This material has been produced by RBS sales and trading staff and should not be considered independent.

The Round Up
21 August 2009
Issue No. 160
The Round Up is a comprehensive daily note produced by the RBS Warrants
team providing an overview of market movements along with quality ideas for
warrant traders and investors.

In today’s issue
Global Market Action Scoreboard, commentary
Aussie Market Action SPI Comment, Events & Dividends
CSL (CSLVZN) Trading Update – Good result + Buyback
BSL (BSLKZI) MINI Trading Buy – Buy the dips
TLS (TLSSZX) Self Funding Buy – Buy for the dividend
Round Up Corner Stocks reporting this week

Equities

Move Last % Move Range Volume

ASX 200 +3.7 4377.5 +0.1% -7 to +51 $5.7 bn(H)
SPI - yesterday -13.0 4321.0 -0.3% -15 to +65 34,413(A)
Dow Jones +70.9 9350.0 +0.8% -11 to +85 Low
S&P 500 +10.9 1007.4 +1.1% -0 to +12 Low
Nasdaq +20.0 1989.2 +1.0% -4 to +23 Low
FTSE +66.9 4756.6 +1.4% u.c to +77 Avg

Commodities

Move Last % Today % Past Month

Oil-WTI spot +0.12 72.54 +0.2% +13.4%
Gold Spot -1.30 940.75 -0.1% -0.8%
Nickel (LME) +2.63 856.30 +0.3% +16.9%
Aluminium (LME) -1.94 84.90 -2.2% +11.2%
Copper (LME) +3.06 274.45 +1.1% +13.3%
Zinc (LME) -0.22 80.59 -0.3% +8.1%
Silver +0.12 13.95 +0.8% +2.0%
Sugar -0.70 21.97 -3.1% +23.8%
Dual Listed Companies (DLC’s)

Move %Move Last AUD Terms Diff to Aus

NWS (US) +0.14 +1.1% 12.77 15.33 -0.7 c
RIO (UK) +23.0 p +1.0% £23.35 46.28 -1175.3 c
BLT (BHP UK) +28.5 p +1.9% £15.625 30.97 -615.7 c
BXB (UK) +8.5 p +2.5% £3.538 7.01 -13.8 c

American Depository Receipts (ADR’s)

Move %Move Last AUD Terms Diff to Aus

BHP (US) +0.54 +0.9% 62.17 37.32 +19.4 c
AWC (US) unch unch 5.48 1.64 -1.5 c
TLS (US) -0.30 -2.0% 14.89 3.58 -7.4 c
ANZ (US) -0.04 -0.2% 16.50 19.81 +19.2 c
WBC (US) -1.01 -1.0% 97.64 23.45 +13.7 c
NAB (US) +0.16 +0.7% 22.42 26.92 +6.0 c
LGL (US) -0.25 -1.2% 20.40 2.45 +0.9 c
RMD (US) -0.32 -0.7% 45.15 5.42 -0.9 c
JHX (US) -0.19 -0.7% 28.51 6.85 +15.6 c
PDN (CAN) -0.05 -1.2% 4.08 4.50 +7.4 c

Overnight Commentary
United States Commentary
US stocks managed to gain across the session, with the Dow posting a gain of 70.9 pts and the S&P500 up 1.1%, albeit on lower than
average volumes. Talk of AIG returning government funds boosted the financials sector, Aerospace added the most pts to the Dow,
and comments from Geithner that the economic recovery is still only in it's early stages all added to the positive sentiment.

Eco - Philly Fed for Aug improved to +4.2 vs -2.0 expected, and from -7.5 previously, and Leading Indicators for July +0.6% vs +0.7%
exp. While nothing special from Initial Jobless Claims 576k vs 551k exp, and Continuing Claims 6241k vs 6223k exp.

Financials - AIG topped the S&P 500, surging 21.2%, after the CEO said they expect to repay the government. The sector followed
with Citigroup up 8.5%, American Express rose 2.6% and JP Morgan gained 2.4%.

Aerospace - Boeing rose 2.8% after it said it has reduced travel costs by a third and will keep cutting jobs this year as the recession
hits airline profits. United tech rose 2.3% after it won a contract to supply systems for a new airliner built by Russia's OAO Irkut Corp,
valued at over $2.3bn. The pair added more than 18pts.

Tech - Google climbed 3.7% after it was added to one broker's conviction buy list on expectations of growth in Europe and increased
revenues as consumers started to increase their spending.

United Kingdom & Europe Commentary

The FTSE 100 added 1.3% or 59pts in a broad based rally with demand for raw materials jumping. The FTSE Eurofirst 300 was up
1.4%, the DAX climbed 1.5% and the CAC rose 1.6%.

UK Banks - Lloyds, up 2.6%, was again subject rumours of an imminent capital raising. Barclays added 1.1% after a broker upgrade,
HSBC was up 0.4%, RBS rose 3.85% but Standard Chartered ended 0.15% lower.

Euro Banks - UBS was up 4.5% after the Swiss government sold its stake in the bank for SFr16.50 per share, making a profit of
SFr1.2bn. Credit Suisse added 0.4%, Deutsche Bank rose 1.5%, BNP climbed 1.5% and UniCredit

Builders - Europe's construction and building materials sector was strong after Holcim, up 5.7%, reported better than expected and
said stimulus measures would drive growth. HeidelbergCement rose 2.3% and Hochtief jumped 6.1% with the stock also benefitting
from a broker upgrade.

Beverages - Diageo, off 0.3%, was one of the few fallers ahead of results next week after multiple brokers downgraded. Carlsberg was
off 0.9% but SABMiller bounced back 3.2% after trading ex the previous session and AnheuserBusch was up 1%.
Eco - British retail sales were stronger than expected in July. Year on Year they were up 3.3% vs 2.7% expected and up from 2.9%
previously. Month on Month they were in line up 0.4%.

Resources Commentary
Miners - Metal prices firmed helping the sector. BHP, Anglo, Xstrata, Vedanta, Lonmin and Kazakhmys were up from 2.3% to 4.8%.
Rio added 1.8% after posting a record drop in first-half profit, in line with market forecasts, and saying it was confident about the future
after a tough 18 months.

Energy - Crude held above $72 a barrel after industry data on Thursday showed a steep drop in crude imports and stockpiles in top
consumer the United States. BP, Shell, BG Group, Tullow and Cairn Energy put on from 0.9% to 2.6%.

SPI Commentary
The Spi traded down 14pts or 0.32% to 4320. Open at 4390 with a high of 4399 and a low of 4319. Volume 33,172. Overnight the SPI
traded up 13pts to 4334

SPI Intraday SPI Daily

*SPI report taken from the 9:50am open to the 4:30pm close on the previous trading day. Charts taken from IRESS

Upcoming Economic Events for the Week

Monday AUS
US NY Fed Empire PMI
Tuesday AUS RBA Board Minutes
US NAHB Survey, PPI, housing starts
Wednesday AUS RBA Asst Gov Edey& Lowe speak
US
Thursday AUS Imports, RBA Bulletin, RBA’s Richards speaks
US
Friday AUS
US Leading index, Philadelphia Fed index, existing home sales
*Dates are indicative only and may change

Upcoming Dividends

ExDivDate Security Description Div (c) Yield Frk(%) PayDate

24-Aug-09 TLS Telstra Corporation 14 14 100 25-Sep-09
27-Aug-09 BEN Bendigo & Adelaide Bank 15 4.93% 100 30-Sep-09
28-Aug-09 COH Cochlear 95 2.92% 100 24-Sep-09
31-Aug-09 BHP BHP Billiton 50.07 3.01% 100 25-Sep-09
3-Sep-09 NWS News Corp 6 0.9% 0 14-Oct-09
Trading Update:

CSL Limited (CSLVZN) – Strong result, buyback is back

We have been bullish CSL under $30 and believe the stock is still cheap following the results announcement. Sales
revenue grew by 30.0% to A$4.62bn and total revenue was up 32% to A$5.04bn. Normalised net profit after tax was
A$1,020.4m (up 45.4% on the pcp). Reuters consensus NPAT was A$1019.3m, with a range of A$911m- 1,123m. CSL
hopes to migrate most patients to Privigen, its liquid IVIG, with the aim of selling 10Mg of Privigen in FY10F. Given solid
underlying demand, we continue to believe this is possible. CSL has also recommenced the on market buyback. Buy the
dips. RBS research have a BUY with target price of $37.50

Source: IRESS

CSL has guided to FY10 NPAT of A$1,160m-1,260m in constant-currency terms. RBS have a FY10F NPAT forecast of
A$1169.0m, which implies a growth rate of 14.6% on the pcp.

RBS Research continue to believe CSL is a high-quality franchise. The next catalyst for the stock should be a 9
September US FDA decision whether to reimburse for HPV vaccination in boys.

RBS MINIs over CSL

Security ExPrc Stop Loss CP ConvFac Delta Description

CSLKZG $23.7313 $ 24.83 Long 1 1 MINI Long
CSLKZH $20.8377 $ 21.80 Long 1 1 MINI Long
CSLKZQ $44.6296 $ 40.21 Short 1 1 MINI Short
CSLKZV $48.6188 $ 46.22 Short 1 1 MINI Short
CSLKZW $40.6625 $ 36.64 Short 1 1 MINI Short

RBS Warrants over CSL

Security ExDate ExPrice CP ConvFac Delta Description

CSLJZB 29-Oct-09 $ 20.00 Call 1 1 HOT Instalment
CSLJZC 29-Oct-09 $ 25.00 Call 1 1 HOT Instalment
CSLSZX 4-Feb-19 $17.9302 Call 1 1 Self Funding Instalment
CSLVZN 29-Oct-09 $ 35.00 Call 4 0.07 Trading Call Warrant
CSLVZO 26-Nov-09 $ 34.00 Call 4 0.11 Trading Call Warrant
CSLVZP 29-Oct-09 $ 30.00 Put 4 -0.05 Trading Put Warrant
MINI Trading Buy:

Bluescope Steel (BSLKZI) – Buy the pullback

We believe the recent pullback in BSL is a buying opportunity. BSL FY09 reported NPAT loss of A$66m, closing the
books on a very challenging six months. Whilst we expect continued uncertainty in demand, a return to profit in 2Q10
appears likely as domestic prices and production levels recover and this is what the market is beginning to focus on. We
think earnings leverage and long-term value are both appealing. RBS Research has a buy recommendation with $3.55
target price. Buy BSLKZI..

Source: IRESS

Result well-guided, with cost savings a highlight

The FY09 reported NPAT loss was A$66m with underlying NPAT of A$56m which was in line with RBS expectations.
Also, the lack of a dividend for 2H09 should not have surprised, and we think a distribution is unlikely to be paid until at
least 2H10 as earnings levels firm. Despite this, RBS Research believe news of achieved permanent cost savings of
A$132m set the tone for the earnings recovery story to come into focus.

Management forecasting small NPAT loss for 1H10

BSL has guided for a small reported NPAT loss in 1H10. However, with domestic price increases likely to be announced
for 1 October, and the Port Kembla mills running at ~75% utilisation, we anticipate BSL returning to profit in 2Q10, with
economic indicators stabilising

RBS Research find the stock appealing at these levels given its earnings leverage to a steel market recovery and a
reasonable 0.97x P/B (FY10F). RBS maintain Buy recommendation and target price of $3.55

RBS MINIs over BSL

Security ExPrc Stop Loss CP ConvFac Delta Description

BSLKZI 160.84 193 Long 1 1 MINI Long
BSLKZS 474.35 403 Short 1 1 MINI Short
Self Funding Instalment Buy:

Telstra Corporation (TLSSZX) – Buy for the dividend

TLS is set to go ex-dividend on the 24th August 2009. The dividend is $0.14 which will be fully franked. This represents a
~3.9% yield on the stock for the half year which can be leveraged up and enhanced through an RBS self funding
instalment warrant. Buying TLSSZX for a dividend play will yield approximately 10.7% on a standstill return basis and
a 45 day holding period including franking credits

Source: IRESS

Telstra Result points and fundamentals

• Broadband ARPU increased 6.5% to A$57.70. MBB SIOs doubled to 1.05m, helping lift mobile ARPU 4.8% to
A$51.84.
• Sales of IP-based products also increased at double-digit rates. With the rate of PSTN erosion reducing in 2H09
(cf 1H09) the speed-driven revenue lines helped keep total revenue growth at 2.7%, a good rate given the
economic slowdown.
• Maintaining comparable revenue growth in FY10 may be harder as unemployment rises, the A$ strengthens and
Sensis sales face a tougher business environment.
• The company says achieving its FY10 targets ‘would give us significant excess free cashflow, and all the
flexibility that brings’. We think there is enough flexibility to contribute to NBN Co, on the right terms, and still pay
an extra 2cps in dividends fully franked.
• RBS Research valuation $4.85 with a target price of $4.30, which is 12.0x FY10F EPS of 35.6c.
• Key downside risks include further margin contraction, tougher regulation and lower access prices.
• Upside risks include faster sales recovery, better cost control and higher access prices. Regulatory issues may
be clearer when proposed legislation is tabled, we think by September.

KEY BENEFITS of the new RBS self funding instalments include:

* NO PUT PROTECTION COST

* Simple, transparent and Cost-effective with a low interest rate of 7.51% per annum
* 1 for 1 movement with the underlying share (delta 1)
* No margin calls
* Non-recourse loan - You can never lose more than your initial outlay
* ATO product rulings - Perfectly suitable to be used in SMSF's
* Listed - Can be sold at anytime
* Can be exercised at any time - simply by paying back loan amount
* RBS are the only product issuer in the market who can offer this product
* Dividends and franking credit benefits as well as interest deductibility
Trading strategy

Lets take a look at how you can enhance your exposure to the TLS dividend in August through an RBS self funding
instalment. The table below shows the potential returns from a dividend play in TLSSZX on a standstill return basis (share
price remains at the purchase price). TLSSZX yields ~10.7% on a standstill return basis and a 45 day holding period
Warrant Current Price Strike Delta Expiry Average Total Dividend Grossed Net Standstill
Code (Warrant/stock) Theta Theta Up Standstill Return
Per Day Cost

TLSSZX $1.70 $3.64 $1.94 1 4-Feb-19 $0.0004 $0.02 $0.14 $0.20 $0.18 10.71%

RBS MINIs over TLS

Security ExPrc Stop Loss CP ConvFac Delta Description

TLSKZC 260.58 274 Long 1 1 MINI Long
TLSKZD 289.16 306 Long 1 1 MINI Long
TLSKZP 449.9 405 Short 1 1 MINI Short

RBS Warrants over TLS

Security ExDate ExPrice CP ConvFac Delta Description

TLSJZB 29-Oct-09 250 Call 1 0.88 HOT Instalment
TLSIZA 28-Jan-10 250 Call 1 0.95 HOT Instalment
TLSIZQ 14-Jun-10 250 Call 1 1 Rolling Instalment
TLSIZR 14-Jun-10 225 Call 1 1 Rolling Instalment
TLSSZX 4-Feb-19 193.88 Call 1 1 Self Funding Instalment
TLSSZZ 30-Jun-17 255.18 Call 1 1 Self Funding Instalment
RBS Round Up Corner:

Stocks Reporting This Week

Reporting season is well underway as we enter week three. RBS Research are expecting company results to come in line or slightly
ahead of expectations due to the long downgrade cycle over the past six months. RBS MINIs are a great way to trade company results
this reporting season, from both a long or short view.

Date Code Company Y/E NPAT (Abs) Div EPS 2H Long Short
(pre abs) div Product Product
17 Aug BSL BlueScope Steel Jun AUD 60.0 -87.0 5.0c 5.3c 0.0c BSLKZI BSLKZS
17 Aug NCM Newcrest Mining Jun AUD 464.1 -200.6 10.0c 99.1c 10.0c NCMKZG NCMKZT
18 Aug UGL United Group Jun AUD 147.5 5.0 63.0c 88.8c 34.0c UGLKZC
18 Aug AMC Amcor Jun AUD 365.0 -58.9 34.0c 43.4c 17.0c AMCKZQ
19 Aug BLD Boral Jun AUD 107.8 0.0 11.0c 18.4c 3.5c BLDKZD
19 Aug CSL CSL Ltd Jun AUD 1021 -80.0 61.0c 173.0c 31.0c CSLKZG CSLKZW
19 Aug ORG Origin Energy Jun AUD 523.7 6386 75.0c 59.9c ORGKZC ORGKZP
19 Aug QAN Qantas Airways Jun AUD 268.0 -184.8 6.0c 12.9c 0.0c QANKZJ QANKZQ
19 Aug WPL Woodside Petroleum Dec AUD 363.7 0.0 20.0c 191.8c 96.0c WPLKZJ WPLKZX
20 Aug RIO Rio Tinto Dec USD 2681 407.0 0.0c 297.6c 27.0c RIOKZE RIOKZQ
20 Aug AGK AGL Energy Jun AUD 381.6 1462 53.0c 85.7c AGKKZE AGKKZP
20 Aug ASX Aust Securities Exch Jun AUD 328.4 0.0 171.7c 191.3c ASXKZI ASXKZS
20 Aug BXB Brambles Jun USD 456.9 -95.7 23.7c 32.9c 10.0c BXBKZG BXBKZP
20 Aug LLC Lend Lease Jun AUD 293.7 -862.3 45.0c 65.7c 20.0c LLCKZJ LLCKZQ
20 Aug WES Wesfarmers Jun AUD 1482 0.0 75.0c 151.5c 35.0c WESKZG WESKZT
20 Aug AMP AMP Ltd Dec AUD 307.0 13.8c 33.1c 27.9c AMPKZH AMPKZQ
20 Aug QBE QBE Insurance Dec AUD 791.0 0.0 126c 171.0c 126.0c QBEKZF QBEKZS
20 Aug STO Santos Dec AUD 60.8 0.0 22.0c 30.6c 42.0c STOKZD STOKZT
21 Aug BBG Billabong Int Jun AUD 161.5 0.0 56.5c 64.1c 25.0c BBGKZB
21 Aug IAG Insurance Australia Jun AUD 277.6 93.0 10.5c 14.1c IAGKZF IAGKZP
*Figures in table based on RBS Research forecasts

Monday
Bluescope Steel (BSL) - underlying NPAT of a $56m was in line with RBS expectations, with management guiding for a small loss at the reported
level in 1H10. Whist RBS remain positive on the near-term, we are weary of the impacts of a rising A$ and increasing reliance on a rally in export
markets. The steel market recovery may be at hand, with BSL holding the best leverage, however we expect a normalisation to earnings is still some
distance away.

Newcrest Mining (NCM) - reported FY09 statutory profit of A$248m versus RBS Research forecast of A$252m and an underlying profit of A$483m
vs RBS Research forecast of A$464m and Reuters consensus of A$472m. EPS was 103.2cps. A dividend of 15c was declared, compared to 10c in pcp.

Tuesday
United Group (UGL) - UGL delivered underlying NPAT of A$150.3m (RBS A$147.5m) and an FY09 dividend of 64c (RBS 63c) with operating cash
flow a feature, reflecting sustained working capital discipline. With guidance for an effectively flat underlying NPAT in FY10, we expect a return to
double-digit growth in FY11 as resources spend grows, especially around LNG, and government-sponsored infrastructure spending picks up the slack
created in a credit constrained private sector

Amcor Limited (AMC) - AMC reported adjusted FY09 NPAT of A$360.5m (-2.3%). This was marginally below RBS Research forecast of A$365m.
EPS was 43.1c, which was in line with RBS forecast of 43.4c. EPS rose by 0.5% as growth benefited from the effect of the share buyback.

Wednesday

Boral Limited (BLD) - underlying NPAT of $131m vs guidance of $120m and consensus expectations of A$113.7m and declared a final dividend of
5.5cps which, at the headline level should all be taken rather well by the market. However RBS see the quality as questionable and the fact that
impairment charges have been made across the portfolio at odds with previous management assurances. Importantly no mention of the new CEO in the
announcement which may well be held over until the October AGM and guidance for FY10 is absent beyond expectations for a tough 1H10 and hope for
an improvement in 2H10 a prospect we do not find unreasonable however there are way too many question marks on quality for us to feel comfortable
including a low tax rate at 11.4%

CSL Limited (CSL) - Sales revenue grew by 30.0% to A$4.62Bn and total revenue was up 32% to A$5.04Bn. Normalised net profit after tax of
A$1020.3m (up 45.2%pcp), 1% below RBS forecast of A$1021.5m. Consensus FY09 NPAT was A$1019.3m with a wide range of A$911.0-1123.0m.
Cash flow was strong at A$1.03bn. Diluted EPS was 170.7 up 34.6%on pcp. The major difference compared to RBS forecasts was due to strong margin
growth, particularly in the CSL Behring division. FY09 EBITDA margin increased 230bp to 33.5% (from 31.2% on pcp).This was partly due to strong
royalties from sales of the HPV vaccine, and higher margin plasma products. Final dividend increased by 74% to 40cps (unfranked) vs. 23cps (franked)
in the pcp which was 9cps above RBS forecast. CSL have guided to FY10 NPAT range of A$1160-A$1260m in constant currency terms (vs. RBS at
A$1146m, and consensus at A$1148m, although this includes the impact of FY10 currency exchange rates. Using current spot rates, this would imply a
(A$90m) translation impact to FY10F earnings.

Origin Energy (ORG) - Underlying NPAT of A$530m was slightly ahead of RBS A$524m forecast (consensus A$525m), Operationally, the retail
business was the biggest negative variance with management admitting to previously locking in hedges at above market rates. The final dividend of 25c
was in-line, bringing the FY to 75c (including the 25c special). Expect today's lower guidance number to initially disappoint the market, but don't expect a
major pullback in the shareprice.

Qantas Airways (QAN) - Reported PBT of A$181m was a solid 50.9% above RBS (comparable) PBT of A$119.9m, 38% above consensus, and
towards the top end of management guidance of A$100-200m. Reported NPAT of A$117m fell out 40.6% above RBS forecast of A$83.2m. Adjusting
the result for the significant items results in revenue -1.7% below RBS forecast, while normalised PBT comes in at $408.0m, 6.3% above RBS $383.9m
forecast. Adjustments include $170m in writedowns, $106m in restructuring, $86m gain on QAN Holidays sale and $37m A380 start-up costs. Final
dividend of 0.0cps (6.0c FY09) was in-line with RBS expectations, although below consensus of 1.0cps.

Woodside Petroleum (WPL) - NPAT of A$898m beat consensus (A$880m) and RBS forecast of A$821m due to lower than expected operating
costs. The previously flagged abnormal gain of A$40-60m after tax for a positive restoration obligation provision was not realised, but booked to PP&E.
Production guidance remained unchanged at 81-86mmboe (RBS 81.5mmboe) and production is expected to pick up with new production coming on line

Thursday
AGL Energy (AGK) - Underlying NPAT of A$379m in-line with RBS at A$382m (consensus at $386m) This compared to the guidance range of
A$352-382m, but consensus expectations appeared to be at A$386m. Positively, the dividend came in at 54cps (RBS 53c). EBITDA of A$793m was
almost bang in-line (RBS A$792m). Operating cashflow was disappointing though, with the reported A$235m around A$200m below what RBS were
expecting.

Australian Securities Exchange (ASX) - a weak result with revenues below RBS forecasts at A$538m (RBS at A$552m). Costs were in line at
A$138m so weak revenues flowed through to a weak normalised NPAT of A$314m vs consensus at A$323m. The main weakness versus forecasts
appears to have been in Listings (lower average fees from all the secondary capital raisings) whereas cash equities and derivatives were bang in
line. According to management the trends at the beginning of FY10 are positive. Stock trading on 19x FY10F EPS, ahead of international peers..

Brambles (BXB) - Reported NPAT of A$452.6m was 25.3% above RBS forecast, however it was boosted by an unexpected A$77.3m one-off item.
On a normalised basis, EBIT of US$794.2m was 2.1% below RBS forecast, while NPAT was 6.8% above due to lower interest and tax expense. In our
view it was reassuring that there were no major nasty surprises in the result. RBS upogrades to BUY and $8.25 target price

Lend Lease Corp (LLC) - Write downs on retail property investments had been expected and flagged since the 1H09 nevertheless, notwithstanding
the currency, they were slightly better than RBS expectations. At an operational level all divisions except IM, exceeded RBS expectations. So we take a
lot of comfort in the strength of the divisional result that should have been worse if the translation of US and UK earnings are taken into account

Wesfarmers (WES) - NPAT A$1535m (RBS: A$1482m) in-line on a reported basis. Of surprise was the A$110m tax adjustment benefit relating to
reviews of leasehold tax base and R&D claims. Dividend of 60cps (final) the main surprise, being 10cps higher than the guidance given during 2H09

AMP Limited (AMP) - pretty solid result from AMP with underlying profit of A$ 367m coming in 5% ahead of RBS forecasts. The key positives were
in CWM with strong cost controls and a robust banking performance and in CWP where risk protection products rose strongly. New Zealand was
disappointing with earnings down 15% which management attributed to higher surrenders, aggressive competition and the weak NZ economy. AMPCI
was understandably weak given the tough markets although perhaps costs could have been cut more aggressively. The outlook statement seems fairly
subdued pointing to ongoing market volatility and subdued investor sentiment.

QBE Insurance (QBE) - We view the result as reasonably solid in the current environment. The NPAT figure of A$1.02bn came in slightly above
consensus forecasts of A$1.0bn. The insurance margin of 17.5% was also in line with consensus (17.2%) and at the top end of full year guidance 16-
18%. Importantly QBE's probability of adequacy increased from 86 to 89% reflecting a $500m increase in risk margins mainly due to rising interest
rates. The company was also able to achieve a gross investment yield of 3.3%, above its full year target of 3%. The negative from the result was the
large rise in claims ratio from 54% in prior year to 60%, which resulted from in a combined ratio of 89% versus full year guidance of under 88%.
Importantly the company has slightly increased the full year insurance margin guidance to be at the upper end of the original 16-18% range.

Santos Limited (STO) - NPAT of A$102m beat consensus of A$67m and was in line with RBS forecast. Interestingly, STO announced the A$0.22ps
dividend would not be fully underwritten, which suggest to us management is very comfortable with its current funding position.

Friday
Billabong (BBG) - Continued tough economic conditions in US and weak sales performance by competitors suggest downside risk to BBG, which is
unlikely to be offset by the Australian stimulus package.

Insurance Australia Group (IAG) - Focus will be on underlying insurance margin improvements and commentary on the commercial rating cycle.

Rio Tinto (RIO) - (USD) Focus on costs and additional writedowns.

MINIs approaching stop loss

Approx. MINI Share:

Underlying MINI Code MINI Type Strike Stop Loss Share Price
Value Stop Loss

WPL WPLKZX Short $54.05 $48.68 $ 47.53 $ 6.52 2.4%

NAB NABKZT Short $31.10 $28.00 $ 26.86 $ 4.24 4.2%
QBE QBEKZS Short $25.79 $23.23 $ 22.06 $ 3.73 5.3%
XJO XJOKZX Short $4,899.33 $4,655.00 $ 4,377.50 $ 5.22 6.3%

For further information please do not hesitate to contact us on the details below

Contact
Equities Structured Products & Warrants
Toll free 1800 450 005 www.rbs.com.au/warrants
Trading Products Team
Ben Smoker 02 8259 2085 ben.smoker@rbs.com
Robbie Taylor 02 8259 2018 robbie.taylor@rbs.com
Ryan Corrigan 02 8259 2425 ryan.corrigan@rbs.com
Investment Products Team
Elizabeth Tian 02 8259 2017 elizabeth.tian@rbs.com
Tania Smyth 02 8259 2023 tania.smyth@rbs.com
Robert Deutsch 02 8259 2065 robert.deutsch@rbs.com
Mark Tisdell 02 8259 6951 mark.tisdell@rbs.com

Disclaimer:
The information contained in this report has been prepared by RBS Equities (Australia) Limited (“RBS”) (ABN 84 002 768 701) (AFS Licence No
240530) (“RBS Equities”) and has been taken from sources believed to be reliable. RBS Equities does not make representations that the information is
accurate or complete and it should not be relied on as such. Any opinions, forecasts and estimates contained in this report are the views of RBS
Equities at the date of issue and are subject to change without notice. RBS Equities and its affiliated companies may make markets in the securities
discussed. RBS Equities, its affiliated companies and their employees from time to time may hold shares, options, rights and warrants on any issue
contained in this report and may, as principal or agent, sell such securities. RBS Equities may have acted as manager or co-manager of a public
offering of any such securities in the past three years. RBS Equities’ affiliates may provide, or have provided banking services or corporate finance to
the companies referred to in this report. The knowledge of affiliates concerning such services may not be reflected in this report. This report does not
constitute an offer or invitation to purchase any securities and should not be relied upon in connection with any contract or commitment. RBS Equities,
in preparing this report, has not taken into account an individual client’s investment objectives, financial situation or particular needs. Before a client
makes an investment decision, a client should, with or without RBS Equities’ assistance, consider whether any advice contained in this report is
appropriate in light of their particular investment needs, objectives and financial circumstances. It is unreasonable to rely on any recommendation
without first having consulted with your adviser for a personal securities recommendation. This information contained in this report is general advice
only. RBS Equities, its officers, directors, employees and agents accept no liability for any loss or damage arising out of the use of all or any part of the
information contained in this report. This Information is not intended for distribution to, or use by any person or entity in any jurisdiction or country where
such distribution or use would be contrary to local law or regulation. If you are located outside Australia and use this Information, you are responsible
for compliance with applicable local laws and regulation. This report may not be taken or distributed, directly or indirectly into the United States, or to
any U.S. person (as defined in Regulation S under the U.S. Securities Act of 1993, as amended.

The warrants contained in this report are issued by RBS Group (Australia) Pty Limited (ABN 78 000 862 797, AFS Licence No. 247013). The Product
Disclosure Statements relating to these warrants are available upon request from RBS Equities or on our website www.rbs.com.au/warrants

© Copyright 2009. RBS Equities. A Participant of the ASX Group.

Explanation of Warrant Tables:

Security – refers to the code ascribed to the warrant, ExDate – refers to the date on which the warrant expires or is reset, ExPrc – refers to the
exercise price, or second instalment payment, CP – tells you whether the warrant is a call or a put, ConvFac – the conversion factor of the warrant
which tells you how many warrants you need to exercise in order to take possession of 1 share, Delta – tells you how much the warrant will move for a
1c move in the underlying security, Description – Tells you the type of warrant.
All charts taken from IRESS unless indicated otherwise