BT Monthly Markets Chart Pack – January 2008 An overview of movements in global financial markets

2 Global share markets weaker in January  It wasn’t the best start to the year for global share markets, with most closing January very much in the red amid continued fallout from the US sub-prime mortgage crisis and increasing fears of a recession in the US. Share markets in the US, Europe and Asia fell as much as 25% from the record highs posted just a few months ago as investors began to turn bearish, though they were able to pull back some of the losses late in the month.  The Australian share market was not immune to the volatility we saw in January, with the S&P/ASX 300 Accumulation Index closing the month 11.3% lower amid fears that a recession in the US will impact on global growth.

3 Source: BT Financial Group, Datastream. Global shares measured by the MSCI World (Price) Index to 31 January 2008 Despite recent market volatility, history shows that share markets usually bounce back over time Feb 94 Bond Market Crash Aug 97 Asian Currency Crisis Jul 98 Russian Bond Crisis Jul 01 Tech Wreck Sep 01 Attack on Twin Towers Jun 07 US Sub-prime Crisis Jan 91 Gulf War Impact of major market events on global shares since 1990

4 Source: BT Financial Group, Datastream S&P/ASX 300 Accumulation Index – year to 31 January 2008 The Australian share market started 2008 in the red

5 Key Australian economic news – January  The Reserve Bank of Australia (RBA) raised interest rates a further 0.25% at its early February meeting, taking the official cash rate to 7.00%. The Bank’s decision came on the heels of the latest CPI data which revealed increasing inflationary pressures. Interest rates are now at their highest level since November  Retail sales grew at a solid rate in December, rising by 0.5% after a 0.8% increase the month before. The rise was broadly in line with expectations.  The unemployment rate ticked down to 4.3% in December, confirming that the labour market ended 2007 on a strong note.  After showing remarkable strength through the second half of 2007, when the housing market staged a solid upswing despite rate hikes in August and November, building approvals showed a sharp reversal in December with activity falling an abrupt 16%. Source: BT Financial Group

6 The Australian dollar stronger against the greenback and the Euro in January  The Australian dollar (A$) has traded within the same US$0.86 to US$0.90 cent range now for the past couple of months as concerns over global growth continue to be offset by a strong local economy and a widening differential between US and Australian interest rates.  At the end of January: A$1 boughtUS$ % € % ¥ % Source: BT Financial Group

7 Currency markets – A$ per US dollar Source: BT Financial Group. Figures at 31 January The Australian dollar versus the US dollar…

8 Currency markets – A$ per Euro Source: BT Financial Group. Figures at 31 January the Euro…

9 and the Yen Currency markets – A$ per Yen Source: BT Financial Group. Figures at 31 January 2008.

10 Official world interest rate movements – January  The US Federal Reserve raised interest rates twice in January, while the Bank of England, the European Central Bank and the Bank of Japan decided to leave rates on hold. The RBA moved rates higher at its early February meeting. Current rateLast moved Direction of last move Australia7.00%Jan 2008 US3.00%Jan 2008 Europe (ECB)4.00%Jun 2007 Japan0.50%Feb 2007 United Kingdom5.50%Dec 2007 Source: BT Financial Group

11 World growth is expected to be 3.2% this year, and follows an estimated 3.7% in 2007 Source: Consensus Economics 2008 world growth estimates Month of estimate Jun 07Jul 07Aug 07Sep 07Oct 07Nov 07Dec 07Jan 08 Australia3.5% 3.6% 3.7% 3.6% US2.9%2.8%2.6%2.4% 2.3%2.1%2.0% Japan2.2% 2.1% 1.9%1.8%1.5% China9.8%9.9%10.6% 10.7%10.5% 10.4% Germany2.3%2.4% 2.3%2.2%2.1%1.9%1.8% UK2.3%2.2% 2.1%2.0%1.9% 1.8% World3.4% 3.5%3.4% 3.2%

12 Source: BT Financial Group 31 January 2008 Global share market returns 1 year3 years (pa)5 years (pa) Global S&P 500 Index (US)-4.15%5.28%10.01% Nasdaq (US Tech.)-3.01%5.03%12.59% Nikkei 225 (Japan)-21.81%6.08%10.26% Hang Seng (Hong Kong)16.66%19.57%20.43% DAX (Germany)0.92%17.21%20.12% CAC (France)-13.17%7.56%10.64% FTSE 100 (UK)-5.21%6.61%10.51% Australia S&P/ASX 300 Accum. Ind.1.53%15.85%18.72% S&P/ASX Small Ordinaries-1.60%15.45%21.56% S&P/ASX 300 Listed Prop %5.61%11.19%

13 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 31 January 2008 (%) Best performing asset class for the year Australian cash Australian bonds Australian property Australian shares International bonds International shares

14 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 31 January 2008 (%) Short-term asset class performance (cont’d) 31 January January 2008 Australian bonds Listed property Australian shares Global bonds Global shares

15 Long-term asset class performance Note: Accumulated returns based on $1,000 invested in December 1984 Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in A$ 31 January 2008 Australian bonds Listed property Australian shares Cash Global shares

16 Source: BT Financial Group. West Texas Intermediate oil price at 31 January Oil prices – US$ per barrel After hitting the US$100 mark for the first time ever, oil closed the month 4.3% lower at US$91.75 a barrel

17 Summary  We expect global growth this year to be positive, though the threat of a recession in the US has obviously increased recently and this will pose a significant risk to future growth.  The underlying strength of the Australian economy looks set to continue, though any significant deterioration in global growth will obviously have an adverse effect locally.  In raising interest rates in February, the RBA appears to have retained its tightening bias. But whether the RBA pulls the trigger on another rate hike in 2008 will depend largely on the Bank’s ability to bring inflationary pressures under control.  The Australian dollar looks set to remain range bound in the near-term, though the threat of a slowdown in global growth will mean a rougher ride.  Gains in global share markets, including here in Australia, are likely to slow in the first half of 2008.

18 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)