Wealth & Investment Management Private Client Asset Management - PowerPoint PPT Presentation

Wealth & Investment Management Private Client Asset Management and Private Client Stockbroking Absa Private Bank / JSE Showcase (KZN) 13 May 2014 Absa presentation title  Date of presentation 1 Company confidential use only / Unrestricted distribution

The Global Economy Absa presentation title  Date of presentation 2 Company confidential use only / Unrestricted distribution

The Global economy Forecasts: Barclays Capital Global Economics Weekly (02 May 2014) 2013 2014 2015 2013 2014 2015 1.9 2.2 2.6 -0.4 1.3 1.5 Growth Growth 1.5 1.9 2.1 1.4 0.7 1.0 Inflation Inflation 15 21 USA EUR 85 79 O Euro Rest USA Rest 2013 2014 2015 2013 2014 2015 1.5 1.0 1.3 7.7 7.2 7.4 Growth Growth 0.4 2.7 2.3 2.6 2.7 3.5 Inflation Inflation 6 18 JAPAN CHIN 94 82 A Japan Rest China Rest Absa presentation title  Date of presentation 3 Company confidential use only / Unrestricted distribution

Global growth - GDP forecasts Real Gross Domestic Product (GDP) - actual and forecast for selected countries/regions 2011 2012 2013 2014 2015 Global growth picking up in WORLD 3.8 3.1 3.0 3.3 3.8 2014… - Developed 1.3 1.2 1.2 1.9 2.1 - Developing 6.5 5.0 4.8 4.7 5.4 2011 2012 2013 2014 2015 US 1.8 2.2 1.9 2.2 2.6 … thanks to the Euro 1.5 -0.5 -0.4 1.3 1.5 DEVELOPED economies … UK 1.0 0.2 1.7 2.8 2.5 Japan -0.6 1.9 1.5 1.0 1.3 2011 2012 2013 2014 2015 Brazil 2.7 0.9 2.3 1.9 2.4 … rather than the DEVELOPING Russia 4.3 3.4 1.3 0.7 1.4 economies. India 7.2 5.1 4.6 5.3 6.4 China 9.3 7.8 7.7 7.2 7.4 Source: Barclays Capital Global Economics S Africa 3.5 2.5 1.9 2.0 2.9 Weekly (02 May 2014) Absa presentation title  Date of presentation 4 Company confidential use only / Unrestricted distribution

Consumer price inflation (%): 2007 - 2014 UK, EU, USA and Japanese consumer price inflation UK JP US EU Source: Bloomberg Absa presentation title  Date of presentation 5 Company confidential use only / Unrestricted distribution

Interest rates in the developed world Key central bank interest rates: 2000 - 2014 UK EU US JP Source: I-Net Bridge Absa presentation title  Date of presentation 6 Company confidential use only / Unrestricted distribution

The South African economy - A challenging year Absa presentation title  Date of presentation 7 Company confidential use only / Unrestricted distribution

Production: Manufacturing & Mining (% y/y): 2011 - 2014 Manufacturing production Not much help from the weaker rand Mar: +0.67% with production up just 0,67% y/y in March. Mining production Low prices, low demand, higher wages, higher costs, labour unrest - all hurting production which was down 4,8% y/y in February. Feb: -4.80% Source: I-Net Bridge Absa presentation title  Date of presentation 8 Company confidential use only / Unrestricted distribution

Consumption: Real retail sales (% y/y) A volatile monthly time series but household consumption growth has slowed Feb: 2.16% Source: I-Net Bridge Absa presentation title  Date of presentation 9 Company confidential use only / Unrestricted distribution

Confidence watch FNB/BER Consumer Confidence: 2007 - 2014 Weak household confidence and outlook Q1: -6 on the domestic economy. RMB/BER Business Confidence: 2007 - 2014 Q1: 41 Business confidence index well below the neutral 50 level. Source: I-Net Bridge Absa presentation title  Date of presentation 10 Company confidential use only / Unrestricted distribution

Real GDP growth expectations Modest pickup in 2014 GDP growth SARB expects GDP growth of 2,6% in 2014 and 3,1% in 2015 with risks to the downside. (revised down from 2,8% and 3,3% respectively). Source: SARB Monetary Policy Statement 27 March 2014 Absa presentation title  Date of presentation 11 Company confidential use only / Unrestricted distribution

The Rand Rand against the USD: 2009 - 2014 2014: R10.35 - R11.30 range Now below R10.52/$ where we started the year Absa presentation title  Date of presentation 12 Company confidential use only / Unrestricted distribution

Brent crude oil prices (per barrel): 2004-2014 US dollar price has stabilised but the rand-price of oil has moved significantly higher Barclays forecasts: BRENT $/b 2011 111 2012 112 2013 109 2014 106 Q1 108 Q2 101 Q3 109 Q4 108 Source: Bloomberg 2015 108 Forecasts: Barclays Capital Commodities Weekly 02 May 2014 Absa presentation title  Date of presentation 13 Company confidential use only / Unrestricted distribution

Petrol price (95 octane at the reef) - onwards and upwards May: 1424c/l Month c/l Jul-13 1323 Jul-12 1082 Jul-11 1009 Jul-10 827 Jul-09 790 Jul-08 1070 Source: I-Net Bridge Absa presentation title  Date of presentation 14 Company confidential use only / Unrestricted distribution

Global food prices: 2011 - 2014 Higher agricultural prices yet to make their mark on domestic inflation Wheat (rhs) Maize (rhs) Sugar (lhs) Source: I-Net Bridge Absa presentation title  Date of presentation 15 Company confidential use only / Unrestricted distribution

Inflation outlook SARB’s fan chart – the inflation outlook has modestly improved for 2015 SARB expects an average of 6,3% in 2014 and 5,8% in 2015. A peak of 6,6% in Q4 2014, being above the range between Q2 2014 and Q2 2015. Source: SARB Monetary Policy Statement 27 March 2014 Absa presentation title  Date of presentation 16 Company confidential use only / Unrestricted distribution

South African economic outlook 2013 2014 2015 1.9 2.0 2.9 Growth 5.8 6.6 6.0 Inflation In a low growth environment with inflation above the upper end of the SARB’s target range it is likely that interest rates will be increased further from their current low levels in 2014. The real kicker to domestic growth will be a pickup in global growth but SA will need to get its house in order first to reap those benefits. 1 % of global 99 GDP SA Rest Forecasts: Barclays Capital Global Economics Weekly (02 May 2014) 17 Absa presentation title  Date of presentation Company confidential use only / Unrestricted distribution

The South African financial markets Absa presentation title  Date of presentation 18 Company confidential use only / Unrestricted distribution

Asset class performance Equities, Bonds and Cash performance: YTD May 2014 Equities Cash Bonds Absa presentation title  Date of presentation 19 Company confidential use only / Unrestricted distribution

The Equity market FTSE/JSE All Share index: November 2013 - May 2014 2004 - 2014 From 10,000 to 49,000 The highs and lows of the past six months - significant volatility Absa presentation title  Date of presentation 20 Company confidential use only / Unrestricted distribution

The Equity market - valuation FTSE/JSE All-share index price/earnings ratio: 2004 - 2014 (and 10-year mean) Expensive Neutral Cheap Absa presentation title  Date of presentation 21 Company confidential use only / Unrestricted distribution

The Equity market - sectors Industrials, Financials and Resources performance: YTD May 2014 Resources Financials Industrials Absa presentation title  Date of presentation 22 Company confidential use only / Unrestricted distribution

The Bond market R186 RSA Government Bond (10,5% Dec 2026) Yield: May 2013 - May 2014 Surprise SARB rate hike First talk of Fed QE tapering Absa presentation title  Date of presentation 23 Company confidential use only / Unrestricted distribution

The listed-property market SAPY Listed-property index: May 2013 - May 2014 Listed property - negatively impacted by rate hike but strong recovery off lows Absa presentation title  Date of presentation 24 Company confidential use only / Unrestricted distribution

Listed-property vs Bonds SAPY Listed-property index & R186 bond price: Jan 2013 – May 2014 SA property index R186 bond price Absa presentation title  Date of presentation 25 Company confidential use only / Unrestricted distribution

Individually tailored risk-profiled Private Client Portfolios Bespoke portfolios solutions For private clients with more than R1m to invest into a fully managed segregated portfolio (either directly into equities or a tailored blend of the various asset classes. Equities Bonds Cash Listed Property Portfolio fact sheets on: www.absa.co.za/wim Pref shares Absa presentation title  Date of presentation 26 Company confidential use only / Unrestricted distribution

Our Equity portfolio holdings NewPlatinum Absa presentation title  Date of presentation 27 Company confidential use only / Unrestricted distribution