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Investment Research

09 July 2010

EMEA Weekly
Will the summer calm hold?

Market movers ahead: Inflation across the CEE and Turkish rate
decision
Even though Turkish inflation continues to be well-above the Turkish central bank’s
(TCMB) official inflation target of 6.5% and the recovery in the Turkish economy Dovish TCMB stays on hold
appears to be quite robust, the TCMB continues to keep its relatively dovish stance.
Hence, the Turkish central bank will keep its wait-and-see stance in monetary policy
keeping rates unchanged next week with the key policy rate at 6.5% at its next week’s
MPC meeting.

Inflation for June is due for release across the CEE region. See page 7, where we take
closer look at the inflation outlook in the EMEA region.

Source: Danske Markets

FX Outlook: Will the summer calm hold... likely not


The total score in the Scorecard – adding up the individual score for all of the currencies
Inflation development in CEE region
in the Scorecard – has during this week been the most negative since February 2009 – and
it is of course well-known that that indication correctly forecast a major sell-off in the
EMEA currencies in Q1 09. Hence, the fact that the overall score is now so negative is a
clear signal to us that that investors should take off risk in the EMEA FX markets and we
would be looking for some kind of overall correction to hit the EMEA FX markets sooner
rather than later.

The South African rand remains the lowest scoring currency in the EMEA FX Scorecard.
It is notable that the rand not only scores poorly overall, but that all the sub scores look
Source: Danske Markets
quite weak. Therefore we continue to recommend investors to be short in this currency.

Scorecard-based trade of the week Buy RON/ZAR


Last week we recommend buying CZK/ZAR based on our EMEA FX Scorecard. That
trade is up marginally over the week. This week the rand is still the lowest scoring
currency in the EMEA FX Scorecard, while the Romanian leu is now the highest scoring
currency in the Scorecard. We therefore recommend buying RON/ZAR going into next
week.

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EMEA Weekly

Calendar

EMEA Data and Events in Week28


Monday, July 12, 2010 Period Danske Bank Consensus Previous
EEK 7:00 Trade balance bln. EEK May -0.4
CZK 9:00 CPI y/y Jun 1.4% 1.3% 1.2%
CZK 9:00 Unemployment rate % Jun 8.9% 8.6% 8.7%
RON 9:00 CPI y/y Jun 4.4%
TRY 9:00 Current account bln. USD May -3.1 -4.4
LVL 12:00 Trade balance mln. LVL May -51.1

Tuesday, July 13, 2010 Period Danske Bank Consensus Previous


LTL - Current account m. Euro May -26.3
HUF 9:00 CPI y/y Jun 5.1% 5.1% 5.1%
CZK 10:00 Current account bln. CZK May -9.80 12.40
PLN 14:00 CPI y/y Jun 2.2% 2.2%
PLN 14:00 Trade balance EUR mil May -263 -368

Wednesday, July 14, 2010 Period Danske Bank Consensus Previous


EEK 11:00 Current account bln. EEK May 1.1
ZAR 11:30 Retail sales y/y May 3.8% 3.2%
PLN 14:00 Current account Euro mil May -483 -424

Thursday, July 15, 2010 Period Danske Bank Consensus Previous


RUB - PPI y/y Jun 18.0% 19.1%
RUB - Industrial production y/y Jun 11.5% 12.6%
TRY 9:00 Unemployment rate % Apr 13.7%
CZK 9:00 PPI y/y Jun 1.8% 1.8% 1.5%
TRY 18:00 Turkish central bank to announce rate decision % 6.50% 6.50% 6.50%

Friday, July 16, 2010 Period Danske Bank Consensus Previous


HUF 9:00 Wages y/y May 3.1% 3.1% 1.1%
PLN 14:00 Wages y/y Jun 5.3% 4.8%
PLN 14:00 Employment y/y Jun 0.9% 0.5%

The editors do not guarantee the accurateness of figures, hours or dates stated above
Note that all releases are CET.

Source: Danske Markets

2| 09 July 2010
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EMEA Weekly

Fixed income market update


Review: Higher risk appetite and dovish central banks
Some return of the risk appetite was clearly visible on EMEA Fixed income markets over EMEA swap rate performance
the week with money market rates and yields falling across the EMEA region. The 2Y IRS Mid level 1W chg - bp
biggest drop was seen in Turkey and South Africa, where dovish comments from the CZK 1.62 -1
central banks cemented that interest rates will stay on hold for some time in Turkey and in HUF 5.83 -6
South Africa the central bank governor Gill Marcus even renewed the speculation that the PLN 4.57 1
South Africa central bank could continue in monetary easing. Hence, considering the RUB 5.47 -8
TRY 7.57 -10
governor’s comments we cannot rule out that the South African central bank cut rates
ZAR 6.61 -8
further at its next MPC meeting on July 22 – 50bp cut now looks possible.
5Y IRS Mid level 1W chg - bp
Preview: No Turkish rate hike - yet CZK 2.18 -3
HUF 6.22 -7
Going into next week the markets’ attention is expected to turn to the Turkish central
PLN 5.11 2
bank’s rate decision on Thursday, Polish labour numbers, and inflation numbers across RUB 6.73 -3
the region. TRY 8.31 -30
ZAR 7.46 -15
We take a closer look at the inflation outlook in EMEA on page 7.
Data updated: 09/07 - CET: 10:57
TCMB on hold for now, but rate hikes have moved closer Source: Reuters Ecowin and Danske Markets

Turkish inflation continues to be well-above the Turkish central bank’s (TCMB) official
inflation target of 6.5% and the recovery in the Turkish economy appears to be quite
robust. Therefore the TCMB will, sooner or later, have to hike its key policy rate to curb
inflationary pressures especially taking into account that the key policy rate at 6.5% is
historically low and below inflation. That said even though inflation is running at above
the inflation target and recovery is well under way the TCMB has some reasons to stay on
hold for now. First of all, the TCMB seems convinced that the rise in inflation this year is
temporary and that there is more downside and upside risk to inflation. Furthermore, the
TCMB seems to have developed relatively dovish instincts in the past couple of years,
which means that the bank would rather err on inflation than on growth. A final reason to
maintain a wait-and-see stance in monetary policy is that inflation surprised somewhat on
the downside in July. Hence, in July Turkish inflation dropped to 8.37% down from 9.1%
in May.

Overall, we are slightly worried that the TCMB is too relaxed about inflationary pressures
in Turkey and that could become a problem at some point, especially in the light of the
longer term risks coming from the growing current account deficit. However, those are
longer term concerns rather than short-term risks and consequently we believe that
TCMB’s likely decision to keep rates on hold next week will not be a big market mover.
Outlook for the Polish labour market continues to improve
The recovery in the Polish economy continues and the output gap has more or less been
close and therefore the outlook for the Polish labour continues to improve. We believe
this will be confirmed on Friday when we get numbers for Polish wage and employment
growth in June. Hence, we expect employment to have grown by 0.9% y/y in June, while
we expect wage growth to have been 5.3% y/y in June – up from 4.8% y/y in May.

Overall, we believe that the continued recovery is like to lead to a continued improvement
in labour market conditions in Poland and unemployment will likely peak in the coming
months and decline going forward, which also should lead to a further acceleration in
wage growth. We expect unemployment to drop from 12.4% in 2010E to 11.8% in
2012E, while we expect wage growth to accelerate from 3.9% y/y in 2010E to 5.3% y/y
in 2011E.

3| 09 July 2010
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EMEA Weekly

FX Market update
Preview: President Komorowski boosts zloty
Poland’s new president is Bronislaw Komorowski. As expected, the second round of
voting in Poland’s presidential elections, held on Sunday, was a close run thing between FX performance – one week
acting president Komorowski – from the governing liberal-conservative Civic Platform TRY vs. EUR
and the social-conservative Jarosław Kaczyński. Komorowski won 53% of the vote, Basket vs. RUB 1-week change
while Kaczyński received 47%. Overall, we believe the result is positive for the Polish TRY vs. USD
markets and the election of Komorowski helps lift the zloty this week. This zloty ZAR vs. EUR

undoubtedly also got some help from improved risk appetite toward the end of the week. EUR/USD

Even though we believe that the election of Komorowski as new Polish president is good CZK vs. EUR
RON vs. EUR
news for the Polish markets and strength of the boost to the Polish markets will be
PLN vs. EUR
dependent critically on how bold the Polish government is in the implementation of
ZAR vs. USD
reforms to consolidate public finances and here we would caution against becoming
HUF vs. EUR
overly optimistic. See our comment on the Polish presidential election here.
-2.0 0.0 2.0 4.0
Review: A surprise top scorer %
Data updated: 09/07 - CET: 09:27
There is no doubt – we were surprised when our updated EMEA FX Scorecard for this
Source: Reuters Ecowin
week showed that the Romanian leu was the highest scoring currency among the seven
currencies covered by the Scorecard and to be frank we are not sure what to make of it
and feel slightly uncomfortable that the Scorecard tells us to be more bullish on the leu.
After all, the Scorecard does not including everything. For example it does not tell us
anything about foreign currency lending in Romania and potential risks to the banking FX performance – one month
sector from this. It does not tell of anything about continued political uncertainty in
ZAR vs. EUR
Romania and a very weak government. Not to mention the risks of contagion from the
TRY vs. EUR
situation in Greece.
RON vs. EUR

On the other hand, it does not “catch” some of the positive factors either – for example Basket vs. RUB 1-month change

that Romania’s IMF deal seems to have been saved by swift action by the Romanian HUF vs. EUR
PLN vs. EUR
government to secure alternative fiscal tightening measures to make up for such reforms
CZK vs. EUR
that have been overruled by the Romanian Constitutional Court. So here goes – we
ZAR vs. USD
believe that the Romanian leu could outperform the other currencies in the region in the
TRY vs. USD
short-term, despite the fact that we maintain our longer-term reservations about the
EUR/USD
outlook for the Romania leu.
-5.0 0.0 5.0 10.0

The key reason why the Romanian leu scores the highest score in our EMEA FX %
Data updated: 09/07 - CET: 09:40
Scorecard is that the sub score for macro conditions in the Scorecard is quite positive. It
Source: Reuters Ecowin
might not be the established consensus view of the Romanian economy that it is doing
well – and it is not – but there are pockets of optimism especially in the manufacturing
sector where it is clear that a recovery is under way – this helps industrial production and
exports. So we believe it is time to give the leu the benefit of the doubt – at least in the
short-run. Furthermore, it is of course notable that the leu has done surprisingly well
during this year’s European market volatility – probably mostly because the Romanian
leu has been extremely illiquid and few investors had long positions in RON going into
the year.
EMEA FX Scorecard the most negative since February 2009
To be fair we have not really changed our view on the leu that much compared with a
week ago – however what have really changed are the scores on the other currencies in
the EMEA FX Scorecard. Hence, since last week the scores for all currencies in the
scores – with the exception of the Romanian leu and the Czech koruna (which is only
neutral now) – has turned negative, so even our long time favourite the Polish zloty now

4| 09 July 2010
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EMEA Weekly

scores negatively in the Scorecard. That does not change our longer term optimism about
the zloty. The short-term outlook for the koruna looks a bit more challenging.

In fact the total score in the Scorecard – adding up the individual score for all of the
currencies in the Scorecard – has during this week been the most negative since February
2009. It is of course well-known that the indication correctly forecast a major sell-off in
the EMEA currencies in Q1 09. Hence, the fact that the overall score now is this negative
is a clear signal to us that that investors should take off risk in the EMEA FX markets and
we would be looking for some kind of overall correction to hit the EMEA FX markets
sooner rather than later.

The South African rand remains the lowest scoring currency in the EMEA FX Scorecard.
It is notable that the rand not only scores poorly overall, but that all the sub scores look
quite weak. Therefore, we continue to recommend investors to be short in this currency.
Scorecard-based trade of the week Buy RON/ZAR
Last week we recommended buying CZK/ZAR based on our EMEA FX Scorecard. That
trade is up marginally over the week. This week the rand is still the lowest scoring
currency in the EMEA FX Scorecard, while the Romanian leu now is the highest scoring
currency in the Scorecard. We therefore recommend buying RON/ZAR going into next
week.

5| 09 July 2010
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EMEA Weekly

FX Scorecard overview
Score – PLN Score – HUF EMEA FX Scorecard outline
5.0 5.0  All scores are computed on a scale
2.5 2.5 from +5 to -5. The score measures
0.0 0.0 how far from a mean point the
-0.1 -0.6
-2.5 -2.5 indicator is, measured by standard
-5.0 -5.0 deviation. A score is then combined

Technical

Global
Carry

Valuation
Technical

Global
Carry

Valuation

Macro
Macro

Total
Total

from the different sub-scores.

 Macro: calculates the growth


momentum in different monthly
Danske Markets calculations Danske Markets calculations
macro indicators.

 Technical: calculates the momentum


Score – CZK Score – TRY in different volatility measures, short-
5.0 5.0 and longer-term moving averages and
2.5 2.5 the level of relative strength index.
0.0
0.0 0.0  Carry: calculates the momentum in
-2.5 -2.5 -0.6
local three-month rates, carry-to-risk,
-5.0 -5.0 spread against EUR or USD three-
Technical

Technical
Global

Global
Carry

Carry
Valuation

Valuation
Macro

Macro
Total

Total
month rates and spread against peers.

 Global: consists of a global growth


score based on leading global
Danske Markets calculations Danske Markets calculations
indicators and hard macro data, a
liquidity score based on the
momentum in G3 real rates and a
Score – ZAR Score – RON
sentiment score based on performance
5.0 5.0
in the global equity market and
2.5 2.5 0.2 traditional funding currencies.
0.0 0.0
-2.5 -1.3 -2.5  Valuation: calculates whether
-5.0 -5.0 currencies are over/undervalued
compared with the long-term trend in
Technical

Technical
Global

Global
Carry

Carry
Valuation

Valuation
Macro

Macro
Total

Total
Com

the real effective exchange rate


(REER). The trend is adjusted for
external imbalances, i.e. an
Danske Markets calculations Danske Markets calculations
imbalance-adjusted REER. The scores
are calibrated to reflect the short-term
Score – ILS Score – Total impact of the valuation on the FX.
5.0 5.0
2.5 2.5
0.0 0.0
-2.5 -0.8 -2.5 -0.4
-5.0 -5.0
Technical

Technical
Global

Global
Carry

Carry
Valuation

Valuation
Macro

Macro
Total

Total

Danske Markets calculations Danske Markets calculations

6| 09 July 2010
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EMEA Weekly

Special: EMEA inflation outlook


June’s inflation is on the agenda in the EMEA region and we take a closer look at the
Stable inflation the rest of the year
inflation outlook.
11 % y/y 11
CEE: Inflation still not an issue 9
% y/y
9

In Poland inflation is currently within the Polish central bank’s inflation target of 2.5% 7 7
5 Hungary 5
y/y +/- 1 percentage point and it should remain in this territory for the rest of 2010. 3
Romania
3
Poland
However, Polish economic activity is progressing at fairly high speed and this should 1 Czech 1
Republic
translate into upward pressure on inflation. We forecast inflation at 2.6% y/y this year and -1 -1
05 06 07 08 09 10 11
3% y/y next year.

In the rest of CEE inflationary pressure remains rather limited. Hungarian inflation is at a Source: Reuters Ecowin and Danske Markets

fairly high level currently due to last year’s VAT hike. However, this is only temporary
and we expect it to gradually decline going forward. We expect inflation on average to be
Double digit Turkish inflation
5.2% y/y in 2010 and 4.6% y/y in 2011. In the Czech Republic inflation remains low even
though it currently ticks up, driven mainly by higher regulated prices, higher indirect 13 % y/y % y/y 13

taxes and fuel prices and Czech inflation should remain within the Czech central bank’s 11 11
9 9
inflation target of 2% y/y +/- 1%-point. We forecast average inflation of 1.5% y/y in 2010 Turkey
7 7
and 2.0% y/y in 2011. Romanian inflation is stabilising around a level of 4.5% y/y. 5 5
South
However, the VAT hike of 5pp, which takes effect on 1 July will likely push Romanian 3
Africa
3
1 1
inflation up to around 8% y/y temporarily. 05 06 07 08 09 10 11

MEA: Turkish inflation surges


Source: Reuters Ecowin and Danske Markets
In the MEA region the inflationary picture is rather mixed. In Turkey inflation has surged
significantly this year moving into double-digit territory again. Given that Turkish
economic growth is also accelerating quite fast inflationary pressure is becoming an issue Inflation to return upwards soon
for Turkey again. Our models indicate that Turkish inflation should on average be about
% y/y % y/y 15
9% y/y this year – well above the Turkish central bank’s year-end inflation target of 6.5% 15

y/y and around 7.5% y/y next year – however, this forecast could turn out to be too 13 13

11 Russia 11
optimistic. Domestic demand is speeding up in Turkey which will likely put further
9 9
pressure on inflation. 7 7

5 5
The outlook for South African inflation looks rather neutral. Inflation has declined 05 06 07 08 09 10
significantly since it peaked at double-digit levels in 2008. Going forward we expect
inflation to remain around the current level and we therefore forecast South African Source: Reuters Ecowin and Danske Markets
inflation at 4.9% y/y in both 2010 and 2011.
CIS: Low inflation only temporary
Inflation remains low
Inflation is currently at historic lows in Russia around 6% y/y. The slowdown in inflation
20.0 % y/y 20.0
is mostly due to depression, as money supply, wage growth and producer prices have % y/y
15.0 15.0
been declining during the crisis. However, we expect to see only a few months of these
10.0 10.0
low inflation rates before the inflation accelerates rapidly at the end of this year.
5.0 5.0
Currently we expect inflation to peak at double-digit levels by the summer of 2011 and 0.0
Estonia
Lithuania 0.0
start to ease after that toward more tolerable 7% medium-term levels. -5.0
Latvia
-5.0
05 06 07 08 09 10 11
Baltics: Weak domestic demand limits inflation
Inflation remains low in the Baltic countries. While weak domestic demand limits Source: Reuters Ecowin and Danske Markets
inflationary pressure, rising energy prices can push inflation up. However, these effects
vary between the Baltic countries. In Latvia lacklustre domestic demand offsets any
inflationary pressure from rising energy prices. We expect Latvian inflation at 0.1% y/y
this year and 0.8% y/y next year. The Estonian and Lithuanian economies are a bit further
in the recovery compared to Latvia and inflation could thus move somewhat higher. We
expect inflation at 3.2% y/y and 2.6% y/y in Estonia and 1.4% y/y and 1.4% y/y in
Lithuania in 2010 and 2011 respectively.

7| 09 July 2010
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EMEA Weekly

CIS update
The most important data due from Russia next week is the industrial output for June. We Industrial production growth
do not expect a significant deceleration in production growth, but we still believe that the 20 20

current momentum can support the industrial output growth for only another couple of 15
% y/y
Mining >>
% y/y 15
10 10
months. After that, real recovery in economic activity is needed, and we remain very 5 5
0 0
bearish on the investment growth potential in 2010. -5 -5
-10 -10

The Russian Central Bank published preliminary current account data for H1 10 last -15 << Manufacturing
<< GDP
-15
-20 -20
Tuesday. Higher oil prices have boosted the trade balance surplus y/y, which will give a -25 -25
-30 -30
positive contribution to Q2 GDP figures as well. But latest months have been showing 07 08 09 10

some deterioration in terms of trade, as consumer demand has significantly increased Source: Reuters Ecowin
imports. So support from trade balance to GDP growth is already fading as well.

Even though consumption is growing again at a steady pace in Russia, we still believe
that the true growth driver for the next two years must be credit growth, which has not
really started yet. We expect the y/y credit growth to accelerate rapidly after summer,
reaching a 15% growth rate by the end of this year. Most of the growth will come from
the household sector, further boosting consumer demand in H1 11.

The Ukraine is headed for a heavy fiscal tightening measures due to its IMF deal. The Private sector credit growth
government has to make significant cuts in budget expenditure as well as a rise in energy 120
110 % y/y
120
% y/y 110
100 100
prices for Ukrainian consumers. IMF loan announcement spurred immediate 90
Kazakhstan >>
90
80 80
improvements in Ukrainian sovereign ratings, making international capital markets more 70 70
60 60
accessible for the Ukraine. 50
40
50
40
30 30
<< Russia
20 20
<< Ukraine
10 10
0 0
-10 -10
06 07 08 09 10

Source: Reuters Ecowin

8| 09 July 2010
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EMEA Weekly

Currency forecast, EMEA


Currency Forecast, New Europe/EMEA
Jul 9. 2010 EUR USD SEK NOK DKK
Actual 1.27 - 751 637 589
+3m 1.15 - 817 665 647
USD
+6m 1.18 - 780 644 631
+12m 1.27 - 724 598 587
Actual 4.07 3.21 234 198 183
+3m 3.95 3.43 238 194 188
PLN
+6m 3.95 3.35 233 192 188
+12m 3.90 3.07 236 195 191
Actual 280 221 3.39 2.88 2.66
+3m 280 243 3.36 2.73 2.66
HUF
+6m 275 233 3.35 2.76 2.71
+12m 270 213 3.41 2.81 2.76
Actual 25.4 20.0 37.5 31.8 29.4
+3m 25.3 22.0 37.2 30.2 29.4
CZK
+6m 24.8 21.0 37.1 30.6 30.0
+12m 23.9 18.8 38.5 31.8 31.2
Actual 15.6 12.4 60.8 51.6 47.6
+3m 15.7 13.6 60.1 48.9 47.5
EEK
+6m 15.7 13.3 58.8 48.6 47.5
+12m 15.7 12.3 58.8 48.6 47.6
Actual 0.71 0.56 1342 1139 1052
+3m 0.70 0.61 1343 1093 1063
LVL
+6m 0.70 0.59 1314 1086 1063
+12m 0.70 0.55 1314 1086 1064
Actual 3.45 2.73 275 234 216
+3m 3.45 3.00 272 222 216
LTL
+6m 3.45 2.92 267 220 216
+12m 3.45 2.72 267 220 216
Actual 4.23 3.34 225 191 176
+3m 4.30 3.74 219 178 173
RON
+6m 4.35 3.69 211 175 171
+12m 4.40 3.46 209 173 169
Actual 1.96 1.54 486 413 381
+3m 1.96 1.70 481 391 381
BGN
+6m 1.96 1.66 471 389 381
+12m 1.96 1.54 471 389 381
Actual 1.96 1.55 484 411 380
+3m 1.74 1.51 540 440 428
TRY
+6m 1.82 1.54 505 418 409
+12m 2.02 1.59 455 376 369
Actual 39.0 30.8 24.4 20.7 19.1
+3m 36.9 32.1 25.5 20.7 20.2
RUB
+6m 36.5 30.9 25.2 20.8 20.4
+12m 36.2 28.5 25.4 21.0 20.6
Actual 10.0 7.90 95.0 80.6 74.5
+3m 10.4 9.00 90.8 73.9 71.9
UAH
+6m 11.2 9.50 82.1 67.8 66.4
+12m 12.7 10.00 72.4 59.8 58.7
Actual 9.6 7.58 99.0 84.1 77.7
+3m 9.0 7.80 104.8 85.3 82.9
ZAR
+6m 9.4 7.95 98.1 81.0 79.3
+12m 10.5 8.25 87.8 72.5 71.1

Source: Reuters Ecowin and Danske Markets

9| 09 July 2010
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EMEA Weekly

Macro Forecast, EMEA


Macro forecast, EMEA
Macro Monitors
Private. Fixed Trade Current Industrial Unem- Infla-
1
Year Gdp Cons1,5 Inv 1,5 1, 4,5
Export 1, 4,5
Import Balance2, 4,5 acc.2, 4,5 prod.1,5 ploym3 tion1
Macro Monitor – Hungary, Jun 25

2009 -4.1 -0.3 -9.2 -14.2 -15.3 5.0 -1.1 -13.2 9.1 1.1 Macro Monitor – Czech Republic, Jun 25
Czech Republic 2010 0.5 0.2 -3.1 12.3 7.7 7.1 1.3 10.7 10.1 1.5 Macro Monitor – Turkey, Jan 05
2011 2.4 0.7 6.4 14.7 11.1 8.1 2.1 9.4 10.7 2.0
Macro Monitor – Poland, Jun 25
2009 -14.8 -19.4 -35.0 -11.6 -27.9 - 3.0 - 14.5 -0.1

Estonia 2010 -2.3 -3.0 0.1 1.5 7.2 - 1.0 - 18.0 -0.4
Source: Danske Markets
2011 2.9 2.2 6.7 13.3 14.9 - 0.0 - 15.0 0.7

2009 -6.3 -7.6 -6.3 -8.9 -15.2 4.3 0.2 -17.8 10.8 4.2

Hungary 2010 -1.9 -2.0 -2.2 12.1 11.2 5.7 1.8 9.5 13.6 5.2

2011 3.0 2.6 4.1 8.9 7.3 5.6 1.3 9.0 14.7 4.6

2009 -18.3 -24.7 -38.0 -15.7 -36.1 - 3.0 - 17.3 3.7

Latvia 2010 -4.7 -3.4 1.3 -0.5 3.5 - 4.5 - 20.0 -0.9

2011 1.6 2.1 7.0 7.5 11.9 0.4 18.0 0.8

2009 -15.5 -17.8 -40.1 -17.9 -32.4 - 0.7 - 14.0 4.5

Lithuania 2010 -3.7 -2.2 -3.2 2.0 2.9 - 1.0 - 18.0 0.3

2011 2.4 3.7 9.4 12.5 11.0 - 0.0 - 17.0 2.3

2009 1.7 2.3 -0.5 -10.6 -14.2 -1.0 -1.6 -3.6 11.9 3.5

Poland 2010 3.0 4.7 -10.6 4.4 3.1 -0.6 -1.1 12.6 12.4 2.6

2011 4.0 3.5 8.5 6.9 5.5 0.2 -0.5 10.0 12.4 3.0

2009 -7.9 -7.5 -17.8 -4.7 -30.9 -42.9 3.8 -10.9 8.2 11.7

2010 3.6 0.3 -1.1 7.3 6.4 5.9 2.9 4.0 9.0 8.0
Russia
2011 4.1 3.2 4.1 4.4 3.7 - 3.0 5.0 8.5 8.8

2012 4.2 3.6 3.6 4.1 3.6 - - - 8.0 8.5

2009 -6.9 -2.5 -20.3 -21.7 -28.4 -6.2 -2.2 -8.0 - 6.3

Turkey 2010 5.0 2.5 2.2 8.4 19.0 -8.1 -6.3 17.1 - 7.7

2011 4.1 3.6 6.3 12.3 13.3 -8.4 -6.9 7.3 - 6.6

1) Average % y/y 2) % of GDP 3) % of total work force 4) Export and import prices (constant prices for Czech Republic, Hungary and
Poland), 5) expectation for 2009

Source: Reuters Ecowin and Danske Markets

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Emerging Markets Contacts

Emerging Markets Research


Lars Christensen +45 45 12 85 30 larch@danskebank.dk
Flemming Jegbjærg Nielsen +45 45 12 85 35 flemm@danskebank.dk
Violeta Klyviene +370 5 2156992 vkly@danskebank.com
Stanislava Pravdova +45 45 12 80 71 spra@danskebank.dk
Jens Nærvig Pedersen +45 45 12 84 98 jenpe@danskebank.dk
Sanna Elina Kurronen +358 10 546 7573 kurr@danskebank.com

Emerging Markets Sales, Danske Markets


Erik Rasmussen +45 45 14 32 47 eras@danskebank.dk

Global Retail SME, FX


Stig Hansen +45 45 14 60 86 sh@danskebank.dk
Flemming Winther +45 45 14 68 24 flw@danskebank.dk

Trading FX, Fixed Income, Danske Markets


Frank Sandbæk Vig +45 45 14 67 96 fsv@danskebank.dk
Thomas Manthorpe +45 45 14 69 68 tman@danskebank.dk
Markku Anttila +358 10 513 8705 markku.anttila@sampopankki.fi
Perttu Tuomi +358 10 513 8738 perttu.tuomi@sampopankki.fi

Danske Bank Poland, Warsaw


Maciej Semeniuk +48 22 33 77 114 msem@pl.danskebank.com
Bartłomiej Dzieniecki +48 22 33 77 112 bdz@pl.danskebank.com

Danske Markets Baltics


Howard Wilkinson +358 50 374 559 howard.wilkinson@danskebank.com
Martins Strazds +371 6707 2245 martins.strazds@danskebanka.lv
Giedre Geciauskiene +370 5215 6180 giedre.geciauskiene@danskebankas.lt
Lauri Palmaru +372 675 2464 lauri.palmaru@sampopank.ee

ZAO Danske Bank Russia, Saint-Petersburg Treasury Department


Mikko Pitkänen +7 812 332 73 06 mikko.pitkanen@danskebank.ru
Vladimir Biserov +7 812 332 73 04 vladimir.biserov@danskebank.ru
Darja Kounina +7 812 332 73 04 darja.kounina@danskebank.ru

All EM research is available on Bloomberg DMEM

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EMEA Weekly

Disclosure
This research report has been prepared by Danske Research, which is part of Danske Markets, a division of
Danske Bank. Danske Bank is under supervision by the Danish Financial Supervisory Authority. The author of
this research report is Lars Christensen, Chief Analyst.

Danske Bank has established procedures to prevent conflicts of interest and to ensure the provision of high
quality research based on research objectivity and independence. These procedures are documented in the Danske
Bank Research Policy. Employees within the Danske Bank Research Departments have been instructed that any
request that might impair the objectivity and independence of research shall be referred to Research Management
and to the Compliance Officer. Danske Bank Research departments are organised independently from and do not
report to other Danske Bank business areas. Research analysts are remunerated in part based on the over-all
profitability of Danske Bank, which includes investment banking revenues, but do not receive bonuses or other
remuneration linked to specific corporate finance or debt capital transactions.

Danske Bank research reports are prepared in accordance with the Danish Society of Investment Professionals’
Ethical rules and the Recommendations of the Danish Securities Dealers Association.

Financial models and/or methodology used in this research report


Calculations and presentations in this research report are based on standard econometric tools and methodology
as well as publicly available statistics for each individual security, issuer and/or country. Documentation can be
obtained from the authors upon request.

Risk warning
Major risks connected with recommendations or opinions in this research report, including as sensitivity analysis
of relevant assumptions, are stated throughout the text.

Expected updates
This publication is updated weekly.

First date of publication


Please see the front page of this research report for the first date of publication.

Disclaimer
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