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Presentation Title Speaker Name Date Journalist Breakfast Briefing Roger Jones, Co-Head of Commodities Kevin Norrish, Director, Commodities Research Bharath.

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Presentation on theme: "Presentation Title Speaker Name Date Journalist Breakfast Briefing Roger Jones, Co-Head of Commodities Kevin Norrish, Director, Commodities Research Bharath."— Presentation transcript:

1 Presentation Title Speaker Name Date Journalist Breakfast Briefing Roger Jones, Co-Head of Commodities Kevin Norrish, Director, Commodities Research Bharath Manium, Director, Commodities Investor Solutions Monday 10 March 2008

2 Click to edit Master title style Roger Jones, Co-Head of Commodities -Welcome

3 Click to edit Master title style Our commodities business operates globally across a broad range of asset classes Industrial Materials Base Metals Precious Metals Plastics Other Speciality Markets Forest Products Weather Environmental products Agricultural products Softs Freight Energy Crude Oil Refined Products European Power & Gas US Power & Gas Coal Investor Products Swaps Commodity Bonds Funds

4 Click to edit Master title style Introductions Kevin Norrish, Director, Commodities Research - Commodity market investment outlook - Results of conference audience survey - Comparison with 2007 results Bharath Manium, Director, Commodities Investor Solutions - Latest evolution in investor products

5 Click to edit Master title style Kevin Norrish, Director, Commodities Research -Commodity market investment outlook -Survey findings

6 Click to edit Master title style In the wake of the credit crisis, commodity investments have outperformed

7 Click to edit Master title style Demand for commodity investments continues to gather pace Launch of new commodity investor products has soared in early 2008 Commodity market investments hit $178bn in 2007

8 Click to edit Master title style Key fundamental drivers

9 Click to edit Master title style Depletion of the resource base Steep decline in mature non-OPEC oil output continues Copper reserves relative to demand are very low

10 Click to edit Master title style Costs escalation is rampant Costs of aluminium smelters are more than double the previous decade Oil project capital costs rising as fast as prices - tar sands capital costs +300% since 2001

11 Click to edit Master title style Commodity market trends are increasingly interlinked Rising energy prices Higher gold prices Higher grain prices Higher industrial metals prices Higher livestock prices Climate change/carbon costs Resource scarcity Rising Asian living standards & industrialisation Inflation concerns & weaker dollar Boost demand for biofuels & raise production costs Inflation concerns Higher food prices raise labour costs Higher animal feed costs Inflation concerns Producer policy

12 Click to edit Master title style Its not too late! The prices of many commodities have set new records in nominal terms in recent months. But relative to inflation-adjusted benchmarks, price rises look more modest. Many commodities are still trading a long way below their 1970/80s real price highs.

13 Click to edit Master title style Carbon: New opportunities for Investors Analysis of the relative economics of different emissions-cutting measures is still in its infancy and cost curves like that shown below come in many different shapes and sizes. But one way or another the incorporation of carbon emission costs will be an important factor impacting future energy costs and prices.

14 Click to edit Master title style Barcelona Annual Conference Survey Results

15 Click to edit Master title style In turbulent financial conditions, investors are raising their commodities exposure…

16 Click to edit Master title style What do you think is the most attractive aspect of investing in commodities? % 8% 33% 4% % 15% 33% 4% Today Question 1

17 Click to edit Master title style In 2006/2007, what percentage of your portfolio was in commodities? % 37% 11% 19% % 31% 7% 12% Today Question 2

18 Click to edit Master title style Over the next 3 years, what percentage of your portfolio will be in commodities? % 35% 37% 22% Today % 38% 19% 36% Question 3

19 Click to edit Master title style Investors view commodities as long-term exposures…

20 Click to edit Master title style How long, typically, would you expect to hold your commodity exposure? % 20% 29% 42% Today % 21% 40% 28% Question 4

21 Click to edit Master title style What is currently your greatest concern with investing in commodities? % 21% 23% 13% % 17% 15% 13% Today Question 5

22 Click to edit Master title style What do you think the average price of oil will be over the next five years? Question 6 Today 54% 27% 16% 2% New York Conference Results December 2007

23 Click to edit Master title style Investor strategy…

24 Click to edit Master title style How are you currently investing in commodities? % 20% 16% 49% Today % 25% 13% 45% Question 7

25 Click to edit Master title style Over the next 3 years, how do you expect to be investing in commodities? % 21% 27% 50% % 28% 15% 46% Today Question 8

26 Click to edit Master title style Which markets do investors favour…?

27 Click to edit Master title style Which commodity sector do you expect will give the highest returns in 2008? Today New York Conference Results December % 19% 8% 45% 10% Question 9

28 Click to edit Master title style What, in your opinion is the best way of getting exposure to the climate change theme? Question 10 Today 33% 16% 40% 12% New York Conference Results December 2007

29 Click to edit Master title style Bharath Manium, Director, Commodities Investor Solutions -Product innovations

30 Click to edit Master title styleProduct Innovations New asset underlyings - Carbon - Coal and Freight -Agriculturals New payoff structures The quest for alpha - CORALS - Everest Alpha

31 Click to edit Master title style Questions & Answers


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