Citi-Market Outlook Aug2012

7/31/2019 Citi-Market Outlook Aug2012

1/10

August 2012

Dont get carried away with growth fearsThe dominant theme of slower growth persists, but Citi analysts think the sources of growth concernhas shifted West-ward amidst signs that Chinas growth has stabilized in 2Q12, while focus may nowbe centred on persistent data disappointments in the US. Indeed, there are five reasons why Citianalysts do not expect a prolonged downturn in Asia.


2/10

Dont get carried away with growth fears

Growth worries migrate from China to the US

The dominant theme of slower growth has not changed, but the sources of growth concern have shifted West-ward. Chin as growthmomentum has managed to avert the worst fears producing a 7.6% YoY GDP growth in 2Q12 with momentum stabilizing via help of

policy easing. Nonetheless, Chinese policymakers clearly cannot be complacent. While there are signs infrastructure investment pickup

has helped support fixed asset investment (FAI) growth, other segments like property/construction are still weak, and even as new loans

an important leading indicator for economic activity picks up, likely with the help of kick-starting government projects, Citi analysts

remain concerned that the share of medium- to long-term loans have fallen slightly from 35% to 32% in June, suggesting that some of

the loan growth remains fragile to reversal without continued policy support, especially given weakness in the export markets.

While leading indicators do not point to a compelling turnaround in China, coincident activity indicators such as the acceleration of FAI

and retail sales growth for the second consecutive month in June and the lagged impact of policy easing (Citi expects one rate cut, two

more reserve requirement ratio (RRR) cuts, some relaxation of loan-deposit ratio (LDR) restrictions, continued pick up in fiscal

spending), could ensure some mild rebound in the second half of 2012. There are some promising signs that housing starts, cement andnew loans have picked up, but despite signs of infrastructure pick up, this has not been enough to boost steel production given lingering

excess capacities, and the outlook for industrial production and exports are still looking rather fragile.

Citi analysts think the newer concern now is the dece lerating growth we are seeing out of the US, as economic data continues to

disappoint, with sharp slowing of momentum in consumption and worries that the upcoming US elections and uncertain global backdrop

could point to a still weaker than expected momentum in 2H12. Not only has the US ISM manufacturing index receded to sub-50 reading

for the first time since mid-2009, prospects for income growth supporting consumption has been somewhat dashed by the disappointing

pace of non-farm payrolls. Thus, from a commodity-heavy slowdown on a China hard landing, Citi analysts think we are now moving

towards a more conventional cyclical slowdown in the region led by US growth concerns.

Expecting a slowdown, not catastrophe

While Asia appears poised for a slowdown, barring a major financial shock, Citi analysts expect only a shallow and short-lived slowdown

for the reasons below.

#1 No double-dip recession is expected in the US

Slowdown risks in the US have risen, but Citis base case is for no double -dip recession. While US growth in 2Q12 is looking weaker

than expected, some upside from housing and moderately better labour gauges counterbalanced by weaker business investments

ahead of the November Presidential elections could continue to keep growth in an expansionary mode, albeit at a slower pace.

#2 Asias financial system continues to function well

Citi analysts do not see any signs of a financial shock in the region, which tends to prolong downturns. Despite lingering signs of

European bank deleveraging, Asias local financial system appears in relatively good shape, and even amidst European bank

deleveraging, the ability to maintain lending growth and intermediate lower real rates look relatively healthy for many as reliance on

cross-border funding is relatively limited, plus prospects for loan substation from non-European/regional bank players are high.

Exposures to European ex UK banks are also not very high outside of Singapore and Hong Kong, and have been declining. Even in

Singapore and Hong Kongs case, Citi analysts think this is highly distorted because of its role as a regional financial cent re not just of

local banks but global banks as well


3/10

Dont get carried away with growth fears

#3 Domestic demand drivers appear to be holding up

While the manufacturing/export outlook may seem more challenging, Citi analysts have yet to see signs of a material impact on labour

markets that would dampen income expectations and consumption growth, especially as receding inflation pressures (so far, barring

continued oil/food price shocks) cushion real incomes. While this may be a lagging indicator, so far, unemployment rates are still close to

historic lows in many countries. Consumer confidence indicators in the more dynamic domestic economies of Philippines, Indonesia,

Thailand, and even China, have also held up fairly well. Moreover, the recent acceleration of retail sales and FAI growth in China gives

some confidence that domestic demand there may be turning, albeit only mildly.

#4 Room for counter-cyclical policy easing alive and well

Despite surfacing concerns about food inflation (which many are keeping a close eye on), Citi analysts think there is still sufficient room

for central banks in the region China, India, Korea, Philippines and Thailand to cut interest rates and for others to keep rates on

prolonged hold at low levels.

On the fiscal front, Citi analysts believe there is sufficient room for easing in many countries, though most are still keeping their powder

dry. Outside of South Asia, many Asian countries have room for counter-cyclical fiscal stimulus to support growth but only a few have

visibly started with additional fiscal spending. The fiscal constraints, however, are particularly acute in South Asia. For example, in the

first two months of fiscal year 2013, Indias budget deficit is already 27% of the fiscal year deficit target, up 8.3% YoY. T his highlights

considerable fiscal slippage. However, most of East Asia has sufficient fiscal room. So far, only Malaysia (given pre-election spending),

Thailand (though this is now losing momentum) and Vietnam (various fiscal relief for industries/small and medium-sized enterprises)

have announced additional fiscal stimulus.

The key country to watch is China. There has been a lot of talk that China will announce additional stimulus but Citi analysts argue that

Chinas fiscal stance this year is already relatively simulative, with a budget deficit roughly about 2.5% of GDP versus 1.3% of GDP in

2011. In 1H12, the budget balance (official definition) is still in surplus to the tune of 1.9% of GDP, though this may be somewhat

seasonal (1H11 saw a budget surplus of 2.6%). The good news is that revenues appear to have outperformed, up 12% YoY when the

full year program has revenue growth of 10.5% YoY. So, while the pace of spending looks like it has outperformed its target, +21% YoY

in 1H12 relative to the 9.3% expenditure growth target for the full year, if revenues sustain outperformance, there is room for

expenditures to ramp up beyond the target. Thus, Citi analysts believe China still has room to increase net fiscal deficit spending by over

3% of GDP in 2H12. Alongside a more accommodative monetary stance, Citi analysts think policymakers may not announce extra fiscal

stimulus at this juncture.

#5 Inventory overhang looks milder than last year, especially in electronics

Even as exports/shipments could potentially slow on global growth challenges, Citi analysts do not expect a significant inventory build-up

that could catalyze abrupt de-stocking, especially in the electronics cycle, which tend to a be a significant driver of theexport/manufacturing cycle in parts of Asia (especially Singapore, Malaysia, Philippines and Korea). Unlike last year when we had some

inventory build-up, especially in the electronics cycle by mid-2011, which amplified the export slowdown amidst worsening Eurozone

concerns; this time around, electronics leading indicators, while softening, look in better shape. Inventory-to-shipment ratios in Korea

and Taiwan do not look unusually elevated relative to history, and especially in Singapores case, electronics exports appear to have

moved beyond production which could signal leaner inventory.

Nonetheless, when Citi analysts look at the broader manufacturing outlook, uncertainties about global demand lingers. Despite

surprisingly resilient exports, Chinas industrial production growth has disappointed mostly this year. Based on recent PMI finished

goods inventory relative to new orders, Citi analysts believe China may still have a bit more broader inventory de-stocking to go. But all

in all, risks to Asias electronics de-stocking cycle may be much shorter this time around, notwithstanding softer final demand.


4/10

Euro-Area90% probability of a Grexit over the next 12-18 months

While market pressure is rising rapidly especially on SpainMoodys

decision to put Germany, the Netherlands and Luxembourg Aaa ratings

on Negative Outlook imply that the core and softcore countries may also

be increasingly affected by the crisis. Taking into account the increasing

reluctance in core countries to provide extra support to Greece and the

problems of the Greek government to implement the existing

programme, Citi analysts have increased the probability of Grexit in the

next 12-18 months to about 90% from 50%-75% previously.

With more negative news on the economy, inflation may undershoot the

European Central Banks (ECB) target of below, but close to 2%. Citi

expects the ECB to cut the refi rate to 0.5% in 3Q12, and by a further 25

bps in 4Q12. Regarding non-standard measures, Spain and Italy are

expected to request support from the European Financial Stability

Facility/European Stability Mechanism, and the ECB could then provide

more multi-year long-term refinancing operations (LTROs) and also

extend the eligible collateral pool.

Citi analysts have raised Media to Overweight (from Underweight) and

lowered Health Care to Neutral (from Overweight). In their view, the

Media group offers exposure to defensive growth at a reasonable price.

For instance, while the Media sector earnings have performed in line

with Health Care over the past 12-15 months, price performance has

lagged. As such, Citi analysts believe there is an opportunity for that

relative performance to reverse somewhat in the coming months.

The Utilities sector has also been raised to Neutral from Underweight.

Outside Spain, Citi analysts see reduced earnings risk across this group

over the next 12 months and relative earnings trends for the sector have

recently turned positive. Finally, Citi analysts have lowered the Oil &

Gas sector to Underweight (from Neutral) as they continue to see an

uninspiring combination of low growth and low returns.

Chart 1:

S&P 500 Index Chart 2:Dow Jones Stoxx 600 Index

*Denotes cumulative performancePerformance data as of 31 July 2012Source: Bloomberg


United StatesFed likely to focus on easing in coming months

Expansions pace appears to have slowed to a meagre 1.5% or less in

2Q12. Although some softening reflects payback from temporary

factors, the pullback in hiring and retail sales has raised doubts about

2H12. Consumer finances have benefited from slowing inflation and

easier credit, while numerous housing indicators are pointing higher.

But the upside appears checked for now by economic policy uncertainty

and ongoing fiscal drag. Citis base case assumes the US will avoid

massive fiscal tightening in 2013 but meaningful restraint from the

public sector is still likely next year and beyond.

Worries about financial headwinds from Europe and the threatened 4%

US fiscal cliff amid already subpar growth have pushed the Federal

Reserve (Fed) closer to another major easing step. Although Operation

Twist has been extended, officials are weighing a new lending effort or

asset purchases as well as enhanced communications. Citi analysts do

not rule out an early August move but September seems more likely.

A variety of metrics, including sentiment, valuation, implied earnings

expectations, and credit conditions have been instrumental to the more

bullish stance outlined in late June, and thus one can derive that a

higher beta tilt to portfolios may be appropriate. Moreover, nearer-term

triggers like the Citi Economic Surprise Index and high intra-stock

realized price correlation argue for the recent rally to continue. If we

look at historical data, industry groups such as Diversified Financials,

Autos, Insurance, and Materials have demonstrated high beta over the

past five years relative to low beta areas such as Telecom Services,Utilities, Pharma & Biotech, and Food & Staples Retailing.

Having said that, while Citi analysts believe that higher beta names

could outperform, they do not favour Autos and Materials given

European economic woes. Instead, Insurance and Diversified

Financials are their preferred plays for beta positioning.

39.68%

6.74%9.68%

1.26%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1-Mth YTD 1-Yr 3-Yr*

16.22%

-1.46%

6.89%

4.06%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%



5/10

Chart 3:

Topix Index Chart 4:MSCI Asia ex Japan Index



JapanGrowth may slow in 2014 due to tax hike

Economic growth in this year and next could be pushed up to an above

2% pace by reconstruction demand from the earthquake and

frontloaded spending ahead of the consumption tax hike. But GDP

growth in 2014 will inevitably slow sharply due to a payback to

frontloaded spending and erosion in real household disposable income

driven by tax hikes. Citi expects a sharp contraction in GDP right after

the tax hike in April 2014, which could in turn make the second tax hike

slated for October 2015 less likely.

Citi expects additional Bank of Japan (BoJ) easing in late October. But

the most likely measure may be to raise the ceiling for short- and

longer-term JGB purchases under the asset purchase programme. A

reduction in the interest rate on excess reserve appears unlikely given

the Governors stance, and the hurdle for extending the maturity of

JGBs that the BoJ purchases also appears high.

Citi analysts believe capex and in particular, in-out merger and

acquisition (M&A) are likely to increase in FY12. In the BoJs Tankan

survey, manufacturers say they plan to increase capex by 7.2% in

FY12. Management sentiment deteriorated in the wake of the March

2011 disaster, resulting in capex being held below depreciation costs.

However, management sentiment has since improved, and capex is

likely to rise, in part as a rebound after previous curtailment.

Indeed, the number of in-out M&A by Japanese firms appears to be

recovering. If the pace seen since the start of the year continues, in-out

M&A numbers would hit a record level in 2012. Citi analysts see three

main reasons for the increase in in-out M&A: 1) management sees the

need to make forays overseas from the standpoint of long-term growth

as the domestic population is declining; 2) the yen is strong at around

80/$; and 3) the emergency facility to combat yen strength set up by

the government in August 2011 is being used.

Asia PacificMost central banks likely to remain on hold

The theme of slower growth continues to dominate, though the source

of growth worries appears to be shifting from China to the US. After rate

cuts by China and Korea, Citi analysts think risks are now tilted towards

Philippines, Singapore and Thailand to ease monetary policy. Others

are likely to remain on prolonged hold.

Asian exporters have kept their currencies broadly stable against both

USD and CNY but this is unlikely to be sustained if domestic data

continues to weaken and USD strengthens as expected over the

medium term. As such, export intensive Asian currencies, in particular

the Korean Won (KRW), Taiwan Dollar (TWD) and Philippine Peso

(PHP) are expected to face the largest downside risks.

August and September have historically been the heaviest months of

corporate earnings revisions post the mid-year results. The latest

revisions have taken on the same pattern as in prior years. With

Institutional Brokers' Estimate System (IBES) expectations still running

at 13.8% for this year, Citi analysts see room for disappointment. They

expect earnings-per-share (EPS) growth to come in between 4-8% for

this year. But markets already appear to be pricing in much weaker

earnings revisions than we have seen thus far.

The worst revisions are in Taiwan, China and Thailand. By sector, the

worst near term revisions have been with the Material and Energy

space. Compared to historical revisions versus price-to-book, Hong

Kong, Singapore, Taiwan and Thailand are all pricing in a significant

worsening of revisions. Banks, Real Estate and Technology are pricing

in worse revisions than what we have currently, while Consumers are

priced for significantly better revisions. Overall investor positioning

remains very cautious with the relative performance or risk versus

quality only having been worse in 1997/98, 9/11 and SARS.

-4.39%

1.06%

-12.49%

-22.51%-25%

-20%

-15%

-10%

-5%

0%

5%


16.16%

-12.49%

7.27%3.55%

-15%

-10%

-5%

0%

5%

10%

15%

20%



6/10

Chart 5:

MSCI Emerging Markets Index


Emerging MarketsOutlook for CEEMA equities appears challenging

CEEMEA1 remains hostage to growth and deleveraging risks from the

Eurozone. In fact, Citis growth forecasts for the Czech Republic,

Slovakia, Ukraine and Kazakhstan have all been taken down slightly for

2012/13, reflecting weak European demand and retrenchment by

European banks.

In Latam, stability appears to be still the name of the game when it

comes to monetary policy (except in Brazil). Resilient growth has kept

most central banks in "wait-and-see" mode but Citi analysts continue to

expect easing later in the year.

While Citi analysts expect some CEEMEA currencies, like the Czech

Koruna (CZK) and Turkish Lira (TRY), to regain some lost ground,

others, particularly the Hungarian Forint (HUF), Israeli Shekel (ILS), and

Russian Ruble (RUB) are forecast to remain under pressure. Meanwhile

in Latam, the Chilean Peso (CLP) is expected to weaken in the medium

term given that its currency is intimately linked to both copper prices

and the weakening Chinese economy, and the central bank has turned

more dovish recently.

Citi analysts have an end-2012 target of 4,300 on the MSCI Latam

index. Although earnings-per-share (EPS) growth appears to be

slowing, policy flexibility implies that the region can weather the

European economic slowdown. They favour Brazil and Peru, and prefer

the Financials, Telecoms and Consumer Discretionary sectors.

While the CEEMEA region is attractively valued, there is reason for

continued caution given relatively weak growth and higher exposure to

the Euro Area. Under such conditions, Citis preferred market is South

Africa thanks largely to its strong and resilient earnings growth outlook.

Their end-2012 target for the MSCI EM EMEA index stands at 350.

1. CEEMEA is the collective term for Central and Eastern Europe, Middle East

and Africa.

Positive on High-grade corporates and Emerging

market debt

US Treasuries

Citi analysts expect yield curves to flatten, and for gains to be potentially

generated in the intermediate- to longer-dated maturity range.

US Corporates

A strengthening technical backdrop, large cash balances, low default

rates, decreasing net issuance, and a smaller universe of safe haven

assets continue to remain supportive. Meanwhile, although high yield

valuations have become more attractive, Citi analysts remain cautious due

to festering concerns in Europe and expectations that global growth will

continue to slow. As such, they selectively favour high quality, double-B

rated issuers and select single-B rated issuers with strong fundamentals.

Euro Bonds

As global growth slows further and heightened uncertainties persist, high

quality government bonds in safe haven markets, particularly UK Gilts are

likely to be well-supported.

Emerging Market Debt

Increased corporate bond issuance in emerging markets may present

opportunities to pick up yield while benefiting from stronger domestic

growth.

General DisclosureCiti analysts refers to investment professionals within Citi Research (CR), CitiGlobal Markets Inc. (CGMI) and voting members of the Citi Global InvestmentCommittee.

Citibank N.A. and its affiliates / subsidiaries provide no independent research oranalysis in the substance or preparation of this document. The information in thisdocument has been obtained from reports issued by CGMI. Such information isbased on sources CGMI believes to be reliable. CGMI, however, does not guaranteeits accuracy and it may be incomplete or condensed. All opinions and estimatesconstitute CGMI's judgment as of the date of the report and are subject to changewithout notice. This document is for general information purposes only and is notintended as a recommendation or an offer or solicitation for the purchase or sale ofany security or currency. No part of this document may be reproduced in any mannerwithout the written consent of Citibank N.A. Information in this document has beenprepared without taking account of the objectives, financial situation, or needs of anyparticular investor. Any person considering an investment should consider theappropriateness of the investment having regard to their objectives, financialsituation, or needs, and should seek independent advice on the suitability orotherwise of a particular investment. Investments are not deposits, are not obligationsof, or guaranteed or insured by Citibank N.A., Citigroup Inc., or any of their affiliatesor subsidiaries, or by any local government or insurance agency, and are subject toinvestment risk, including the possible loss of the principal amount invested.

Investors investing in funds denominated in non-local currency should be aware ofthe risk of exchange rate fluctuations that may cause a loss of principal. Pastperformance is not indicative of future performance, prices can go up or down. Someinvestment products (including mutual funds) are not available to US persons andmay not be available in all jurisdictions. Investors should be aware that it is his/herresponsibility to seek legal and/or tax advice regarding the legal and taxconsequences of his/her investment transactions. If an investor changes residence,citizenship, nationality, or place of work, it is his/her responsibility to understand howhis/her investment transactions are affected by such change and comply with allapplicable laws and regulations as and when such becomes applicable. Citibankdoes not provide legal and/or tax advice and is not responsible for advising aninvestor on the laws pertaining to his/her transaction.

1.62%3.94%

-16.28%

12.85%

-20%

-15%

-10%

-5%

0%

5%

10%

15%



7/10

US Presidential Elections and Equity Market PerformanceThe US Presidential elections are just three months away (November) and the race remains tight betweenincumbent Barack Obama and challenger Mitt Romney. In this months issue, we take a peek at how the S&P 500index historically performed during the Presidential cycle.

Source: Citibank N.A., Singapore Branch, Regional Wealth Management.

The Presidential election cycle typically argues for a good year in equities in both the third and fourth year of a Presidents term,

even though it did not hold true in 2008 (-38.5%) and 2011 (0.0%).

Thus far in 2012, the S&P 500 is up around 6% year-to-date 24 July.

Source: Haver and Citi Research US Equity Strategy. As of July 24, 2012

Average S&P 500 Performance by Year in Presidential Cycle Since 1900

Average S&P 500 Performance after Incumbent Re-Election/Loss by Year in Presidential Cycle Since 1900

1.2%

11.2%

8.7%

2.7%

7.4%

-0.3%

30.5%

13.2%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Year 1 Year 2 Year 3 Year 4

Average after incumbent wins re-election Average following an incumbent loss

Source: MSCI, Datastream and Citi Investment Research and Analysis. As of June 13, 2012

Historically, in the year following an election, challenger wins tend to be more rewarding and this tends to be nonpartisan.

But in general terms, Energy, Health Care, Utilities, Coal Miners and Defence sectors tend to fare better under Republicans,

while Environmental and Generic Pharmaceuticals tend to fare better under Democrats.

Notes: Franklin D. Roosevelt's last term is counted as Truman's first term and is not included in any incumbent averages.Years in Nixon's and McKinley's 2nd terms are not included in the incumbent averages if they did not serve for more thanhalf of the year in question. The time served by their successor was counted as the successor's first term


8/10

Spotlight on Allocations


9/10

Spotlight on Allocations


10/10

Citi analysts refers to investment professionals within Citi Research (CR), Citi Global Markets Inc. (CGMI) and voting members of the CitiGlobal Investment Committee.

Citibank N.A. and its affiliates / subsidiaries provide no independent research or analysis in the substance or preparation of this document. Theinformation in this document has been obtained from reports issued by CGMI. Such information is based on sources CGMI believes to bereliable. CGMI, however, does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute

CGMI's judgment as of the date of the report and are subject to change without notice. This document is for general information purposes onlyand is not intended as a recommendation or an offer or solicitation for the purchase or sale of any security or currency. No part of thisdocument may be reproduced in any manner without the written consent of Citibank N.A. Information in this document has been preparedwithout taking account of the objectives, financial situation, or needs of any particular investor. Any person considering an investment shouldconsider the appropriateness of the investment having regard to their objectives, financial situation, or needs, and should seek independentadvice on the suitability or otherwise of a particular investment. Investments are not deposits, are not obligations of, or guaranteed or insuredby Citibank N.A., Citigroup Inc., or any of their affiliates or subsidiaries, or by any local government or insurance agency, and are subject toinvestment risk, including the possible loss of the principal amount invested. Investors investing in funds denominated in non-local currencyshould be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Past performance is not indicative of futureperformance, prices can go up or down. Some investment products (including mutual funds) are not available to US persons and may not beavailable in all jurisdictions. Investors should be aware that it is his/her responsibility to seek legal and/or tax advice regarding the legal and taxconsequences of his/her investment transactions. If an investor changes residence, citizenship, nationality, or place of work, it is his/herresponsibility to understand how his/her investment transactions are affected by such change and comply with all applicable laws andregulations as and when such becomes applicable. Citibank does not provide legal and/or tax advice and is not responsible for advising aninvestor on the laws pertaining to his/her transaction.

Australia : This document is distributed in Australia by Citigroup Pty Limited ABN 88 004 325 080, AFSL 238098. For a fullexplanation of the risks of investing in any investment, please ensure that you fully read and understand therelevant Product Disclosure Statement prior to investing.

Hong Kong : This document is distributed in Hong Kong by Citibank (Hong Kong) Limited ("CHKL"). Prices and availability offinancial instruments can be subject to change without notice. Certain high-volatility investments can be subject tosudden and large falls in value that could equal the amount invested.

India : This document is distributed in India by Citibank N.A. Investment are subject to market risk including that of lossof principal amounts invested. Products so distributed are not obligations of, or guaranteed by, Citibank and arenot bank deposits. Past performance does not guarantee future performance. Investment products cannot be

offered to US and Canada Persons. Investors are advised to read and understand the Offer Documents carefullybefore investing.

Indonesia : This report is made available in Indonesia through Citibank, N.A. Indonesia Branch, Citibank Tower Lt 7, Jend.Sudirman Kav 54-55, Jakarta. Citibank, N.A. Indonesia Branch is regulated by the Bank of Indonesia.

Korea : This document is distributed in South Korea by Citibank Korea Inc. Investors should be aware that investmentproducts are not guaranteed by the Korea Deposit Insurance Corporation and are subject to investment riskincluding the possible loss of the principal amount invested. Investment products are not available to US persons.

Malaysia : This document is distributed in Malaysia by Citibank Berhad.

People's Republic ofChina

: This document is distributed by Citibank (China) Co., Ltd in the People's Republic of China (excluding the SpecialAdministrative Regions of Hong Kong and Macau, and Taiwan).

Philippines : This document is made available in Philippines by Citicorp Financial Services and Insurance Brokerage Phils. Inc,Citibank N.A. Philippines, and/or Citibank Savings Inc. Investors should be aware that Investment products arenot insured by the Philippine Deposit Insurance Corporation or Federal Deposit Insurance Corporation or any

other government entity.

Singapore : The information in this report has been sourced from Citigroup Global Markets Inc. ("CGMI") which is a member ofFINRA and registered with the US Securities and Exchange Commission. This report is distributed in Singaporeby Citibank Singapore Ltd ("CSL"). CSL provides no independent research or analysis of the substance or inpreparation of this report. Investment products are not insured under the provisions of the Deposit Insurance andPolicy Owners Protection Schemes Act 2011 of Singapore and are not eligible for deposit insurance coverageunder the Deposit Insurance Scheme. CSL accepts legal responsibility for the content of this report. Pleasecontact your CSL Relationship Manager if you have any queries on or any matters arising from or in connectionwith this report.

Thailand : This document is distributed in Thailand by Citibank N.A. and made available in English language only.Investment contains certain risk, please study prospectus before investing. Not an obligation of, or guaranteed by,Citibank. Not bank deposits. Subject to investment risks, including possible loss of the principal amount invested.Subject to price fluctuation. Past performance does not guarantee future performance. Not offered to US persons.

United Kingdom : This document is distributed in U.K. by Citibank International plc., it is registered in England with number

1088249. Registered office: Citigroup Centre, Canada Square, London E14 5LB. Authorised and regulated by theFinancial Services Authority.

COUNTRY SPECIFIC

GENERAL DISCLOSURE