Equity Research - Brazil

Thursday, October 1, 2009

Focus List

Strategy Upsides in Short Supply
For the month of October we are sticking to our strategy of favoring sectors and companies with greater exposure to the domestic market in our stock picking. On a year-to-date basis, the Ibovespa index is one of the best performers in the world, climbing 63.8% (+114.6% in USD terms), and at current levels we see limited upside for the market (our YE10 target for the Ibovespa is 67,000). We hold to our view that the global economy’s growth may take some time to return to pre-crisis levels, as current economic indicators still point to uncertain conclusions. On the other hand, the Brazilian economy continues to post encouraging indicators, leading our economists to raise the GDP growth estimate for 2010 by 50bps to 3.5%. Inflation is not currently an issue, although we expect interest rates to go up in 2010, most likely after the presidential election, which will take place in 2H10. Changes in the portfolio. For the month of October we have made only two changes compared to the previous month’s portfolio, having included BR Malls (BRML3) and São Martinho (SMTO3) and removed Açúcar Guarani (ACGU3) and ALL (ALLL11).

Company Top Picks - October Banco ABC Brasil BR Malls MMX NET OGX Oi Oper. Pão de Açúcar São Martinho TIM VisaNet

Ticker

Rating

ADTV 3m R$mn

Price Target Upside

P/E 2009 2010

EV/EBITDA 2009 2010

ABCB4 BRML3 MMXM3 NETC4 OGXP3 TMAR5 PCAR5 SMTO3 TCSL4 VNET3

Outperform Outperform Outperform Outperform Outperform Outperform Outperform Outperform Outperform Outperform

1.7 12.3 33.5 29.4 95.7 8.8 29.9 0.9 17.7 137.3

R$ 12.50 R$ 29.00 R$ 16.80 R$ 25.30 R$ 1,668.70 R$ 85.70 R$ 72.00 R$ 29.50 R$ 6.00 R$ 22.30

19.0% 38.8% 54.1% 22.8% 23.2% 47.3% 44.0% 77.7% 36.1% 26.8%

10.4 7.7 19.1 24.9 n.m n.m 16.1 16.2 144.3 121.2 6.9 5.5 20.4 15.4 14.9 18.1 87.8 12.8 16.4 13.9

14.3 nm 6.8 nm 3.5 8.7 7.6 3.5 10.2

12.2 74.9 6.0 nm 3.2 7.1 6.0 3.4 8.7

Source: Bloomberg, Bradesco Corretora estimates

Equity Analysts: Carlos Firetti, CFA
carlosfiretti@bradescobbi.com.br 55 11 2178 5363

Marcos Suzaki
marcos@bradescobbi.com.br 55 11 2178 5317

Chief Economist: Dalton Gardimam
dalton@bradescobbi.com.br 55 11 2178 4275

Bradesco Corretora – Av. Paulista, 1450 7º andar São Paulo, Brazil – 5511 3556 3001
Bradesco S.A. Corretora de Títulos e Valores Mobiliários (Bradesco Corretora) does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that Bradesco Corretora and its affiliates may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

For full disclaimer and definitions, please refer to the end of this report.

Equity Research – Brazil: Thursday, October 1, 2009

The Month Ahead – Mapping Fundamentals and Beyond
ACTIVITY: Clearly the most important figure on the activity front was GDP data for the second quarter of 2009, with growth of 7.8% (SAAR). Favorable formal employment numbers have come out (creation of 242k jobs in August) as well. Remuneration indicators in the labor market are not deteriorating as before (although some fatigue is still evident). Good economic figures continued with data from the monthly employment survey, which revealed an 8.1% unemployment rate for the month of August. However, positive results did not come exactly from occupation: the number of employed people was flat in both the MoM and YoY comparisons. Retail sales rose 5.9% YoY in July, with a 0.5% MoM increase, the third in a row, elevating 3-month moving average growth to +0.9% MoM (+0.7% MoM in June). We have not denied or ignored the improvement in activity indicators. The end of the Brazilian recession is indeed a reason for celebration, although growth momentum is one part of the equation; the other one is sustainability. Credit has picked up but credit demand is still faltering in some sectors. Our strongest concern right now is the removal of expressive stimuli in the global economy in 2010, which could create additional fatigue for the economy. All that said, we have revised our forecast for GDP growth in 2010 to 3.5% from 3%. INFLATION: Outright deflation in wholesale prices is over, but it is neither fair nor correct to say that inflation is a concern. The Central Bank’s Quarterly Inflation Report has not materially changed the inflation outlook. For the Bacen, IPCA inflation should be 4.2% in 2009 and 4.4% in 2010. The 4.6% inflation penciled out for 1Q11 was probably the trigger for markets becoming more nervous about interest rates. We have lower forecasts: 3.9% for 2009 and 4% for 2010. However, we have no disagreement with 2011 forecasts: 4.6%. Before the release of the Inflation Report we had imagined the Central Bank raising rates in late 2010, and we stick to that view. We are not yet seeing a hike in 1H10. FISCAL: The possibility of deducting investments corresponding to 0.94% of GDP from the current primary balance target, which effectively reduces the actual target, is an important precedent. This move ratifies the ongoing fiscal push, increases concerns about medium-term issues regarding fiscal finances, and gives room for interest rate futures to bid up (as we saw in late September). Although we share the view that the lower target will eventually lead to an increase in the debt-to-GDP ratio or not allow for a decrease as would be the case otherwise, the present conditions of public finances are extremely comfortable in terms of debt dynamics. This comes from the relief of lower rates. The interest burden is going to be approximately 4.8% of GDP in 2009, while it has averaged 8.5% in the last 10 years. There is plenty of room for this administration to use this maneuvering room in 2010. Debt is likely to remain stable or decline slightly in 2010-2011. BOP: In Jan-Aug 2009 the current account deficit reached US$9.5bn (1.2% of GDP). This is roughly 47% the size of the current account generated in the same period of 2008. We reiterate our view that there is not a major problem in the currency level (REER), since the overall structure of foreign exchange transactions is still highly unconvertible. Our point is that with more flexible, more open and freer FX transactions we would have better conditions to gauge the most appropriate path for

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Equity Research – Brazil: Thursday, October 1, 2009

the currency level. Current account deficits that remain very low, as is the case right now, or that are going to be relatively small, which is going to be the case next year, are not good arguments for major intervention in the currency or assertions that Brazil suffers from Dutch disease or some other malfunction in the currency. That said, it is important to differentiate this overall positive assessment about the BRL and the present dynamics of abundant flows. The BRL is probably reacting to extraordinary (as opposed to “normal”) flows. On the domestic front there is a great deal of equity operations in the pipeline, and a good number of fixed income instruments (bonds and debentures) to come to market as well, some of which with sizeable volumes. That combination of supply of domestic assets and still abundant liquidity motivated us to come up with a trading call for the BRL: while keeping the US$1.90/R$1 forecast for year-end, we now see the Brazilian currency moving to US$1.7/R$1 in the short term. GLOBAL: Housing indicators in the US have begun to stabilize, but new home sales are 70% off their peak. Leaders of the developed world pleading for everyone to keep stimuli in place is a perfect indication of the challenges of removing them at this stage. The global economy is held hostage by the fiscal and monetary stimuli implemented in 2008 and 2009. Our major concern is faulty credit markets (corporate credit flat or declining on a YoY basis in the US and Europe is extremely concerning). CPI inflation is not a problem (we are more worried about deflation and the impacts of debt spiral in the economy). China is trying harder and harder with ever lower marginal visible results (industrial production and exports), despite still “good” (and debatable) GDP numbers. The recovery is well on track, although a genuine recovery to sustainable growth levels will have to wait a little more. CONCLUSIONS/ECONOMY AND MARKETS EQUITY ENVIRONMENT. Valuations are dear, fund managers are talking more and more about this, and (forced?) migration to stocks with lower liquidity and relatively better valuations are happening not necessarily with money seeking these stocks with gusto. The rally is a reflection of loose monetary policies in a world that is improving. The flow’s momentum simply continues. There are numerous equity issues in the pipeline as well. INTEREST/BONDS/COPOM. Interest rates will go up in 2010. We have had, and maintain, this view. The point is timing of the first rate hike. We do not see this happening in the first quarter, and view the chances of it happening in 2Q10 are low. We initially imagined the hike happening in the last quarter of 2010. This is still likely since an initial move a couple of months before the presidential election in 2010 does not seem to be the most likely outcome. A benign inflation outlook reinforces this scenario. USD/BRL. The combination of inflows and bond/equity issues of good names has led us to a trading call for the BRL: while keeping the US$1.90/R$1 forecast for yearend, we now see the Brazilian currency moving to US$1.7/R$1 in the short term. Dalton Gardimam – 5511 2178 4275 – dalton@bradescobbi.com.br Denis Blum – 5511 2178 4224 – denis@bradescobbi.com.br

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Equity Research – Brazil: Thursday, October 1, 2009

Sector View
Figure 1: Sector Allocation for Ibovespa
Ibovespa 14.0% View Under Our Weight Ibovespa 12.5% Stocks Banco do Brasil Bradesco Itaú Unibanco BM&FBovespa Redecard VisaNet Ambev Minerva Perdigão Pão de Açúcar OGX Petrobras CSN Usiminas MMX Vale BR Malls Ticker BBAS3 BBDC4 ITUB4 BVMF3 RDCD3 VNET3 AMBV4 BEEF3 PRGA3 PCAR5 OGXP3 PETR4 CSNA3 USIM3 MMXM3 VALE5 BRML3 Our Weight Ibovespa 4.0% 5.0% 3.5% 2.5% 2.5% 3.1% 2.5% 1.0% 1.4% 4.0% 4.0% 15.0% 5.5% 5.5% 2.5% 14.5% 4.0%

Banks

Other Fin. Sector

6.3%

Over

8.1%

Consumer Goods

4.5%

Neutral

4.9%

Retail Oil Steel Mining Pulp and Paper Real Estate Aerospace Airlines Telecom - Fixed Telecom - Wireless Utilities

3.7% 18.8% 11.4% 18.0% 2.4% 3.4% 0.7% 1.3% 3.3% 1.7% 6.7%

Over Neutral Neutral Under Under Over Under Under Over Neutral Neutral

4.0% 19.0% 11.0% 17.0% 0.0% 4.0% 0.0% 0.0% 6.0% 2.0% 6.5%

Transports and Logistics Sugar and Ethanol Petrochemicals Others Total

1.3% 0.5% 0.9% 1.0% 100.0%

Over Over Under Under

2.0% 3.0% 0.0% 0.0% 100.0%

NET Oi Part. TIM Part. AES Tietê Tractebel Transmissão Pta. ALL Cosan

NETC4 TMAR5 TCSL4 GETI4 TBLE3 TRPL4 ALLL11 CSAN3

4.0% 2.0% 2.0% 2.5% 2.5% 1.5% 2.0% 3.0%

100.0%

Source: BM&F Bovespa and Bradesco Corretora

Figure 2: Sector Allocation for Ibx-50
Ibx-50 21.9% View Under Our Weight Ibx-50 Stocks 18.0% Banco do Brasil Bradesco Itaú Unibanco 6.0% BM&FBovespa Redecard VisaNet 6.5% Ambev Minerva Perdigão 3.0% Pão de Açúcar 28.0% OGX Petrobras 8.0% CSN Usiminas 16.0% MMX Vale 0.0% 1.5% BR Malls 0.0% 0.0% 2.5% NET Oi Part. 1.0% TIM Part. 5.0% AES Tietê Tractebel Transmissão Pta. 2.0% ALL 2.5% Cosan 0.0% 0.0% 100.0% Ticker BBAS3 BBDC4 ITUB4 BVMF3 RDCD3 VNET3 AMBV4 BEEF3 PRGA3 PCAR5 OGXP3 PETR4 CSNA3 USIM3 MMXM3 VALE5 BRML3 Our Weight Ibx-50 6.0% 7.0% 5.0% 2.0% 2.0% 2.0% 3.5% 1.0% 2.0% 3.0% 6.0% 22.0% 4.0% 4.0% 2.0% 14.0% 1.5%

Banks

Other Fin. Sector

4.8%

Over

Consumer Goods

6.1%

Neutral

Retail Oil Steel Mining Pulp and Paper Real Estate Aerospace Airlines Telecom - Fixed Telecom - Wireless Utilities

2.6% 26.3% 7.6% 17.5% 0.7% 1.3% 1.0% 0.4% 1.8% 1.2% 4.6%

Over Over Neutral Under Under Neutral Under Under Over Neutral Neutral

Transports and Logistics Sugar and Ethanol Petrochemicals Others Total

0.6% 0.3% 0.8% 0.4% 100.0%

Over Over Under Under

NETC4 TMAR5 TCSL4 GETI4 TBLE3 TRPL4 ALLL11 CSAN3

1.5% 1.0% 1.0% 2.0% 2.0% 1.0% 2.0% 2.5%

100.0%

Source: BM&F Bovespa and Bradesco Corretora

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Equity Research – Brazil: Thursday, October 1, 2009

Top Picks
Banco ABC Brasil (ABCB4) – ABC Brasil is currently our best bet to play the banking sector. We favor small banks with a strong presence in the corporate segment, in which opportunities for niche players like ABC Brasil have risen since the recent mergers of Itaú with Unibanco and Santander with ABN. Furthermore, the bank is already prepared and waiting for better timing to expand its operations in the SME segment, where there are major growth opportunities and higher return levels. BR Malls (BRML3) – We expect BR Malls shares to present good performance in the coming weeks as it has fallen short of the sector’s average, especially in the last month. We also believe the company will use ~R$600mn of its current ~R$1bn in cash to continue growing through acquisitions in the short term, increasing expected EBITDA and reducing its “premium” 10.9x EV/EBITDA10 multiple against the sector average of 9.8x. Moreover, we believe that the company’s results will continue to confirm our good perception of the sector, and is likely to maintain strong sales growth. In addition, the company has more liquidity compared to its peers. We have an Outperform rating for BRML3, with a R$29.00/share target price. MMX (MMXM3) – MMX’s expansion project is so promising that the company has considerable upside potential even taking into account the macroeconomic risks that still exist in China. We have a TP of R$14.1/share for the company, implying upside potential of 64%, even though we are assuming iron ore prices dropping 42% over the next three years. Moreover, there is the possibility of positive triggers in the short to medium term as the company closes a strategic agreement with Wisco, China’s second-largest steel mill, and as the construction of the Sudeste Port begins. However, fluctuations in the Chinese stock market could add some volatility to commodities stocks. NET (NETC4) – NET should gain good momentum with its 3Q09 results being published on October 21. In our view, the company should continue to improve its performance and grow as pay TV penetration increases in the country, with NET gaining the most on the back of its highly-competitive triple play bundles (TV + telephone + broadband). In addition, we believe the company will expand its crossselling efforts, increasing penetration of broadband customers in its own pay TV subscriber base. It is important to note that NETC4 has underperformed the market (+3.7% in September vs. +8.9% for Ibovespa) OGX (OGXP3) – OGX started its drilling campaign on August 16 in the BM-S-29 block (more specifically, the Abacate-1 prospect) and on September 17 began the Vesuvio BM-C-43 project. The company’s schedule for 2009 involves drilling six wells, with the announcement of results for four of them, in a process that will convert potential resources into proven reserves. In light of OGX’s team, the accredited certification company that revised the potential reserve studies and the general development of the company, we are optimistic about the success rate to be achieved and the enormous upside potential to be created with the discoveries.

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Equity Research – Brazil: Thursday, October 1, 2009

Oi (TMAR5) – We maintain our bet on Oi as a value play trading at low multiples (3.8x EV/EBITDA10E, vs. international peers trading at 5.1x), implying large upside, while also being a defensive bet in a more cautious scenario. In our view, the negative pressure on the company’s results due to the merger has already subsided, and the market should start looking forward to 2010 with synergies amounting to roughly R$1.0bn, besides a positive outcome from the startup of wireless operations in São Paulo state, which will permit the company to generate strong FCF (above 20%) that should be used to reduce debt (currently at 2.2x EBITDA 2010). Pão de Açúcar (PCAR5) – We have an Outperform rating for PCAR5 and a R$66.4 target price for YE09 on the back of: (i) potential value addition of R$750mn, or R$3.00 per share, due to synergies generated from combined operations with Ponto Frio; (ii) potential value addition from the group’s e-commerce business, which has already risen to second place in the Brazilian market and should reach R$904mn in sales in 2009 (we are evaluating it at R$1.115bn, or R$4.40 per share); and (iii) our valuation of the company’s real estate assets at R$2.603bn, which, discounting the present value of the additional lease expenses it would incur in case it sells its assets, is estimated at R$1.781bn, or R$7.00 per share. In addition, we see other hidden values, such as the group’s drugstores and gas stations, which we are not taking into account in our target price but nevertheless evaluate at R$88mn and between R$103mn and R$145mn, respectively. São Martinho (SMTO3) – Among the listed sugar & ethanol companies, São Martinho has the highest exposure to ethanol, whose prices were quite compressed recently. However, due to rainfalls and the normal cycle, ethanol prices have started to recover and we expect this trend to continue through April 2010. Under this scenario we expect the entire sector to benefit, although more so for São Martinho, which has greater exposure to the fuel and is leveraged by its own sugarcane production. TIM (TCSL4) – We believe TIM should continue to outperform Vivo considering that it is still trading at a discount that should become narrower, as we believe the company has a greater potential to improve margins and consequently profitability compared to Vivo. The company is in a turnaround phase, investing in its network and improving its customer base, focusing on the postpaid segment. Furthermore, synergies with Intelig, to be tapped only in 2010, should drive EBITDA margins upwards as the company significantly reduces its interconnection and leased-line expenses. TCSL4 is trading at 3.5x EV/EBITDA10E, lower than Vivo’s 4.0x. VisaNet (VNET3) – We believe the current valuations for VisaNet have already priced in most of the negative impact we expect from new regulations and the new competitive environment. The company has a strong long-term growth case in terms of volumes and strong competitive positioning that certainly makes it one of the dominant players in the sector. According to our numbers, VisaNet currently trades at 16.4x P/E 2009 and 13.9x P/E 2010.

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Equity Research – Brazil: Thursday, October 1, 2009 Figure 3: Top Picks for October

Company Banco ABC Brasil BR Malls MMX NET OGX Oi Oper. Pão de Açúcar São Martinho TIM VisaNet
Source: Economática and Bradesco Corretora

ABCB4 BRML3 MMXM3 NETC4 OGXP3 TMAR5 PCAR5 SMTO3 TCSL4 VNET3

Avg. 3m Vol. R$ million 1.7 12.3 33.5 29.4 95.7 8.8 29.9 0.9 17.7 137.3

Figure 4: Main Recommendations for October – Minimum Average Daily Volume of R$10mn

Company AmBev BR Malls MMX NET OGX Pão de Açúcar TIM VisaNet
Source: Economática and Bradesco Corretora

AMBV4 BRML3 MMXM3 NETC4 OGXP3 PCAR5 TCSL4 VNET3

Avg. 3m Vol. R$ million 41.2 12.3 33.5 33.5 29.4 95.7 17.7 137.3

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Equity Research – Brazil: Thursday, October 1, 2009

Performance of Top Picks
Our Performance in September
Figure 5: Top Picks’ Performance in September

Company Açúcar Guarani ALL Banco ABC Brasil MMX NET OGX Oi Oper. Pão de Açúcar TIM VisaNet Portfolio Ibovespa
Source: Economática and Bradesco Corretora

ACGU3 ALLL11 ABCB4 MMXM3 NETC4 OGXP3 TMAR5 PCAR5 TCSL4 VNET3 IBOV

Avg. 3m Vol. R$ million 6.1 49.9 1.7 33.5 29.4 95.7 8.8 29.9 17.7 137.3

Change% -0.5% 0.3% 11.5% 29.8% 3.9% 32.2% 12.6% 8.4% 11.4% 6.9% 11.6% 8.9%

Figure 6: Main Recommendations for September – Minimum Average Daily Volume of R$10mn

Company ALL AmBev MMX NET OGX Oi Oper. Pão de Açúcar TIM VisaNet Portfolio Ibovespa
Source: Economática and Bradesco Corretora

ALLL11 AMBV4 MMXM3 NETC4 OGXP3 TMAR5 PCAR5 TCSL4 VNET3 IBOV

Avg. 3m Vol. R$ million 49.9 41.2 33.5 29.4 95.7 8.8 29.9 17.7 137.3

Change% 0.3% 5.0% 29.8% 3.9% 32.2% 12.6% 8.4% 11.4% 6.9% 13.8% 8.9%

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Equity Research – Brazil: Thursday, October 1, 2009

Analyst Certification
Each analyst responsible for the preparation and content of this report hereby certifies, pursuant to SEC Regulation AC and applicable laws and regulations of other jurisdictions, that: (i) (ii) pursuant (i) (ii) (iii) (iv) the views expressed herein accurately and exclusively reflect his or her personal views and opinions about the subject company(ies) and its or their securities; that no part of their compensation was, is, or will be paid directly or indirectly, related to the specific recommendation or views expressed by that analyst in this report; and to Brazilian securities exchange commission (Comissão de Valores Mobiliários – CVM) Instruction 388/03: the recommendations indicated in this report solely and exclusively reflect his or her personal opinions and were prepared independently and autonomously, including in relation to Bradesco Corretora; he or she has no relation with the persons acting within the company(ies) analyzed in this report; Bradesco Corretora, for which he or she works, may be involved in the acquisition, sale or dealing of securities of the company(ies) analyzed in this report; he or she does not receive compensation for services provided and does not have commercial relations with the company(ies) analyzed in this report, or with individuals, legal entities, funds, trusts or estates that act representing the same interest as the company(ies). However, Bradesco Corretora may receive compensation for services provided or have commercial relations with the company(ies) analyzed in this report, or with individuals, legal entities, funds, trusts or estates that act representing the same interest as the company(ies); and his or her compensation is not linked to the pricing of any securities issued by the company(ies) analyzed in this report, or the proceeds of trades or financial operations conducted by Bradesco Corretora.

(v)

Important Disclosures Company-specific regulatory disclosures
x x 1 2 Bradesco Corretora and/or its affiliates beneficially own one percent or more of any class of common equity securities of the subject company(ies). This position reflects information available as of the business day prior to the date of this report; Bradesco Corretora and/or its affiliates have managed or co-managed a public or Rule 144A offering of the subject company’s(ies’) securities in the twelve months preceding the date of this report; Bradesco Corretora and/or its affiliates have received compensation for investment banking services from the subject company(ies) in the twelve months preceding the date of publication of the research report and/or expects to receive or intends to seek compensation for investment banking services from the subject company(ies) in the three months following the date of this report; Bradesco Corretora and/or its affiliates were making a market in the subject company’s(ies’) equity securities at the date of this report; Any other actual material conflict of interest of Bradesco Corretora and/or its affiliates known at the date of this report.

x

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Bradesco Corretora research ratings distribution
Rating Outperform Market Perform Underperform Under Review Restricted (1) (2) Definition Expected to outperform the Ibovespa by more than 10%. Expected to perform in the range of 10% above or below the Ibovespa. Expected to underperform the Ibovespa more than 10%. This indicates that both the target price and the rating are currently being revised. The analyst cannot express his/her views on the company. 10/1/09 Coverage¹ 59% 22% 10% 5% 4% Bradesco Corretora had 73 BR² 74% 88% 86% 100% 100% companies

Percentage of companies under coverage globally within this rating category. As of under coverage globally.

Percentage of companies within this rating category for which [investment banking] services were provided within the past 12 months.

Bradesco Corretora ratings
Bradesco Corretora ratings are constantly revised and any temporary inconsistencies between the upside potential that gave rise to any such rating and the upside potential in connection with the target price are at all times deliberate. The official rating shall prevail. Any differences between the rating and the target price may occur especially due to the analyst’s expectations to the effect that any short/medium term factors that cannot be priced-in yet might lead to inconsistencies between Bradeco Corretora valuation and the stock behavior. The factors Bradeco Corretora considered include, but are not limited to: Any expectations in connection with quarterly results, market conditions, ownership issues and any expectations involving mergers and acquisitions. The ratings reflect only the analyst’s expectation on the future performance of the relevant stock. A “Outperform” rating does not necessarily represent that the analyst approves of the company and its management whilst a “Underperform” rating does not necessarily means that the analyst has a negative view on the company. Within Bradeco Corretora coverage universe there are sound companies, with good fundamentals as per the market consensus, and fair priced stock, and would not be Bradeco Corretora investment pick.

Price target and rating history
Price target, rating history chart(s), valuation/method used to determine price target, and our policy for managing conflicts of interest in connection with investment research are available upon request. You may obtain this information by contacting your representative or by sending an email to bradescocorretora@infobradesco.com.br.

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Equity Research – Brazil: Thursday, October 1, 2009

Ad d ition al Disclosu res
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T his report is direc ted only at relev ant persons and m ust not be acted on or relied on by pers ons who are not relevant persons. Any inv estm ent o r inves tm ent ac tivity to which this report relates is available only to relevant pers ons and will be engaged i n only with relev ant persons . No public offer of any s ec urities to w hich this report relates is being made by Brades co UK or B radesco C orretora in the United Ki ngdom or els ewhere in the European Econom ic Area. U nited States: This report is dis tributed in the U nited States by Brades co Securities Inc. Bradesco Sec urities Inc ., a U .S. regis tered brok er-dealer and a wholly ow ned subsidiary of Banco Bradesco S.A., is a m ember of FINR A/SIPC . All U.S. rec ipients of this report wis hing to effec t trans ac tions in sec urities dis cuss ed should contact and plac e orders through Bradesco Securities Inc. at (212) 888-9141. Oth er C ou n tries: T his report, and the securities discussed herein, m ay not be eligible for dis tribution or sale in al l c ountries or to certain categories of investors. In general, this report may be distributed only to profes sional and institutional investors.

G en eral Disclosu res
1) T his report has been prepared solely by B rad esco C orreto ra and is being provided exclusively for inform ational purposes. The information, opini ons, es tim ates and projections c onstitute the judgment of the author as of the current date and are subject to m odifications without prior notice. Bradesco C orreto ra has no obligation to update, m odify or am end this report and inform the reader acc ordingly, except w hen term inating cov erage of the i ss uer 2) 3) of the sec urities disc ussed in this report. T his report, including the es ti mates and calc ulations of B rad esco Co rr eto ra , is based on publ icly av ailable inform ation that it consider reliable, but it do not repres ent it is accurate or c om plete, and should not be relied upon as s uc h. T his report is not an offer or a solicitati on for the purc hase or sale of any financ ial instrum ent. It is not intended to provide personal inves tm ent advice and it does not take into acc ount the s pecific investm ent obj ectives, financial situation and the partic ular needs of any sp ecific pers on who may receive this report. Investors s hould s eek financial advi ce regarding the appropriateness of investing in any s ecurities, other investm ent or inves tm ent s trategies discu ss ed or recom m ended i n this report and should understand that statem ents regarding future prospects m ay not be realiz ed. Investors should no te that inc ome from securities or other inv estm ents, if any, referred to in this report may fluctuate and that price or value of such s ecurities and investm ents m ay rise or fall. Acc ordingly, inv estors m ay rec eive back less than originally i nves ted. P ast perform ance is not neces sari ly a guide to future perform ance. Brad esco C orreto ra and its affiliates do not accept responsibili ty for any direc t or indirect loss arising due to us e of this report. Inv estors s hould c onsider w hether any advic e or recom m endation in this res earch is s uitable for their particular circums tanc es and, if appropriate, s eek profes sional advice, including tax advice. Exc hange rate mov ements could hav e adverse effects on the v alue or price of, or incom e 5) deriv ed from , certain investm ents. B rad esco Co rretor a’s and its affiliates’ s alespeople, traders and other profess ionals may provide oral or written mark et comm entary or trading s trategies to their clients and their proprietary trading desk s that reflec t opinions that are contrary to the opinion exp res sed in this report. Suc h m arket c om mentary or trading strategies reflect the different tim e fram es, assum pti ons, view s and analytical m ethods of the persons who prepared them, and B rad esco C orreto ra and its affiliates are under no obligation to ens ure that suc h m arket c omm entary or trading strategies are brought to the attention 6) 7) of any rec ipient of this report. F rom tim e to tim e, B rad esco C orreto ra or its affiliates and offic ers, directors and em ployees, not including its analy sts m ay, to the ex tent permitted by law , hold long or short pos itions, or otherw ise be interes ted in trans actions in ass ets directly or indirectly related to this report. N on-US research analy sts w ho have prepared this report are not registered or qualified as res earch analysts w ith F IN RA but instead have satis fied the regis tration and qualifica tion requirements or other research-related standards of a non-U S ju ri sdiction.

4)

Any additional inform ation m ay be obtained by contacting y our representativ e or by se nding an email to bradescocorretora@infobrades co.c om .br No p ortio n o f th is do cum ent may be (i) co pied, ph oto cop ied o r d up licated in any fo rm, or b y an y mean s, or (ii) redistribu ted witho ut prio r co nsen t from Bradesco Co rretora.

10

Bradesco Corretora Research Team
Sectors
Economics

Analysts
Dalton Gardimam (Chief Economist) Denis Blum
55 11 2178 4275 dalton@bradescobbi.com.br 55 11 2178 4224 denis@bradescobbi.com.br

Associates

Strategy, Banking, Insurance and Financial Services

Carlos Firetti, CFA (Head of Research)

55 11 2178 5363 carlosfiretti@bradescobbi.com.br

Marcos Suzaki Rafael Frade

55 11 2178 5317 marcos@bradescobbi.com.br 55 11 2178 4056 rafaelf@bradescobbi.com.br 55 11 2178 5310 bvarella@bradescobbi.com.br 55 11 2178 5329 alessandrotm@bradescobbi.com.br 55 11 2178 5324 pecanha@bradescobbi.com.br

Oil & Gas, Petrochemicals and Sugar & Ethanol

Auro Rozenbaum

55 11 2178 5315 auro@bradescobbi.com.br

Bruno Varella Alessandro Mady

Transportation, Logistics, Malls and Small Caps Consumer Goods and Retail

Edigimar Maximiliano

55 11 2178 5327 maximiliano@bradescobbi.com.br

Luiz Peçanha

Fabio Monteiro

55 11 2178 5318 fabio@bradescobbi.com.br

Ricardo Boiati Rodrigo Santoro

55 11 2178 5326 rboiati@bradescobbi.com.br 55 11 2178 4276 rodrigo@bradescobbi.com.br 55 11 2178 4274 vpini@bradescobbi.com.br 55 11 2178 4276 rodrigo@bradescobbi.com.br 55 11 2178 5321 luisazevedo@bradescobbi.com.br 55 11 2178 4273 marcelo.sa@bradescobbi.com.br 55 11 2178 4272 gina@bradescobbi.com.br 55 11 2178 5329 alessandrotm@bradescobbi.com.br

Telecom, Media and Technology

Luis Azevedo

55 11 2178 5321 luisazevedo@bradescobbi.com.br

Vitor Pini Rodrigo Santoro

Education Electric Utilities, Water & Sewage Steel, Mining, Pulp & Paper

Vitor Pini Vladimir Pinto Raphael Biderman

55 11 2178 4274 vpini@bradescobbi.com.br 55 11 2178 5323 vladimir.pinto@bradescobbi.com.br 55 11 2178 5313 rbiderman@bradescobbi.com.br

Luis Azevedo Marcelo Sá Gina Montone Alessandro Mady

Real State Fixed Income Individual Investors

André Rocha Altair Pereira Jose Francisco Cataldo

55 11 2178 4223 andre.rocha@bradescobbi.com.br 55 11 2178 4279 altair@bradescobbi.com.br 55 11 2178 5319 cataldo@bradescobbi.com.br

Nathalie Aron Nathalie Aron

55 11 2178 4225 nathalie@bradescobbi.com.br 55 11 2178 4225 nathalie@bradescobbi.com.br

Institutional Sales Team
Bradesco Corretora CTVM S.A. – São Paulo Sales – 55 11 3556 3001
João Saldanha, CFA José Arvelos Juvenal Neves
saldanha@bradescobbi.com.br arvelos@bradescobbi.com.br juvenal@bradescobbi.com.br

Bradesco Securities, Inc. – New York FINRA/SIPC Member Sales – 01 212 888 9141
Marcelo Cabral Alison Kulach Vikram Kapur Jason Myers
mcabral@bradescosecurities.com akulach@bradescosecurities.com vic@bradescosecurities.com jason@bradescosecurities.com

Sales - Fixed Income – 01 212 888 9141 Sales Trading – 55 11 3556 3001
Adilson dos Santos
5900.adilson@bradesco.com.br

Shinichiro Fukui

shin@bradescosecurities.com

Sales Trading – 01 212 888 9141 Sales - Fixed Income - 55 11 2178 6959
Ana Carolina Quadros Fernanda Weber Bratz
carolina.quadros@bradescobbi.com.br fernanda@bradescobbi.com.br

Alec Cunningham Robert Vespa

alec@bradescosecurities.com robert@bradescosecurities.com

Sales - Local Fixed Income - 55 11 2178 4419
Dauro Zaltman Denise Chicuta Keite Bianconi
dauro@bradescobbi.com.br denise.chicuta@bradescobbi.com.br keite@bradescobbi.com.br

Bradesco Securities UK, Ltd Sales – 44 (0)203 178 4170
Jeffrey Noble Victor Cortes Robert Hulme
jnoble@bradescosecurities.com victor@bradescosecurities.com rhulme@bradescosecurities.com

Av. Paulista, 1450 7º andar CEP: 01310-917 São Paulo – SP Brazil