A member of the FirstRand Group a bumpy road ahead? Speakers Tristan Hanson Jonathan Schiessl Craig Farley Investment Presentation Jersey – February 2010

A member of the FirstRand Group Climate change Tristan Hanson Crisis, Recovery…What Next? Investing in an Uncertain World May 2010

A member of the FirstRand Group A stronger than anticipated recovery Source: IMF IMF growth forecasts: EUJapanUSAAsian NICs BrazilIndiaChina % Apr '09 forecast Apr '10 forecast

A member of the FirstRand Group Agenda Three Issues:  Sovereign debt in developed countries  Is China’s growth sustainable?  US unemployment & consumer spending Implications for asset allocation

A member of the FirstRand Group Why Greece?  Loss of credibility  Persistent budget deficits  Unsustainable debt dynamics  debt outstanding  size of budget deficit  demography

A member of the FirstRand Group Greek finances: worst of a bad bunch Budget Surplus/Deficit (% of GDP) Avg: Germany Greece Ireland Italy Portugal Spain UK US Source: EC, CBO, IMF, Barclays Capital Gross Public Debt (% of GDP) US UK Germany France Greece Spain Italy Ireland Portugal

A member of the FirstRand Group Euro periphery compared Source: Bloomberg Debt (€m)Credit Rating % debt externalDebt Issuance (€bn) S&PFitch Greece273BB+BBB Portugal126A-AA-7221 Ireland105AAAA Spain560AAAAA Italy1,761A

A member of the FirstRand Group Greek contagion: how serious is it? Source: Bloomberg European 10yr bond yields May'10Change YTD (bps) Germany Netherlands France Italy4.1-7 Spain4.220 Ireland5.673 Portugal Greece

A member of the FirstRand Group No contagion to core of Euro-area Source: Bloomberg German & French 10yr bond yields Apr-09Jul-09Oct-09Jan-10Apr-10 Germany France

A member of the FirstRand Group Scepticism merited when price drives opinion Oct. 16 (Bloomberg) – “The dollar will extend its drop versus the euro over the next two to five years, falling as much as 20% to an all-time low under a widening budget deficit, Harvard University’s Professor Niall Ferguson said.” Source: Bloomberg US dollar strength May-09Aug-09Nov-09Feb-10May-10 €/$

A member of the FirstRand Group Conclusion: “nothing to fear but fear itself?”  Europe’s Achilles heel: one currency, 16 finance ministers  EU/IMF deal should ringfence Greece into 2012  Spain & Italy: too big to save = too big to fail?  Austerity packages are deflationary  Printing money can eliminate default risk in low inflation world (US, UK)  Behavioural Perspective: the legacy of the 2008 financial crisis is still with us…are we now preconditioned to fear the worst in any shock/contagion event?

A member of the FirstRand Group China: stimulus-led recovery Source: World Bank

A member of the FirstRand Group Chinese property: bubble territory? Source: World Bank

A member of the FirstRand Group China’s growth potential remains huge Source: PWT, WB GDP per capita (US$, PPP terms) Brazil10,080 South Africa9,790 Colombia8,430 Ecuador7,780 Jamaica7,370 Namibia6,250 China6,010 Sri Lanka4,460 India2,930 Sierra Leone770 GDP per capita relative to the USA PPP terms % Japan Taiwan Korea China

A member of the FirstRand Group China: industrial profitability has improved Source: Macquarie

A member of the FirstRand Group US household balance sheet Source: Federal Reserve, Bloomberg % of disposable income Assets Net Worth Debt

A member of the FirstRand Group Debt remains high; service cost declining Source: Federal Reserve Mar-80Mar-83Mar-86Mar-89 Mar-92Mar-95Mar-98Mar-01Mar-04Mar-07 % of disposable income Debt Service Ratio

A member of the FirstRand Group US: job losses vs GDP declines Source: Bloomberg, Barclays Capital Declines in US GDP & Employment compared -7.0% -6.0% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% Avg: /022008/09 GDP Employment

A member of the FirstRand Group Replica Asset Management: asset allocation Source: Ashburton Replica Asset Management Asset Allocation (28/04/10) Equities* Govt/quasi-govt Inflation-protected DM - IG corporate DM - High Yield corporate EM - IG corporate EM - govt/quasi-govt FRNs Effective Cash *net of put options DM=developed markets EM=emerging markets Currency Weightings (%) – 30/04/10 £$€ EU--72 US-905 UK95-8 JPN--- ASIA4914 Other111

A member of the FirstRand Group Replica Asset Management: performance Source: Lipper Ashburton Replica Sterling Asset Management MSCI World TR LC Percentage Growth Total Return, Tax Default, In LC 3 Years From 30/03/2007 To 31/03/2010 Percentage Growth /200707/200710/200701/200804/200807/200810/200801/200904/200907/200910/200901/2010

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