A Global Economic and Market Outlook September 2010 Presented by Dr Chris Caton

2 Financial Market Forecasts Now (10 Sep) End-Dec 2010 End-Jun 2011 AUD/USD Official cash rate (%) Year Bond yield (%) ASX

3 The Australian Dollar and US Trade Weighted Index Source: Datastream IndexAUD/USD US TWI inverted (LHS) AUD/USD (RHS)

4 The $A remains volatile (average daily trading range by month)

5 Australian Sharemarket Performance – ASX200 Source: Bloomberg

6 As a result of the recent correction the Australian market is again cheap (forward P/E ratio)

7 Recoveries from “big ugly bears”

8 Australian shares look to be good value

9 US Housing starts are bumping along the bottom Source: Datastream (Millions)

10 US Employment is looking somewhat better Source: Datastream 3mth / 3mth chg(%)

Growth Forecasts (%) Month of Forecast F-10M-10A-10M-10J-10 A-10 Australia New Zealand US Japan China Germany UK “World” Source: Consensus Economics

Growth Forecasts (%) Month of Forecast F-10M-10A-10M-10J-10 A-10 Australia New Zealand US Japan China Germany UK “World” Source: Consensus Economics

13 Real GDP growth in Australia and the US Source: Datastream Year to % change

14 Retail trade was so much stronger here

15 Export growth *(volume, %change, 9 months to June quarter 2009)

16 Our exports to China

17 The Labour market is on the mend Source: ABS 000’s% Employment (LHS) Unemployment Rate (RHS)

18 The resource States have led the way in jobs growth (index, June 1997=100)

19 Australian Inflation Source: ABS % BT Forecasts GST Effect

20 Interest payments as a share of after-tax household income (%)

21 House Prices - Australia v Melbourne Source: ABS Index (1987 = 100)

22 Another look at house prices (in thousands!)

23 Gross Domestic Product Source: ABS % BT Forecasts GST Effect

24 Source: Consensus Economics GDPInflation Australia United States New Zealand Canada Norway Sweden United Kingdom Netherlands Switzerland France1.8 Spain Euro Zone Japan Germany Italy Global Medium-Term Economic Growth and Inflation Prospects ( )

25 Asia-Pacific Medium-Term Economic Growth and Inflation Prospects ( ) GDPConsumer Prices China India8.0na Indonesia Malaysia Philippines4.9 Thailand Singapore Taiwan South Korea Hong Kong Australia New Zealand Japan Source: Consensus Economics

26 Morgan Stanley Capital Indexes Source: Datastream Developed IndexAsian Emerging Markets Index Asian Emerging Markets Index (RHS) World Developed Index (LHS)

27 Summary  The global economic recovery continues, albeit slowly. The threat of a double dip has been exaggerated.  The Australian economy should continue to grow well, led by mining investment.  Rates will probably rise further.  The exchange rate is above fair value.  Share markets are again cheap.

28 This presentation has been prepared by BT Financial Group Limited (ABN ) ‘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 :00am to 6:30pm (Sydney time)

29 Average interest rates on outstanding business lending