SPEAKER: Juliana Roadley, Market Analyst, CommSec LOCATION: Sydney DATE: December 2012

ASX INVESTMENT TALKS

DISCLAIMER: The views, opinions or recommendations of the presenters are solely their own and do not in any way reflect the views, opinions, recommendations, of ASX Limited ABN 98 008 624 691 and its related bodies corporate (“ASX”). Information and material presented at the seminar is for educational purposes only and does not constitute financial product advice. Investors should obtain independent advice from an Australian financial services licensee before making investment decisions. No responsibility is accepted by ASX for any loss or damage arising in any way (including due to negligence) from anyone acting or refraining from acting as a result of this information or material. © Copyright 2012 ASX Operations Pty Limited ABN 42 004 523 782. All rights reserved 2012.

Stocks for your stocking

Stocks for your stocking

Juliana Roadley Market Analyst Dec 2012

The Santa Claus Effect • Is there a Santa Claus effect? • Analysing results over the last 70 years the

answer is YES. • Best 2 months over last 70 years • January • December

The Santa Claus Effect • The average monthly gain for the All

Ordinaries index over the past 70 years has been 0.6%

• December and January have clearly out-performed over time.

• 70yr. average monthly gain January 1.9% • 70yr. average monthly gain December 1.8%

The Santa Claus Effect • Why? No clear reason • End of year joy and freedom to take punt. • End of AGM season – know a lot more

about company results and future plans • Positioning for the summer break so don’t

have to sit and watch market – buy and forget

• Time when US & European volumes pick up

2013 plan

• Low interest rate environment • Low global yield • Investor caution • Total returns for Australian market set to lift • High AUD to continue • Government policy – election 2013

ECONOMIC AND OTHER FACTORS • US fiscal Cliff • European Dramas • Government policy – election 2013 • Planned investment • Commodity prices – especially coal, iron

ore, petroleum, copper & wheat • All Ordinaries Accumulation index (total

return on shares) now at 20mth highs - highest since late April 2011

Computershare (CPU) • In 2012 – Globally low rates & low

corporate activity held stock back • Signs of life are emerging in the US, with

M&A activity in key markets tracking up 31% in the 6 months

• Finance costs have fallen • Companies looking for ways to boost

returns • Target price $9.50 as at 12th DEC 2012

Rio Tinto (RIO) • Still feel RIO is cheap due to massive

disconnect between commodity, equity markets and share values

• Strong cash flow especially from Iron Ore operations currently 90% of total earnings

• Large scale – low cost miner • Small increase in cost base shouldn’t hurt • Target price $73.00 as at 12th DEC 2012

Westpac Bank (WBC) • WBC has a strong balance sheet with

sector leading capital and coverage levels • Even with banking reform (Basel 3 Capital

rules) still in a good place to see growth • Only major bank that is committed to

continued dividend growth • High dividend yield – historic 6.4% • Target price $26.72 as at 12th DEC 2012

TPG Telecom Ltd (TPM)

• TPG still our preferred Telco • Strong underlying organic growth with both

retail and corporate segments • Quality business contracts • Sales will benefit from its group restructure • Telstra’s Adam Internet threat limited • Target price $2.60 as at 12th DEC 2012

Sigma Pharmaceuticals (SIP)

• Strong balance sheet and room to improve capital management – relative to other health care firms

• Good management team with strong track record

• Looking to grow retail strategy • Strong dividend yield – historic 5.8% • Target price $0.70 as at 12th DEC 2012

Wotif Group (WTF)

• Flat start to this financial year • From 1st Jan 2013, Wotif will increase its

commission from 10% to 11% • Strong uptick in earnings, high demand for

product • Dominates distressed hotel inventory

market • Target price $5.60 as at 12th DEC 2012

IMPORTANT INFORMATION Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL: 234945 (the Bank) and a Participant of the ASX Group. This presentation is not advice been prepared without taking account of the objectives, needs, financial and taxation situation of any particular individual. For this reason any individual should, before acting on the information, consider the appropriateness of it having regard to their own objectives, needs, financial and taxation situation and if necessary, seek appropriate independent financial and taxation advice. Information relating to taxation is based on current legislation and is subject to change. Any securities or prices used in the examples in this presentation are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. CommSec refers to products tradeable on exchange during this presentation (ETF, Warrants, LIC, ETIS), CommSec strongly recommends that before making any investment decision you consult the product issuer and consider the Product Disclosure Statement (PDS) or equivalent disclosure documents. This information is not a summary or exhaustive statement on any matters and investors must not rely on this material as the basis for making any investment decisions. CommSec Cash Management and CommSec Margin Loan refers to products of the Bank administered by CommSec. Please consider the PDS before making any decisions about the CommSec Margin Loan. Terms and conditions are available upon request, applications are subject to credit approval. For products where CommSec is the product issuer (OTC CFDs, ASX CFDs, ETOs) CommSec strongly recommends that clients consider the PDS prior to making any investment decision. All these PDSs are available from commsec.com.au. Fees and charges apply.

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