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STORMY WEATHER
Marcin Kujawski
Economist Central & Eastern Europe
STORMY WEATHER
Global: Key messages
� We have revised our global growth forecasts down and expect the global economy to grow more slowly in 2016 than in 2015. Financial stress is a major reason behind.
� Financial stress reflects a number of factors. Reducing it will require either a rebound in China’s economy, which we think is unlikely until mid-2017, and/or a Fed pause, at least
� The risks in our expected scenario will lock the Fed out of hiking in 2016 and 2017; a softening economy will leave them becalmed.
� The ECB eased substantially further this year, including the moves in March.
� China is also expected to ease and likely devalue the RMB again by the end of 2016.
� Emerging markets should remain troubled by weak growth, weak commodity prices and burdensome USD debt. Event risk in EM and DM credit could further harm sentiment.
� We think the probability of a global recession is 30%. Whatever central bankers say, the market sees them as almost out of ammo; any available ammo consists largely of blanks.
� With further action from major central banks to ease policy (and no action from Fed and BOE), govvies are likely to remain well supported, particularly if risk-aversion persists.
� The USD looks to have ended its reign as the world’s strongest currency, as the likes of the EUR and JPY look to outperform; while the commodity bloc is expected to stay weak.
March 2016 2
Global growth forecast
3March 2016
Global inflation forecast
4March 2016
Global financial markets forecasts
5March 2016
Global: Leading indicators
Source: Macrobond, BNP Paribas
� Growth prospects for both the US and UK has been steadily worsening since 2014; Japan’s outlook has been also weakening from the the second half of 2015 on.
� The eurozone remains the only large global economy, where leading indicators suggest further upswing. While consumer demand should remain supported by low oil prices and fiscal expansion,
global headwinds and a stronger EUR will weigh on exports and investment.
Falling, except for the eurozone
6March 2016
Global: Uncertainty weighing on markets
Source: Macrobond, BNP Paribas
� Volatility rattled markets in early 2016. Pessimism has been growing, with equities down, oil prices hitting new lows, EM currencies having devalued against the USD, and credit markets showing signs of
stress. Following ECB and Fed meetings the situation has subsided though risks persist.
� Whether volatility is a consequence of lower global economic activity or a cause of it has yet to be
determined. What is clear is that economic forecasts will have to be revised down. Ours is no exception – we now see global growth at 3.0% in 2016, slower than in 2015
High volatility on the markets in early 2016
7March 2016
Global: China slowdown contributing to EMK slump
Source: Macrobond, BNP Paribas
� China’s hard(er) landing reduces demand for commodities, while their supply is rising…
� …exacerbating the falls in commodity prices…
� …reducing directly and indirectly growth across the emerging-markets-universe.
� The bottom in the EMK growth cycle has not been reached, yet, it seems.
Direct and indirect spillovers
8March 2016
Global: Dollar strength and commodities weakness…
Source: Macrobond, BNP Paribas
� Dollar strength is consistent with cheap commodities.
� Low commodity prices directly hit large commodities-exporting EMKs like Brazil, Russia, etc.
� A stronger dollar hurts all those EMKs indebted in foreign currency.
…bad for emerging markets
9March 2016
Global: Fall in reserves strengthens disinflation pressures
Source: Macrobond, BNP Paribas
� Dollar strength results in a decline in global FX reserves and, consequently, a contraction in base money.
� Countries seeing their currencies depreciate may see inflationary shocks through import prices.
� Meanwhile, disinflation pressure is growing for the developed economies and the commodity importers.
Global inflation has yet to bottom
10March 2016
Global: Oil – the long road to recovery
� We see no reason for OPEC to change its supply policy of putting market share ahead of price. It is bearing fruit, thanks to sharp cuts in oil-industry capex. With Iran to add to an oversupplied market, oil is unlikely to rally strongly this year; but it is likely to have reached a floor.
� Non-OPEC production should contract this year, but perhaps not enough to offset high OPEC output and reduce global inventories. For the second year in a row, non-OPEC countries are slashing investment, suggesting less supply in three years and medium-term support for prices.
� So far, 2016 has seen greater cross-asset correlation between oil and equity markets due to China-related jitters. The market's pricing of the likelihood and duration of Fed rate moves, if any, will influence the USD and hence price action. Geopolitics will always play a role, notably when it involves Saudi Arabia and Iran.
� Many observers are optimistic that Iran can raise its supply quickly over the next six months, as its officials claim. We remain cautious, as the true state of Iran’s oil industry is unclear. Opening its oil sector to foreign participation might also encounter domestic resistance.
� Concerns over the hit to oil prices from weaker growth in demand for oil products in 2016 may have been overdone. Demand for crude oil to fill strategic reserves is likely to remain strong, notably in China, offsetting some of the negative price impact of softer demand for oil products.
11March 2016
Global: Oil price breakevens for different type of producers…
…is on average above current market prices
12March 2016
Global: Demand vs Supply point to rising oil prices
Oil demand vs supply analysis suggest that price could head to 60$ per barrel next year
13
Source: Macrobond, BNP Paribas
March 2016
China: Cyclical or structural slowdown?
Source: Macrobond, BNP Paribas
� Over the decades Chinese economy has been driven by high savings and resultant brisk investment growth.
� However transforming savings into investment led to a fast build-up of debt. As Chinese propensity to consume remained low, capital spending induced overcapacity and a need for deleveraging.
Growth driven by investment led to a debt build-up
14
Savings as % of GDP
Investment as % of GDP
15
20
25
30
35
40
45
50
55
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Total debt as % of GDP
150
160
170
180
190
200
210
220
230
240
250
2004 2006 2008 2010 2012 2014
March 2016
China: Rebalancing hurts growth in the near-term
Source: Macrobond, BNP Paribas
� China appears determined to carry on supply-side restructuring to cut overcapacity, reduce housing inventory and de-leverage. While this is good for rebalancing the economy in the medium and long
term, it is likely to undermine the growth momentum further in 2016-17.
� There is little upward inflation pressure in prospect, either from home or abroad. Producer prices should
keep falling this year, with only a small improvement in 2016 from 2015.
Weak growth momentum seen in 2016-17
15
Industrial GVA (% y/y, 3mma)
GDP (% y/y)
5.0
7.5
10.0
12.5
15.0
17.5
20.0
22.5
2004 2006 2008 2010 2012 2014 2016
March 2016
China: Tight financial and monetary conditions…
Source: Macrobond, BNP Paribas
� China’s real interest rates continue rising, as PPI deflation continues.
� The real effective exchange rate has been appreciating fast until recently given the quasi-peg to the
USD and depreciating currencies of China’s other key trading partners (Asia, Europe, EMKs).
� Financial and monetary conditions remain tight, though less tight than few months ago, giving some hope for Chinese growth rebounding eventually.
… is sluggishly getting looser
16March 2016
US: One hike and Fed is done?
Source: Macrobond, BNP Paribas
� Fed’s communication during the March meeting was more dovish than expected, with a weaker tone on growth dominating references to higher inflation
� We see tighter financial conditions and global market uncertainty as unlikely to abate anytime soon, with a gradual slowing in employment and economic growth on the horizon.
� We therefore expect no further rate hikes from the Fed in 2016 or 2017.
After December hike, it appears the Fed will remain on hold until the end of 2017
17
Shadow federal funds rate (Wu-Xia)
Federal funds target rate
-3
-2
-1
0
1
2
3
4
5
6
2007 2008 2009 2010 2011 2012 2013 2014 2015
US GDP (% y/y, RHS)
US Financial and MonetaryConditions Index (6m lag)
Tighter Looser
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5 -5
-4
-3
-2
-1
0
1
2
3
4
5
2000 2002 2004 2006 2008 2010 2012 2014 2016
March 2016
US: One hike and Fed is done?
Source: Macrobond, BNP Paribas
Concerns about the stock exchange may also tie Fed’s hands
18March 2016
US: Solid labour market to drive inflation higher…
Source: Macrobond, BNP Paribas
� Impressive job creation and falling unemployment rate point to greater wage pressure in the months to come.
� Against this backdrop, inflation looks poised to rise, albeit slowly, throughout 2016-17.
� Inflation is being closely monitored by the Fed but, while spot inflation has picked up, market-based inflation expectations are low; stress on symmetry of the inflation objective suggests that, while the Fed
does not aim to exceed 2% inflation, it would likely be tolerant of some mild overshoot of 2%.
…but inflation expectations remain well anchored
19March 2016
US: Services catching down
Source: Macrobond, BNP Paribas
� In 2015 services benefitted from rising real incomes and robust consumption…
� …while softer global growth and the strong USD is pushing manufacturers’ prospects lower.
� More recently, the outlook for the services sector has been catching down.
Services’ outperformance diminishing
20March 2016
Eurozone: Key messages
� While consumer demand should remain supported by low oil prices and fiscal expansion,
global headwinds and a stronger EUR will weigh on exports and investment.
� Our growth forecasts are already below consensus, but the risk is to the downside. A key
judgement underlying the numbers is that consumers will spend the income gained from
lower oil prices; raised concerns about the external backdrop could boost saving instead.
� With the output gap hardly closing and low oil prices and a stronger currency weighing on
goods prices, we expect core inflation to remain broadly flat and headline inflation to hover
around zero this year, the same level as in 2015.
� Our inflation forecasts are below the consensus both for this year and next. In our view,
the risk highlighted by the ECB of inflation expectations becoming unanchored is
significant.
� The first- and second-round effects of low oil prices on inflation drove ECB easing in
March (a lower deposit rate and more asset purchases), in tandem with downward
revisions to staff projections.
� Further easing is likely beyond March due to persistent low inflation.
� The perceived effectiveness of unconventional measures is diminishing, however.
21March 2016
Eurozone growth: Policy mix…
Source: Macrobond, national statistics, European Commission, BNP Paribas
� Our Financial and Monetary Conditions Index (FMCI) signals monetary conditions will remain easy this year, although slightly less soft than in 2015.
� Meanwhile, the eurozone’s fiscal stance is seen moving from broadly neutral in 2014-15 to somewhat expansionary in 2016.
…will remain expansionary…
Monetary policy stance (FMCI)
22March 2016
Eurozone growth: Consumption
Source: Macrobond, European Commission, Eurostat, ECB, BNP Paribas
� Private consumption has recently been the main driver of improved eurozone growth.
� Rates of increase have risen back to levels last seen in the pre-crisis period.
� The effect of lower energy prices is set to fade over time, however.
Main growth driver, for now
23March 2016
Eurozone growth: Bank lending
Source: Macrobond, ECB, BNP Paribas
� The amount of loans outstanding is growing for the first time since the beginning of 2012.
� New lending to households and non-financial corporations is increasing at a sustained pace.
� The ECB Bank Lending Survey suggests looser credit standards and robust loan demand.
On the up
24March 2016
Eurozone growth: Investment
Source: Macrobond, European Commission, national statistics, BNP Paribas
� Easier monetary conditions should continue to support investment over the next few quarters.
� Investment goods orders point to further increase in machinery investment, although the recent
moderation is worrying, especially in light of rising uncertainty.
Upside potential?
25March 2016
Eurozone growth: Uncertainty and financial stress
Source: Macrobond, Eurostat, Markit, European Commission, BNP Paribas
Rising uncertainty
� Proxy of uncertainty derived from ESI business surveys – the higher the dispersion of panellists’ opinions, the higher the uncertainty. Uncertainty in the manufacturing sector is based on the
assessment on future activity.
� Our Financial Stress Indicator takes into account stress in several markets (money, sovereign debt,
corporate debt, etc.). The two indices are highly related, with financial stress Granger-causing uncertainty, but not the other way around.
26March 2016
Eurozone: External exposure
Source: Macrobond, Eurostat, BNP Paribas
*India, Indonesia, Hong Kong, South Korea, Taiwan, Malaysia, Thailand and Singapore
� Eurozone export volume growth has recently outperformed global trade growth. China’s importance as a trading partner has risen but it still accounts for only around 6% of eurozone exports.
� The US and UK shares are roughly twice as big as China’s, while CEE is higher still. However, over 30% of eurozone exports go to EM and/or economies that are linked by trade or commodities to China.
EM matters
0
2
4
6
8
10
12
14
16
18
20
Russia Latam OPEC China OtherAsia*
US UK CEE
2004 2014
Eurozone exports by destination(% of total exports)
*India, Indonesia, Australia, Hong Kong, South Korea, Malay sia, Singapore, Thailand, Taiwan
27March 2016
Eurozone inflation: Subdued domestic price pressures
� The recent acceleration of core prices has been mainly driven by higher core goods inflation on the back of past EUR exchange rate depreciation.
� Services inflation remains subdued and has been trending down since 2012.
� The downtrend appears to have stopped, though.
Source: Macrobond, Eurostat, BNP Paribas
No domestic-demand pressure
28March 2016
Eurozone inflation: Compensation
Source: Macrobond, Bloomberg, BNP Paribas
� Still, wage growth remains sluggish, keeping price pressures low.
� Despite faster economic growth and better job data, wages are unlikely to accelerate much both this
and next year.
No wage inflation
29March 2016
Eurozone inflation: Exchange rate impact
� Past euro depreciation is passing through to core goods price inflation.
� There is potential for some further upward pressure in the short-term.
� The recent currency appreciation, however, should change these trends.
Source: Macrobond, Eurostat, BNP Paribas
Short-term upside potential for prices
30March 2016
Eurozone inflation: Oil price impact
� Headline inflation to accelerate towards the core rate, only once base effects on oil dissipate.
Source: Macrobond, BNP Paribas
Disinflationary impact to persist for some time still
31March 2016
Eurozone inflation: ECB Survey of Professional Forecasters
Source: Macrobond, Bloomberg, BNP Paribas
� Long-term inflation expectations are back again to their lows, despite the uptick in nearer-term (1-year and 2-year ahead) expectations.
� Combined with a worsening growth outlook, lower inflation and inflation expectations put pressure on the ECB to act.
Skewed to the downside
32March 2016
Eurozone: Monetary policy
� Tighter financial and monetary conditions and building downside risks to growth and
inflation justified a more substantial, broader-based package of ECB measures on 10
March.
� The ECB delivered a 10bp deposit-rate cut to -0.40%.
� The monthly run-rate of asset purchases was risen by EUR 20bn, to EUR 80bn per
month.
� With policy transmission at risk of impairment due to banking-sector stress, measures
aimed at this area have also been announced, including new long-term liquidity provisions.
� The ECB’s mandate offers plenty of scope to expand its array of unconventional tools. But
the more exotic the policy, the higher the likelihood of opposition within the Governing
Council, with some members of the view that even some of the existing measures ought to
have been used only as a last resort, if deflation is imminent.
� Concern about the diminished potency of unconventional policy measures has contributed
to more turbulent markets recently. The longer it takes for such measures to be deployed,
the less likely they would be to have the desired effects.
33March 2016
� Since the launch of the APP, narrow money supply and ECB balance sheet are rising in tandem.
� Faster money supply growth is consistent with higher investment some 12 months down the line.
� The extension of the APP could support a stronger eurozone economy in 2017.
Eurozone: QE pass-through
Source: ECB, Macrobond, BNP Paribas
Boost to nominal growth
34March 2016
Eurozone: Impact of deposit rate cut
Source: Macrobond, BNP Paribas
� A cut in the ECB deposit rate will further depress European short-term market rates. In the past cuts in depo rate had a meaningful impact on market rates up to 2y maturities .
� The US-eurozone 2y swap spread has been the key determinant affecting the EURUSD over the last12-18 months.
� Rates on hold in the US together with Mario Draghi’s comments, suggesting that the ECB may shift
away from deposit rate as a policy tool, point to a stable or slightly stronger EUR.
Through the exchange rate channel
35March 2016
FX: EURUSD hovering around 1.15 in 2016
Source: Macrobond, BNP Paribas
� Nominal rate differential along with differences in pace of economic growth point to lower EURUSD in the months to come.
� In contrast real rate differential and differences in inflation suggest EURUSD should be somewhathigher.
� Consequently, we look for a fairly stable EURUSD hovering around 1.15 over the course of 2016. In
2017 we see stronger USD as faster inflation will lead to higher expectations for rate hikes in the US.
EURUSD fairly stable in 2016 and falling next year
36March 2016
Central Europe: Growth to remain robust
Source: Macrobond, BNP Paribas
� Growth prospects for the region look rosy, though country-specific risks persist eg. political risk in Poland.
� In general however Central Europe looks very robust in a fairly lukewarm global environment. In 2015 economies in the region benefitted mainly from cheap oil and low exposure to China.
� An eventual rise in oil prices this year could act in the opposite direction
General prospects for the region look rosy, though country-specific risks persist
37March 2016
Central Europe: Cheap oil boosted consumption in 2015
Source: Macrobond, BNP Paribas
� On average USD oil prices fell by some 46% last year. Cheaper oil brought a significant boost to real disposable incomes in oil importing countries.
� Central Europe was one of the biggest beneficiaries of the sizable decline in oil prices. Simple calculations suggest it could have propped up real consumption by some 0.5-1.0% across the region.
Cheap oil boosting households’ consumption
38
Consumer confidence:
Romania
Czech Republic
Hungary
Poland
Bulgaria
-70
-60
-50
-40
-30
-20
-10
0
10
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Fuel weight
in the CPI
basket
Avg. y/y change
in fuel prices in
2015
Gain to real
consumption
Bulgaria 7.2% -14.5% 1.0%
Czech Rep. 3.9% -13.3% 0.5%
Hungary 8.2% -12.2% 1.0%
Poland 5.8% -13.4% 0.8%
Romania 5.6% -9.0% 0.5%
March 2016
Central Europe: Low exposure to China
China is not a key trading partner for Central European economies
39
Direct reaction to a 1% fall
in Chinese GDP
Share of sales to China in
exports Share of exports in GDP:
Direct impact on
domestic GDP
Bulgaria 2.4% 52% 0.037%
Hungary 1.7% 81% 0.041%
Poland 1% 40% 0.012%
Czech Rep. 1.2% 84% 0.030%
Romania 1% 35% 0.011%
Direct EZ reaction to a 1%
fall in Chinese GDP
Share of sales to China in
EZ exports Share of exports in GDP: Direct impact on EZ GDP
Eurozone (EZ) 3.5% 35% 0.037%
Indirect reaction to a 1%
fall in Chinese GDP
Share of sales to EZ in
exports
Share of exports in GDP: Indirect impact on
domestic GDP
Bulgaria 46% 52% 0.026%
Hungary 58% 81% 0.052%
Poland 55% 40% 0.024%
Czech Rep. 64% 84% 0.059%
Romania 52% 35% 0.020%
Total reaction to a 1% fall
in Chinese GDP
Direct reaction to a 1% fall
in Chinese GDP
Indirect reaction to 1% fall
in Chinese GDP
Total reaction to a 1%
fall in Chinese GDP
Bulgaria 0.0% 0.0% 0.1%
Hungary 0.0% 0.1% 0.1%
Poland 0.0% 0.0% 0.0%
Czech Rep. 0.0% 0.1% 0.1%
Romania 0.0% 0.0% 0.0%
* we assume the elasticity of imports with respect to GDP is equal to 3
March 2016
Central Europe: External environment key risk in the short-term
GDP growth in Central Europe closely correlated to the cycle in the eurozone
40March 2016
� Funds from the EU’s 2014-20 financial framework are a chance for Central European
countries to continue bringing their economies in line with richer Western European
nations.
� To achieve this, the Central European states need to maximise their absorption of the
funds and effectively allocate the money to secure growth in the longer term.
� Poland, Romania and Bulgaria will receive more money than under the 2007-13
framework, while Hungary and the Czech Republic will get less.
� EU funds inflows could potentially affect GDP growth by +/-0.5-0.7pp a year from 2016,
when the funding starts to be spent and its effects trickle down to the economy.
Central Europe: EU funds
Lots of money to be spent in the next years
41
Table 1: EU fund allocation in Central Europe under 2014-20 financial framework
2007-13 2014-20
(EUR bn) Total Total
(% of GDP) Structural
funds CAP Total
Total (% of GDP)
Structural funds
CAP
Poland 99.5 25.5 67.2 32.3 106.6 27.3 77.6 29.0
Czech Republic 35.0 22.3 26.5 8.5 29.4 18.7 22.0 7.4
Hungary 36.9 37.5 24.9 12.0 33.0 33.5 21.9 11.1
Romania 37.3 26.3 19.1 18.3 41.5 29.3 23.0 18.5
Bulgaria 14.0 31.7 6.7 7.3 14.4 32.6 7.6 6.8
Source: European Commission, Eurostat, BNP Paribas ; CAP = Common Agricultural Policy
March 2016
Central Europe: Playing EU-funded catch-up
Source: Macrobond, BNP Paribas
� Over the recent decades Central Europe has been steadily bridging the gap to richer Western European nations.
� For this process to continue, however, the economies in the region should focus on investment whichspur innovation and producitvity – key factors standing behind long-term sustainable growth. .
A need to climb up the technological ladder
42
GDP per capita (PPS, EU15=100)
Czech Republic
HungaryRomania
Poland
Bulgaria
20
30
40
50
60
70
80
90
1995 2000 2005 2010 2015
R&D expenditure (% of GDP):
Czech Republic
Hungary
Poland
Germany
RomaniaBulgaria
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1996 1998 2000 2002 2004 2006 2008 2010 2012
March 2016
Disclaimer
February 2016
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BNP Paribas isincorporated in France as a Société Anonyme and regulated in France by the European Central Bank andby the Autorité de Contrôle Prudentiel et de Résolution.Netherlands: This report is being distributed in the Netherlands by BNP Paribas Fortis SA/NV, NetherlandsBranch, a branch of BNP Paribas SA/NV whose head office is in Brussels, Belgium. BNP Paribas FortisSA/NV, Netherlands Branch, Herengracht 595, 1017 CE Amsterdam, is authorised and supervised by theEuropean Central Bank (ECB) and the National Bank of Belgium and is also supervised by the BelgianFinancial Services and Markets Authority (FSMA) and it is subject to limited regulation by the NetherlandsAuthority for the Financial Markets (AFM) and the Dutch Central Bank (De Nederlandsche Bank).Portugal: BNP Paribas – Sucursal em Portugal Avenida 5 de Outubro, 206, 1050-065 Lisboa, Portugal.www.bnpparibas.com. Incorporated in France with Limited Liability. Registered Office: 16 boulevard desItaliens, 75009 Paris, France. 662 042 449 RCS Paris. BNP Paribas – Sucursal em Portugal is leadsupervised by the European Central Bank (ECB) and the Autorité de Contrôle Prudentiel et de Résolution(ACPR). BNP Paribas - Sucursal em Portugal is authorized by the ECB, the ACPR and Resolution and it isauthorized and subject to limited regulation by Banco de Portugal and Comissão do Mercado de ValoresMobiliários. BNP Paribas - Sucursal em Portugal is registered in C.R.C. of Lisbon under no. NIPC980000416. VAT Number PT 980 000 416.”Spain: This report is being distributed in Spain by BNP Paribas S.A., S.E., a branch of BNP Paribas S.A.whose head office is in Paris, France (Registered Office: 16 boulevard des Italiens, 75009 Paris, France).BNP Paribas S.A., S.E., C/Ribera de Loira 28, Madrid 28042 is authorised and supervised by the EuropeanCentral Bank (ECB) and the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and subject to limitedregulation by the Bank of Spain.United States: This report is being distributed to US persons by BNP Paribas Securities Corp., or by asubsidiary or affiliate of BNP Paribas that is not registered as a US broker-dealer to US major institutionalinvestors only. BNP Paribas Securities Corp., a subsidiary of BNP Paribas, is a broker-dealer registered withthe U.S. Securities and Exchange Commission and a member of the Financial Industry Regulatory Authorityand other principal exchanges. For the purposes of, and to the extent subject to, §§ 1.71 of the U.S.Commodity Exchange Act, this report is a general solicitation of derivatives business. BNP ParibasSecurities Corp. accepts responsibility for the content of a report prepared by another non-U.S. affiliate onlywhen distributed to U.S. persons by BNP Paribas Securities Corp.Brazil: This report was prepared by Banco BNP Paribas Brasil S.A. or by its subsidiaries, affiliates andcontrolled companies, together referred to as "BNP Paribas", for information purposes only and do notrepresent an offer or request for investment or divestment of assets. Banco BNP Paribas Brasil S.A. is afinancial institution duly incorporated in Brazil and duly authorized by the Central Bank of Brazil and by theBrazilian Securities Commission to manage investment funds. Notwithstanding the caution to obtain andmanage the information herein presented, BNP Paribas shall not be responsible for the accidentalpublication of incorrect information, nor for investment decisions taken based on the information containedherein, which can be modified without prior notice. Banco BNP Paribas Brasil S.A. shall not be responsibleto update or revise any information contained herein. Banco BNP Paribas Brasil S.A. shall not beresponsible for any loss caused by the use of any information contained herein. 43
Disclaimer (cont)
February 2016
IMPORTANT DISCLOSURES: Please see important disclosures in the text of this report
Israel: BNP Paribas does not hold a licence under the Investment Advice and Marketing Law of Israel, to offerinvestment advice of any type, including, but not limited to, investment advice relating to any financial products”
South Africa: BNP Paribas Securities South Africa (Pty) Ltd (Registration number 1996/009716/07) is a licensedmember of the Johannesburg Stock Exchange and an authorised Financial Services Provider (FSP 29451) interms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Any view or opinion expressed in thisreport does not constitute advice and the recipient should obtain their own advice prior to making any decision ortaking any action whatsoever based hereon.
Japan: This report is being distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited or bya subsidiary or affiliate of BNP Paribas not registered as a financial instruments firm in Japan, to certain financialinstitutions defined by article 17-3, item 1 of the Financial Instruments and Exchange Law Enforcement Order.BNP Paribas Securities (Japan) Limited is a financial instruments firm registered according to the FinancialInstruments and Exchange Law of Japan and a member of the Japan Securities Dealers Association and theFinancial Futures Association of Japan. BNP Paribas Securities (Japan) Limited accepts responsibility for thecontent of a report prepared by another non-Japan affiliate only when distributed to Japanese based firms byBNP Paribas Securities (Japan) Limited. Some of the foreign securities stated on this report are not disclosedaccording to the Financial Instruments and Exchange Law of Japan.
Hong Kong: This report is being distributed in Hong Kong by BNP Paribas Hong Kong Branch, a branch of BNPParibas whose head office is in Paris, France. BNP Paribas Hong Kong Branch is registered as a Licensed Bankunder the Banking Ordinance and regulated by the Hong Kong Monetary Authority. BNP Paribas Hong KongBranch is also a Registered Institution regulated by the Securities and Futures Commission for the conduct ofRegulated Activity Types 1, 4 and 6 under the Securities and Futures Ordinance.
Singapore: BNP Paribas Singapore Branch is regulated in Singapore by the Monetary Authority of Singaporeunder the Banking Act, the Securities and Futures Act and the Financial Advisers Act. This report may not becirculated or distributed, whether directly or indirectly, to any person in Singapore other than (i) to an institutionalinvestor pursuant to Section 274 of the Securities and Futures Act, Chapter 289 of Singapore ("SFA"), (ii) to anaccredited investor or other relevant person, or any person under Section 275(1A) of the SFA, pursuant to and inaccordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and inaccordance with the conditions of, any other applicable provisions of the SFA.
South Korea: Branch: BNP Paribas Seoul Branch is regulated by the Financial Services Commission andFinancial Supervisory Service for the conduct of its financial investment business in the Republic of Korea.This report does not constitute an offer to sell to or the solicitation of an offer to buy from any person anyfinancial products where it is unlawful to make the offer or solicitation in South Korea.Securities: BNP Paribas Securities Korea is registered as a Licensed Financial Investment Business Entityunder the FINANCIAL INVESTMENT SERVICES AND CAPITAL MARKETS ACT and regulated by theFinancial Supervisory Service and Financial Services Commission. This report does not constitute an offerto sell to or the solicitation of an offer to buy from any person any financial products where it is unlawful tomake the offer or solicitation in South Korea.
Taiwan: BNP Paribas Taipei Branch is registered as a licensed bank under the Banking Act and regulatedby the Financial Supervisory Commission, R.O.C. This report is directed only at Taiwanese counterpartieswho are licensed or who have the capacities to purchase or transact in such products. This report does notconstitute an offer to sell to or the solicitation of an offer to buy from any person any financial productswhere it is unlawful to make the offer or solicitation in Taiwan.
Australia: This material, and any information in related marketing presentations (the Material), is beingdistributed in Australia by BNP Paribas ABN 23 000 000 117, a branch of BNP Paribas 662 042 449 R.C.S.,a licensed bank whose head office is in Paris, France. BNP Paribas is licensed in Australia as a ForeignApproved Deposit-taking Institution by the Australian Prudential Regulation Authority (APRA) and deliversfinancial services to Wholesale clients under its Australian Financial Services Licence (AFSL) No. 238043which is regulated by the Australian Securities & Investments Commission (ASIC).The Material is directed toWholesale clients only and is not intended for Retail clients (as both terms are defined by the CorporationsAct 2001, sections 761G and 761GA). The Material is subject to change without notice and BNP Paribas isunder no obligation to update the information or correct any inaccuracy that may appear at a later date.
Some or all of the information contained in this report may already have been published onhttps://globalmarkets.bnpparibas.com
© BNP Paribas (2016). All rights reserved.
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