FOR RETAIL INVESTORS

WEEKLY MARKET ROUND-UPEQUITIES POWER AHEADWEEK ENDING 9 DECEMBER 2016

HOPES OF SANTA RALLY STRENGTHEN AS INVESTORS LOOK ON BRIGHT SIDEWorld equity (company share) markets continued to rally, as investors took a rosy view of the prospective administration of US president-elect Donald Trump, eyeing his tax-cutting and big spending plans with enthusiasm. European stock markets turned in their strongest performance since February, shrugging off the Italian referendum and showing reliefthatthe European Central Bank did not announce an early termination to its stimulus programme. Chinese equities began the week nervously after a Trump tirade on Twitter against the superpower, but soon recovered.

DRAGHI EXTENDS WITH ONE HAND, CUTS WITH THE OTHERMario Draghi, president of the European Central Bank (ECB), pledged to continue its bond buying programme for longer than expected, but also cut the amount. The programme, intended to boost flaccid eurozone economic growth, has been extended until at least December 2017; but from April 2017 the ECB will buy only €60 billion each month, less than the current €80 billion. Bond markets focused on the cut rather than the extension, and Spanish and Portuguese government debt weakened. By extending the programme’s date, the eurozone stands in stark contrast to the United States, where the Federal Reserve is expected to raise interest rates on 14 December.

RENZIT: INVESTORS SHRUG OFF ITALIAN REFERENDUM Matteo Renzi resigned on Wednesday as Italian prime minister after suffering a stinging defeat in a referendum over his flagship constitutional reforms. Following the move, plans for a private-sector rescue of Monte dei Paschi di Siena, the oldest bank in the world, were thrown into doubt. Most parliamentary factions are now pushing for an early election in a few months' time. Yet investors have taken these developments in their stride: the FTSE MIB Index of Italian shares rallied, while Italy’s government debt market edged slightly lower.

AUSTRALIA’S ECONOMY HEADS DOWN UNDERAustralia’s summer may be firmly underway but dark economic clouds are looming large over the country. Data released last week showed that Australia’s economy contracted by 0.5% in the third quarter, its first negative quarter of economic growth in five years and only its fifth in 25 years. The Australian economy hasn’t been in recession – defined as two consecutive quarters of negative GDP growth – since 1991. The economy’s downturn has been attributed to shrinking government spending and low business investment but the size of the contraction was unexpected – it paints a bleak picture of Australia’s economic health.

HAIR FORCE ONE VERSUS AIR FORCE ONE In what’s becoming an increasingly regular occurrence, US president-elect, Donald Trump, took to Twitter last week to single out yet another US business. In less than 140 characters he seemingly commanded Boeing, manufacturers of the presidential plane, Air Force One, to cancel an order for a new version of the aircraft, citing spiralling costs. Boeing shares momentarily stuttered on the news, but swiftly recovered to end the week slightly higher. The dressing-down comes just weeks after Trump persuaded Indiana-based air-conditioning manufacturer, Carrier, to keep 1,000 jobs on US turf, after it had been planning to outsource to Mexico.

Weekly market round-up

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Please remember that past performance is not a guide to future performance. The value of investments and the income from them cango down as well as up and investors may not get back the amount originally invested. Exchange rate changes may cause the value ofoverseas investments to rise or fall. Issued by Old Mutual Global Investors (UK) Limited (trading name, Old Mutual Global Investors), amember of the Old Mutual Group. Old Mutual Global Investors is registered in England and Wales under number 02949554 and itsregistered office is 2 Lambeth Hill London EC4P 4WR. Old Mutual Global Investors is authorised and regulated by the UK FinancialConduct Authority (“FCA”) with FCA register number 171847 and is owned by Old Mutual Plc, a public limited company limited by shares,incorporated in England and Wales under registered number 3591559. This communication is for information purposes only and does notconstitute a financial promotion (as defined in the Financial Services and Markets Act 2000) or other financial, professional or investmentadvice in any way. Nothing in this document constitutes a recommendation suitable or appropriate to a recipient’s individualcircumstances or otherwise constitutes a personal recommendation. It is distributed solely for information purposes, it does not constitutean advertisement and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments in anyjurisdiction. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliabilityof the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets ordevelopments referred to in the document. Any opinions expressed in this document are subject to change without notice and maydiffer or be contrary to opinions expressed by other business areas or groups of Old Mutual Global Investors as a result of using differentassumptions and criteria. This communication is for retail investors. OMGI 12_16_0143

Source: All data sourced from Bloomberg as at 12:00pm, 9 December 2016. *In GBP terms. **Yields move inversely to prices.

RAIDING THE RESERVES: CHINA’S FOREX RESERVES SLIP

MARKET DATA – % CHANGE IN WEEK ENDING 09/12/2016

As the People’s Bank of China (PBoC) continues its battle to stem further deprecation of the Chinese currency, the renminbi, data showed China’s foreign exchange (forex) reserves fell by US$70bn in November, the sharpest monthly fall since January. Its reserves, which total a whopping US$3.1 trillion, declined by 2.2% over the month. The PBoC has been selling US dollars as a means of combatting the renminbi’s weakness. Also contributing to the drop in its forex reserves is the strength of the US dollar versus other major currencies; the greenback’s strength has weakened the value of China’s non-US dollar reserves.

EQUITIES LAST VALUE % CHANGEFTSE All-Share (UK) 3,772 +2.94%*MSCI All Country World 423 +2.66%*S&P 500 (US) 2,246 +2.52%*Stoxx 600 (Europe) 354 +4.37%*Topix (Japan) 1,525 +3.21%*MSCI Asia ex Japan 534 +2.28%*MSCI Emerging Markets 879 +3.09%*

FIXED INCOME Bloomberg Barclays Global Aggregate bond index, GBP-hedged – total return 755 -0.08%10-year Gilt yield 1.43% +0.05%**10-year US Treasury yield 2.43% +0.04%**10-year Bund yield 0.36% +0.08%**10-year Japanese government bond yield 0.06% +0.02%**

COMMODITIESGold (US$, per troy ounce) 1,165 -1.03%Brent Crude (US$, per barrel) 54.14 -0.59%

CURRENCIESGBP/USD 1.26 -1.03%GBP/EUR 1.19 -0.17%

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Source: Bloomberg as of 30 November 2016, People's Bank of China.