Economic OutlookIn growth we hope, but in low rates we trust

October 2015

Thomas Jellvik+46 8 473 48 07thomas.jellvik@dnb.se

Macro

Current trends: Too modest growth – China in focus

The US: Dependent upon continued private sector releveraging

The Eurozone: Recovery under austerity likely to be weak

China: Slow rebalancing means weak growth, but the toolbox is well equipped

Sweden: Fighting deflation is still top of the agenda

2

Contents

Despite markets’ concerns about global growth, data is not all that bad, particularly for the Develop World.

The Eurozone is actually doing a little better than expected and the US is in line with expectations. Thus, we do not expect forecasters to have to reconsider the expected cyclical recovery during H2.

If the outlook for Develop World looks stable, it is more uncertain for Emerging Markets and particularly for China where data is undershooting expectations. The situation in China is more complex given the huge internal imbalances, meaning growth looks set to underperform expectations for some time.

3

Global economy: short-term momentum – a lot of concerns, but how bad is it?

Citi, Economic Surprise Index China & EMG

- 150

- 125

- 100

- 75

- 50

- 25

0

25

50

75

100

jan maj sep jan maj sep jan maj sep jan maj sep jan maj sep jan maj sep

2010 2011 2012 2013 2014 2015

Emerging MarketsChina

Source: Macrobond

Citi, Economic Surprise Index USA & EMU

- 125

- 100

- 75

- 50

- 25

0

25

50

75

100

125

150

jan maj sep jan maj sep jan maj sep jan maj sep jan maj sep jan maj sep

2010 2011 2012 2013 2014 2015

United StatesEuro Area

Source: Macrobond

Case for optimism: Private sector cash flow remains strong and balance sheet

consolidation is mostly done.

Despite that Fed looks likely to hike rates later this year –‘whatever it takes’ central banks remains the norm.

A prolonged period of soft private sector demand in the OECD makes the pent-up demand story more likely.

Falling commodity prices are a boost to household consumption.

Case for pessimism: Correction of the investment overhang in China.

Slump in commodity prices could further hamper an already weak investment cycle.

Higher volatility in asset prices – lower ‘wealth effects’ for the household sector.

4

Where do we stand? The case for optimism and pessimism

World, CPB World Trade Monitor, SA, Index

Inde

x

30

40

50

60

70

80

90

100

110

120

130

140

150

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Total, VolumeTotal, VolumeTotal, VolumeTotal, Volume

Source: Macrobond

OECD Retail sales & industrial production

"long term trend growth"

Inde

x

85

90

95

100

105

110

115

120

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

OECD Industrial ProductionOECD Total, Retail Sales

Source: Macrobond

Falling commodity prices and a strong labour market point to healthy domestic demand as income growth gets a boost.

The private sector (particularly the corporate sector) continues to increase spending faster than it is generating income, supporting growth in the short run.

The outlook for manufacturing is more mixed as a stronger USD and weak growth in export markets take their toll on growth.

All in all, the short-term trend looks rather solid for the US economy and we expect positive growth momentum into 2016.

5

The US: promising domestic growth outlook in the short run…

ISM, Purchasing Managers' Index

Index

30

35

40

45

50

55

60

65

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

ManufacturingNon - Manufacturing

Source: Macrobond

United States

1,0

1,1

1,2

1,3

1,4

1,5

1,6

1,7

Index

80

85

90

95

100

105

110

115

120

125

130

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Foreign Trade, Bureau of Economic Analysis, Import/Export, SA, USD, lhs

FX Indices, Federal Reserve, Broad Index (Real), rhs

Source: Macrobond

Consensus of 3% growth for the coming years could prove challenging as the stronger USD and weak export market growth start to have an impact…

…hence the recovery looks set to depend on the private sector driving demand, which would be equal to more leverage, particularly with the current fiscal stance.

This could be done through a further reduction of savings in the corporate sector – but profitability, although high, is falling.

Or by a rising debt to income trend in the household sector.

Would this be a plausible scenario in a environment of rising yields and richly valued asset prices?

6

…but sustained growth expectations near 3% could prove more challenging

Household Sector Financial Svaings & Net Wealth

-0,050

-0,025

0,000

0,025

0,050

0,075

0,100

0,125 4,50

4,75

5,00

5,25

5,50

5,75

6,00

6,25

6,50

6,75

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Net wealth/D.I average 1960 -ytd, rhsNet wealt/D.I, rhsFinancial balance US household, lhs

Source: Macrobond

No “wealth effect” Consumption

US Business Sector Profitability & Cash flow

0,045

0,050

0,055

0,060

0,065

0,070

0,075

0,080

0,085

0,090

0,095

0,100

-0,04

-0,03

-0,02

-0,01

0,00

0,01

0,02

0,03

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

RoE (after tax), lhsFlow of Funds: Internal funds - Investment, rhs

Source: Macrobond

US import market is growing nicely, which, together with the accumulated weakness in the effective exchange rate since the beginning of 2014, continues to lend support to the recovery.

On the domestic side it is encouraging to see that consumer credit is finally start to grow. Another positive is the continued improvement in car sales. Could it be that we now witness the first signs of a real comeback for consumer?

7

Eurozone: external sector gets a helping hand from domestic demand....USA: Import y/y

- 10,0

-7,5

-5,0

-2,5

0,0

2,5

5,0

7,5

10,0

2009 2010 2011 2012 2013 2014 2015

United States, Foreign Trade, Census Bureau, Goods, Import, Capital Goods, Constant Prices, SA, USD

United States, Foreign Trade, Census Bureau, Goods, Import, Consumer Goods, Constant Prices, SA, USD

0

Source: Macrobond

Euro Area, Consumer Credit y/y

- 1

0

1

2

3

4

5

6

7

8

9

10

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Eurozone Consumer Credit

Source: Macrobond

Euro Area, ECB, Nominal Effective Exchange Rate Index

Inde

x

80

85

90

95

100

105

110

115

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Euro Area, FX Indices, ECB, Nominal Effective Exchange Rate Index

Source: Macrobond

Private sector continues to accumulate big cash surplus, i.e. spending considerable less than income, showing little confidence in the future.

If the private sector were to revert to a normal spending pattern, we estimate activity in the Eurozone would be c3% higher than today, resulting in a strong persistent recovery.

Unfortunately this is unlikely to happen as long as fiscal policy undermines confidence, leaving the private sector in a risk-averse mood.

So, until policymakers change their minds, the growth outlook is likely to remain weak.

8

...but Eurozone could do a lot better with a more sensible macro policy

EMU Profitshare vs Investment

0,4000

0,4025

0,4050

0,4075

0,4100

0,4125

0,4150

0,4175

0,4200

0,4225

0,4250

0,4275

0,18

0,19

0,20

0,21

0,22

0,23

0,24

0,25

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Profit Share, lhsInvestment ratio, rhs

Source: Macrobond

EUROZONE: Financial savings by sector

- 7

- 6

- 5

- 4

- 3

- 2

- 1

0

1

2

3

4

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

HOUSEHOLDSTOTAL (CA)CORPORATIONSGOVERMENT

Source: Macrobond

9

China: reforms in second place as policymakers focus on reviving growth momentum

China, Statistics China, SA

Index

50

60

70

80

90

100

110

120

130

140

150

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Business Cycle SignalCoincident IndexLagging Index

Source: Macrobond

China

- 20

- 10

0

10

20

30

40

50

60

70

- 40

- 30

- 20

- 10

0

10

20

30

40

50

2008 2009 2010 2011 2012 2013 2014 2015

Energy Production, Transmission & Distribution, Energy Consumption, Electric Energy, Electricity, Ga s & Other …

Traffic, Rail, Turnover Volume of Freight Transport, rhs

Source: Macrobond

China, Income, Households, Urban, Disposable Income, Per Capita, y/y

%

5,0

7,5

10,0

12,5

15,0

17,5

20,0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Per capita Income

Source: Macrobond

Too dependent on exports and investments – weak DM and strong currency not that good for the economy. Problem: overdependence on investment and exports did not

just happen – it is a consequence of the economic policy agenda.

The rebalance from overdependence on investment is likely to remain a drag on the economy. A sustainable investment ratio should be c30% of GDP. To get there within 5–7 years implies growth in investment would lag behind GDP growth by c4–5%-points.

This suggests a high risk of a hard landing and further downside risk in commodity prices.

So what policy tools does China have to play with? Nearly 40% of GDP in foreign reserves. Monetary policy support from lower rates, cutting reserve

requirement for banks, bond buying, direct lending, and a weaker currency.

Fiscal spending on a greater scale – on infrastructure and social reforms.

Risk of credit crunch: total debt at c220% of GDP is manageable. But the risk stems from the concentration of debt, as 140% is in the corporate sector.

10

China: medium-term outlook – the big question is how to rebalance without major setbacks

China Share of GDP

0,300

0,325

0,350

0,375

0,400

0,425

0,450

0,475

0,500

0,525

0,550

0,05

0,10

0,15

0,20

0,25

0,30

0,35

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Investment, lhsExport, rhsPrivate consumption, lhs

Source: Macrobond

China, Foreign Trade, Terms of Trade, Total, CPPY=100

Inde

x

80

85

90

95

100

105

110

115

120

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

China, Foreign Trade, Terms of Trade, Total, CPPY=100, Index

Source: Macrobond

We expect the oil price to be back to USD65/b in 2016e as the supply situation starts to normalize.

Upside is capped by falling production costs, US spare capacity in the form of available rigs, and OPEC’s market share strategy.

The low price has boosted demand in 2015, but we expect this to fade in 2016 as the price rises as supply starts to normalize.

Other commodities are still having a hard time as China’s investment cycle continues to level off as the economy slowly transforms. In addition, the supply side situation looks set to continue to hurt commodity prices in 2016e.

11

Commodity & energy prices in the wake of a weaker China: oil price back up, but the rest suffering from weak investment cycle

Crude Oil, Close, USD

USD

/Bar

rel

0

25

50

75

100

125

150

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Brent, Spot, FOB North Sea, ICEWTI, Global Spot

Source: Macrobond

Commodity Indices, Bloomberg, Close, USD

Inde

x

0

100

200

300

400

500

600

700

800

900

1000

1100

1200

1300

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Copper Sub-

Index, Total Return

Nickel Sub -Index, Total Return

Zinc Sub -Index, Total Return

Aluminum Sub -Index, Excess Return

Silver Sub -Index, Total Return

Source: Macrobond

After a long period of weak exports, we now see stronger momentum in exports and investment.

Investment also gets a boost from housing. Despite this, new housing still lags behind population growth. This, and the absence of stricter amortization rules, looks set to keep house prices rising for the foreseeable future.

Private consumption still an engine of growth as low rates and continued asset price inflation keep the household sector in a good mood.

The public sector does not add much to growth as the government keeps a lid on the budget deficit.

All in all, we expect a cyclical peak next year and thereafter growth to settle down at c2%, which raises questions about whether growth is sufficient to keep inflation at the Riksbank’starget.

12

Sweden: cyclical rebound without with strong legs raises a question…

Sweden, Import & Domestic Supply Prices

- 10,0

-7,5

-5,0

-2,5

0,0

2,5

5,0

2010 2011 2012 2013 2014 2015

Import Prices, Total

Domestic Supply Prices, Total, except Construction, Food, Beverages & Tobacco

Source: Macrobond

Sweden, GDP Contributions, Constant Prices

Perc

ent

- 3

- 2

- 1

0

1

2

3

4

5

6

7

8

9

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

2010 2011 2012 2013 2014 2015

Total

Net Exports of Goods & Services

Households Consumption Expenditure

Gross Fixed Capital Formation

Government Consumption Expenditure

Change in Inventories

Source: Macrobond

Employers organizations' wage expectations for the next two years are well below what is consistent with long-term inflation of 2%. As about two thirds of inflation is generated by underlying wage cost, a result in line with current wage expectations would be a problem for the Riksbank.

If wages do not grow fast enough, one could always hope that productivity falls short of expectations. But with current growth about 2% and a cyclical recovery on the horizon, this is unlikely to be the case in our opinion.

All this points – from a Riksbank point of view – to a disturbingly weak domestic inflation picture and a need to import inflation to reach the target.

13

...about the Riksbank’s ability to create a sustainable lift in domestic inflation...

Sweden, Labour Productivity

- 6

- 5

- 4

- 3

- 2

- 1

0

1

2

3

4

5

6

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Sweden, Productivity, Costs & Hours Worked, Labour Productivity, Market Producers & Producers for Ow n Fina …

Source: Macrobond

Sweden, Prospera, Wage Increase Expectations, Employers' Organisations, 2 Years

1,75

2,00

2,25

2,50

2,75

3,00

3,25

3,50

3,75

4,00

4,25

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

The outlook for imported inflation depends primarily on non-durable consumption goods and the impact of the SEK.

For oil the recent fall is not in line with the Riksbank forecast of a continued rise to USD70 by 2017. However, given the high volatility, this might still happen. Our view of the oil price is similar to the Riksbank’s forecast.

The most likely saviour is a weak SEK. As the Riksbank expects a near-8% strengthening of the KIX index by 2017 and still to get inflation back to 2%, a prolonged period of weakness could compensate for weak domestic inflation as importers finally raise prices.

14

...or will the only rescue be a weak currency?

Crude Oil, WTI, Global Spot,USD

USD/

Barre

l

30

40

50

60

70

80

90

100

110

120

2010 2011 2012 2013 2014 2015 2016 2017

Crude Oil, WTI, Global Spot, Close, USD

Source: Macrobond

Riksbank forecast

Sweden, FX Indices, Riksbanken, KIX Index

Inde

x

97,5

100,0

102,5

105,0

107,5

110,0

112,5

115,0

117,5

2011 2012 2013 2014 2015 2016 2017

Source: Macrobond

Riksbank forecast

Inline with our expectation Fed delivered a dovish statement and pushed hike further out in time. The timing will be decided by the international development. However, the big question remains the amount of tightening Fed can deliver in a world starved on growth. With a cyclical recovery we expect the market to keep current pricing. But, the US economy is still sensitive to a stronger USD and dependent on credit-driven consumer demand to sustain strong growth, hence we think that the 2-3 year segment still offers value.

ECB: Given the policy set-up in the Eurozone with weak private sector demand and no sign of fiscal stimulus, in our view the Eurozone needs a weak currency. Current market expectations of no action for at least two years looks reasonable to us.

Riksbank: Focus remains on inflation and the Riksbank is grappling with falling commodity prices and slow wage drift. With the upcoming wage negotiations and the ECB on the dovish side, we believe rate hikes will come more slowly than current pricing indicates.

15

Monetary policy: central banks’ short-term outlook well priced. But how much can it deliver?

Expected central bank action compared the 10 of August when global worries resurfaced in the wake of China devaluation.

Recent growth worries have not affected the 10y US treasury yield too much. We see no value below 2% and expect the trading range of 2.1–2.5% to hold as the market pushes the first Fed hike to the December meeting.

Little confidence for the Riksbank ability to rise inflation calls for the need of a weak SEK – we expect that the Swedish bond market will continue to follow Germany and particularly the action from the ECB.

Near-term trigger for the Swedish bond market continues to be focused around the SEK development, short term inflation figures and the upcoming wage negotiations as all these factors remains troublesome for the Riksbank:scurrent inflation forecast.

16

Bond market: dovish central banks and low growth expectations keep yields down

Government Benchmarks, 10y Yield

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

2011 2012 2013 2014 2015

United StatesGermanySweden

Source: Macrobond

Credit quality outlook: fairly stable with low default rate, risks linked to M&A

17

Sources: Moody’s

We expect general credit quality for European corporates to be fairly stable near-term: A gradually improving macroeconomic outlook in Europe, with

emerging markets being the main drag. Corporate credit quality has so far been helped by tight cost

control and favourable FX rates. Main risks are tied to increasing M&A activity, albeit at significantly

lower levels than the US, where the corporate credit quality outlook is weaker due to more aggressive financial policy, the USD appreciation, and looming rate hikes.

Near-term default outlook remains favourable and stable: Lowest default rate since the financial crisis for European

corporates. Helped by the macro environment and the accommodative ECB

policy flooding the market with liquidity. We expect aggregated default rates to remain benign, and below

3% near-term. The divergence between sectors is likely to increase, with

commodity and energy-related companies the most exposed.

0%

2%

4%

6%

8%

10%

12%

14%

16%

Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

Moody’s global speculative grade default rate and forecasts

Returns – fairly muted but well compensated for by credit risk component

18

Bloomberg

Recent market volatility could be an attractive entry point Generally well compensated for by the assumed credit risk.

Volatile market conditions have raised credit spreads, while credit fundamentals and default rates are broadly unchanged.

Return levels are still fairly muted but we like EUR HY Yields in the European IG space are seen just north of 1%,

with similar return levels expected in the SEK space.

Likely to push investors into the higher-yielding credits.

We expect returns in the EUR-denominated high-yield space to be in the region of 5% in the next year, with slightly lower returns for the SEK space given slightly lower credit spreads and assumptions of continued negative 3-month Stibor.

Returns in the USD market are highly dependent on the Fed’s policy and timing of the first rate hike.

0

0,5

1

1,5

2

2,5

3

3,5

4

Aug-14 Nov-14 Feb-15 May-15 Aug-15

Bloomberg IG Credit Indexes - US & EURYield (%)

EUR Investment grade (LHS) US Investment grade (RHS)

0

1

2

3

4

5

6

7

8

9

Aug-14 Nov-14 Feb-15 May-15 Aug-15

Bloomberg HY Credit Indexes - US & EURYield (%)

US High Yield (LHS) EUR High Yield (RHS)

Equity market outlookModest growth and high valuation – not sounding like a great party

19

20

MSCI Sweden: FX is waning and next year and we need growth, or persistent low rates

Valuations remain above historical averages, but Sweden does not look particularly pricey compared with other markets. Looking ahead: despite recent turmoil it is very unusual to see persistent drop in valuations without a big dive in profitability. We do not expect this to happen as the macro outlook – although uninspiring – looks stable.

Buy and hold: valuations and expected returns: At current valuations, we believe the market is priced for yearly returns of 7.5% based on an historical mid-cycle ROE, still offering a sizeable risk premium.

Our 12-month view: Looking into next year, we expect weak profit growth to lower the ROE by over 1%-point to 14.0% (equivalent to a 12-month forward P/E of 14.7x). This is still above the historical average and implies a ‘fair value’ at P/B of 2.3x under normal RRR assumption. Hence, the fundamentals support a 12-month total return

in the region of 8.5%.

All in all, after recent sell off due to global growth worries we believe the equity market offers value, especially in a current low-yield environment.

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

0

1

2

3

4

5

6

7

P/B (lhs) RoE (rhs)

-2%

3%

8%

13%

18%

1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014

Implicit Return - MSCI Sweden( MIid- Cycle ROE 13.5% Payout ratio 45%)

Source Bloomberg/DNB

IMPORTANT/DISCLAIMERThis note (the “Note”) must be seen as marketing material and not as an investment recommendation within the meaning of the Norwegian Securities Trading Act of 2007 paragraph 3-10 and the Norwegian Securities Trading Regulation 2007/06/29 no. 876. The Note has been prepared by DNB Markets, a division of DNB Bank ASA, a Norwegian bank organized under the laws of the Kingdom of Norway (the “Bank”), for information purposes only. The Note shall not be used for any unlawful or unauthorized purposes. The Bank, its affiliates, and any third-party providers, as well as their directors, officers, shareholders, employees or agents (individually, each a “DNB Party”; collectively, “DNB Parties”) do not guarantee the accuracy, completeness, timeliness or availability of the Note. DNB Parties are not responsible for any errors or omissions, regardless of the cause, nor for the results obtained from the use of the Note, nor for the security or maintenance of any data input by the user. The Note is provided on an “as is” basis. DNB PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE NOTE’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE NOTE WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall DNB Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the Note, even if advised of the possibility of such damages. Any opinions expressed herein reflect the Bank’s judgment at the time the Note was prepared and DNB Parties assume no obligation to update the Note in any form or format. The Note should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. No DNB Party is acting as fiduciary or investment advisor in connection with the dissemination of the Note. While the Note is based on information obtained from public sources that the Bank believes to be reliable, no DNB Party has performed an audit of, nor accepts any duty of due diligence or independent verification of, any information it receives. Confidentiality rules and internal rules restrict the exchange of information between different parts of the Bank and this may prevent employees of DNB Markets who are preparing the Note from utilizing or being aware of information available in DNB Markets/the Bank which may be relevant to the recipients of the Note. Please contact DNB Markets at + 08940 (+47 915 08940) for further information and inquiries regarding this Note, such as ownership positions and publicly available/commonly known corporate advisory performed by DNB Markets etc, in relation to the Norwegian Securities Trading Act 2007/06/29 no. 75 and the Norwegian Securities Trading Regulation 2007/06/29 no. 876.The Note is not an offer to buy or sell any security or other financial instrument or to participate in any investment strategy. Distribution of material like the Note is in certain jurisdictions restricted by law. Persons in possession of the Note should seek further guidance regarding such restrictions before distributing the Note. The Note is for clients only, and not for publication, and has been prepared for information purposes only by DNB Markets - a division of DNB Bank ASA registered in Norway with registration number NO 984 851 006 (the Register of Business Enterprises) under supervision of the Financial Supervisory Authority of Norway (Finanstilsynet), The Monetary Authority of Singapore, and on a limited basis by the Financial Conduct Authority and the Prudential Regulation Authority of the UK, and the Financial Supervisory Authority of Sweden. Details about the extent of our regulation by local authorities outside Norway are available from us on request. Information about DNB Markets can be found at dnb.no.

Additional information for clients in SingaporeThe Note has been distributed by the Singapore Branch of DNB Bank ASA. It is intended for general circulation and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should seek advice from a financial adviser regarding the suitability of any product referred to in the Note, taking into account your specific financial objectives, financial situation or particular needs before making a commitment to purchase any such product.You have received a copy of the Note because you have been classified either as an accredited investor, an expert investor or as an institutional investor, as these terms have been defined under Singapore’s Financial Advisers Act (Cap. 110) (“FAA”) and/or the Financial Advisers Regulations (“FAR”). The Singapore Branch of DNB Bank ASA is a financial adviser exempt from licensing under the FAA but is otherwise subject to the legal requirements of the FAA and of the FAR. By virtue of your status as an accredited investor or as an expert investor, the Singapore Branch of DNB Bank ASA is, in respect of certain of its dealings with you or services rendered to you, exempt from having to comply with certain regulatory requirements of the FAA and FAR, including without limitation, sections 25, 27 and 36 of the FAA. Section 25 of the FAA requires a financial adviser to disclose material information concerning designated investment products which are recommended by the financial adviser to you as the client. Section 27 of the FAA requires a financial adviser to have a reasonable basis for making investment recommendations to you as the client. Section 36 of the FAA requires a financial adviser to include, within any circular or written communications in which he makes recommendations concerning securities, a statement of the nature of any interest which the financial adviser (and any person connected or associated with the financial adviser) might have in the securities.Please contact the Singapore Branch of DNB Bank ASA at +65 6212 0753 in respect of any matters arising from, or in connection with, the Note. The Note is intended for and is to be circulated only to persons who are classified as an accredited investor, an expert investor or an institutional investor. If you are not an accredited investor, an expert investor or an institutional investor, please contact the Singapore Branch of DNB Bank ASA at +65 6212 0753.We, the DNB group, our associates, officers and/or employees may have interests in any products referred to in the Note by acting in various roles including as distributor, holder of principal positions, adviser or lender. We, the DNB group, our associates, officers and/or employees may receive fees, brokerage or commissions for acting in those capacities. In addition, we, the DNB group, our associates, officers and/or employees may buy or sell products as principal or agent and may effect transactions which are not consistent with the information set out in the Note.

Additional Information, including for Recipients in the In the United States: The Note does not constitute an offer to sell or buy a security and does not include information, opinions, or recommendations with respect to securities of an issuer or an analysis of a security or an issuer; rather, it is a “market letter,” as the term is defined in NASD Rule 2211.

In BrazilIf the analyst or any close associates serves as an officer, director or board member, or have a personal relationship with any individual that works for a company which DNB Markets publish a research note, this will be mentioned under the disclaimer in the relevant research note.The analyst or any close associates do neither hold nor do they have any direct/indirect involvement in the acquisition, sale, or intermediation of the securities discussed in each research note. Any financial interests, not mentioned in the relevant research notes, that the analyst or any close associates holds in the issuer discussed in the report is limited to investment funds that do not mainly invest in the issuer or industry discussed in the report and the management of which these persons cannot influence.