1. Economic & Investment Update GK Wealth Management Limited Jim Power Chief Economist, Friends First April 30th 2008

2. The Global Background 4 US in recession 4 UK has slowed sharply 4 Euro Zone still robust, but signs of slowing 4 China & the Emerging World doing well 4 Balance of economic power continues to shift 4 Sub-Prime still casting dark shadow & legacy will last

3. Sub-Prime Crisis 4 ‘Bankers Behaving Badly’ 4 Losses still unfolding $1 tn estimate 4 Undermining economic confidence 4 Serious impact on credit availability & financial market liquidity 4 Legacy will last 4 A major financial crisis!

4. US Economy 4 Consumer confidence very weak 4 Manufacturing & Service activity contracting 4 232’000 jobs lost in Q1 4 Housing market in strong decline 4 Equity market falling since beginning of year 4 Economy in recession 4 US at eye of sub-prime crisis

5. US Unemployment Rate

6. US House Prices (Case-Shiller)

7. UK Economy 4 Housing market under serious pressure;RICS-78.5% 4 Tighter mortgage credit 4 Labour market strong, but incomes being squeezed 4 Low levels of saving 4 Economy now very vulnerable

8. UK Halifax House Price Index

9. Euro Zone 4 Economic background solid 4 Good consumer dynamics 4 Strong Euro/US/Interest Rates/Oil risk factors 4 France & Germany good but Italy & Spain very vulnerable 4 Households do not have imbalances that US & UK have

10. Global Growth Forecast

11. Economic Risks 4 Sub Prime legacy 4 Record oil prices & still rising 4 Weakening housing markets -UK, US, Ireland, Spain 4 Currency volatility 4 Equity market turmoil 4 Significantly slower global growth in 2008 4 Much more challenging climate

12. Interest Rate Outlook 4 Global background has altered significantly over past year 4 BoE -0.75% & Federal Reserve -3% since Sept. ‘07 - both will ease further 4 ECB monitoring situation, worried about inflation, but economic arguments should eventually win out - but not for the moment 4 Global bias will remain downwards 4 Interest rate activities reflect the dangerous global financial situation

13. Exchange Rates 4 Dollar under considerable pressure 4 Interest rates, growth, finnacial imbalances,sub-prime lending, structural shifts etc 4 Not a lot of reasons to buy $ 4 Sterling under pressure also - not too many reasons to buy £ 4 $ & £ likely to weaken further

14. USD/Euro Exchange Rate

15. Sterling/Euro Exchange Rate

16. Equity Markets Jan 1st-April 28th 2008

17. Equity Markets 4 Market sentiment has deteriorated sharply 4 Sub-prime problems the key issue 4 More uncertain global economic outlook 4 International volatility & uncertainty to continue 4 Irish market has gone through a crisis of confidence - recovery will be difficult 4 Turmoil symptomatic of economic & financial strain - will require further official action

18. FTSE 100

19. Dow Jones Industrial Average

20. ISEQ

21. The Irish Economy in 2007 4 Consumer sentiment weakened,spending held up well, but weaker in Q4 4 Business confidence reasonable, but some warning signs 4 Retail sales, exports & manufacturing robust 4 Housing the key area of weakness 4 Higher level of uncertainty than for some time

22. The Irish Economy in 2008 4 Consumer spending easing sharply 4 Construction contribution will ease due to lower housing starts 4 Export sector will be challenged by exchange rates & cost competitiveness 4 Less certain employment outlook 4 Inflation pushed by food, energy & mortgage rates 4 Easing of growth inevitable 4 GDP 2.0% in 2008 4 An economy in transition-adjustment painful, but worthwhile

23. The Irish Housing Market Outlook 4 Affordability improving 4 Demand fundamentals still solid & industry supply response positive 4 78,027 completions in 2007, 48,000 in 2008 & 2009, 50,000 medium-term demand? 4 Prices could fall 10% in 2008 4 Challenging environment 2008 & 2009 4 Market adjustment has further to run as ‘stand-off’ not yet over

24. What are the Pressure Points for Ireland? 4 Globalisation 4 Lost competitiveness 4 External economics 4 Exchange rate developments 4 Over-reliance on construction 4 Wage agreement - has to be low 4 Taxation v Spending 4 Serious shortcomings in economy 4 Greater focus on regional balance

25. Investment Summary 4 Global background difficult 4 Lots of bad news built into equity markets 4 Strong policy response will eventually work 4 Mixed outlook for global property 4 Global balance of power shifting to emerging markets 4 Economic & investment cycles are called cycles because they cycle

26. ANY QUESTIONS?