BT Monthly Markets Chart Pack – September 2008

An overview of movements in global financial markets

2

Global share markets tumble in September...

Global share markets were hit hard in September as attempts by the US government to bail out Wall Street failed to offset earlier losses. In the US, the benchmark S&P 500 Index closed the month 9.2% lower while stocks in Europe (-9.7%), the UK (-13%) and Japan (-13.9%) were also down.

The Australian share market was not immune to the chaos that affected other global share markets during September, with the S&P/ASX 200 Accumulation Index closing the month 9.8% lower. But it wasn’t just weaker financial stocks that helped drag the local market lower. Weaker commodity prices also contributed to the fall.

3

Global shares measured by the MSCI World ex-Australia (net dividends) Index in A$.Source: BT Financial Group, MSCI

Impact of major market events on global shares since 1986

…but continue to perform well over the long-term, despite some major market events

700

1,200

1,700

2,200

2,700

3,200

3,700

4,200

4,700

5,200

5,700

6,200

Sep-86 Sep-88 Sep-90 Sep-92 Sep-94 Sep-96 Sep-98 Sep-00 Sep-02 Sep-04 Sep-06 Sep-08

Jan 91Gulf War

Feb 94Bond Market Crash

Aug 97Asian Currency Crisis

Jul 98Russian Bond Crisis

Jul 01Tech Wreck

Sep 01Attack on Twin Towers

Jun 07US Sub-prime Crisis

Oct 87Wall Streetcrash

Nov 89Fall of the Berlin Wall Mar 03

Troops enter Iraq

4

Source: BT Financial Group, Premium Data

S&P/ASX 200 Accumulation Index – year to 30 September 2008

The Australian share market closed 9.8% lower in September

30,000

31,500

33,000

34,500

36,000

37,500

39,000

40,500

42,000

43,500

30/09/2007 30/11/2007 30/01/2008 30/03/2008 30/05/2008 30/07/2008 30/09/2008

5

Key Australian economic news – September

Australia’s economy grew by 0.3% in the June quarter, in line with expectations. Growth on a year-on-year basis was 2.7%.

Our trade deficit was much worse than the market had anticipated in July, coming in at $717 million. The market had actually been expecting a $108 million surplus.

Retail trade figures were positive in July, up 1.4% for the month to be 3.5% higher year-on-year.

Housing finance in July was up 0.6%, though perhaps not surprisingly it remains 22.1% lower for the year. The monthly gain was the first in five months.

ANZ Bank’s monthly survey of job advertisements showed a 4% drop in newspaper ads in August, the largest monthly decline since February 2001 and the fourth consecutive monthly decline.

Source: BT Financial Group

6

The Australian dollar fell again in September

The Australian dollar (A$) continued its slide against the US dollar in September, thanks mainly to expectations of slower growth ahead and the impact that this will have on commodity prices. However, with commodity prices expected to stay relatively high over the long-term, the trend in the A$ is likely to remain up.

At the end of September:

A$1 bought US$0.7933 -7.5%

€0.5625 -3.9%

¥93.34 -9.9%

Source: BT Financial Group

7

Currency markets – A$ per US dollar

Source: BT Financial Group. Figures at 30 September 2008.

0.6000

0.6500

0.7000

0.7500

0.8000

0.8500

0.9000

0.9500

1.0000

Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08

The Australian dollar versus the US dollar…

8

Currency markets – A$ per Euro

the Euro…

0.5600

0.5700

0.5800

0.5900

0.6000

0.6100

0.6200

0.6300

0.6400

0.6500

Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08

Source: BT Financial Group. Figures at 30 September 2008.

9

and the Yen

70

75

80

85

90

95

100

105

110

Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08

Currency markets – A$ per Yen

Source: BT Financial Group. Figures at 30 September 2008.

10

Official world interest rate movements – September

In Australia, the Reserve Bank cut the official cash rate by 1.00% (to 6.00%) at its early October meeting. Elsewhere (in September), the European Central Bank, the Bank of England, the Bank of Japan and the US Federal Reserve all left their rates on hold.

Current rate Last movedDirection of last move

Australia 6.00% Oct 2008

US 2.00% Apr 2008

Europe (ECB) 4.25% Jul 2008

Japan 0.50% Feb 2007

United Kingdom 5.00% Apr 2008

Source: BT Financial Group

11

Source: BT Financial Group

30 September 2008

Global share market returns

1 year 3 years (pa) 5 years (pa)

Global

S&P 500 Index (US) -23.71% -1.77% 3.18%

Nasdaq (US Tech.) -22.92% -1.09% 3.11%

Nikkei 225 (Japan) -32.92% -6.04% 1.96%

Hang Seng (Hong Kong) -33.62% 5.30% 9.92%

DAX (Germany) -25.83% 4.95% 12.35%

CAC (France) -29.46% -4.30% 5.16%

FTSE 100 (UK) -24.19% -3.63% 3.68%

Australia

S&P/ASX 200 Accum. Ind. -26.76% 3.99% 12.39%

S&P/ASX Small Ordinaries -34.51% 1.48% 10.37%

S&P/ASX 300 Listed Prop. -41.79% -4.25% 5.76%

12

Short-term asset class performance

Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in A$

1-year rolling returns to 30 September 2008 (%) Best performing asset class for the year

2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993

Australian cash

7.65 6.54 5.87 5.68 5.49 4.89 4.63 5.81 5.92 4.95 5.12 6.17 7.73 7.69 5.00 5.67

Australian bonds

8.37 3.47 4.78 5.75 5.23 5.51 5.74 10.68 5.90 1.36 9.32 14.60 12.19 16.53 -4.24 16.52

Australian property

-41.79 20.13 25.55 16.76 29.10 6.24 11.93 16.25 11.12 0.78 14.58 24.73 12.61 11.57 -2.42 25.66

Australian shares

-27.08 32.70 16.01 31.73 20.67 11.78 1.24 -4.36 21.33 16.74 -3.64 26.36 10.66 10.47 6.39 34.60

International bonds

21.17 -8.34 4.61 -2.28 -0.02 -8.16 0.32 17.06 15.79 -8.81 36.43 11.90 -0.61 13.90 -11.12 20.61

International shares

-16.68

1.37 16.91 12.37 9.21 0.51 -26.99 -21.31 30.46 17.58 22.77 35.84 8.49 12.22 -6.28 32.89

13

Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in A$

1-year returns to 30 September 2008 (%)

Short-term asset class performance (cont’d)

-16.7

21.2

-27.1

-41.8

8.4

1.4

-8.3

32.7

20.1

3.5

30 September 2007

30 September 2008

Australian bonds

Listed property

Australian shares

Global bonds

Global shares

14

Long-term asset class performance

Note: Accumulated returns based on $1,000 invested in December 1984Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in A$

30 September 2008

Australian bonds

Listed property

Australian shares

Cash

Global shares

15

Source: BT Financial Group. West Texas Intermediate oil price at 30 September 2008.

Oil prices – US$ per barrel

Oil prices fell again in September as a slowing global economy continued to dampen demand

$0

$15

$30

$45

$60

$75

$90

$105

$120

$135

$150

88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08

16

Summary

The underlying strength of the Australian economy, relative to its global counterparts, looks set to continue in the near-term, though admittedly we are now beginning to feel the knock-on effects of the slowdown that’s impacted countries like the US and the UK.

The RBA’s decision to lower the official cash rate again in October should help to bring inflation under control, though at the moment it continues to sit well outside the Bank’s 2-3% comfort zone. If our economy continues to slow as expected, then there’s a chance we could yet see another rate cut by year-end.

The Australian dollar (A$) looks set to remain at high levels over the long-term, supported in part by relatively high commodity prices. However, if interest rates were to continue to fall, then the A$ would lose further ground against the US dollar.

Gains in global share markets, including here in Australia, are likely to remain under pressure in the near-term, particularly as global growth continues to slow down.

17

This presentation has been prepared by BT Financial Group Limited (ABN 63 002 916 458) ‘BT’ and is for general information only.  Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described.  The presentation has been prepared without taking into account any personal objectives, financial situation or needs.  It does not contain and is not to be taken as containing any securities advice or securities recommendation.  Furthermore, it is not intended that it be relied on by recipients for the purpose of making investment decisions and is not a replacement of the requirement for individual research or professional tax advice.  BT does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this presentation.  Except insofar as liability under any statute cannot be excluded, BT and its directors, employees and consultants do not accept any liability for any error or omission in this presentation or for any resulting loss or damage suffered by the recipient or any other person.  Unless otherwise noted, BT is the source of all charts; and all performance figures are calculated using exit to exit prices and assume reinvestment of income, take into account all fees and charges but exclude the entry fee.  It is important to note that past performance is not a reliable indicator of future performance.

This document was accompanied by an oral presentation, and is not a complete record of the discussion held.

No part of this presentation should be used elsewhere without prior consent from the author.

For more information, please call BT Customer Relations on 132 135 8:00am to 6:30pm (Sydney time)