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

The Round Up

7 December 2009

Issue No. 233

The Round Up is a comprehensive daily note produced by the RBS Warrants

team providing an overview of market movements along with quality ideas forwarrant traders and investors.

In todays issue

Global Market Action Scoreboard, commentary

Aussie Market Action SPI Comment, Events & Dividends

NWS (NWSKZJ) MINI Trading Buy USD rebound, more value in TV

BXB (BXBKZG) MINI Trading Buy Recovery Story

ASX (ASXKZI) MINI Trading Buy Strong November trading

Round Up Corner Banks Update ANZ,CBA,NAB,WBC

Equities

Move Last % Move Range Volume

ASX 200 -72.4 4702.2 -1.5% -87 to -14.u.c $4.0 bn(L)

SPI - yesterday -82.0 4706.0 -1.7% -97 to -38.u.c 26,354(A)

Dow Jones +22.8 10388.9 +0.2% -54 to +151 Very High

S&P 500 +6.1 1106.0 +0.6% -3 to +19 High

Nasdaq +21.2 2194.4 +1.0% -3 to +41 Avg

FTSE +9.4 5322.4 +0.2% -40 to +61 High

Commodities

Move Last % Today % Past Month

Oil-WTI spot -0.99 75.47 -1.3% -6.1%

Gold Spot -46.20 1161.40 -3.8% +6.3%

Nickel (LME) -0.23 722.40 -0.0% -10.7%

Aluminium (LME) +0.66 96.00 +0.7% +11.9%

Copper (LME) -1.87 317.74 -0.6% +6.9%

Zinc (LME) -1.88 106.02 -1.7% +6.1%

Silver -0.31 18.52 -1.6% +6.1%

Sugar -0.59 21.95 -2.6% -4.6%

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Dual Listed Companies (DLCs)

Move %Move Last AUD Terms Diff to Aus

NWS (US) +0.37 +2.7% 14.29 15.63 +47.9 c

RIO (UK) -58.5 p -1.8% 31.25 56.16 -1569.4 c

BLT (BHP UK) -41.0 p -2.1% 18.905 33.97 -742.8 c

BXB (UK) -3.0 p -0.8% 3.518 6.32 -4.9 c

American Depository Receipts (ADRs)

Move %Move Last AUD Terms Diff to Aus

BHP (US) -1.86 -2.4% 75.27 41.16 -23.7 c

AWC (US) -0.03 -0.5% 5.72 1.56 -2.1 c

TLS (US) -0.32 -2.0% 15.68 3.43 +1.0 c

ANZ (US) +0.08 +0.4% 20.34 22.25 +26.7 c

WBC (US) -0.53 -0.5% 111.06 24.29 +25.4 c

NAB (US) -0.31 -1.2% 25.85 28.27 +17.3 c

LGL (US) -2.07 -6.1% 31.64 3.46 -6.9 c

RMD (US) +0.73 +1.4% 52.25 5.71 +11.5 cJHX (US) -1.58 -4.0% 37.82 8.27 +9.2 c

PDN (CAN) -0.07 -1.7% 3.97 4.11 -6.7 c

Overnight Commentary

United States Commentary

Arguably, a more subdued reaction to better than expected payrolls on Friday night than most expected. Despite a betteroutcome from both Non-Farm and unemployment, the Dow finished well shy of highs up only 22pts, the S&P up 0.6% andthe Nasdaq finished 1% higher.

Eco - A much better than expected result from Non Farm Payrolls, -11K vs -125K expected and a significant improvement

on October's -190K. Unemployment for November ticking down slightly to 10.0% vs consensus and last months 10.2%.Change in Manufacturing Payrolls -45K vs -41K and Factory Orders +0.6% vs forecasts for a flat reading.

Bellwether Barometers - To be expected following the better jobs data and any uptick in confidence around the health ofthe US economy, the likes of HP, Intel, Boeing, United Tech and 3M led the Dow higher. All of the aforementionedadding between 1.5%-3%, featuring in the top10 and together accounting for all of the days gains.

Fnancials - Topping the Dow, BofA up 3.3% after completing their $19.3bln raising, the biggest sale of stock or preferredshares by a US public company since 2000. The fact the discount was less than 5% and the funds will be used to freethemselves from TARP, was enough to generate some buying across the rest of the sector, Regions up 3.8%, MorganStanley and GS up 2%.

Bonds - Yields up 11.2bps, 8.8bps and 6.3bps across the 2, 10 and 30yr treasuries on the back of the better thanexpected jobs data. Aside from a tick in the box for the jobs market and economy as a whole, the numbers also served toshorten some traders timetables on the Fed's tightening regime.

United Kingdom & Europe Commentary

TheFTSEekedoutagainof0.2%or9ptsasstrongUSjobsdatapulledtheFTSEintopositiveterritory.TheFTSEEurofirst300wasup1.1%,theCACclimbed1.3%andtheDAXendedthesession0.8%higher.UK Banks -StandardChartered,off3.6%,wastheworstofthebanks,withthesectorweakerfollowingnewsthepricetagforthebailouthadhit850bnwiththeNationalAuditOfficesayingthefullcostwontbeknownforyears.RBSwasoff1.4%andBarclaysdropped0.3%.Beverages -SABMillerwasup2.1%inLondonaftertheHeinekenbosssaidthetop4brewerswouldgreatlyincreasemarketshare.Heinekenjumped3.7%,Anheuser-BuschInBevadded0.7%andCarlsbergrose0.3%.

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Defensives -DrugmakersGSKandAstraZenecawereup2.2%and2.6%respectively.AstraZenecabenefitedfromnewsthattheUSregulatorhadapprovedanewversionofitsSeroquelanti-psychotic.AstraZenecasoriginalformulationofSeroquellosespatentprotectionin2012.Airlines -BAledthewayontheFTSE100up2.8%afterabrokerupgradeandadditiontoits'BUY'list.ThenotesaidsynergieswithIberiacouldbestrongandthatpotentialdisposalscouldalsohelp.

Commodites Commentary

Miners -ThestrongUSjobssawabounceinthedollarwhichsawthemetalscomeoff.Theminingstockswereabigfeature in the worst performerswith BHP falling 2.1%,Rio dropped 1.8%,Anglo fell 1.6%, Lonmin sank 2.6% andRandgoldwastheworstontheFTSE100off4.3%.

SPI Commentary

The SPI traded up 82pts or 1.72% to 4706. Open at 4788 with a high of 4805 and a low of 4691. Volume 28,797. Overnight the SPItraded up 28 to 4729.

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 Aus ANZ job ads

US

Tuesday AUS Aus NAB business confidence, Aus current account balance

US US consumer credit

Wednesday AUS Aus trade balance, Aus housing finance

US

Thursday AUS Aus unemployment rate

US US wholesale inventoriesNZ NZ RBNZ cash rate decision

Friday AUS

US US trade balance, US retail sales

*Dates are indicative only and may change

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MINI Trading Buy:

News Corp (NWSKZJ) USD rebound, more value in TV

The NWS share price has been weighted down on the falling USD index of late, currently trading now at low $15 where itwas in early August. The stock looks well supported at this level so we feel that with a stablising/rising USD, NWS canbounce strongly from this level. RBS Research believe that the introduction of retransimssion fees will add a substantial

uplift to the TV revenues and valuation. RBS Research have a $19.92 Target Price on NWS which represents a healthy31.4% upside. Get Long NWS with NWSKZJ.

Source: IRESS

Retransmission fees could be a share-price catalystNews Corp has indicated that it intends to try to start charging the cable, satellite and IPTV operators for the right toretransmit the Fox Network to their pay TV customers. We estimate potential additional revenue and operating profit forNews Corp of US$500m+ over a threeto four-year time-frame, which could help drive News Corps TV operating profitback up to US$1bn by FY14F (from only US$174m in FY09). etransmission revenues will take time to ramp up asagreements come up for renewal, but the announcement of an initial deal could be a catalyst for an overall re-assessmentof the valuation of News Corps TV assets.

Retransmission fees could add US$3.2bn+ to TV valuationWe currently value News Corps TV operations at US$3.8bn (8.5x FY11F EBITDA). We estimate that retransmissionrevenues of cUS$500m per annum would add US$3.2bn to our TV DCF valuation (equivalent to US$1.25 or A$1.40 per

share), with further upside if News Corp is able to achieve a rate per subscriber above that of CBS.

Buy rating and A$19.92 price target retainedWe believe guidance for FY10 operating profit growth of high single to low double digit is conservative and see potentialfor ongoing upgrades as the year progresses (we forecast growth of 16%). The stock looks cheap on both peer multipleand a sum-of-the-parts basis, with possible catalysts around retransmission deals and eventual capital management.

RBS MINIs over UGL

Security ExPrc Stop Loss CP ConvFac Delta Description

NWSKZJ 1157.22 1272 Long 1 1 MINI Long

NWSKZI 783.16 861 Long 1 1 MINI Long

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MINI Trading Buy:

Brambles (BXBKZG) Recovery Story

BXBs AGM trading update last week conmtained few surprises and highlighted that conditions remain soft in BXB's keymarkets. While conditions may remain tough in the short term, RBS Research maintain a long-term Buy on the back ofBXB's leverage to economic recovery. Last weeks pullback to the previous key resitance level at $6.50 is a buying

opportunity. Buy BXBKZG

Source: IRESS

BXBs AGM trading update showed underlying group revenue down 3% on the pcp, with CHEP and Recall both recording3% declines. Given the weak economic conditions through the period to October we think this was not a bad outcome.Outlook commentary suggests conditions remain weak with BXB yet to see a pickup in activity in its key US andEuropean markets.

CHEPWith a 5% decline in revenue, the CHEP Americas business was slightly weaker than expected. A soft US market wasthe primary driver, with management now estimating pallet issues in the US will be 3% below FY09. CHEP EMEAdeclined 1% (+1% ex-autos), while CHEP Asia Pacific increased 2% (+4% exautos) reflecting the better economicenvironment in the region.

Buy at the bottom for longer-term upside

RBS retain long-term Buy rating. We think the BXB business will prove itself over time and see sentiment returning as apickup in the economic environment feeds through to earnings growth. Executing on the US will be key. Target price$7.51.

RBS MINIs over BXB

Security ExPrc Stop Loss CP ConvFac Delta Description

BXBKZG 382.1 Long 1 1 MINI Long

BXBKZP 981.09 Short 1 1 MINI Short

BXBKZR 911.27 Short 1 1 MINI Short

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MINI Trading Buy:

Aust Securities Exchange (ASXKZI) Strong November trading

RBS Research have a Buy recommendation on ASX with a 12mth Target Price of $40. Yesterday ASX releasedNovember trading activity showing a surprisingly strong rebound to trading volumes in cash and deriviativeproducts. Cash equity volumes were in line with RBS Researchs forecast at 541k/day (up 31% on the pcp), while

futures & options volumes were up a sizeable 47% on an average daily basis. Furthermore, both primary andsecondary issuances remained healthy.

Get long ASX with ASXKZI for a valuation uplift to Target Price of $40.

Source: IRESS

Cash equities value traded up 19% on the pcp at A$5.1bnTotal average daily volume traded was 541k in November, up 31% on the pcp. The daily average value traded was up19% on the pcp to A$5.1bn (although this is down on the A$5.4bn in October). Overall we view these as strong numbersand remain confident that our forecast of A$6.0bn in average value traded for FY10 remains intact.

Futures & options November volumes up 47% on the pcp

November was an exceptionally strong month for futures & options with average daily volumes up 47% on the pcp.Management attributed this strength to strong trading in 3-year treasury bond futures, as the contract has become thefocal point of liquidity across the yield curve. The uncertainty around future cash rates contributed to the volumes, as didthe high level of Commonwealth Government bond issuance (A$4.8bn).

ASX last traded $33.33, BUY ASXKZI for 1-for-1 upside towards RBS Target Price of $40.00

RBS SFIs over ASX

Security ExPrc Stop Loss CP ConvFac Delta Description

ASXKZI 2101.11 2415 Call 1 1 MINI Long

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RBS Round Up Corner:

Banks Sector Update ANZ,CBA,NAB,WBC

Post the bank reporting season, CBA trading update and ANZ, NAB and WBC going ex dividend, the banks haveunderperformed. RBS Research believe banks will wait until they understand how businesses are performing postChristmas before poviding further upbeat commentary. This is likely to weigh on relative share price performance in the

short term, however the BDD cycle seems to be peaking and any pullbacks in the banks into the end of the year shouldbe used as a buying opportunity.

Sector performanceBanks' PE relative (to All Ords) is back down to 86%, having underperformed the market over the last month. While this isabove the long-run average, given short-term structural advantages, we believe the sector can trade at a premium. Thebanks are now trading at an average PE of 13.5x FY10F on IBES consensus.

Investment view RBS Research prefer ANZ and NAB to WBC and CBAAs a result of a normalising earnings cycle, we believe relative valuation will again play a significant role in the relativeperformance of stocks in the sector. RBS believe ANZ and NAB still have the greater share price upside potential overthe next six to 12 months, given their 1-2 PE point discounts.

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

Equities Structured Products & Warrants

Toll free 1800 450 005 www.rbs.com.au/warrantsTrading Products Team

Ben Smoker 02 8259 2085 ben.smoker@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

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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

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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

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