Newsletter March 2013

Newsletter No. 13
March 2013
INVESTMENT
NEWSLETTER
EDITORIAL
INDICATORS*
The equity markets began to consolidate the gains made in recent months.
Fourth-quarter earnings publications in the US and Europe were fairly strong, and macroeconomic data
in the US continued to improve, while in Europe there is little hope of an exit from recession until the end
of the year.
Beyond these fundamentals, the main catalyst for all asset classes in the months ahead will be the
matter of a gradual withdrawal of the massive liquidity that the Federal Reserve has been injecting into
the market since 2008. Talks are already underway between the members of the FOMC on the durability
of the current buyback programme of US bonds. The markets have started to factor in this scenario, with
gold (the asset most correlated to liquidity insofar as it offers no return) correcting by around 5.5% since
the start of the year. This downward trend could continue over the coming months, although it should be
limited in scope since the central banks of emerging countries are likely to take advantage of this low
price to diversify their currency reserves.
INDEX - PERFORMANCE (February)
DJ Eurostoxx 50
: 2633
-2.57%
-0.26%
CAC 40
: 3723
DAX
: 7742
-0.44%
S&P 500
: 1515
+1.11%
Nikkei 225
: 11559
+3.78%
IBOV Brazil
: 57424
-3.91%
MICEX Russia
: 1486
-3.93%
Hang Seng China : 23020
-2.99%
BSE SENSEX India : 18862
-5.19%
CURRENCIES
Béatrice Cavaillès
Head of Investment
Monaco
Marc Mongellaz
Head of Advisory Team
Monaco
Investment opportunity: gold-linked Twin Win
EUR/USD
: 1.3057
-3.84%
USD/JPY
: 92.56
+0.93%
EUR/GBP
: 0.86108 +0.56%
EUR/CHF
: 1.22295 -1.02%
YIELDS
We are proposing the Twin Win structured solution to take advantage of gold price fluctuations.
German 10 year
The gold-linked Twin Win is a structured product with a two-year maturity. You get 100% upside
exposure on maturity, capped at 15%, and 100% downside exposure with a protection barrier of -27%.
The product offers an American-style barrier (continuous daily observation so that if the barrier is
breached over the two years, it is deactivated and you buy gold at the Twin Win starting price of 1610
dollars).
French 10 year
: 2.166%
US 10 year
: 1.876%
For example, if the gold price rises by 10% in relation to the starting value without ever touching the
protection barrier, the product is redeemed on maturity at 110%. Alternatively, if the gold price were to fall
by 20% in relation to the starting value without ever touching the protection barrier, the product would be
redeemed on maturity at 120%.
COMMODITIES
Brent
: $ 111.38
-2.76%
Gold
: $ 1580
-5.05%
Silver
: $ 28.544
-9.28%
*Prices as at 28/02/2013
With this structured solution, you can profit from a rebound in gold up to a cap of 15% over two years and
from a negative performance to a barrier of 27% in relation to the starting value of 1610 dollars.
: 1.454%
ANALYSIS - GOLD
Fundamental analysis
Upside catalysts
•
The ultra accommodative stance by central banks to underpin the economy. The said
banks are significantly increasing their balance sheets by massively injecting liquidity into
the financial system (see Chart I).
•
Gold shall remain a safe haven if there is a revival of fear on the market.
•
Global demand for gold remains strong (mainly driven by emerging countries).
•
Central banks continue to buy gold to diversify their currency reserves (notably emerging
country central banks). According to the World Gold Council, central banks purchased
almost 145 tonnes of gold in Q4 2012, bringing their total purchases in 2012 to 535
tonnes, which is the highest level seen since 1964 (see Chart III).
Graphique I : prix de l’Or vs bilan des principales Banques Centrales
Graphique II : demande en Or par régions géographiques au T4 2012 (source : World
Council of Gold)
Graphique III : poursuite des achats d’Or de la part des Banques Centrales
Downside catalysts
•
Based on recent activity indicators, the global economy seems to be gradually picking up.
If economic activity continues to increase, central banks could start to shift away from
their ultra accommodative monetary policies more rapidly than expected (see chart IV).
•
On the back of central bank activities, appetite for risk among investors has increased. In
other words, investors seem to be moving away from assets that are considered risk-free
(government bonds, gold, etc.) and into assets that are riskier but which offer a better
return (equities, etc.) (see Chart V).
•
Gold ETFs have suffered from considerable capital outflows over the last few weeks,
proof that investors seem to want to reduce their gold positions (see chart VI).
Graphique VI : flux sur les ETF sur l’Or (en tonnes, données hebdomadaires)
Graphique IV : évolution des indicateurs PMI (manufacturier) dans les
principales zones économiques
Graphique V : Flux entrants dans les fonds mutuels equity en M¤ (données
journalières)
Ce document ne constitue pas une offre de contrat, une sollicitation, un conseil ou une recommandation en vue d’un achat ou d’une vente d’instruments financiers. Société
Générale ne peut être tenue responsable de toutes conséquences, notamment financières, résultant d’opérations sur instruments financiers conclu sur la base de ce seul
document. Les informations contenues dans ce document n’ont qu’une valeur indicative et n’ont aucune valeur contractuelle. Elles sont sujettes à des modifications,
notamment en fonction des fluctuations de marché. Les données historiques utilisées proviennent notamment de sources externes que Société Générale considère fiables
mais que Société Générale n’a pas vérifiées de manière indépendante. Société Générale n’assume aucune responsabilité quant à l’exactitude, la pertinence et l’exhaustivité
de ces données. Les chiffres relatifs aux performances (passées ou futures) ou aux simulations de performances (passées ou futures) ne sauraient constituer un indicateur
fiable quant aux performances futures réelles. Société Générale est agréée par le Comité des Etablissements de Crédit et des Entreprises d’Investissement.
SOCIETE GENERALE PRIVATE BANKING (Monaco) S.A.M au capital de EUR 7.650.000 RC Monaco 96S 03214.
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