Professional Documents
Culture Documents
Albert Edwards
IS ICE AGE SECULAR DE-RATING OF EQUITIES V BONDS OVER?
BOND/EQUITY YIELD (CASHFLOW) RATIO
Source: Datastream 4
VALUATIONS DON’T MATTER APPARENTLY? FORWARD PE
Source: Datastream 5
SHILLER (P/E10) RATIOS : S&P 500 SECTOR‐MATCHED TO EAFE
Source: GMO 6
2017 SAW BUMPER CENTRAL BANK MONEY PRINTING
4 .0 0
3 .5 0
3 .0 0
2 .5 0
2 .0 0
1 .5 0
1 .0 0
87 89 91 93 95 97 99 01 03 05 07 09 11 13 15
Source: Twitter 10
US EQUITIES RALLIED THROUGH 1987, DESPITE BOND SELL-OFF
20 6
7
18
10y yield
(inverted, rhscale)
8
16
14 10
11
12
trailing PE 12
10
13
8 14
1984 1985 1986 1987
Source: Datastream
11
US ISM AND BRENT OIL PRICE (JAN 1985-OCT 1987)
62 35
58
25
56
54 20
52
15
50
10
48
manufacturing ISM
46 5
1985 1986 1987
Source: Datastream
12
$ STABILIZED IN 1987 DUE TO HIGHER RATES & LOUVRE ACCORD
13 3 .6 0
$/DM (rhscale)
3 .4 0
12
3 .2 0
11
3 .0 0
10
2 .8 0
9
US 10y 2 .6 0
2 .4 0
8
2 .2 0
2 .0 0
Fed Funds
6
1 .8 0
5 1 .6 0
1985 1986 1987
Source: Datastream
13
IS THIS LIKE 1987? EQUITIES IGNORE RISING YIELDS - FOR NOW
3 .5 0 3 .5 0
3 .0 0 3 .0 0
2 .5 0
S&P dividend yield 2 .5 0
2 .0 0 2 .0 0
1 .5 0 1 .5 0
1 .0 0 1 .0 0
0 .5 0 0 .5 0
2y
0 0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Datastream 14
THE MARKET HAS LITTLE BELIEF IN FED TIGHTENING PROMISES
3 .0 0 3 .0 0
2 .5 0 2 .5 0
10y
2 .0 0 2 .0 0
1 .5 0 1 .5 0
2y
1 .0 0 1 .0 0
0 .5 0 0 .5 0
Fed Funds
0 0
J F M A M J J A S O N D J F M A M J J A S O N D
Source: Datastream 15
IT LOOKED SO DIFFERENT IN 1994
Source: Datastream 16
US DOLLAR NOT BEING DRAGGED UP AS US 2Y YIELDS RISE
Source: Datastream
17
SPECULATORS ARE VERY SHORT THE DOLLAR NOW AGAINST €
THIS TIME LAST YEAR THEY WERE VERY LONG!
EUR/USD CFTC spec EUR, 000s
1.25 150
100
1.2
50
1.15
0
1.1 -50
-100
1.05
-150
1
-200
0.95 -250
01/15 07/15 01/16 07/16 01/17 07/17 01/18
0
01/13 07/13 01/14 07/14 01/15 07/15 01/16 07/16 01/17 07/17 01/18
Source: Datastream
20
THE MAIN REASON THE MARKET IS BELOW THE FED DOTS IS…
Source: Datastream 21
BUT IS US CORE CPI SET TO RISE?
US GDP AND CORE INFLATION
3.5 8
3.0 6
2.5 4
4 QTR %
2.0 2
12M%
1.5 0
1.0 -2
CORE CPI GDP* (RHS)
0.5 -4
* LEA DING BY 18M.
0.0 -6
1995 1998 2001 2004 2007 2010 2013 2016 2019
Source: Gerard Minack, Downunder Daily 22
NY FED SUGGESTS US CORE CPI COULD SURGE
CORE CPI AND NY FED'S UNDERYING INFLATION GAUGE
3.5 5
* FRBNY UNDERLYING INFLA TION GA UGE FULL
DA TA SET (UIGDDA TA INDEX). LEA DING BY 15M. 4.5
3.0 4
3.5
2.5 3
2.5
2.0
12M %
12M%
2
1.5
1.5
1
1.0 0.5
CORE CPI (LHS) 0
UNDERLYING
0.5 INFLATION -0.5
GAUGE* -1
0.0 -1.5
1995 1998 2001 2004 2007 2010 2013 2016 2019
Source: Datastream 24
LOTS OF LABOUR SLACK IN THE US?
65 employment rate 97
95
63
94
62
93
61
92
60 employment/labour force
91
(1-unempyment rate, rhscale)
59
90
58 89
88 90 92 94 96 98 00 02 04 06 08 10 12 14 16
Source: Datastream 25
PRIME AGE EMPLOYMENT RATE STRONGER THAN TOTAL
67 83
66
prime age employment rate (25-54) 82
65 81
64 80
63 79
62 78
61 77
58 74
57 73
88 90 92 94 96 98 00 02 04 06 08 10 12 14 16
Source: Datastream 26
US PHILLIPS CURVE IS NOT DEAD
PRIME AGE WAGE GROWTH AND CORE EMPLOYMENT RATE
6.0 83
* MEDIA N HOURLY EA RNING (MA TCHED SA MPLE OVER
PRIOR 12 MONTHS). PRIME-A GE ONLY (25-54). FULL TIME
5.5 PA Y ONLY, EXCLUDES SELF-EMPLOYED. † 25-54 YEA R OLD
82
EMPLOYED A S % OF 25-54 POPULA TION. LEA DING BY 6M.
5.0 81
PRIME AGE EMPLOYMENT
% OF POPULATION
4.5 RATE* (RHS) 80
12 M %
4.0 79
3.5 78
PRIME AGE MEDIAN
3.0 77
EARNINGS*
2.5 76
2.0 75
1.5 74
1996 1999 2002 2005 2008 2011 2014 2017 2020
Source: Gerard Minack, Downunder Daily
27
WHY AREN’T US BOND YIELDS RISING MORE QUICKLY?
100 1 .5 0
6m ch in US bond yield
(rhscale)
1 .0 0
50
0 .5 0
0
0
- 0 .5 0
-50
- 1 .0 0
- 1 .5 0
-100
US economic surpises
- 2 .0 0
-150 - 2 .5 0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Datastream
28
THE MOST IMPORTANT CHART IN THE WORLD?
Source: Datastream 31
JAPANESE WAGE INFLATION BUMPING ALONG AT ½% YOY
Source: Datastream 32
JAPANESE LABOUR MARKET MUCH TIGHTER THAN THE US
Source: Datastream 33
JAPAN: A BIG INCREASE IN FEMALE PARTICIPATION RATIO
34
JAPANESE HOUSEHOLD INCOME IS STRONG (YOY%)
Source: Datastream 35
JAPAN: CONSUMPTION WEAK V INCOME – UNLIKE THE US & UK!
4 4
3 3
2
consumer spending 2
1 1
0 0
-1 -1
-2 -2
-3 -3
-4 -4
employee compensation
-5 -5
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Source: Datastream 36
JAPANESE STOCKMARKET PROFITS SURGING
Source: Datastream 37
JAPANESE CORE CPI INFLATION RISING
Source: Datastream 38
JAPANESE IMPLIED INFLATION EXPECTATIONS BOTTOMING?
Source: Datastream 39
JAPANESE BEGINNING TO BELIEVE IN INFLATION AGAIN!
4 65
% seeing inflation
60
3 (rhscale)
55
50
1
45
40
0
35
-1
30
-3 20
03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Source: Datastream 40
JAPANESE QE IS OFF THE SCALE. COULD THEY TAPER TOO?
80
60
40
20
0
Sep-08 Sep-11 Sep-14 Sep-17
Source: Bloomberg 41
HAS QT ALREADY STARTED IN JAPAN?
45
EASY MONEY
Andrew Lapthorne
GLOBAL QUANTITATIVE STRATEGY
Consecutive monthly positive total returns
10
12
14
0
2
4
6
8
1969
1971
1972
1974
1975
1977
1978
1980
1981
1996
1998
1999
2001
2002
2004
2005
2007
2008
2010
2011
2013
2014
2017: A RECORD BREAKING YEAR FOR MSCI WORLD
2016
2017
47
WHO NEEDS HEDGE FUNDS!
MSCI World delivered a Sharpe Ratio of more than 4.0x!
6.0
5.0
4.0
Annual Sharpe ratio (x)
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
1980
1985
1990
1995
1970
1975
2000
2005
2010
2015
Source: SG Cross Asset Research/Equity Quant, Factset
48
VOLATILITY FELL, PARTICULARLY IN EQUITY
Realised Equity, Bond and FX annualised realised volatility
45
Currency (USD, Euro, Yen, Sterling)
40
Bonds ( Treasuries, Bunds, JGBs, Gilts)
35 Equity (US, Japan, Eurozone, UK)
Realised volatility (%)
30 Average
25
20
15
10
0
Dec-02
Dec-03
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-16
Dec-00
Dec-01
Dec-04
Dec-15
Dec-17
Source: SG Cross Asset Research/Equity Quant, Factset
49
NATURAL LANGUAGE PROCESSING BECAME POPULAR
50
Median EV/EBITDA ratios (x)
10
11
12
13
14
5
6
7
8
9
Dec-95
Dec-96
Dec-97
Dec-98
Dec-99
Dec-00
Dec-02
Dec-03
Dec-04
PEAK EQUITY VALUATIONS
Dec-05
Dec-06
Median EV/EBITDA ratios Globally, US and Europe
Dec-07
Dec-08
Dec-09
US
Dec-10
Global
Europe
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
51
REGIONAL RETURN ON ASSETS ARE CONVERGING
Median company return on assets by region (%)
7.00
6.00
Median return on assets (%)
5.00
4.00
3.00
2.00
US Europe
1.00
Japan
0.00
Dec-96
Dec-97
Dec-99
Dec-01
Dec-03
Dec-05
Dec-06
Dec-08
Dec-10
Dec-12
Dec-13
Dec-15
Dec-17
Dec-95
Dec-98
Dec-00
Dec-02
Dec-04
Dec-07
Dec-09
Dec-11
Dec-14
Dec-16
Source: SG Cross Asset Research/Equity Quant, Factset
52
3 year relative maximum drawdown (%)
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
Dec-92
Dec-93
Dec-94
Dec-95
Dec-96
Dec-97
Dec-98
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Sector relative FCF yield - 3 year maximum drawdown versus Benchmark
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
53
GLOBALLY, OUR (SGVB) VALUE INDEX HAD A PRETTY GOOD YEAR
130
MSCI World Enhanced Value
125 MSCI World
SG Global Value Beta Index (SGVB)
120
Total returns (%)
115
110
105
100
Oct-17
Dec-17
Dec-16
Sep-17
Jul-17
Apr-17
Feb-17
Mar-17
Jan-17
Jun-17
May-17
Aug-17
Nov-17
Source: SG Cross Asset Research/Equity Quant, FTSE, I/B/E/S, FactSet .
54
AND IN THE LONG RUN
55
VALUE DOESN’T WORK AMONGST THE LARGEST CAP
10.0
Annualized Return(%)
8.0
6.0
4.0
2.0
0.0
Smallest Small Mid Large Largest
56
JAPAN AND FINANCIALS DOMINATE THE CHEAP UNIVERSE
57
US CORPORATES ARE STILL OUTSPENDING CASH FLOW...
2,000,000
Gross cashflow
1,800,000
1,600,000
Capex + Investment + Dividends
1,400,000
800,000
600,000
400,000
200,000
0
Dec-95
Dec-97
Dec-99
Dec-00
Dec-02
Dec-04
Dec-05
Dec-07
Dec-09
Dec-10
Dec-12
Dec-14
Dec-15
Dec-96
Dec-98
Dec-01
Dec-03
Dec-06
Dec-08
Dec-11
Dec-13
Dec-16
Source: SG Cross Asset Research/Equity Quant, Factset
58
US CASH FLOW GROWTH IS NOT AS STRONG AS YOU THINK
59
-200000
-100000
100000
200000
400000
500000
300000
0
Dec-90
Dec-91
Dec-92
Dec-93
Dec-94
Dec-95
Dec-99
Change in Debt
Dec-00
Dec-01
Dec-02
BUYBACKS ARE FINALLY DECLINING
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
60
BUYBACKS ARE A SIGN OF WEAKNESS NOT STRENGTH
Correlation between stocks with the highest buyback yields versus Value and Quality stocks
1.0
Rolling annual (daily) correlation
0.8
0.6
0.4
0.2
0.0
-0.2
-0.4
Value stocks
-0.6
High Quality stocks
-0.8
-1.0
Aug-99
Aug-01
Aug-02
Aug-03
Aug-04
Aug-05
Aug-06
Aug-07
Aug-08
Aug-09
Aug-12
Aug-15
Aug-95
Aug-96
Aug-97
Aug-98
Aug-00
Aug-10
Aug-11
Aug-13
Aug-14
Aug-16
Aug-17
Source: SG Cross Asset Research/Equity Quant, Factset
61
Net Debt to total assets (%)
11
13
15
17
19
21
23
25
5
7
9
Jun-98
Dec-98
Jun-99
Dec-99
Jun-00
Dec-00
Jun-01
Dec-01
Jun-02
Jun-08
Dec-08
Net Debt % Assets
Jun-09
Dec-09
Jun-10
Dec-10
Jun-11
Dec-11
Jun-12
Dec-12
Jun-13
Dec-13
MEDIAN S&P 1500 EX FINANCIALS LEVERAGE RATIOS
Jun-14
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
30
35
40
45
50
55
60
65
18
16 Biggest 10%
14 Bottom 50%
EBIT interest cover (x)
12
Average
10
0
Dec-98
Dec-99
Dec-03
Dec-04
Dec-05
Dec-08
Dec-09
Dec-10
Dec-14
Dec-15
Dec-16
Dec-00
Dec-01
Dec-02
Dec-06
Dec-07
Dec-11
Dec-12
Dec-13
Source: SG Cross Asset Research/Equity Quant, Factset
63
MERTON DISTANCE TO DEFAULT – A MARK TO MARKET CREDIT MODEL
Debt Debt
64
Realised 60 days volatility (%)
100
10
20
30
40
50
60
70
80
90
Aug-00
Feb-01
Aug-01
Feb-02
Aug-02
Feb-03
Aug-03
Feb-04
Aug-04
Feb-07
Aug-07
Average 60 day stock volatility
Feb-08
Aug-08
Feb-09
Aug-09
Feb-10
Aug-10
Feb-11
Aug-11
Feb-12
Aug-12
Feb-13
Aug-13
Feb-14
Aug-14
Feb-15
Aug-15
Feb-16
CREDIT RISK AND EQUITY VOLATILITY IS THE SAME THING
Aug-16
Feb-17
Aug-17
0
2
6
4
8
10
12
14
16
18
20
22
66
THERE IS A GOOD REASON WHY MANY ARE SHORT RUSSELL 2000!
Net Debt versus EBITDA for the Russell 2000
500
450
400
350
Net Debt EBITDA
300
US$ Bln
250
200
150
100
50
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
67
WE'RE WATCHING THE RED LINE CLOSELY!
Balance sheet performance in the Russell 2000
68
Profit share as % of AC MSCI World
-10
10
20
30
40
50
60
0
Dec-00
Jul-01
Feb-02
Sep-02
Apr-03
Nov-03
Jun-04
Jan-05
May-07
Dec-07
Jul-08
Feb-09
Sep-09
Europe
Apr-10
Nov-10
Jun-11
Jan-12
Japan
Aug-12
Mar-13
Oct-13
May-14
Dec-14
Jul-15
Emerging
Feb-16
THE EUROPEAN QUOTED SECTOR IS LOSING GLOBAL RELEVANCE
Sep-16
Apr-17
Nov-17
69
JAPAN NOW GENERATES THE EQUIVALENT OF 50% OF EUROPEAN PROFITS
(MSCI Japan total 12m forward and reported earnings as % of MSCI Europe in USD)
60
40
Reported Earnings
30
% of Europe
20
10
-10
-20
Dec-86
Dec-88
Dec-90
Dec-92
Dec-94
Dec-95
Dec-96
Dec-97
Dec-99
Dec-01
Dec-03
Dec-05
Dec-07
Dec-08
Dec-10
Dec-12
Dec-14
Dec-16
Dec-85
Dec-87
Dec-89
Dec-91
Dec-93
Dec-98
Dec-00
Dec-02
Dec-04
Dec-06
Dec-09
Dec-11
Dec-13
Dec-15
Source: SG Cross Asset Research/Equity Quant, FactSet, IBES
70
Japan – seriously!
FUNDAMENTALLY JAPAN HAS BEEN OKAY – VALUATION WAS THE ISSUE
72
THE LONG ROAD TO NORMALISATION – 12M FORWARD PE BY REGION
73
MEDIAN JAPAN DIVIDEND YIELD IS SIMILAR TO THE US
Median company dividend yield by region
5.5
5.0
4.5
Japan
4.0 Europe
3.5 US
Median Dividend Yield (%)
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Dec-95
Dec-96
Dec-97
Dec-99
Dec-00
Dec-01
Dec-04
Dec-05
Dec-08
Dec-09
Dec-12
Dec-13
Dec-16
Dec-98
Dec-02
Dec-03
Dec-06
Dec-07
Dec-10
Dec-11
Dec-14
Dec-15
Source: SG Cross Asset Research/Equity Quant, FTSE, I/B/E/S, FactSet
Note: Past performance is not indicative of future performance. Portfolio presented assumes no transaction costs. For additional details on portfolio performance please contact us.
74
JAPAN HAS THE LOWEST PAYOUT RATIO
Dividend payout ratios by region
150
140
130
120
110
Payout ratio (%)
100
90
80
70
60
50
40
30
20
10
0
SWEDEN
NORWAY
UK
USA
HONG KONG
SPAIN
ITALY
AUSTRALIA
FRANCE
JAPAN
CANADA
DENMARK
SINGAPORE
GERMANY
FINLAND
NETHERLANDS
SWITZERLAND
Source: SG Cross Asset Research/Equity Quant, MSCI
75
JAPAN HAS MORE NET CASH BALANCES THAN OTHER REGIONS
Percentage of companies with a net cash balance (MSCI Indices)
50
% of companies net cash (%)
40
30
20
10
0
Denmark
France
Germany
Hong Kong
Sweden
United States
Spain
Australia
Switzerland
Italy
Japan
Singapore
Canada
United Kingdom
Netherlands
Source: SG Cross Asset Research/Equity Quant, MSCI, FactSet
76
SGQI JAPAN VS NIKKEI 225 YEN SENSITIVITY
77
SGQI JAPAN PERFORMANCE
Launch Date
78
CONCLUSIONS
• Central bank policies have resulted in record valuations
and record levels of corporate leverage – well done!
• US corporate sector is vulnerable; average corporate
profitability is weak and balance sheets are in a
dangerous state. US small caps could be the source of
the next market crisis.
• Central banks will not be able to hold back the wave of
balance sheet issues in 2018, as they couldn’t in 2017.
• Will still like Japan, the equity market is cheaper and less
leveraged than Europe or the US and now represents a
sensible long term investment proposition..
79
APPENDIX - DISCLAIMER
IMPORTANT DISCLAIMER: The information herein is not intended to be an offer to buy or sell, or a solicitation of an offer to buy or sell, any securities and has been obtained from, or is based upon, sources believed to
be reliable but is not guaranteed as to accuracy or completeness. Material contained in this report satisfies the regulatory provisions concerning independent investment research as defined in MiFID. Information
concerning conflicts of interest and SG’s management of such conflicts is contained in the SG’s Policies for Managing Conflicts of Interests in Connection with Investment Research which is available at
https://www.sgresearch.com/Content/Compliance/Compliance.aspx SG does, from time to time, deal, trade in, profit from, hold, act as market-makers or advisers, brokers or bankers in relation to the securities, or
derivatives thereof, of persons, firms or entities mentioned in this document and may be represented on the board of such persons, firms or entities. SG does, from time to time, act as a principal trader in equities or
debt securities that may be referred to in this report and may hold equity or debt securities positions. Employees of SG, or individuals connected to them, may from time to time have a position in or hold any of the
investments or related investments mentioned in this document. SG is under no obligation to disclose or take account of this document when advising or dealing with or on behalf of customers. The views of SG
reflected in this document may change without notice. In addition, SG may issue other reports that are inconsistent with, and reach different conclusions from, the information presented in this report and is under no
obligation to ensure that such other reports are brought to the attention of any recipient of this report. To the maximum extent possible at law, SG does not accept any liability whatsoever arising from the use of the
material or information contained herein. This research document is not intended for use by or targeted to retail customers. Should a retail customer obtain a copy of this report he/she should not base his/her
investment decisions solely on the basis of this document and must seek independent financial advice.
The financial instrument discussed in this report may not be suitable for all investors and investors must make their own informed decisions and seek their own advice regarding the appropriateness of investing in
financial instruments or implementing strategies discussed herein. The value of securities and financial instruments is subject to currency exchange rate fluctuation that may have a positive or negative effect on the
price of such securities or financial instruments, and investors in securities such as ADRs effectively assume this risk. SG does not provide any tax advice. Past performance is not necessarily a guide to future
performance. Estimates of future performance are based on assumptions that may not be realized. Investments in general, and derivatives in particular, involve numerous risks, including, among others, market,
counterparty default and liquidity risk. Trading in options involves additional risks and is not suitable for all investors. An option may become worthless by its expiration date, as it is a depreciating asset. Option
ownership could result in significant loss or gain, especially for options of unhedged positions. Prior to buying or selling an option, investors must review the "Characteristics and Risks of Standardized Options" at
http://www.optionsclearing.com/publications/risks/riskchap.1.jsp.
Notice to French Investors: This publication is issued in France by or through Société Générale ("SG") which is authorised and supervised by the Autorité de Contrôle Prudentiel and regulated by the Autorite des
Marches Financiers.
Notice to U.K. Investors: Société Générale is a French credit institution (bank) authorised by the Autorité de Contrôle Prudentiel (the French Prudential Control Authority) and the Prudential Regulation Authority and
subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the Prudential Regulation Authority, and regulation by the
Financial Conduct Authority are available from us on request.
Notice to Polish Investors: this document has been issued in Poland by Societe Generale S.A. Oddzial w Polsce (“the Branch”) with its registered office in Warsaw (Poland) at 111 Marszałkowska St. The Branch is
supervised by the Polish Financial Supervision Authority and the French ”Autorité de Contrôle Prudentiel”. This report is addressed to financial institutions only, as defined in the Act on trading in financial instruments. The
Branch certifies that this document has been elaborated with due dilligence and care.
Notice to U.S. Investors: For purposes of SEC Rule 15a-6, SG Americas Securities LLC (“SGAS”) takes responsibility for this research report. This report is intended for institutional investors only. Any U.S. person
wishing to discuss this report or effect transactions in any security discussed herein should do so with or through SGAS, a broker-dealer registered with the SEC and a member of FINRA, with its registered address at
245 Park Avenue, New York, NY, 10167. (212)-278-6000.
Notice to Canadian Investors: This document is for information purposes only and is intended for use by Permitted Clients, as defined under National Instrument 31-103, Accredited Investors, as defined under National
Instrument 45-106, Accredited Counterparties as defined under the Derivatives Act (Québec) and "Qualified Parties" as defined under the ASC, BCSC, SFSC and NBSC Orders
Notice to Singapore Investors: This document is provided in Singapore by or through Société Générale ("SG"), Singapore Branch and is provided only to accredited investors, expert investors and institutional investors,
as defined in Section 4A of the Securities and Futures Act, Cap. 289. Recipients of this document are to contact Société Générale, Singapore Branch in respect of any matters arising from, or in connection with, the
document. If you are an accredited investor or expert investor, please be informed that in SG's dealings with you, SG is relying on the following exemptions to the Financial Advisers Act, Cap. 110 (“FAA”): (1) the
exemption in Regulation 33 of the Financial Advisers Regulations (“FAR”), which exempts SG from complying with Section 25 of the FAA on disclosure of product information to clients; (2) the exemption set out in
Regulation 34 of the FAR, which exempts SG from complying with Section 27 of the FAA on recommendations; and (3) the exemption set out in Regulation 35 of the FAR, which exempts SG from complying with Section
36 of the FAA on disclosure of certain interests in securities.
Notice to Hong Kong Investors: This report is distributed in Hong Kong by Société Générale, Hong Kong Branch which is licensed by the Securities and Futures Commission of Hong Kong under the Securities and
Futures Ordinance (Chapter 571 of the Laws of Hong Kong) ("SFO"). This document does not constitute a solicitation or an offer of securities or an invitation to the public within the meaning of the SFO. This report is to
be circulated only to "professional investors" as defined in the SFO.
Notice to Japanese Investors: This publication is distributed in Japan by Societe Generale Securities (North Pacific) Ltd., Tokyo Branch, which is regulated by the Financial Services Agency of Japan. This document is
intended only for the Specified Investors, as defined by the Financial Instruments and Exchange Law in Japan and only for those people to whom it is sent directly by Societe Generale Securities (North Pacific) Ltd.,
Tokyo Branch, and under no circumstances should it be forwarded to any third party. The products mentioned in this report may not be eligible for sale in Japan and they may not be suitable for all types of investors.
Notice to Korean Investors: This report is distributed in Korea by SG Securities Korea Co., Ltd which is regulated by the Financial Supervisory Service and the Financial Services Commission.
Notice to Australian Investors: Societe Generale is exempt from the requirement to hold an Australian financial services licence (AFSL) under the Corporations Act 2001 (Cth) in respect of financial services, in reliance on
ASIC Class Order 03/8240, a copy of which may be obtained at the web site of the Australian Securities and Investments Commission, http://www.asic.gov.au. The class order exempts financial services providers with a
limited connection to Australia from the requirement to hold an AFSL where they provide financial services only to wholesale clients in Australia on certain conditions. Financial services provided by Societe Generale may
be regulated under foreign laws and regulatory requirements, which are different from the laws applying in Australia.
http://www.sgcib.com. Copyright: The Société Générale Group 2018. All rights reserved.
This publication may not be reproduced or redistributed in whole in part without the prior consent of SG or its affiliates.
80