tag:blogger.com,1999:blog-31628940197351544692024-03-13T05:47:09.275+03:00Russian Market Watchreport from the scene: ideas, opinions, rumorsNicholashttp://www.blogger.com/profile/09959976537957483849noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-3162894019735154469.post-49732029901579235012011-06-12T02:08:00.002+04:002011-06-12T12:29:34.875+04:00Leveraged ETFs don't suffer from leverage<div dir="ltr" style="text-align: left;" trbidi="on">I took an interest in mechanics of leveraged ETFs when I knew about two new products by direxion with exposition in RSX. I faced a huge number of critics on such investment products, also lot of critics on these critics. Even I found some strategies based on myths and misunderstanding these and similar financial instruments. I cannot say that leveraged products are better than investment without leverage exactly. As I can't conclude that leveraged products are better or worse leveraged exposition on underlying benchmark. It depend from investment policy of everyone, everyone's preferences which are different, as it well known. <br />
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Anyway usually conclusions are based on insufficient data. This can explain why some myths are so popular and why there are to many misunderstandings. I point on effect of leverage. When we judge some investment product we compare it with related benchmark. Usually we either watch changes in final worth or study compound rate of return. At the practice (and at theory too) leveraged scheme can not beat its own unleveraged underlying very often. But it does not mean that future value of worth (expected value) suffer from leverage definitely.<br />
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To prove this let's perform simplest experiment based on Monte-Carlo Simulation. Why MC? Because it is<br />
<ul><li>easy (every one is able repeat this) </li>
<li>illustrative (you can "touch" it and feel its mechanics) </li>
<li>representative (much more data, actually here is artificial data)</li>
</ul><br />
Assume, RSXs dynamics is based on Geometric Brownian Motion with growth 12% annual and volatility 30%. These numbers are much close to reality (at least close to some popular estimations). Let's study three investment strategies. First one: buy and hold RSX directly. Second: borrow money and buy and hold RSX with leverage 3x ether till end of some defined period or till "margin call" happens. Third scheme are purchasing of some leveraged ETF (or other product) which adjusts leverage every day to 3x.<br />
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Additional conditions: At second strategy when investor's worth falls below "zero" worth becomes equal "zero" (here we model limited liability kinda like shareholder's liability). At the third scheme let's define maximum daily change of worth as 100% from previous value.<br />
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Suppose we start a 500 days period (approximately, two years) with a portfolio consisting of equal amounts of capital in these three schemes (let it be 1 dollar in each strategy). What do we get after 2 years? Final worth in 1st, 2nd and 3rd strategies are 1.27 (+27%) 2.05 (+105%) and 1.84 (+84%). Expected worth of leveraged ETF beats and direct investment (1st strategy) and "buy and hold" scheme with borrowing (2nd).<br />
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<div><a href="http://imgstr.investhought.com/bmrk.PNG" rel="nofollow" target="_blank"><img alt="" height="235" src="http://imgstr.investhought.com/bmrk.PNG" width="320" /></a></div><br />
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But what about chances to beat market? So for each 7 from 10 time Leveraged ETFs were worse then benchmark purchased following 2nd strategy (borrow money)!!! There is 2 chances from 3 that unleveraged benchmark beat leveraged ETF and only 37 from 100 that benchmark will be better then 2nd scheme.<br />
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<div><a href="http://imgstr.investhought.com/3xa.PNG" rel="nofollow" target="_blank"><img alt="" height="235" src="http://imgstr.investhought.com/3xa.PNG" width="320" /></a></div><div><br />
<a href="http://imgstr.investhought.com/3xc.PNG" rel="nofollow" target="_blank"><img alt="" height="235" src="http://imgstr.investhought.com/3xc.PNG" width="320" /></a></div><br />
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Results of this simple experiment (study) show following:<br />
<ul><li>expected value of final worth does not suffer from leverage</li>
<li>leverage cut rapidly your chances for success</li>
</ul> If you have any questions about this simulation or you interested in simulation of another strategies (products) don't hesitate ask me (contacts: fincolonel@gmail.com)</div>Nicholashttp://www.blogger.com/profile/09959976537957483849noreply@blogger.com0tag:blogger.com,1999:blog-3162894019735154469.post-42451206705828749612011-05-22T10:27:00.003+04:002011-05-23T03:03:06.855+04:00Russian Top Stocks (Valuation Measures & Dividend yield)<div dir="ltr" style="text-align: left;" trbidi="on"><table border="0" cellspacing="0" cols="8" frame="VOID" rules="NONE"><colgroup><col width="200"></col><col width="64"></col><col width="64"></col><col width="64"></col><col width="64"></col><col width="64"></col><col width="64"></col><col width="64"></col></colgroup> <tbody>
<tr> <td align="CENTER" bgcolor="#ff9966" height="50" valign="TOP" width="200"><b><span style="color: white;"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">NAME</span></span></span></b></td> <td align="CENTER" bgcolor="#ff9966" valign="TOP" width="64"><b><span style="color: white;"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">BETA</span></span></span></b></td> <td align="CENTER" bgcolor="#ff9966" valign="TOP" width="64"><b><span style="color: white;"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">RISK</span></span></span></b></td> <td align="CENTER" bgcolor="#ff9966" valign="TOP" width="64"><b><span style="color: white;"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">% 12MO RETURN</span></span></span></b></td> <td align="CENTER" bgcolor="#ff9966" valign="TOP" width="64"><b><span style="color: white;"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">P/E</span></span></span></b></td> <td align="CENTER" bgcolor="#ff9966" valign="TOP" width="64"><b><span style="color: white;"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">P/BV</span></span></span></b></td> <td align="CENTER" bgcolor="#ff9966" valign="TOP" width="64"><b><span style="color: white;"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">LAST DIVIDEND</span></span></span></b></td> <td align="CENTER" bgcolor="#ff9966" valign="TOP" width="64"><b><span style="color: white;"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">%12MO DIV. YLD.</span></span></span></b></td> </tr>
<tr> <td align="LEFT" bgcolor="#ffffff" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Aeroflot - Russian Airlines OJSC</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.77</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">23.9</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">24.3</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">29.9</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">2.8</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.085</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.582</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#e6e6e6" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Severstal OAO</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.23</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">32.0</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">49.1</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">9.4</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">2.5</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">2.420</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.894</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#ffffff" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Unified Energy System JSC</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.04</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">40.0</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">10.7</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">23.6</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.5</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.002</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.594</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#e6e6e6" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Gazprom OAO</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.04</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">30.4</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">34.0</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">4.7</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.8</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">3.850</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.956</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#ffffff" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">MMC Norilsk Nickel OJSC</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.10</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">29.4</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">51.3</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">9.7</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">3.3</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">180.000</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">5.539</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#e6e6e6" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Federal Hydrogenerating Co JSC</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.86</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">24.7</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">-11.5</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">33.8</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.9</span></span></td> <td align="CENTER" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">N/A</span></span></td> <td align="CENTER" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">N/A</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#ffffff" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Lukoil OAO</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.97</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">25.1</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">20.5</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">5.6</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.8</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">59.000</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">3.440</span></span><br />
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<tr> <td align="LEFT" bgcolor="#e6e6e6" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Magnitogorsk Iron & Steel Works</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.87</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">31.0</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">-8.7</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">38.4</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.0</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.330</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.337</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#ffffff" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Mosenergo OAO</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.09</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">19.2</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">-22.7</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">11.6</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.5</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.013</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.000</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#e6e6e6" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Mobile Telesystems OJSC</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.73</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">15.7</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">6.9</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">16.0</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">3.7</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">14.540</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">6.160</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#ffffff" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Novolipetsk Steel OJSC</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.02</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">34.4</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">13.9</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">17.7</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">2.3</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.200</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.744</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#e6e6e6" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">NovaTek OAO</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.88</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">29.9</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">97.4</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">22.4</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">7.3</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">2.500</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.126</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#ffffff" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">PIK Group</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.97</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">31.9</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">-11.2</span></span></td> <td align="CENTER" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">N/A</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">N/A</span></span></td> <td align="CENTER" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">N/A</span></span></td> <td align="CENTER" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">N/A</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#e6e6e6" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Polyus Gold OJSC</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.77</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">26.5</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">43.8</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">41.9</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">4.2</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">11.250</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.045</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#ffffff" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Polymetal JSC</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.75</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">35.7</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">51.7</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">25.2</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">6.4</span></span></td> <td align="CENTER" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">N/A</span></span></td> <td align="CENTER" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">N/A</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#e6e6e6" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Rosneft Oil Co</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.04</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">28.7</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">10.3</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">6.5</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.3</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">2.760</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.215</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#ffffff" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Rostelecom OJSC</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.69</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">38.1</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">63.6</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">29.9</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">2.2</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.000</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.680</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#e6e6e6" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Sberbank of Russia</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.13</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">28.0</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">37.2</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">11.1</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">2.1</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.920</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.978</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#ffffff" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Gazprom Neft JSC</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.01</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">30.1</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">-0.8</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">5.0</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.1</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">4.440</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">3.688</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#e6e6e6" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Surgutneftegas OJSC</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.99</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">25.8</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">3.8</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">8.2</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.8</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.500</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.883</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#ffffff" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Tatneft</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.97</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">30.1</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">28.0</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">7.0</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.0</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">5.020</span></span></td> <td align="RIGHT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">3.239</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#e6e6e6" height="18"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Uralkali</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.00</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">34.6</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">121.8</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">27.4</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">8.1</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">4.550</span></span></td> <td align="RIGHT" bgcolor="#e6e6e6"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.000</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#ffffff" height="18" style="border-bottom: 1px solid rgb(230, 230, 230);"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">VTB Bank OJSC</span></span></td> <td align="RIGHT" bgcolor="#ffffff" style="border-bottom: 1px solid rgb(230, 230, 230);"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.16</span></span></td> <td align="RIGHT" bgcolor="#ffffff" style="border-bottom: 1px solid rgb(230, 230, 230);"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">29.6</span></span></td> <td align="RIGHT" bgcolor="#ffffff" style="border-bottom: 1px solid rgb(230, 230, 230);"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">20.9</span></span></td> <td align="RIGHT" bgcolor="#ffffff" style="border-bottom: 1px solid rgb(230, 230, 230);"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">14.9</span></span></td> <td align="RIGHT" bgcolor="#ffffff" style="border-bottom: 1px solid rgb(230, 230, 230);"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">1.6</span></span></td> <td align="RIGHT" bgcolor="#ffffff" style="border-bottom: 1px solid rgb(230, 230, 230);"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.001</span></span></td> <td align="RIGHT" bgcolor="#ffffff" style="border-bottom: 1px solid rgb(230, 230, 230);"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">0.700</span></span></td> </tr>
<tr> <td align="LEFT" bgcolor="#ffffff" height="18"><i><span style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;">Source: bloomberg.com</span></span></i></td> <td align="LEFT" bgcolor="#ffffff"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-size: x-small;"><br />
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</tbody> </table></div>Nicholashttp://www.blogger.com/profile/09959976537957483849noreply@blogger.com0tag:blogger.com,1999:blog-3162894019735154469.post-59997871092214635972010-12-16T02:47:00.009+03:002010-12-18T04:18:45.511+03:00Russian Government privatization plans may lift market to the new highs.<b>I don't envy short-sellers in Russia</b>.<br />
<img alt="" src="http://imgstr.investhought.com/ch.gif" /><br />
Currently the budget deficit in Russian Federation is equal 911 bln of Rubles in jan-nov (~$29 bln, wich approximately are equal 10% of GDP), as Russian Ministry of Finance reports. And its value will increase, as Authority expects. Also there are few way to cover budget deficit (there listed in Government's plan). There are:<br />
<ul><li style="text-align: justify;">tax increases,</li>
<li style="text-align: justify;">borrowing (issue bonds at 1 trillion Rubles),</li>
<li style="text-align: justify;">privatization (sell property at 1 trillion Rubles or more).</li>
</ul><div style="text-align: justify;">Early, at November, the Russian government has approved a privatization plan for sale of federal property in 2011-2013. As it expected, revenue of this sell-off could yield 1 trillion Rubles.</div><blockquote>MOSCOW, November 17 (RIA Novosti)</blockquote><blockquote>The government hopes to get most of the privatization revenues from the sale of shares in ten major state-owned banks and companies. All decisions on the sale of these companies have been confirmed, Nabiullina said.</blockquote><blockquote>The list of privatizations includes the sale of shares in oil major Rosneft (RNGZY.PK, 25 percent minus one share), RusHydro hydropower generator (7.97 percent minus one share), the Federal Grid Company of Unified Energy System (4.11 percent minus one share), the country's largest shipping company Sovcomflot (50 percent minus one share), Russia's top bank Sberbank (7.58 percent minus one share), the country's second largest lender VTB bank (35.5 percent minus one share), the United Grain Company (100 percent by 2012), Rosagroleasing agricultural leasing company (50 percent minus one share from 2013), the country's rail monopoly Russian Railways (25 percent minus one share from 2013) and Russian Agricultural Bank (25 percent minus one share by 2015), Nabiullina said.</blockquote>So ... Goals are obvious: "The government hopes to get most of the privatization revenues". This may mean that <b>tax pressure increases will be delayed for a time</b>, likely, at the first. At the second, <b>Government need to put the stock's price on highest level</b>. It's normal practices of initial offering. They gotta give some positive to markets.<br />
<a name='more'></a><br />
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<b>Roadshow started, didn't it?</b> (the greatest Roadshow since 2008)<br />
<blockquote>At Dec 9, 2010 <a href="http://af.reuters.com/article/energyOilNews/idAFMSC00011920101209">reuters</a> writes</blockquote><blockquote>Russia's largest oil producer, privatization target Rosneft (RNGZY.PK), is around three times undervalued when compared to international peers, Deputy Prime Minister Igor Sechin said on Thursday.</blockquote><blockquote>"We think Rosenft is undervalued. Compare the structure of Rosneft's reserves and those of (Brazil's) Petrobas (PBR), for example. Rosneft is undervalued by around three times," Sechin told reporters.</blockquote>And<br />
<blockquote>As interfax reports At Dec 9. </blockquote><blockquote>ROSNEFT CHIEF UPS STAKE IN COMPANY FROM 0.0028% TO 0.0051%</blockquote>Also<br />
<blockquote><a href="http://www.gazprom.com/press/miller-journal/">Alexey Miller's column</a></blockquote><blockquote>Gazprom is becoming ever more valuable, which is clearly evidenced by the fact that the Company's share value steadily goes up. The Company's capitalization has increased by nearly 35 per cent since the most recent Gazprom Shareholders Meeting.</blockquote><blockquote>The global economy is reviving, investors' confidence is growing. By purchasing Gazprom shares, the investors once again cast their vote for the course we have shaped for the Company's comprehensive development on a global scale, they invest funds in the most promising securities putting their trust in the future.</blockquote><blockquote>I have no doubt that Gazprom's capitalization will not only reach the pre-crisis level, but go up to its fair value. I give a buy recommendation!</blockquote>Local TV shows following commercials (or similar):<br />
<blockquote><object height="265" width="320"><param name="movie" value="http://www.youtube.com/v/IHV7XmvDYv8?fs=1&hl=ru_RU&rel=0"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/IHV7XmvDYv8?fs=1&hl=ru_RU&rel=0" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="320" height="265"></embed></object></blockquote><blockquote><i><span class="Apple-style-span" style="font-size: x-small;">Enjoy, this isn't as boring as commercials of Shell, ExxonMobil, etc</span></i></blockquote><br />
<br />
And more one funny fact: earler, at may, "German Gref, the head of Sberbank, Russia's biggest lender, became a shareholder in the firm for the first time after buying a 0.000004 percent stake worth $2,500, the bank said on Monday." //<a href="http://www.reuters.com/article/idUSLDE64U1IU20100531">reuters</a><br />
<br />
<b>to be continued ... (?)</b><br />
<br />
So, when you and authority banded together, you have significantly greater chances for success. Of course it may seem unconvincing for someone, but look it this way: you buy stocks and Government care about the market growth, 'cause they are interested in higher prices, at least till the sell-off.<br />
<br />
In fact, Russian stocks are undervalued on comparing to international peers (even taking into account the country risk premium). And this Government media propaganda is able to lift market higher. This is a powerful support for equity prices, for a time. <b>Any way, I don't envy short-sellers</b>.Nicholashttp://www.blogger.com/profile/09959976537957483849noreply@blogger.com0tag:blogger.com,1999:blog-3162894019735154469.post-49757126586212894102010-11-29T05:35:00.001+03:002010-11-29T05:36:18.743+03:00ETF Overview: Risk Premiums for Some Countries."RUSSIAN RTS INDEX $ (priced in USD)" trades at eight times earning, meanwhile S&P500 has 14.891 (approximately 13-14 P/E for next year). Assume that US Equity market is correctly priced. So, based on the comparative P/E ratio we conclude that investors agree to pay only 54 cents for one dollar of profit. Is it normal? Actually I don't know. Let's estimate risk premium for some countries.<br />
<br />
<b>Equity Risk Premium (US).</b><br />
<br />
First metric is difference between the geometric average of historical rates of returnable on equity market and 10-years Treasury Bonds - 9.26% and 4.97% respectively (for the period 1928-2009). Premium is equal 4.29% (see <a href="http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html">Historical Returns on Stocks, Bonds and Bills - United States</a>, for instance).<br />
<br />
Second one - difference between current or expected Earn-Price ratio and current 10-years Treasury Bonds Yield (we used current Earn-Price ratio). It's aproximately 4.09%. If we assume that expected P/E is equal 14, given this, we get 4.52%.<br />
<br />
At the third, Implied Equity Risk Premium. Parameters used in model and results see in following table.<br />
<br />
<a name='more'></a><br />
<blockquote><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i>Table 1: Implied Equity Risk Premium (US)</i></div><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><span class="apple-style-span"><span style="color: black; font-size: 8pt;">At Nov 25th 2010.</span></span></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><span class="apple-style-span"><span style="color: black; font-size: 8pt;"><br />
</span></span></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-size: 11px;"></span></span></div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: -0.75pt; width: 407px;"><tbody>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 257pt;" valign="bottom" width="343"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">S&P 500 INDEX (20-Day Average), pts<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 48pt;" valign="bottom" width="64"><div class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">1199.58<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 257pt;" valign="bottom" width="343"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Dividends and Buybacks Trailing 12-m, pts<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 48pt;" valign="bottom" width="64"><div class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">48.2<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 257pt;" valign="bottom" width="343"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Expected growth rate in earnings for next 5-y, %<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 48pt;" valign="bottom" width="64"><div class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">7.2<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 257pt;" valign="bottom" width="343"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Expected growth rate in the long term, %<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 48pt;" valign="bottom" width="64"><div class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">2.84<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 257pt;" valign="bottom" width="343"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">CBOE Interest Rate 10-Year (5-Day Average), %<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 48pt;" valign="bottom" width="64"><div class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">2.84<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 257pt;" valign="bottom" width="343"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Expected income rate, %<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 48pt;" valign="bottom" width="64"><div class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">7.51<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 257pt;" valign="bottom" width="343"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Implied Equity Risk Premium, %<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 48pt;" valign="bottom" width="64"><div class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">4.67<o:p></o:p></div></div></td></tr>
</tbody></table><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><span class="Apple-style-span" style="font-size: small;"><br />
</span></div></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">see <a href="http://invest2russia.blogspot.com/p/country-risk-premium.html">"Implied Equity & Counrty Risk Premium weekly report"</a></div><div style="margin-bottom: 0cm; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span lang="EN-US" style="color: black; font-size: 8pt;">Sources: finance.yahoo.com, standardandpoors.com, damodaran.com<o:p></o:p></span></i></div></div><div style="margin-bottom: 0cm; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span style="color: black; font-size: 8pt;">Calculations: invest2russia.blogspot.com</span></i></div></div></blockquote>So we have three estimates of equity risk premium, which are enough closely each to other. Let us assume that <i>risk premium is 4.67%</i> and <i>expected rate of return</i> <i>on equity</i> <i>is equal 7.75% </i>(free risk "plus" risk premium) for US market.<br />
<i></i><br />
<br />
<b>Country Risk Rates.</b><br />
<br />
There are many approaches to estimate Country Risk Premia. We use following ones: approach based on Moody's Long-Term Credit Rating, based upon AAA-JPM CEMBI yield spread market volatility adjusted and upon the CDS-rates volatility adjusted.<br />
<blockquote><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i>Table 2: Bonds and rates</i></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><br />
</i></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"></div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: -0.75pt; width: 427px;"><tbody>
<tr style="height: 51pt;"><td style="height: 51pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="top" width="100"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><span style="font-size: 10pt;"><b>Country<o:p></o:p></b></span></div></td><td style="height: 51pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="top" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><span style="font-size: 10pt;"><b>Moody's LT Rating<o:p></o:p></b></span></div></td><td style="height: 51pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="top" width="81"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><span lang="EN-US" style="font-size: 10pt;"><b>10Y-Gov bond local currency, %<o:p></o:p></b></span></div></td><td style="height: 51pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="top" width="75"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><span style="font-size: 10pt;"><b>JPM CEMBI, pts<o:p></o:p></b></span></div></td><td style="height: 51pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="top" width="90"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><span style="font-size: 10pt;"><b>CDSs, %</b><o:p></o:p></span></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Brazil<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;">Baa3<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">12.50<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.94<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">1.15<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">China<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;">A1<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">3.99<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.99<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">0.74<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Hong Kong<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;">Aa2<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">2.66<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">4.78<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">0.43<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">India<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;">Ba2<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">8.38<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.34<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">1.26<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Indonesian<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;">Ba2<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.50<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.15<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">1.02<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Mexico<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;">Baa1<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">6.27<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.75<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">1.18<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Russia<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;">Baa1<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.73<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.79<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">1.63<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Australia<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;">Aaa<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.500<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">0.83<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Japan<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;">Aa2<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">1.160<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">0.61<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">U.K.<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;">Aaa<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">3.361<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">0.70<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">USA<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;">Aaa<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">2.91<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td></tr>
</tbody></table><br />
<div style="margin-bottom: 0cm; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span lang="EN-US" style="color: black; font-size: 8pt;"><br />
</span></i></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span lang="EN-US" style="color: black; font-size: 8pt;">Sources: wsj.com, markit.com, bloomberg.com</span></i></div></div></blockquote><i><br />
</i><br />
<blockquote><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i>Table 3: Equity Markets (local currency)</i></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"></div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: -0.75pt; width: 427px;"><tbody>
<tr style="height: 12.75pt;"><td style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="top" width="100"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span style="font-size: 10pt;">Country<o:p></o:p></span></b></div></td><td style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61.8pt;" valign="top" width="82"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span style="font-size: 10pt;">Index<o:p></o:p></span></b></div></td><td style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 59.4pt;" valign="top" width="79"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span style="font-size: 10pt;">Risk, %<o:p></o:p></span></b></div></td><td style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 57.7pt;" valign="top" width="77"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span style="font-size: 10pt;">P/E<o:p></o:p></span></b></div></td><td style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 66.1pt;" valign="top" width="88"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span style="font-size: 10pt;">E/P, %<o:p></o:p></span></b></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Brazil<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61.8pt;" valign="bottom" width="82"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">IBOV<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 59.4pt;" valign="bottom" width="79"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">17.85<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 57.7pt;" valign="bottom" width="77"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">13.75<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 66.1pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.28<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">China<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61.8pt;" valign="bottom" width="82"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">SHSZ300<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 59.4pt;" valign="bottom" width="79"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">26.41<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 57.7pt;" valign="bottom" width="77"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">18.95<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 66.1pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.28<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Hong Kong<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61.8pt;" valign="bottom" width="82"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">HSI<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 59.4pt;" valign="bottom" width="79"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">15.84<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 57.7pt;" valign="bottom" width="77"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">11.75<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 66.1pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">8.51<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">India<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61.8pt;" valign="bottom" width="82"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">SENSEX<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 59.4pt;" valign="bottom" width="79"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">15.59<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 57.7pt;" valign="bottom" width="77"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">14.12<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 66.1pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.08<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Indonesian<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61.8pt;" valign="bottom" width="82"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">INDEXCF<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 59.4pt;" valign="bottom" width="79"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">15.77<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 57.7pt;" valign="bottom" width="77"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">17.55<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 66.1pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.70<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Mexico<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61.8pt;" valign="bottom" width="82"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">MEXBOL<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 59.4pt;" valign="bottom" width="79"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">12.71<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 57.7pt;" valign="bottom" width="77"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">17.48<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 66.1pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.72<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Russia<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61.8pt;" valign="bottom" width="82"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">INDEXCF<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 59.4pt;" valign="bottom" width="79"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">15.30<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 57.7pt;" valign="bottom" width="77"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">8.76<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 66.1pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">11.41<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Australia<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61.8pt;" valign="bottom" width="82"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">AS52<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 59.4pt;" valign="bottom" width="79"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">13.64<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 57.7pt;" valign="bottom" width="77"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">39.41<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 66.1pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">2.54<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Japan<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61.8pt;" valign="bottom" width="82"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">TPX<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 59.4pt;" valign="bottom" width="79"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">17.31<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 57.7pt;" valign="bottom" width="77"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">15.62<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 66.1pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">6.40<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">U.K.<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61.8pt;" valign="bottom" width="82"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">UKX<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 59.4pt;" valign="bottom" width="79"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">15.15<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 57.7pt;" valign="bottom" width="77"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">16.87<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 66.1pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.93<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">USA<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61.8pt;" valign="bottom" width="82"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">SPX<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 59.4pt;" valign="bottom" width="79"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">15.34<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 57.7pt;" valign="bottom" width="77"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">14.89<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 66.1pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">6.72<o:p></o:p></div></td></tr>
</tbody></table><br />
<div style="margin-bottom: 0cm; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span lang="EN-US" style="color: black; font-size: 8pt;"><br />
</span></i></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span lang="EN-US" style="color: black; font-size: 8pt;">Sources:bloomberg.com</span></i></div></div></blockquote><i><span class="Apple-style-span" style="font-style: normal;"><i><br />
</i></span></i><br />
<blockquote><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span class="Apple-style-span" style="font-style: normal;"><i>Table 4: Equity Markets (US dollars)</i></span></i></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"></div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: -0.75pt; width: 427px;"><tbody>
<tr style="height: 12.75pt;"><td style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="top" width="100"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><span style="font-size: 10pt;"><b>Country<o:p></o:p></b></span></div></td><td style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="top" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><span style="font-size: 10pt;"><b>Index<o:p></o:p></b></span></div></td><td style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="top" width="81"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><span style="font-size: 10pt;"><b>Risk, %<o:p></o:p></b></span></div></td><td style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="top" width="75"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><span style="font-size: 10pt;"><b>P/E<o:p></o:p></b></span></div></td><td style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="top" width="90"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><span style="font-size: 10pt;"><b>E/P, %</b><o:p></o:p></span></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Brazil<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">MXBR<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">22.47<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">12.47<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">8.02<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">China<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">MXCN<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">17.02<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">14.59<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">6.85<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Hong Kong<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">MXHK<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">14.48<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">12.81<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.80<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">India<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">MXIN<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">16.07<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">17.41<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.74<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Mexico<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">MXMX<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">17.35<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">19.70<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.08<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Russia<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">MXRU<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">19.72<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">8.13<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">12.31<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Australia<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">MXAU<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">13.85<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">16.34<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">6.12<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Japan<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">MXJP<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">17.53<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">15.50<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">6.45<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">U.K.<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">MXGB<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">15.06<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">16.88<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.92<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">USA<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">SPX<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">15.34<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">14.89<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">6.72<o:p></o:p></div></td></tr>
</tbody></table><br />
<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"></div><div style="margin-bottom: 0cm; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span lang="EN-US" style="color: black; font-size: 8pt;"><br />
</span></i></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span lang="EN-US" style="color: black; font-size: 8pt;">Sources:bloomberg.com</span></i></div><div><i><span lang="EN-US" style="color: black; font-size: 8pt;"><br />
</span></i></div></div></blockquote><blockquote><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i>Table 5: Country Risk Premium</i></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><br />
</i></div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: -0.75pt; width: 427px;"><tbody>
<tr style="height: 89.25pt;"><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="top" width="100"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span style="font-size: 10pt;">Country<o:p></o:p></span></b></div></td><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="top" width="80"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span style="font-size: 10pt;">Based upon Moody's rating<o:p></o:p></span></b></div></td><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="top" width="81"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span lang="EN-US" style="font-size: 10pt;">Based upon JPM CEMBI-AAA Spread<o:p></o:p></span></b></div></td><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="top" width="75"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span lang="EN-US" style="font-size: 10pt;">Based upon JPM CEMBI-AAA Spread, Volatility adjusted<o:p></o:p></span></b></div></td><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="top" width="90"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span lang="EN-US" style="font-size: 10pt;">Based upon CDSs, Volatility adjusted<o:p></o:p></span></b></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Brazil<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">3.00<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">1.44<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.45<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">6.47<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">China<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">1.35<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">3.49<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.43<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">3.51<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Hong Kong<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">0.90<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">0.28<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">0.85<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">1.90<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">India<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">4.50<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">0.84<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">2.53<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">4.93<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Indonesian<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">4.50<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">2.65<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Mexico<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">2.40<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">1.25<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">3.77<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">5.08<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Russia<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">2.40<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">1.29<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">4.39<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.18<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Australia<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">3.13<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Japan<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">0.90<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">3.11<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">U.K.<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">2.99<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">USA<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">0.00</div></td></tr>
</tbody></table><br />
<div style="margin-bottom: 0cm; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span lang="EN-US" style="color: black; font-size: 8pt;">Sources: damodaran.com<o:p></o:p></span></i></div></div><div style="margin-bottom: 0cm; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span style="color: black; font-size: 8pt;">Calculations: invest2russia.blogspot.com</span></i></div></div></blockquote><div><br />
</div><blockquote><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i>Table 6: Total </i><i>Risk Premium</i></div><div style="text-align: -webkit-auto;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br />
</div></div><div style="text-align: -webkit-auto;"></div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: -0.75pt; width: 427px;"><tbody>
<tr style="height: 89.25pt;"><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="top" width="100"><div align="center" class="MsoNormal" style="text-align: center;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><b><span style="font-size: 10pt;">Country<o:p></o:p></span></b></div></div></td><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="top" width="80"><div align="center" class="MsoNormal" style="text-align: center;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><b><span style="font-size: 10pt;">Based upon Moody's rating<o:p></o:p></span></b></div></div></td><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="top" width="81"><div align="center" class="MsoNormal" style="text-align: center;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><b><span lang="EN-US" style="font-size: 10pt;">Based upon JPM CEMBI-AAA Spread<o:p></o:p></span></b></div></div></td><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="top" width="75"><div align="center" class="MsoNormal" style="text-align: center;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><b><span lang="EN-US" style="font-size: 10pt;">Based upon JPM CEMBI-AAA Spread, Volatility adjusted<o:p></o:p></span></b></div></div></td><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="top" width="90"><div align="center" class="MsoNormal" style="text-align: center;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><b><span lang="EN-US" style="font-size: 10pt;">Based upon CDSs, Volatility adjusted<o:p></o:p></span></b></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Brazil<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">7.67<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">6.11<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">10.12<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">11.14<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">China<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">6.02<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">8.16<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">12.10<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">8.18<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Hong Kong<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">5.57<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">4.95<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">5.52<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">6.57<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">India<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">9.17<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">5.51<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">7.20<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">9.60<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Indonesian<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">9.17<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">5.92<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br />
</div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br />
</div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Mexico<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">7.07<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">5.92<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">8.44<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">9.75<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Russia<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">7.07<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">5.96<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">9.06<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">11.85<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Australia<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">4.67<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br />
</div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br />
</div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">7.80<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Japan<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">5.57<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br />
</div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br />
</div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">7.78<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">U.K.<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">4.67<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br />
</div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br />
</div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">7.66<o:p></o:p></div></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 75pt;" valign="bottom" width="100"><div class="MsoNormal"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">USA<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 60.2pt;" valign="bottom" width="80"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">4.67<o:p></o:p></div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 61pt;" valign="bottom" width="81"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br />
</div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br />
</div></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 67.8pt;" valign="bottom" width="90"><div align="right" class="MsoNormal" style="text-align: right;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">4.67<o:p></o:p></div></div></td></tr>
</tbody></table><div style="margin-bottom: 0cm; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span lang="EN-US" style="color: black; font-size: 8pt;"><br />
</span></i></div><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span style="color: black; font-size: 8pt;">Calculations: invest2russia.blogspot.com</span></i></div><div><i><span style="color: black; font-size: 8pt;"><br />
</span></i></div></div></blockquote><blockquote><i><span class="Apple-style-span" style="font-style: normal;"><i>Table 7: Expected Rate of Return (free risk rate "plus" total premium)</i></span></i><br />
<div><br />
<div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: -0.75pt; width: 373px;"><tbody>
<tr style="height: 89.25pt;"><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="top" width="75"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span style="font-size: 10pt;">Country<o:p></o:p></span></b></div></td><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="top" width="75"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span style="font-size: 10pt;">Based upon Moody's rating<o:p></o:p></span></b></div></td><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="top" width="75"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span style="font-size: 10pt;">Based upon JPM CEMBI-AAA Spread, Volatility adjusted<o:p></o:p></span></b></div></td><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="top" width="75"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span style="font-size: 10pt;">Based upon CDSs, Volatility adjusted<o:p></o:p></span></b></div></td><td style="height: 89.25pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="top" width="75"><div align="center" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: center;"><b><span style="font-size: 10pt;">Average<o:p></o:p></span></b></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Brazil<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">10.51<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">12.96<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">13.98<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">12.48<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">China<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">8.86<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">14.94<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">11.02<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">11.61<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Hong Kong<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">8.41<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">8.36<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">9.41<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">8.73<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">India<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">12.01<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">10.04<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">12.44<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">11.50<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Indonesian<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">12.01<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">12.01<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Mexico<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">9.91<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">11.28<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">12.59<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">11.26<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Russia<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">9.91<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">11.90<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">14.69<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">12.17<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Australia<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.51<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">10.64<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">9.08<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">Japan<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">8.41<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">10.62<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">9.52<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">U.K.<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.51<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">10.50<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">9.01<o:p></o:p></div></td></tr>
<tr style="height: 12.75pt;"><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">USA<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.51<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;"><br />
</div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.51<o:p></o:p></div></td><td nowrap="" style="height: 12.75pt; padding-bottom: 0cm; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0cm; width: 56pt;" valign="bottom" width="75"><div align="right" class="MsoNormal" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: right;">7.51<o:p></o:p></div></td></tr>
</tbody></table><div style="margin-bottom: 0cm; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-size: 11px;"><i><br />
</i></span></span></div></div><div style="margin-bottom: 0cm; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;"><div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><i><span style="color: black; font-size: 8pt;">Calculations: invest2russia.blogspot.com</span></i></div></div></div></div></blockquote><br />
<b>What does it means? (Conclusion)</b><br />
<br />
We can use these results as estimation of required rates of return for equity markets, for the risk weighting purposes and P/E forecasting.<br />
<br />
Actual current P/E for S&P500 is equal 14.891 times earning. Expecting P/E is 13.32. Its very close to some forecasts. Russia has 8.22 current and 8.13 estimated P/E. It's close to actual ratio too. In other words <i>55 cents for one dollar of current profit in Russia is normal</i>. Also Hong Kong trades near its P/E estimation.<br />
<br />
Following our results, required rates of return on equity are 12.48, 11.61 and 11.5 for Brazil, China and India respectively. Current earn-prices marks are equal 8.02, 6.85 and 5.74. So Brazilian, Chinese and Indian companies should increase their profit. The expecting GDP's growth looks like the great opportunity for companies from these countries to demonstrate the rising of their earning. Otherwise if they will not use it Investors will be very disappointed (it looks very risky). In a nutshell there are no significant upside potential and very weak downside protection at this moment.Nicholashttp://www.blogger.com/profile/09959976537957483849noreply@blogger.com0tag:blogger.com,1999:blog-3162894019735154469.post-53845633918973798772010-11-13T02:37:00.001+03:002010-11-13T19:47:05.617+03:00Are Russian Gas & Oil Producers really undervalued?<div><div>The 4 largest publicly-listed Russian Oil and Gas Producers included in <a href="http://seekingalpha.com/symbol/rsx" rel="nofollow" target="_blank">RSX</a> portfolio: <a href="http://seekingalpha.com/symbol/ogzpy.pk" rel="nofollow" target="_blank">OGZPY.PK</a> (7.67%), <a href="http://seekingalpha.com/symbol/lukoy.pk" rel="nofollow" target="_blank">LUKOY.PK</a> (7.52%), <a href="http://seekingalpha.com/symbol/sgtpy-pk" rel="nofollow" target="_blank">SGTPY.PK</a> (5.38%), and RNGZY.PK (7.76%).<br />
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The average P/E of presented Russian companies is equal approximately 5-6 (weighted by market cap). Is it very attractive? I don't think so.</div><div><br />
When you invest to emerging you get more risk (it's generally accepted idea). If you get more risk be sure that risk reward is really adequate. </div><div><br />
<a name='more'></a>Modern finance theory identifies two components to asset returns: a systematic (oil, gas, gasoline prices; world consumption and supply energy resources, phase of business cycle etc...) component and a nonsystematic, or idiosyncratic, component (regional economy environment, country's/region's monetary and fiscal/taxes policies, cost of mining, etc... for example).</div><div><br />
Assume that government bond yield is some measure of region's idiosyncratic risk. And let's compare some well known companies with more then $50 billion market cap by P\E ratio. </div><div><br />
We use current stock prices, divided by forecast earnings per share (that well known as P/E ratio). But also we multiply this value by relevant bond yield rate. Thus we get some relative index, which could help us to compare companies from one region with companies from another regions.</div><div><br />
A lower value indicates that company is undervalued then other.</div><div><br />
<img alt="" src="http://imgstr.investhought.com/OG2010Pe.gif" /></div><div><br />
So, what should we see? Emerging markets have higher P/E - bond yield ratio then developed. And Russian companies are not outstanding ones on rest emerging background. Of course <a href="http://seekingalpha.com/symbol/ogzpy.pk" rel="nofollow" target="_blank">OGZPY.PK</a> looks undervalued, little bit. But the prospective payoff is approximately 30-50%. Also <a href="http://seekingalpha.com/symbol/sgtpy-pk" rel="nofollow" target="_blank">SGTPY.PK</a> is likely little bit less then other companies. But basically Russian Oil & Gas industry have the same valuation that emerging.</div></div><div><br />
Related ETF: Market Vectors-Russia ETF (RSX)</div>Nicholashttp://www.blogger.com/profile/09959976537957483849noreply@blogger.com0tag:blogger.com,1999:blog-3162894019735154469.post-23844303216415779122010-07-02T04:57:00.000+04:002010-11-14T04:58:48.977+03:00Comparing Country ETFs By P/E - Government Bond Yield - GDPSome countries have low <em>P</em>/<em>E</em> ratio, while other, by contrast, high. But this does not mean, that some countries are more attractive for investors, then other. So this simple compare may be useless. Actually, countries have different <em>P</em>/<em>E</em> ratios, but also they have different interest rates.<br />
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Let's follow the "FED" model. This comparison is more adequate. So, <em>P</em>/<em>E</em> ~ 1/<em>r</em>, where <em>r</em> is 10 year Government Bond yield. Or (<em>P</em>/<em>E</em>)*<em>r</em>=<em>k</em>, where <em>k</em> is adjustment coefficient. In general, Lower <em>k</em> may indicate cheaper equity market (under-priced or troubled). At least, lower <em>k </em>(<em>k</em><1) means that stock price is less then it's theoretical value.<br />
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<a name='more'></a><br />
What about GDP expectation?<br />
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OK. Let's include this parameter in our model. Actually, you don't find any strong relationship between GDP and <em>P</em>/<em>E</em> (or <em>r</em>*<em>P</em>/<em>E</em>) on historical data. However, higher GDP indicates stronger economics. Hence, higher GDP may indicates more attractive environment of country's equity market.<br />
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Thus, most attractive countries correspond to points at the bottom-right on diagram (see below). Conversely, overvalued markets at the background of weak GDP situated top-left on figure. Data and data sources.<br />
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<img alt="Single Country ETFs: P/E, Bond Yield, GDP" height="378" src="http://investhought.com/IMGSTORAGE/EN/1Figure.jpg" width="440" /><br />
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<img alt="Single Country ETFs: P/E, Bond Yield, GDP" height="378" src="http://investhought.com/IMGSTORAGE/EN/2Figure.jpg" width="440" /><br />
<a href="http://investhought.com/IMGSTORAGE/EN/t1.bmp" rel="nofollow" target="_blank">Data (t1.bmp)</a> | <a href="http://investhought.com/IMGSTORAGE/EN/Source.txt" rel="nofollow" target="_blank">Source (Source.txt)</a><br />
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Conclusion: obviously, China (GXC, FXI, PGJ) is leader. Chine will stay leader, even GPD forecast reduce to 6%. Hong-Kong (EWH) and Singapore (EWS) are another most atractive countries. Concerning India (INDY, INP, PIN, EPI), I am not assured: strong GDP forecast, but equity market is overvalued. Brazil (EWZ) also have most overvalued k ratio and 5.5% GDP. Canada (EWC), USA (IWV) and Russia (<a href="http://seekingalpha.com/symbol/rsx">RSX</a>) are somewhere in the middle of our rankings. So I don't find Russian Markets very attractive. Switzerland (EWL) and Germany (EWG) are most preferable in Europe.<br />
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</b>Nicholashttp://www.blogger.com/profile/09959976537957483849noreply@blogger.com0