10 May 2024
Weekly Market View
A triple top in rates?
Risk assets have rebounded this month as concerns about another Fed rate hike eased. The third failed attempt by the policy-sensitive US 2-year government bond yield to break above 5% over the past year could be a significant signal.
It suggests markets agree with the Fed view that the next policy change, whenever that happens, is likely to be a rate cut, rather than a rate hike. Money markets are now pricing a 90% chance the Fed first cuts in September.
Strong corporate earnings beats, upward revisions to 2024-25 US earnings estimates and a softer-than-expected US job market report have also helped revive risk sentiment.
There is one near-term hurdle to cross for the risk-on rally to sustain – next week’s US consumer inflation data.
If the data confirms inflation has started to cool again, we see scope for this year’s outperformance in equities over bonds and cash to extend and US stocks to break above its March all-time high.
What are the key catalysts that could sustain the equity rally in China?
Do you see value in China USD bonds amid the recent rebound in China equities?
Do you expect continued CHF weakness, despite sticky Swiss inflation?
Charts of the week: Was that the peak?
A peak in US short-term rates would be positive for equities, given the positive stock-bond correlation
US 2-year and 10-year bond yields and recent peak levels
Rolling 52-week correlation between US stock and bond return
Source: Bloomberg, Standard Chartered
Editorial
A triple top in rates?
Risk assets have rebounded this month as concerns about another Fed rate hike eased. The third failed attempt by the policy-sensitive US 2-year government bond yield to decisively rise above 5% over the past year could be a significant signal. It suggests markets agree with the Fed view that the next policy change, whenever that happens, is likely to be a rate cut, rather than a rate hike. This is because bond yields typically peak around the peak in Fed policy rates. Money markets are now pricing a 90% chance the Fed first cuts in September. Strong corporate earnings beats, upward revisions to 2024-25 US earnings estimates and a softer-than-expected US job market report have also helped revive risk sentiment.
There is one near-term hurdle to cross for the risk-on rally to sustain – next week’s US consumer inflation data. If the data confirms consensus estimates that inflation has started to cool again after Q1’s rebound, we see scope for this year’s outperformance in equities over bonds and cash to extend and US stocks to break above its March all-time high. Nevertheless, there is an opportunity for those underinvested in bonds to add exposure to high quality bonds as they’re likely to outperform equities if the job market deteriorates sharply.
Softer US data: Last week’s softer-than-expected jobs report suggests the labour market is cooling. The slowdown in monthly job creation in April to 175,000 and a rise in the unemployment rate to 3.9% were backed up by falling job vacancy and hiring rates and a rise in initial jobless claims to a 9-month high. Average weekly hours worked and average hourly earnings growth also slowed. A downturn in US manufacturing and services sector activity (ISM PMIs), especially in new orders and employment, also point to labour market softness. These indicators point to a slowdown ahead in US consumption, a key driver of US growth in the post-pandemic era.
Peak in inflation? Fed officials would want to see inflation sustainably easing back to 0.2% m/m or below for a few months before they consider rate cuts (April’s CPI data is due next week; consensus for core inflation: 0.3% m/m vs. 0.4% in March). The key uncertainty is around shelter inflation which remains elevated and sticky, partly due to a boost in population growth from immigration amid a structurally tight housing market. We expect shelter inflation to cool in H2 as lagged official data catches up with falling market rents. A cooling job market should help ease wage inflation in the coming quarters.
Fed reaction: While the Fed is keenly watching inflation, we believe it is likely to be equally sensitive to a slowdown in the job market. For now, a sustained pace of monthly job creation of around 175,000 should keep the unemployment rate stable. However, any further rise in jobless claims is likely to push up the jobless rate above the Fed’s 4% long-term target, triggering several time-tested indicators of a recession. Hence, we believe the Fed will start to cut rates in Q3 to support growth.
Investment implications: Further confirmation of the peak in bond yields is likely to extend equity market’s outperformance over bonds and cash in the near term. US stock-bond correlation remains positive i.e., lower bond yields continue to support equities, underlining the current ‘goldilocks’ environment of a not-too-hot-not-too-cold economy. The key markers to watch are: i) any persistence in inflation, as that could revive concerns about Fed rate hikes (2-year rates could decisively break above 5% in this scenario); and ii) any sharp deterioration in the job market (leading to a drop in the 10-year bond yield decisively below December’s low of around 3.8%).
For now, all our quantitative models are pointing to continuation of the risk-on rally, although the latest downturn in the ISM manufacturing PMI data has toned down the models’ bullish bias. Technical charts point to further upside in S&P500 index towards next key resistance – the all-time high of 5264.85.
The weekly macro balance sheet
Our weekly net assessment: On balance, we see the past week’s data and policy as neutral for risk assets in the near term
(+) factor: Recovering Euro area retail sales, investor confidence
(-) factor: Soft US payrolls, ISM services, weak loan demand
US services sector activity slowed more than expected in April, with employment component contracting and new orders slowing sharply
US ISM services PMI, including new orders and employment components
A revival in Euro area retail sales extends a stream of positive data surprises recently and explains the upturn in investor confidence
Euro area retail sales, Citi Economic Surprise index and Sentix Investor Confidence index
China’s exports and imports rose more than expected, mirroring an upturn in global trade and manufacturing activity
China’s export and import growth
Top client questions
What are the key catalysts that could sustain the equity rally in China?
The MSCI China index has gained over 10% since 19 April, led by the real estate (+23%), communication services (+17%) and consumer discretionary (+14%) sectors. We believe Chinese equities have been benefitting from a global rotation of funds from the US. It was also supported by 25 consecutive days of positive net inflows from Southbound trading (Mainland Chinese investors buying Hong Kong equities). Investors’ positioning on MSCI China is still relatively light. Valuations continue to be cheap at 10.3x 12m forward P/E, which remains below the long-term average.
In the coming week, Q1 24 earnings from widely held Chinese internet companies will be in focus. On the positive side, further cash return to shareholders via buybacks or dividends could be an upside catalyst. On the flip side, 2024 earnings growth estimates for MSCI China has been revised down to 11.3%, from 15.9% at the start of the year. We believe there will be a short-term tactical opportunity in Chinese equities once the Hang Seng Index corrects to the 17,800 level. For a longer-term sustainable uptrend in Chinese equities, the earnings revision would have to stabilise or turn positive. We prefer exposure to consumption-oriented sectors in China, such as communication services, consumer discretionary and technology.
— Jason Wong, Equity Analyst
China corporate earnings likely need to stabilise in order for equity gains to sustain long-term
Consensus 2024 earnings growth estimate for MSCI China index
Do you see value in China USD bonds amid the recent rebound in Chinese equities?
The recent rebound in Chinese equities raises the question: will the positive sentiment spill over to Asia USD bonds? We believe this will be challenging. Valuation indicators suggest that Chinese equities have been undervalued for a significant period, in contrast to China USD bonds, where the yield premium is currently at expensive levels relative to its own history. Additionally, the yield premium is at the tight end of its historical range relative to Developed Market (DM) peers, limiting the potential for meaningful spread compression.
That said, we still see some value in China USD bonds for two main reasons. Firstly, despite the tight yield premium, nominal yields continue to look attractive due to elevated government bond yields. Secondly, we believe there are relative value opportunities within the High Yield (HY) space. In our view, fundamentals in sectors such as industrials and financials are strong despite a still-challenging outlook for the property sector. Given this balanced risk-reward profile, we believe a Neutral allocation to Asia USD bonds is warranted, with a preference for HY bonds over Investment Grade (IG).
— Cedric Lam, Senior Investment Strategist
China USD bond valuations are high relative to Developed Market peers
China USD – DM bond yield premium (Apr 2010 to date)
Top client questions (cont’d)
What is the outlook for UK equities?
The strong performance of UK equities in recent weeks can be largely attributed to the rally in the healthcare sector. Overall, we retain a Neutral stance on UK equities and expect the region to perform in line with global equities in the next 12 months. Valuations remain appealing, with the MSCI UK index trading at a 12m forward P/E of 12x. This is still below its historical average, despite a modest rerating this year. UK equities’ defensive nature and the market’s value bias can also help the market weather any unexpected economic downturn and a higher-for-longer yield environment.
That said, we remain cautious over the UK’s subdued EPS growth of 2% in 2024 – this is well below consensus for global equities and other major DMs, including the US (11%) and Japan (10%).
Looking ahead, we continue to see opportunities to stay invested in the UK via a barbell strategy of being Overweight the energy and healthcare sectors. We are also bullish on energy prices, given subdued supply amid geopolitical tensions and strong demand. The healthcare sector provides secular growth exposure, with expected EPS growth of 7% in 2024 – the fourth highest among major sectors.
— Michelle Kam, Investment Strategist
What is the view on industrial metals and material stocks?
Industrial metals have been strong in recent weeks; specifically, copper reached a two-year high, with over 14% gains last month. There are a few factors that powered this move:
- Global manufacturing activity has begun to stabilise, as evidenced by the improving manufacturing PMI and new orders data across some major economies (though US PMIs fell).
- China is a major source of demand for most industrial metals. Its share of global copper consumption was 60% in 2023. The firming of growth momentum in China boosted industrial metals.
- Inventories remain tight for some industrial metals due to supply disruptions from mine closures.
The use of copper in electrification trends argues for a positive structural outlook. However, our technical indicator is now pointing to overbought conditions, implying limited gains in the near term.
Rebounding industrial metal prices led us to upgrade our view on materials sector equities from Underweight to Neutral in our last Global Market Outlook. The announcement of a large hostile takeover in the mining sector also highlights the strategic importance of copper. However, we expect global growth to slow in H2, softening demand for commodities. Hence, we expect material stocks to perform in line with the broader market over the next 6-12 months.
— Fook Hien Yap, Senior Investment Strategist
— Zhong Liang Han, CFA, Investment Strategist
UK equities remain inexpensive vs. history
MSCI UK 12m forward P/E ratio
Global manufacturing activity has begun to stabilise, supporting demand for industrial metals
Global manufacturing PMI
Improvement in global manufacturing activity has supported the outperformance of material stocks
Global manufacturing PMI and relative performance of the global materials sector vs. the broader market
Top client questions (cont’d)
Do you expect continued CHF weakness, despite sticky Swiss inflation data?
Swiss annual inflation rose to 1.4% in April 2024, above market expectations of 1.1%. This lowered market expectations of another SNB rate cut at their next meeting in June. The market is currently pricing in a total cut of 36bps in 2024. Moreover, the SNB usually uses CHF purchases as part of its policy to control imported inflation. Swiss foreign reserves have gradually rebounded from a seven-year low over the past few months. Therefore, the market is also inferring that the SNB is no longer supporting the currency, adding further downward pressure on the CHF.
Meanwhile in the US, until April, investors were pushing back the timing of the first rate cut amid sticky inflation. However, recent data has been mixed – the labour market remains soft, and the manufacturing sector contracted. This may limit the extent to which the greenback strengthens.
Hence, USD/CHF is likely to consolidate with a bullish bias in the next three months. Technically, the pair has been trading in an ascending channel since the start of the year. We see the October 2023 and April 2024 highs of 0.9200-0.9250 acting as the near-term resistance zone.
— Iris Yuen, Investment Strategist
Swiss foreign reserves have gradually rebounded, adding pressure on the CHF
CHF NEER* and SNB foreign reserves (inverted)
Market performance summary*
*Performance in USD terms unless otherwise stated, 2024 YTD performance from 31 December 2023 to 09 May 2024; 1-week period: 02 May 2024 to 09 May 2024
Our 12-month asset class views at a glance
Economic and market calendar
The US 10-year yield has next interim support at 4.43%
Technical indicators for key markets as on 9 May close
Investor diversity has normalised across asset classes
Our proprietary market diversity indicators as of 9 May close
Disclosure
This document is confidential and may also be privileged. If you are not the intended recipient, please destroy all copies and notify the sender immediately. This document is being distributed for general information only and is subject to the relevant disclaimers available at our Standard Chartered website under Regulatory disclosures. It is not and does not constitute research material, independent research, an offer, recommendation or solicitation to enter into any transaction or adopt any hedging, trading or investment strategy, in relation to any securities or other financial instruments. This document is for general evaluation only. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person or class of persons and it has not been prepared for any particular person or class of persons. You should not rely on any contents of this document in making any investment decisions. Before making any investment, you should carefully read the relevant offering documents and seek independent legal, tax and regulatory advice. In particular, we recommend you to seek advice regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs, before you make a commitment to purchase the investment product. Opinions, projections and estimates are solely those of SC at the date of this document and subject to change without notice. Past performance is not indicative of future results and no representation or warranty is made regarding future performance. The value of investments, and the income from them, can go down as well as up, and you may not recover the amount of your original investment. You are not certain to make a profit and may lose money. Any forecast contained herein as to likely future movements in rates or prices or likely future events or occurrences constitutes an opinion only and is not indicative of actual future movements in rates or prices or actual future events or occurrences (as the case may be). This document must not be forwarded or otherwise made available to any other person without the express written consent of the Standard Chartered Group (as defined below). Standard Chartered Bank is incorporated in England with limited liability by Royal Charter 1853 Reference Number ZC18. The Principal Office of the Company is situated in England at 1 Basinghall Avenue, London, EC2V 5DD. Standard Chartered Bank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. Standard Chartered PLC, the ultimate parent company of Standard Chartered Bank, together with its subsidiaries and affiliates (including each branch or representative office), form the Standard Chartered Group. Standard Chartered Private Bank is the private banking division of Standard Chartered. Private banking activities may be carried out internationally by different legal entities and affiliates within the Standard Chartered Group (each an “SC Group Entity”) according to local regulatory requirements. Not all products and services are provided by all branches, subsidiaries and affiliates within the Standard Chartered Group. Some of the SC Group Entities only act as representatives of Standard Chartered Private Bank and may not be able to offer products and services or offer advice to clients.
Copyright © 2024, Accounting Research & Analytics, LLC d/b/a CFRA (and its affiliates, as applicable). Reproduction of content provided by CFRA in any form is prohibited except with the prior written permission of CFRA. CFRA content is not investment advice and a reference to or observation concerning a security or investment provided in the CFRA SERVICES is not a recommendation to buy, sell or hold such investment or security or make any other investment decisions. The CFRA content contains opinions of CFRA based upon publicly-available information that CFRA believes to be reliable and the opinions are subject to change without notice. This analysis has not been submitted to, nor received approval from, the United States Securities and Exchange Commission or any other regulatory body. While CFRA exercised due care in compiling this analysis, CFRA, ITS THIRD-PARTY SUPPLIERS, AND ALL RELATED ENTITIES SPECIFICALLY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, to the full extent permitted by law, regarding the accuracy, completeness, or usefulness of this information and assumes no liability with respect to the consequences of relying on this information for investment or other purposes. No content provided by CFRA (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of CFRA, and such content shall not be used for any unlawful or unauthorized purposes. CFRA and any third-party providers, as well as their directors, officers, shareholders, employees or agents do not guarantee the accuracy, completeness, timeliness or availability of such content. In no event shall CFRA, its affiliates, or their third-party suppliers be liable for any direct, indirect, special, or consequential damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with a subscriber’s, subscriber’s customer’s, or other’s use of CFRA’s content.
Market Abuse Regulation (MAR) Disclaimer
Banking activities may be carried out internationally by different branches, subsidiaries and affiliates within the Standard Chartered Group according to local regulatory requirements. Opinions may contain outright “buy”, “sell”, “hold” or other opinions. The time horizon of this opinion is dependent on prevailing market conditions and there is no planned frequency for updates to the opinion. This opinion is not independent of Standard Chartered Group’s trading strategies or positions. Standard Chartered Group and/or its affiliates or its respective officers, directors, employee benefit programmes or employees, including persons involved in the preparation or issuance of this document may at any time, to the extent permitted by applicable law and/or regulation, be long or short any securities or financial instruments referred to in this document or have material interest in any such securities or related investments. Therefore, it is possible, and you should assume, that Standard Chartered Group has a material interest in one or more of the financial instruments mentioned herein. Please refer to our Standard Chartered website under Regulatory disclosures for more detailed disclosures, including past opinions/ recommendations in the last 12 months and conflict of interests, as well as disclaimers. A covering strategist may have a financial interest in the debt or equity securities of this company/issuer. This document must not be forwarded or otherwise made available to any other person without the express written consent of Standard Chartered Group.
Sustainable Investments
Any ESG data used or referred to has been provided by Morningstar, Sustainalytics, MSCI or Bloomberg. Refer to 1) Morningstar website under Sustainable Investing, 2) Sustainalytics website under ESG Risk Ratings, 3) MCSI website under ESG Business Involvement Screening Research and 4) Bloomberg green, social & sustainability bonds guide for more information. The ESG data is as at the date of publication based on data provided, is for informational purpose only and is not warranted to be complete, timely, accurate or suitable for a particular purpose, and it may be subject to change. Sustainable Investments (SI): This refers to funds that have been classified as ‘Sustainable Investments’ by Morningstar. SI funds have explicitly stated in their prospectus and regulatory filings that they either incorporate ESG factors into the investment process or have a thematic focus on the environment, gender diversity, low carbon, renewable energy, water or community development. For equity, it refers to shares/stocks issued by companies with Sustainalytics ESG Risk Rating of Low/Negligible. For bonds, it refers to debt instruments issued by issuers with Sustainalytics ESG Risk Rating of Low/Negligible, and/or those being certified green, social, sustainable bonds by Bloomberg. For structured products, it refers to products that are issued by any issuer who has a Sustainable Finance framework that aligns with Standard Chartered’s Green and Sustainable Product Framework, with underlying assets that are part of the Sustainable Investment universe or separately approved by Standard Chartered’s Sustainable Finance Governance Committee.
Country/Market Specific Disclosures
Botswana: This document is being distributed in Botswana by, and is attributable to, Standard Chartered Bank Botswana Limited which is a financial institution licensed under the Section 6 of the Banking Act CAP 46.04 and is listed in the Botswana Stock Exchange. Brunei Darussalam: This document is being distributed in Brunei Darussalam by, and is attributable to, Standard Chartered Bank (Brunei Branch) | Registration Number RFC/61 and Standard Chartered Securities (B) Sdn Bhd | Registration Number RC20001003. Standard Chartered Bank is incorporated in England with limited liability by Royal Charter 1853 Reference Number ZC18. Standard Chartered Securities (B) Sdn Bhd is a limited liability company registered with the Registry of Companies with Registration Number RC20001003 and licensed by Brunei Darussalam Central Bank as a Capital Markets Service License Holder with License Number BDCB/R/CMU/S3-CL and it is authorised to conduct Islamic investment business through an Islamic window. China Mainland: This document is being distributed in China by, and is attributable to, Standard Chartered Bank (China) Limited which is mainly regulated by National Financial Regulatory Administration (NFRA), State Administration of Foreign Exchange (SAFE), and People’s Bank of China (PBOC). Hong Kong: In Hong Kong, this document, except for any portion advising on or facilitating any decision on futures contracts trading, is distributed by Standard Chartered Bank (Hong Kong) Limited (“SCBHK”), a subsidiary of Standard Chartered PLC. SCBHK has its registered address at 32/F, Standard Chartered Bank Building, 4-4A Des Voeux Road Central, Hong Kong and is regulated by the Hong Kong Monetary Authority and registered with the Securities and Futures Commission (“SFC”) to carry on Type 1 (dealing in securities), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activity under the Securities and Futures Ordinance (Cap. 571) (“SFO”) (CE No. AJI614). The contents of this document have not been reviewed by any regulatory authority in Hong Kong and you are advised to exercise caution in relation to any offer set out herein. If you are in doubt about any of the contents of this document, you should obtain independent professional advice. Any product named herein may not be offered or sold in Hong Kong by means of any document at any time other than to “professional investors” as defined in the SFO and any rules made under that ordinance. In addition, this document may not be issued or possessed for the purposes of issue, whether in Hong Kong or elsewhere, and any interests may not be disposed of, to any person unless such person is outside Hong Kong or is a “professional investor” as defined in the SFO and any rules made under that ordinance, or as otherwise may be permitted by that ordinance. In Hong Kong, Standard Chartered Private Bank is the private banking division of SCBHK, a subsidiary of Standard Chartered PLC. Ghana: Standard Chartered Bank Ghana Limited accepts no liability and will not be liable for any loss or damage arising directly or indirectly (including special, incidental or consequential loss or damage) from your use of these documents. Past performance is not indicative of future results and no representation or warranty is made regarding future performance. You should seek advice from a financial adviser on the suitability of an investment for you, taking into account these factors before making a commitment to invest in an investment. To unsubscribe from receiving further updates, please send an email to feedback.ghana@sc.com. Please do not reply to this email. Call our Priority Banking on 0302610750 for any questions or service queries. You are advised not to send any confidential and/or important information to Standard Chartered via e-mail, as Standard Chartered makes no representations or warranties as to the security or accuracy of any information transmitted via e-mail. Standard Chartered shall not be responsible for any loss or damage suffered by you arising from your decision to use e-mail to communicate with the Bank. India: This document is being distributed in India by Standard Chartered in its capacity as a distributor of mutual funds and referrer of any other third party financial products. Standard Chartered does not offer any ‘Investment Advice’ as defined in the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013 or otherwise. Services/products related securities business offered by Standard Charted are not intended for any person, who is a resident of any jurisdiction, the laws of which imposes prohibition on soliciting the securities business in that jurisdiction without going through the registration requirements and/or prohibit the use of any information contained in this document. Indonesia: This document is being distributed in Indonesia by Standard Chartered Bank, Indonesia branch, which is a financial institution licensed, registered and supervised by Otoritas Jasa Keuangan (Financial Service Authority). Jersey: In Jersey, Standard Chartered Private Bank is the Registered Business Name of the Jersey Branch of Standard Chartered Bank. The Jersey Branch of Standard Chartered Bank is regulated by the Jersey Financial Services Commission. Copies of the latest audited accounts of Standard Chartered Bank are available from its principal place of business in Jersey: PO Box 80, 15 Castle Street, St Helier, Jersey JE4 8PT. Standard Chartered Bank is incorporated in England with limited liability by Royal Charter in 1853 Reference Number ZC 18. The Principal Office of the Company is situated in England at 1 Basinghall Avenue, London, EC2V 5DD. Standard Chartered Bank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. The Jersey Branch of Standard Chartered Bank is also an authorised financial services provider under license number 44946 issued by the Financial Sector Conduct Authority of the Republic of South Africa. Jersey is not part of the United Kingdom and all business transacted with Standard Chartered Bank, Jersey Branch and other SC Group Entity outside of the United Kingdom, are not subject to some or any of the investor protection and compensation schemes available under United Kingdom law. Kenya: This document is being distributed in Kenya by and is attributable to Standard Chartered Bank Kenya Limited. Investment Products and Services are distributed by Standard Chartered Investment Services Limited, a wholly owned subsidiary of Standard Chartered Bank Kenya Limited that is licensed by the Capital Markets Authority in Kenya, as a Fund Manager. Standard Chartered Bank Kenya Limited is regulated by the Central Bank of Kenya. Malaysia: This document is being distributed in Malaysia by Standard Chartered Bank Malaysia Berhad (“SCBMB”). Recipients in Malaysia should contact SCBMB in relation to any matters arising from, or in connection with, this document. This document has not been reviewed by the Securities Commission Malaysia. The product lodgement, registration, submission or approval by the Securities Commission of Malaysia does not amount to nor indicate recommendation or endorsement of the product, service or promotional activity. Investment products are not deposits and are not obligations of, not guaranteed by, and not protected by SCBMB or any of the affiliates or subsidiaries, or by Perbadanan Insurans Deposit Malaysia, any government or insurance agency. Investment products are subject to investment risks, including the possible loss of the principal amount invested. SCBMB expressly disclaim any liability and responsibility for any loss arising directly or indirectly (including special, incidental or consequential loss or damage) arising from the financial losses of the Investment Products due to market condition. Nigeria: This document is being distributed in Nigeria by Standard Chartered Bank Nigeria Limited, a bank duly licensed and regulated by the Central Bank of Nigeria. Standard Chartered accepts no liability for any loss or damage arising directly or indirectly (including special, incidental or consequential loss or damage) from your use of these documents. You should seek advice from a financial adviser on the suitability of an investment for you, taking into account these factors before making a commitment to invest in an investment. To unsubscribe from receiving further updates, please send an email to clientcare.ng@sc.com requesting to be removed from our mailing list. Please do not reply to this email. Call our Priority Banking on 02 012772514 for any questions or service queries. Standard Chartered shall not be responsible for any loss or damage arising from your decision to send confidential and/or important information to Standard Chartered via e-mail, as Standard Chartered makes no representations or warranties as to the security or accuracy of any information transmitted via e-mail. Pakistan: This document is being distributed in Pakistan by, and attributable to Standard Chartered Bank (Pakistan) Limited having its registered office at PO Box 5556, I.I Chundrigar Road Karachi, which is a banking company registered with State Bank of Pakistan under Banking Companies Ordinance 1962 and is also having licensed issued by Securities & Exchange Commission of Pakistan for Security Advisors. Standard Chartered Bank (Pakistan) Limited acts as a distributor of mutual funds and referrer of other third-party financial products. Singapore: This document is being distributed in Singapore by, and is attributable to, Standard Chartered Bank (Singapore) Limited (Registration No. 201224747C/ GST Group Registration No. MR-8500053-0, “SCBSL”). Recipients in Singapore should contact SCBSL in relation to any matters arising from, or in connection with, this document. SCBSL is an indirect wholly owned subsidiary of Standard Chartered Bank and is licensed to conduct banking business in Singapore under the Singapore Banking Act, 1970. Standard Chartered Private Bank is the private banking division of SCBSL. IN RELATION TO ANY SECURITY OR SECURITIES-BASED DERIVATIVES CONTRACT REFERRED TO IN THIS DOCUMENT, THIS DOCUMENT, TOGETHER WITH THE ISSUER DOCUMENTATION, SHALL BE DEEMED AN INFORMATION MEMORANDUM (AS DEFINED IN SECTION 275 OF THE SECURITIES AND FUTURES ACT, 2001 (“SFA”)). THIS DOCUMENT IS INTENDED FOR DISTRIBUTION TO ACCREDITED INVESTORS, AS DEFINED IN SECTION 4A(1)(a) OF THE SFA, OR ON THE BASIS THAT THE SECURITY OR SECURITIES-BASED DERIVATIVES CONTRACT MAY ONLY BE ACQUIRED AT A CONSIDERATION OF NOT LESS THAN S$200,000 (OR ITS EQUIVALENT IN A FOREIGN CURRENCY) FOR EACH TRANSACTION. Further, in relation to any security or securities-based derivatives contract, neither this document nor the Issuer Documentation has been registered as a prospectus with the Monetary Authority of Singapore under the SFA. Accordingly, this document and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the product may not be circulated or distributed, nor may the product be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons other than a relevant person pursuant to section 275(1) of the SFA, or any person pursuant to section 275(1A) of the SFA, and in accordance with the conditions specified in section 275 of the SFA, or pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. In relation to any collective investment schemes referred to in this document, this document is for general information purposes only and is not an offering document or prospectus (as defined in the SFA). This document is not, nor is it intended to be (i) an offer or solicitation of an offer to buy or sell any capital markets product; or (ii) an advertisement of an offer or intended offer of any capital markets product. Deposit Insurance Scheme: Singapore dollar deposits of non-bank depositors are insured by the Singapore Deposit Insurance Corporation, for up to S$100,000 in aggregate per depositor per Scheme member by law. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured. This advertisement has not been reviewed by the Monetary Authority of Singapore. Taiwan: SC Group Entity or Standard Chartered Bank (Taiwan) Limited (“SCB (Taiwan)”) may be involved in the financial instruments contained herein or other related financial instruments. The author of this document may have discussed the information contained herein with other employees or agents of SC or SCB (Taiwan). The author and the above-mentioned employees of SC or SCB (Taiwan) may have taken related actions in respect of the information involved (including communication with customers of SC or SCB (Taiwan) as to the information contained herein). The opinions contained in this document may change, or differ from the opinions of employees of SC or SCB (Taiwan). SC and SCB (Taiwan) will not provide any notice of any changes to or differences between the above-mentioned opinions. This document may cover companies with which SC or SCB (Taiwan) seeks to do business at times and issuers of financial instruments. Therefore, investors should understand that the information contained herein may serve as specific purposes as a result of conflict of interests of SC or SCB (Taiwan). SC, SCB (Taiwan), the employees (including those who have discussions with the author) or customers of SC or SCB (Taiwan) may have an interest in the products, related financial instruments or related derivative financial products contained herein; invest in those products at various prices and on different market conditions; have different or conflicting interests in those products. The potential impacts include market makers’ related activities, such as dealing, investment, acting as agents, or performing financial or consulting services in relation to any of the products referred to in this document. UAE: DIFC – Standard Chartered Bank is incorporated in England with limited liability by Royal Charter 1853 Reference Number ZC18.The Principal Office of the Company is situated in England at 1 Basinghall Avenue, London, EC2V 5DD. Standard Chartered Bank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. Standard Chartered Bank, Dubai International Financial Centre having its offices at Dubai International Financial Centre, Building 1, Gate Precinct, P.O. Box 999, Dubai, UAE is a branch of Standard Chartered Bank and is regulated by the Dubai Financial Services Authority (“DFSA”). This document is intended for use only by Professional Clients and is not directed at Retail Clients as defined by the DFSA Rulebook. In the DIFC we are authorised to provide financial services only to clients who qualify as Professional Clients and Market Counterparties and not to Retail Clients. As a Professional Client you will not be given the higher retail client protection and compensation rights and if you use your right to be classified as a Retail Client we will be unable to provide financial services and products to you as we do not hold the required license to undertake such activities. For Islamic transactions, we are acting under the supervision of our Shariah Supervisory Committee. Relevant information on our Shariah Supervisory Committee is currently available on the Standard Chartered Bank website in the Islamic banking section. For residents of the UAE – Standard Chartered Bank UAE does not provide financial analysis or consultation services in or into the UAE within the meaning of UAE Securities and Commodities Authority Decision No. 48/r of 2008 concerning financial consultation and financial analysis. Uganda: Our Investment products and services are distributed by Standard Chartered Bank Uganda Limited, which is licensed by the Capital Markets Authority as an investment adviser. United Kingdom: In the UK, Standard Chartered Bank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. This communication has been approved by Standard Chartered Bank for the purposes of Section 21 (2) (b) of the United Kingdom’s Financial Services and Markets Act 2000 (“FSMA”) as amended in 2010 and 2012 only. Standard Chartered Bank (trading as Standard Chartered Private Bank) is also an authorised financial services provider (license number 45747) in terms of the South African Financial Advisory and Intermediary Services Act, 2002. The Materials have not been prepared in accordance with UK legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research. Vietnam: This document is being distributed in Vietnam by, and is attributable to, Standard Chartered Bank (Vietnam) Limited which is mainly regulated by State Bank of Vietnam (SBV). Recipients in Vietnam should contact Standard Chartered Bank (Vietnam) Limited for any queries regarding any content of this document. Zambia: This document is distributed by Standard Chartered Bank Zambia Plc, a company incorporated in Zambia and registered as a commercial bank and licensed by the Bank of Zambia under the Banking and Financial Services Act Chapter 387 of the Laws of Zambia.