 250 6.5 200 150 5.5 Jul-08 Yield
EMBI Latin America Spreads and Yields

7.6 7.4 7.2 7.0 6.8 6.6 6.4 6.2 Mar-07 Spread (L) Oct-07 Yield 6.0 Jul-08 100 Jun-06
Mar-07 Spread (L)
Oct-07
Mar-07 Spread (L)
Oct-07
Source: Bloomberg, JPMorgan Source: Bloomberg, JPMorgan Source: Bloomberg, JPMorgan Source: CEIC, JP Morgan estimates, Moody's, Standard & Poor's, Bloomberg * Data from World Economic Outlook for April 2006 for Current Account data, ** F denotes forecast. Note: Forex reserves as of 31 March 2008 or latest available data.
Source: Bloomberg, JPMorgan

Updated as of Jul 2
16
July 3, 2008
Perspective: Emerging Markets Balance Sheets

Korea Taiwan China Brazil Russia South Africa Mexico India Malaysia Israel Poland Chile Turkey Thailand Indonesia Hungary Egypt Czech Republic Argentina Peru Philippines Morocco Colombia Pakistan Jordan No. of Companies 97 108 102 60 29 42 26 54 45 28 21 24 24 25 17 3 13 6 8 5 14 9 5 9 4 Debt/Equity 0.28 0.30 0.44 0.48 0.13 0.91 0.58 0.43 0.56 0.81 0.34 0.54 0.75 0.68 0.54 0.47 0.75 0.37 0.79 0.18 0.59 0.36 0.33 0.63 0.50 Debt/Assets 0.15 0.18 0.20 0.23 0.10 0.31 0.26 0.22 0.29 0.25 0.18 0.30 0.33 0.31 0.26 0.22 0.33 0.19 0.35 0.13 0.28 0.18 0.22 0.26 0.13 Debt/Mkt. Cap 0.10 0.08 0.21 0.19 0.41 0.22 0.15 0.02 0.11 0.10 0.09 0.09 0.14 0.09 0.04 0.11 0.04 0.03 0.10 0.01 0.08 0.01 0.09 0.07 0.06 Asset Turnover 0.86 0.84 0.66 0.58 0.61 0.71 0.71 0.84 0.50 0.46 1.00 0.59 1.08 1.05 0.86 0.90 0.62 0.58 0.65 0.78 0.63 1.02 0.41 1.50 2.06 Current Ratio 1.19 1.57 1.01 1.40 2.14 1.32 1.27 1.77 1.93 1.84 1.67 1.43 1.61 1.31 1.66 1.89 1.03 1.31 1.71 3.73 1.41 1.24 1.02 1.54 1.30 Interest Coverage 8.4 14.2 13.6 7.3 13.2 9.0 6.5 15.9 5.8 4.3 11.5 4.1 11.2 6.8 11.4 11.1 6.2 7.8 12.3 18.9 4.1 48.4 1.9 10.2 2.2 Altman Z Score 4.15 6.54 5.06 3.06 5.49 4.62 4.37 6.88 5.03 4.26 4.91 3.14 4.83 5.31 4.89 4.90 3.92 4.02 5.23 10.99 3.60 5.65 3.58 5.59 5.47
Debt to Equity Ratios Quartile Distribution Chart (x)

8
0 Brazil Israel Turkey Egypt India Pakistan Hungary Czech Republic Argentina Jordan Korea China Chile Peru South Africa Philippines Indonesia Colombia Malaysia Thailand Morocco Taiwan Russia Mexico Poland
Source: Datastream, Bloomberg, JPMorgan.
Updated as of Jul 2008
Note: 1. All ratios are calculated from latest financial reports available ex Banks, Insurance and Diversified financials sector and calculations are based on weighted average of companies in the MSCI EMF universe. For Altman z-score, its application on company level is such that a score of less than 1.8 indicates bankruptcy likely, between 1.8-2.7 bankruptcy likely within 2 years and more than 3 most likely safe from bankruptcy. For market as a whole, the ratio is a weighted average of companies' z-score, thereby giving a general quality of companies in the market. 2. For the debt to equity distribution chart, each box indicates quartile levels and markets with values exceeding the scale are indicated by the open-ended top box. The diamond indicates weighted average for each market. 3. Quartile Distribution Charts: each quartile is separated by a line, with the exception of the top quartile which is subdivided in order to show the top decile of companies, shaded in blue. Markets with values exceeding the scale are indicated by the open-ended top box. The diamond indicates the weighted mean for each market.
17
July 3, 2008
Perspective: Demographic and Key Economic Statistics

Population and Demographics Population ## Age 2008 Growth Dependency Ratio* Young Old million %YoY USA China Russia# Brazil# India Korea Mexico Turkey Poland Indonesia Taiwan Argentina Venezuela Thailand South Africa Czech Rep. Malaysia Colombia Chile Philippines Israel Hungary Pakistan Egypt Peru Morocco MSCI EM 306 1327 141 192 1147 48 106 75 38 228 23 40 28 67 48 10 27 48 17 90 7 10 161 75 29 31 4,021 1 0.5 -0.5 1.3 1.5 0.2 1.0 1.4 -0.2 1.3 0.9 1.0 2.0 1.0 1.0 0.0 1.7 1.6 1.2 2.0 2.2 -0.2 1.8 2.0 1.5 1.0 1.0 na 0.3 0.2 0.4 0.5 0.3 0.5 0.4 0.2 0.4 0.3 0.4 0.4 0.3 0.5 0.2 0.5 0.5 0.4 0.6 0.4 0.2 0.7 0.5 0.5 0.5 na 0.1 0.2 0.1 0.1 0.1 0.1 0.1 0.2 0.1 0.1 0.2 0.1 0.1 0.1 0.2 0.1 0.1 0.1 0.1 0.2 0.2 0.1 0.1 0.1 0.1 Nominal GDP Gross Enrollment Ratio Secondary** 98 73 93 102 54 91 80 79 97 64 na 86 72 77 90 96 76 75 89 86 93 97 27 87 92 48 2008 US$ billion 14,365 4185 1761 1629 1242 974 972 790 570 475 435 303 302 298 288 240 221 217 193 178 177 161 160 151 145 84 16,170 Per capita (US$) 47,014 3153 12452 8492 1083 20091 9144 10584 15014 2087 18676 7614 10758 4436 5949 23380 8111 4493 11498 1966 24769 16028 994 2016 5074 2720 4,021 10 year CAGR*** Total Per capita (%) (%) 5 16.0 18.5 5.6 11.6 10.9 8.4 10.0 10.0 17.7 5.0 -0.7 12.1 10.1 8.4 11.5 11.9 6.3 7.7 10.6 4.3 12.0 8.0 5.8 6.7 7.1 11.8 4 15.3 19.0 4.1 9.9 10.4 7.2 8.0 10.1 16.4 4.4 -1.6 10.0 8.9 7.2 11.5 9.5 4.6 6.4 8.2 2.2 12.3 5.9 3.7 5.1 5.9 11.3 Real GDP 10 year CAGR*** Total Per capita (%) (%) 3 10.1 6.7 3.0 7.0 5.5 3.0 4.0 4.2 4.6 4.2 2.7 3.4 4.9 4.0 4.0 10.2 3.3 4.0 4.8 3.7 4.0 5.3 5.1 4.5 4.3 2 9.5 7.2 1.6 5.4 5.0 1.9 2.1 4.4 3.5 3.5 1.7 1.5 3.8 2.8 4.0 7.9 1.6 2.7 2.6 1.6 4.2 3.2 3.0 2.9 3.1
Source: CEIC, Datastream, Bloomberg, US Consensus Bureau, World Bank, IMF, UNESCO, JPMorgan estimates * Age dependency ratio defined as dependents to working-age population. ** Gross Enrollment Ratio is defined as pupils enrolled in a secondary level, regardless of age expressed as a percentage of the population in the relevant official age group *** 10-year CAGR for period 1998-2008, in local currency. # CAGR for period 1998-2008 ## Population data based on IMF estimate as on July 2007 Data for Gross enrollment data for 2004 except for Malaysia, Brazil and Argentina which is for 2003
Updated as of Jul 2
18
Perspective: Global Emerging Capital Markets

MSCI EMF Index Total Market Cap US$ Bn 929 1084 657 1039 501 310 569 272 136 173 116 113 133 130 96 83 36 61 49 52 73 57 35 19 17 6740 Estimated Free Float (%) 59 43 63 34 68 70 34 58 61 43 47 48 33 32 37 38 70 40 46 42 20 23 32 26 15 48 Companies Number 70 101 93 28 114 42 61 27 22 43 20 22 26 28 17 6 4 12 6 5 7 6 14 8 3 785 Average Daily Turnover US $ Mn 3262 4855 4336 518 2860 1042 633 449 432 259 282 196 319 997 112 153 93 131 6 11 52 24 41 92 na 21154 % of Emerging Weighting in MSCI Market Trading EMF Volume % (%) 15.4 16.9 23.0 14.2 20.5 12.8 2.4 10.9 13.5 10.5 4.9 6.7 3.0 5.9 2.1 4.9 2.0 2.6 1.2 2.3 1.3 1.7 0.9 1.7 1.5 1.4 4.7 1.3 0.5 1.1 0.7 1.0 0.4 0.8 0.6 0.8 0.0 0.7 0.1 0.7 0.2 0.4 0.1 0.4 0.2 0.3 0.4 0.2 na 0.1 100 100 Markets Concentration Stocks constituting 75% Stocks constituting 75% of Country Market Cap of Country Market Cap Number 16 9 28 5 31 17 22 7 10 20 10 7 14 11 9 3 2 7 2 3 4 4 7 5 2 (%) 19 19 19 25 25 43 33 22 45 56 45 23 54 43 65 50 75 25 67 80 57 83 57 75 233 Market Capitalisation US$ Bn 49.5 7.0 na 32.8 na 4.3 na 49.5 na 9.1 5.7 3.4 na 22.0 4.9 na 1.4 1.2 7.8 5.1 7.4 0.7 19.0 1.0 na 232
July 3, 2008
JPM EMBI Global Issues Number 23 8 na 4 na 4 na 29 na 7 5 3 na 14 8 na 1 1 8 2 7 1 14 2 na 141
Brazil China Korea Russia Taiwan South Africa India Mexico Israel Malaysia Indonesia Poland Thailand Turkey Chile Czech Republic Hungary Egypt Peru Argentina Colombia Morocco Philippines Pakistan Jordan Total
AC World Index Market Capitalisation

Emerging Markets 11%
MSCI Regional Market Capitalisation

EM Latin America 25% EM Asia 49% EM Europe and Middle East 26%
Top 8 versus Rest of Emerging Markets

Russia 11% Rest of EM 17% Korea 13% Taiwan 11% Brazil 16% South Africa 7%
Japan 9% Developed Asia 4% Developed Europe 29%
North America 47%
India 6% Mexico 5%
China 14%
Source: MSCI, JPMorgan
Updated as of Jul 2
19
Perspective: MSCI Emerging Market Index Composition by Countries and Sectors

Number of Companies: 785 Consumer Staples Consumer Discretionary Health care Industrials Financials Total Market Capitalization (in billion US$): Telecom Services Information Technology Materials
July 3, 2008
6740
MSCI Emerging Markets Free Index
Utilities
Energy
China Korea Taiwan India Malaysia Indonesia Thailand Philippines Pakistan Asia Russia South Africa Israel Poland Turkey Hungary Egypt Czech Republic Morocco Jordan EMEA Brazil Mexico Chile Argentina Peru Colombia LatAm Total
Source: MSCI, JPMorgan
0.5 1.3 0.2 0.2 0.3 0.1 0.0 0.0 2.6 0.1 0.5 0.0 0.1 0.1
0.3 0.8 0.2 0.3 0.4 0.1 0.0 2.1 0.0 0.2
3.0 0.3 0.1 1.3 0.1 0.5 0.6 0.0 6.0 6.9 1.1 0.0 0.2 0.1 0.3
0.2
0.1 0.1 0.9 0.5 0.6 0.0 0.4 0.7 0.9 0.1 8.5 5.3
0.6 0.2 6.0 20.6
1.1 4.6
1.8 4.3
4.4 2.4 1.8 1.3 0.6 0.3 0.4 0.2 0.1 11.5 1.0 1.3 0.4 0.8 0.5 0.4 0.2 0.1 0.1 0.1 4.9 3.0 0.3 0.1 0.0 0.2 0.2 3.7 20.2
0.3
1.5 2.6 0.3 0.5 0.5 0.1 0.0 0.0 5.5 0.3 0.1 0.1 0.2 0.2
0.4 3.1 5.8 1.0
0.8 1.6 1.5 0.6 0.0 0.1 0.1 0.0 4.7 1.7 2.3 0.6 0.2 0.1 0.1 0.0
0.3 0.1 0.1 1.1 0.0 0.1 0.1
10.2 0.0 0.2 0.0
0.0 1.4 1.0 0.5 0.3 0.2 0.2 0.2 4.9 5.2 0.8 0.3 0.0 0.5 0.1 7.0 16.6
3.0 0.5 0.5 0.2 0.2 0.3 0.1 0.1 0.0 5.0 1.1 0.9 0.2 0.2 0.2 0.1 0.3 0.1 0.1 3.1 0.7 2.0 0.1 0.0
0.3 0.3 0.3 0.3 0.1 0.0 0.0 1.2
0.6 0.0 0.6 0.9 0.3
1.7
20
0.9 7.4
0.2 10.6
2.8 10.9
0.0 1.2 3.1
14.2 12.8 10.5 5.9 2.3 1.7 1.4 0.3 0.2 49.2 10.9 6.7 2.6 1.7 1.3 0.8 0.8 1.0 0.4 0.1 26.0 16.9 4.9 1.1 0.7 0.7 0.4 24.7 100.0
Updated as of Jul 2
Total
Emerging Markets Equity Strategy Research
Analyst Certification The research analyst(s) denoted by an AC on the cover of this report certifies (or, where multiple research analysts are primarily responsible for this report, the research analyst denoted by an AC on the cover or within the document individually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of any of the research analysts compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report. Important Disclosures MSCI: The MSCI sourced information is the exclusive property of Morgan Stanley Capital International Inc. (MSCI). Without prior written permission of MSCI, this information and any other MSCI intellectual property may not be reproduced, redisseminated or used to create any financial products, including any indices. This information is provided on an 'as is' basis. The user assumes the entire risk of any use made of this information. MSCI, its affiliates and any third party involved in, or related to, computing or compiling the information hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of this information. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in, or related to, computing or compiling the information have any liability for any damages of any kind. MSCI, Morgan Stanley Capital International and the MSCI indexes are services marks of MSCI and its affiliates. Price Charts for Compendium Reports: Price charts are available for all companies under coverage for at least one year through the search function on JPMorgan's website https://mm.jpmorgan.com/disclosures/company or by calling this toll free number (1-800-477-0406). Explanation of Equity Research Ratings and Analyst(s) Coverage Universe: JPMorgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the average total return of the stocks in the analysts (or the analysts teams) coverage universe.] Neutral [Over the next six to twelve months, we expect this stock will perform in line with the average total return of the stocks in the analysts (or the analysts teams) coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of the stocks in the analysts (or the analysts teams) coverage universe.] The analyst or analysts teams coverage universe is the sector and/or country shown on the cover of each publication. See below for the specific stocks in the certifying analyst(s) coverage universe. JPMorgan Equity Research Ratings Distribution, as of June 30, 2008 Overweight Neutral Underweight (buy) (hold) (sell) JPM Global Equity Research Coverage 45% 42% 14% IB clients* 51% 52% 41% JPMSI Equity Research Coverage 41% 48% 11% IB clients* 75% 70% 60% *Percentage of investment banking clients in each rating category. For purposes only of NASD/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold rating category; and our Underweight rating falls into a sell rating category. Valuation and Risks: Please see the most recent company-specific research report for an analysis of valuation methodology and risks on any securities recommended herein. Research is available at http://www.morganmarkets.com , or you can contact the analyst named on the front of this note or your JPMorgan representative. Analysts Compensation: The equity research analysts responsible for the preparation of this report receive compensation based upon various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues, which include revenues from, among other business units, Institutional Equities and Investment Banking. Registration of non-US Analysts: Unless otherwise noted, the non-US analysts listed on the front of this report are employees of non-US affiliates of JPMSI, are not registered/qualified as research analysts under NASD/NYSE rules, may not be associated persons of JPMSI, and may not be subject to NASD Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, public appearances, and trading securities held by a research analyst account.
21
Emerging Markets Equity Strategy Research J.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , adrian.mowat@jpmorgan.com
J.P.Morgan Equities Limited: Deanne Gordon (27-21) 712 0875, deanne.gordon@jpmorgan.com
Other Disclosures: JPMorgan is the global brand name for J.P. Morgan Securities Inc. (JPMSI) and its non-US affiliates worldwide Options related research: If the information contained herein regards options related research, such information is available only to persons who have received the proper option risk disclosure documents. For a copy of the Option Clearing Corporations Characteristics and Risks of Standardized Options, please contact your JPMorgan Representative or visit the OCCs website at http://www.optionsclearing.com/publications/risks/riskstoc.pdf. Legal Entities Disclosures U.S.: JPMSI is a member of NYSE, FINRA and SIPC. J.P. Morgan Futures Inc. is a member of the NFA. JPMorgan Chase Bank, N.A. is a member of FDIC and is authorized and regulated in the UK by the Financial Services Authority. U.K.: J.P. Morgan Securities Ltd. (JPMSL) is a member of the London Stock Exchange and is authorised and regulated by the Financial Services Authority. 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22
JPMorgan Emerging Markets Strategy Team

Chief Equity Strategists
Adrian Mowat Ben Laidler Deanne Gordon Peter Westin Thomas J Lee Mislav Matejka Hajime Kitano Asia and Emerging Market Latin America South Africa Russia US Europe Japan China India Indonesia Taiwan Korea Malaysia Mexico Brazil Southern Cone & Andean South Africa Thailand Global Head, Emerging Markets Research Emerging Asia Korea Greater China China and Taiwan Thailand, Indonesia and Philippines LATAM and Mexico Argentina, Chile Brazil Regional Head, Emerging Europe Turkey South Africa Russia Hungary, Poland & Czech Republic (852) 2800 8599 (562) 425 5407 (27-21) 712 0875 (7-495) 967-1771 (1) 212 622 6505 (44-20) 7325 5242 (81-3) 5545 8655 (852) 2800 7006 (91-22) 5639 3005 (62-21) 5291 8570 (886-2) 27259864 (82-2) 758 5759 (60-3) 2270 4728 (52 55) 55 40 93 17 (55-11) 3048 6684 (562) 425 5245 (27-21) 712 0875 (66-2) 684 2670 (1-212) 834 4203 (65) 6882 2461 (82-2) 758 5509 (852) 2800 7006 (852) 2800 7002 (65) 6882 7143 (52-55) 5540 9558 (1-212) 834 4144 (55-11) 3048 3634 (44-20) 7777 4627 (90-212) 326 5890 (27-11) 507 0376 (7-095) 937 7321 (44-20) 7777 3981 adrian.mowat@jpmorgan.com ben.m.laidler@jpmchase.com deanne.gordon@jpmorgan.com peter.westin@jpmorgan.com thomas.lee@jpmorgan.com mislav.matejka@jpmorgan.com hajime.x.kitano@jpmorgan.com frank.fx.gong@jpmorgan.com bharat.x.iyer@jpmorgan.com rizal.b.prasetijo@jpmorgan.com nick.yc.lai@jpmorgan.com scott.seo@jpmorgan.com chris.ch.oh@jpmorgan.com bond.w.snodgrass@jpmorgan.com
Country Strategists
Frank Gong Bharat Iyer Rizal Prasetijo Nick Lai Scott Seo Chris Oh Bond Snodgrass Emy Shayo Brian Chase Deanne Gordon Sriyan Pietersz
emy.shayo@jpmorgan.com brian.p.chase@jpmorgan.com
deanne.gordon@jpmorgan.com sriyan.pietersz@jpmorgan.com joyce.chang@jpmorgan.com david.g.fernandez@jpmorgan.com jiwon.c.lim@jpmorgan.com frank.fx.gong@jpmorgan.com grace.h.ng@jpmorgan.com sinbeng.ong@jpmorgan.com alfredo.e.thorne@jpmorgan.com vladimir.werning@jpmorgan.com fabio.akira@jpmorgan.com michael.marrese@jpmorgan.com yarkin.cebeci@jpmorgan.com marisa.fassler@jpmorgan.com nina.a.chebotareva@jpmorgan.com nora.szentivanyi@jpmorgan.com
Economic & Policy Research

Joyce Chang David Fernandez Jiwon Lim Frank Gong Grace Ng Sin Beng Ong Alfredo Thorne Vladimir Werning Fabio Akira Michael Marrese Yarkin Cebeci Marisa Fassler Nina A Chebotareva Nora Szentivanyi
The authors acknowledge the contribution of Nageswararao Khandavalli, Sanaya Tavaria and Bharat Kheria of J.P. Morgan Services India Private Ltd., Mumbai, to this report. Any analysis or opinions expressed are those of the authors alone.

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Emerging Markets Equity Research 3 July 2008

Emerging Markets Strategy Dashboards

J.P. Morgan Securities (Asia Pacific) Limited

Market Performance: MSCI AC Performance by Regions, Countries and Sectors

-26.3% -39.5% -35.5% -9.7%

EMF Latin America

0.2% 9.8% 3.8% -1.8% -5.3% -11.4% -4.2% 4.7%

-13.1% -23.8% 1.3% -26.6% 1.3%

-51.6% -22.5% -23.4% -52.2% -37.2% 9.5% -42.4% -41.2% -5.9%

2008 Year to Date

10.7% -29.3% -6.6% 5.1%

-20.1% -24.5% 14.1%

-27.4% -10.8% 1.8% -7.9% 17.4%

23.4% -23.2% -5.7% 3.8%

29.7% 20.5% 6.7%

Outlook: Market Drivers

Emerging Market Drivers

Outlook: December 2008 Index Targets

Emerging Market Indices

2-Jul-08 0.96 1.36 7.8 1.0 1.99 106 1.59* 1.59*

Total Returns 13 37 39 16 12 -3 12 13 Updated as of Jul 2

Profit Outlook: Earnings Forecasts Matrix for Countries and Sectors

Emerging Markets Equity Strategy

Profit Outlook: Changes in 2008 and 2009 EPS Forecasts

EM Latin America 145 135 125

155 145 135 125 115 105 95 Feb-07

Russia 140 2009

Emerging Markets Equity Strategy

Profit Outlook: Changes in 2008 and 2009 EPS Forecasts

Argentina 130 2009 120 110

78 58 38 Feb-07 2008 90 80 Feb-07

Value: Regional and Countries Valuations

Value: PE Matrix for Countries and Sectors

11.3 NA NA 11.2 NA 12.1 NA NA 10.2 10.6 10.8 11.5

NA NA 8.8 9.6 NA NA NA 8.5 14.6 NA 9.4 11.1

NA 23.8 8.9 12.0 NA NA NA 10.4 14.4 NA 9.8 12.2

10.6 NA NA 8.6 NA 12.3 14.7 12.9 11.9 NA 12.2 11.8

7.2 14.7 7.0 5.0 NA 10.7 NA 9.1 8.8 NA 6.8 8.7

NA NA 9.8 7.1 13.6 NA NA NA 9.6 NA 8.6 10.6

NA NA NA 10.8 NA 16.8 NA 9.5 13.7 NA 12.8 12.0

19.9 NA NA 12.7 18.5 NA NA 11.5 14.3 14.3 14.4 12.9

14.5 18.4 NA 15.4 NA 15.4 NA 8.8 13.7 NA 13.2 12.9

16.6 14.7 NA NA NA 14.2 NA 12.5 12.8 20.1 15.4 12.6

NA NA 10.9 7.6 NA NA NA 6.3 10.0 NA 10.1 10.2

Value: Distribution Tables for PE, PBR, DY and RoE

2008E: Price to Book Value Ratio (x)

2008E: Dividend Yield (%)

2008E: Return on Equity (%)

Value: Equities relative to Bonds

DDM Implied Growth

Economic Forecasts: Changes in Real GDP Forecasts

Economic Forecasts: Policy Rate Trend and Forecasts

Europe, Middle East and Africa

Change in policy rates

Emerging Markets policy rate

Change from Aug 07 Forecast change from now to Q4 08

Nominal Policy Rate

Economic Forecasts: Currency Movements and Forecasts

JPMorgan Jul 08 Jun 09

Israeli New Shekel (ILS)

Consensus Oct 06 Sep 07 Jul 08 Jun 09

Consensus Oct 06 Sep 07 Jul 08 Jun 09

Source: Datastream, JPMorgan estimates, Bloomberg. 14