Daily Market Reviews by MAYZUS.com

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03 APRIL 2013: EURO WEAKENS AS UNEMPLOYMENT CLIMBS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Euro/USD fell to 1.2803 as unemployment inside the euro zone fell to a record high 12,5%. The euro fell against 12 of its 16 most traded peers as unemployment continued to soar in Greece and Spain adding to concern of an even deeper recession. Unemployment in Greece reached 26,7% with 60% of the youth without jobs. A mix of lower than expected industrial manufacturing data and unemployment paint a grim picture for hopes of a quick recovery inside the euro zone.

Asian stocks fell before later publication of new US job numbers. The dollar index (DXY) which has fallen for the last days rose 82,920 as gold prices plunged 35 dollars to USD 1567 an ounce. Copper and silver continue to fall while oil prices are steady. New York crude (YMEX) has been trading above 96 for the whole week and Brent crude above USD 110 a barrel. The European Central Bank (ECB) which along with the EU and International Monetary Fund, IMF, has been strongly criticized for its handling of the Cyprus crisis, meets on April 4th.

As indicated in our Daily Report yesterday Cyprus has started a blame hunt for a crisis running out of hand. Finance Minister Michael Sarris who conducted the bailout negotiations in Brussels and afterwards came empty handed back from Moscow, resigned on Tuesday and was replaced by Labor Minister Haris Georgiades. Sarris has for the last year served as President of the Board in the bankrupt Popular Bank of Cyprus, Laiki. Over the last months Laiki received billions of Euros from ECB in emergency funding.

The use of these funds will be part of a special investigation conducted by three special judges appointed by President Nicos Anastasiades. The judges shall within three months present a report on whom bear responsibility for the crisis. Bank of Cyprus (BOC) and Laiki Bank were till recently regarded as solid profitable national flagships. The two banks have over the last 2 – 3 years lost billions of euro on speculation in Greek treasury bills and unsecured loans to Greek individuals and companies.

President Anastasiades himself came under fire yesterday when it was known that a company headed by his son of law and other relatives presumably transferred 21 million euro out of Cyprus just before the controversial EU decision to raid bank deposits took place. Anastasiades flatly rejected tip-off to close family members or any other wrong doing; “I never knew, and it was never possible for me to wage war until Saturday morning March 16th to avoid what they imposed on us and at the same time supposedly tip-off people”.

Other politicians have received similar accusations which would be subject for the investigations. Even if lose accusations, the tip-off suspicions illustrate what the Cypriot public regards as, too, “cozy” relations between bankers and politicians.

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04 APRIL 2013: ECB UNDER FIRE FOR CYPRUS HANDLING

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Asian stocks fell as worse-than-estimated US economic data spurred concern about the pace of the US recovery as investors speculated whether the Bank of Japan (BOJ) would be able to meet forecast for monetary expansion and an inflation target of 2%. The MSCI Asia Pacific index slid 1% with carmakers as Toyota Motor declining on a stronger Yen. USD/JPY trades at 93.00. Copper prices, a strong indicator for economic growth, sank to its lowest level since August. Gold and silver prices plunged with Gold at USD 1546 an ounce. Oil prices fell two dollar a barrel.

The European Central bank (ECB) is meeting today in the aftermath of a botched attempt to rescue Cyprus. Bank shares have been tumbling across the Euro area and rattled confidence in policy maker’s ability to tame the sovereign debt crisis. With unemployment reaching a record high of 12,5%, doubts are growing about Mario Draghi’s forecast for a second-half economic recovery. The austerity measures prescribed from European bankers and politicians have so far dragged Europe into an even deeper recession.

The disconnect between official low lending rates and those businesses are actually charged, is also a growing concern for the ECB. More than four times as many small businesses in Spain were rejected loans in the second half of 2012 than in Germany or walked away from, too, expansive offers. The excess liquidity in the banking sector has halved over the last half year and lenders in the south European periphery might be in need of more central bank funding.

In front of today’s meeting critical questions are asked on the role ECB plaid in the Cyprus bailout. ECB initially welcomed and supported the Cypriot government’s plan to confiscate funds on all banking accounts including those below Euro 100 000. This was rejected by the Cypriot Parliament. A revised agreement was negotiated a week later under the threat of ECB cutting emergency funding to Cypriot banks. Additionally; capital controls were for the first time in the EU history introduced to avoid capital flight. Free movement of capital is one of the four basic freedoms EU cooperation is built upon.

The confiscation of private accounts and introduction of capital control have damaged investor confidence and banks reputation across the Euro zone. Between March 15 and 27 the Stoxx Europe 600 Bank index dropped 6,8%. The cost of insuring against default on European bank bonds have surged 41% in the same period. Partially responsible for a flawed bailout plan being presented to Parliament, ECB exacerbated markets reactions to the bailout and simultaneously harmed the trust in Europe’s crisis fighting abilities.

Analysts stress that even if the error originated in Cyprus, Euro Finance ministers and ECB’s big miscalculation were to support a flawed plan. This resulted in increased financial stress and uncertainties in global markets. The trust in the Euro was undermined. Whether Mario Draghi and the ECB today would be able to present the right damage limiting response, is an open question.

Three Supreme Court judges appointed by President Nicos Anastasiades will today start investigations into a decade of financial profligacy which brought Cyprus to its knees. They have also a mandate to look into the President’s own affairs after accusations of tipoffs that presumably saved close family for big amounts when of 21 million euros were transferred abroad days before the bailout plan was announced.

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05 APRIL 2013: DRAGHI: CYPRUS NOT A TEMPLATE

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Cyprus is not a template for other possible banking crisis inside the Euro zone, the president of the European Central Bank, ECB, Mario Draghi stated after the ECB board meeting yesterday. Draghi thereby criticized his own decision where Cyprus banks with the blessing of the ECB, was given the right to confiscate funds on private banking accounts below the guaranteed Euro 100 000. Draghi admitted that the proposal was not very “smart”, and stressed that potential future crises would be handled differently without risk for private account holders and companies. This initial wrong decision was quickly corrected, Draghi added.

It took, however, more than a week before the ECB sponsored proposal was rejected by the Cypriot parliament and a new bailout plan was presented. In the meantime it created confusion and havoc in the global financial markets. The new proposal exempted accounts with a balance below Euro 100 000 and from confiscation and left to foreign account holders, mainly Russians and Ukrainians, to bear the bulk of the bailout burden.

The Euro fall as low as 1.2745 on Draghi’s remarks. Euro/USD later recovered strongly to 1.2933. The way ECB and the EU have handled the Cyprus crisis, has, however, put grave question marks as to Draghi and EU-politicians ability to handle the euro zone problems. The crisis ridden Southern European periphery is dragging further into recession, and the only solution the troika of EU, ECB and the International Monetary Fund, IMF, has been able to come up with is a further vicious circle of reduced economic growth, increased taxes and growing unemployment.

Draghi had suggested yesterday that ECB could slash the interest rate, already at a record low level, even further. In a situation where the currency rates are highly volatile and often jump more than one percent a day, a reduction of the interest rate with 0,25% is not the most convincing argument to get the euro zone back on track. Along with low interest rates quantitative easing has been central banks preferred tool. ECB has heavily been buying national bonds in Italy and Spain to avoid spiraling bond rates.

Bank of Japan which also met yesterday, announced aggressive measures to ease monetary policy. USD/JPY plummeted from 93 to 95,67. BOJ will in the next two years double its holding of bonds and shares in line with the monetary easing policies of the US Federal Reserve (FED). BOJ has also set an inflation target of 2% to stimulate economic growth. OJ’s plan implies to buy bonds for an equivalent of USD 73 Billion monthly. Fed is in comparison buying for USD 85 billion a month. Wall Street got a lift from BOJ’s surprisingly dramatic stimulus plan. This came along with supportive comments from ECB and FED, suggesting that central bank policies will keep underpinning measures to the benefit of stocks.

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08 APRIL 2013: YEN SLUMPS AS US - JOB FIGURES HIT DOLLAR

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

US job figures set alarm bells ringing as the rise in job recruitment was half the expected. US employers added only 88 000 jobs in March at its slowest pace in 10 months. The job figures published on Friday triggered fresh concerns about a slowdown in the world’s largest economy. Equity markets fell and might indicate that the last months strong US stock rally has come to an end. Expectations of a fast recovery might have run faster than what is economic fundamental realities.

The dollar plunged in relation to EURO and other major currencies. The Euro/USD rose to a two week high at 1.3039 stabilizing around 1.30 in early Asian trade today. The British pound, GDP, hit the strongest level in six weeks at 1.5362 on concerns of the health of the US labor market. Oil prices fell. Brent crude trades at USD 104,50 a barrel.

The Japanese yen, JPY also fell dramatically. USD/JPY trades at 98,52 after he Japanese Central Bank (BOJ) announced strong quantitative monetary easing measures to combat deflation. After falling 20% in some few months, analysts ask how far down the JPY would be permitted to go. Recent developments might encourage investors to shift back to yen as a funding currency instead of the dollar. The data may encourage more long European currency/yen trading with yen as the favored funder. It might reinforce the yen’s place as the favored carry trading currency.

The Euro received a boost earlier last week as the European Central Bank held rates at 0,75% and the ECB President, Mario Draghi, sought to reassure markets that the Cyprus bailout should not be seen as a template for possible future bailouts in the Eurozone. In a memorandum of understanding between the parties involved in the bailout; Cyprus, ECB, IMF and the EU-commission, severe budget cuts and privatization of state owned assets are among the measures needed for Cyprus to receive its periodic allotments of bailout money.

The anger and public fury run high on the island. Adding to the public tension a financing consulting firm, Alvarez & Marshal hired by the Central Bank to make investigations on the banks behavior leading up to the crisis, revealed that two of the most senior executives at the Bank of Cyprus may have deleted crucial emails pertaining the bank’s disastrous buying of Greek government bonds just before Greece’s international bailout in 2010.

While most attention over the last weeks has been directed towards Cyprus, the leak of 2.5 million files containing details of offshore accounts of some of the world’s wealthiest individuals has added fuel to Europe’s debate over the economic crisis. In a situation where many struggling Europeans are asked to tighten belts and pay more taxes, the political and financial elites of Europe have stuffed their wealth in offshore tax havens as British Virgin Islands, the Cook Island and Singapore, making German, EU and INF accusations against Cyprus pale in comparison. The latest money laundering and tax exemptions accusations involve reputable Western European banks as Deutsche Bank, and individual top German and French bankers and politicians.

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09 APRIL 2013: AGGRESSIVE BOND BUYING SINKS JPY

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

USD/ JPY dropped for the third straight day as the Bank of Japan (BOJ) yesterday started its aggressive monetary easing program. Following the strategy of the US Federal Reserve (FED), BOJ is buying Japanese bonds for trillion in an effort to stimulate economic growth. The Japanese government intends to get out of the vicious inflation circle and has set a target for 2% inflation. The bond buying has boosted the Japanese stock market. US stocks also gained yesterday ahead of second quarter earnings session which is expected to show moderate growth.

USD rallied to its highest level towards JPY seen since 2009, trading at 99,50 yen as BOJ concluded its first bond purchases since announcing the new monetary easing last week. Wall Street dipped in early trading as caution head of the quarterly season dominated the sentiment. Stocks turned around and ended in positive territory. US stocks have rallied strongly over the last months with major indexes hitting record highs. Earnings forecast are predicting a 1,6% rise in earnings over the last year.

The Nikkei index in Tokyo jumped 3.1% and saw its highest level since 2008 as BOJ shall pump an equivalent to USD 1,4 trillion into bonds over the next two years. These measures have created a bonanza in the stock and real estate markets. Traders are waiting for a breakthrough of the psychological 100 yen level a dollar. US 10 years treasury bills fell sharply last week in response to the aggressive Japanese measures.

Oil prices hitting an 8 month low on Friday, have recovered. Brent crude is trading at USD 105,55 a barrel, up one dollar from the beginning of the week. Euro/USD has made a strong come back from its low level on 1.2760 last week in the aftermath of the turbulence in Cyprus and the press conference of the European Central Bank (ECB). Euro/USD is trading at 1.3050. British pound, GBP, and other major currencies have also gained ground against dollar. Precious metals led by gold, USD 1575 an ounce, is also trading higher.

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10 APRIL 2013: DOW CLOSING AT RECORD HIGH

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

US-Stocks advanced on Tuesday with Dow Jones closing at a record high following a rally in cyclical shares and as the earnings season started to heat up. Asian stocks edged higher in Wednesday morning trade. Chinese trade data signaled a recovery in the world’s second largest economy as imports grew 14,1% year on year, much higher than expectations. The yen remained under pressure. USD/JPY stayed on 99; not able to break through the psychological 100 yen a dollar barrier.

The return to record levels indicates that investors again are using market declines as buying opportunities. The two winning groups, technology and energy, are closely tied to the pace of the economic growth. Microsoft jumped 3,6% as the top gainer on Dow Jones which advanced 0,41% to a record high on 14 673. Stocks were given a boost from the earnings session. ¾ of the 5% of the companies hitherto reporting results, have delivered higher than expectations.

In advance of the reports of earnings for the second quarter expectations have deliberately been plaid down. Alcoa, the aluminium producer, which traditionally is first out with its quarterly report, filed its adjusted results late on Monday, setting the tone for the earnings season. Alcoa’s results were slightly better than expectations. The Alcoa stock ended flat. First Solar Inc was the shining star with a surge of 45,5%. Solar’s results lifted the whole solar sector.

The dollar which has jumped 7% against yen since the Bank of Japan (BOJ) last Thursday stated that it will pump USD 1,4 trillion into the Japanese economy, was not able to break through the 100 level. This might easily happen during the week. Australian dollar continues to demonstrate strength after the surge in Chinese import. Euro/USD is steady in the interval between 1.3050 and 1.31.

Oil prices have recovered after the steep fall last week. NYMEX, New York crude, trades at 93,91 and Brent crude is at USD 106,40; up two dollars from the lows yesterday. Precious metals are up with gold trading at USD 1585 an ounce.

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11 APRIL 2013: WALL STREET LIFTS ASIAN SHARES

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Wall Street’s record closing and optimism on the Chinese economy lifted Asian shares in early Thursday morning trading. The Japanese yen continues to be under strong pressure. USD/JPY trades at 99,60, a hair’s breadth within the 100 level. Yen continues to test fresh lows against major currencies as the effect of the Bank of Japan’s (BOJ) bold monetary easing takes hold. The South East Asian Pacific index, MSCI, gained 0,8%, while the Japanese Nikkei jumped 1,3%.

The new Governor of BOJ has proven that is serious regarding a 2% inflation level bringing fresh impetus to a stagnating, deflationary economy. There are questions whether this is enough. Monetary measures ought to be followed up by a strong restructuring of the Japanese economy especially steps to encourage the private bond market. Japanese bonds have fallen on BOJ measures, and Japanese investors are said to be moving funds into foreign bonds.

The last published minutes from the Federal Reserve (FED) Board’s meeting gives new to the US dollar. According to the minutes FED officials have debated to slow down the pace of asset purchases or end them later this year. The Dow Jones industrial average and the Standard & Poor’s 500 gave also impetus to a stronger dollar. Both indexes ended at historic highs on Wednesday, led by cyclical shares on China’s rosier demand outlook. Chinese imports have increased significantly during the last quarters. Higher-yield commodity currencies also gained ground on the Chinese data with the Australian dollar jumping to 1,0553 Against the USD.

A report published by the European commission yesterday gave a bleak picture of the economic development inside the euro zone. One of the EU-newcomers, Slovenia, has been a stark warning to put his house in order. The banking sector’s debt ridden and suffers. Slovenia might therefore be the next in line to follow Cyprus. The EU Commission also points to serious weaknesses in the banking sector in Italy, France and Spain in and reminds that the European banking and financial crisis might only be in its beginning.

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12 APRIL 2013: WALL STREET POSTS NEW RECORD HIGHS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Asian shares retreated marginally Friday morning after recent gains. The Asia-Pacific, MSCI-index fell 0,3% due especially to the tense situation in the Korean peninsula. Investor’s confidence was underpinned by new record highs on Wall Street. Shares rose for the fourth day. A drop last week in the number of Americans seeking unemployment benefits, gave markets a new boost. A 14% plunge in personal computer sales in first quarter, the sharpest drop in two years, could not spoil the good sentiment. USD/JPY continues to flirt with the 100 yen mark.

The Nikkei index helped by Bank of Japan’s (BOJ) efforts to fight deflation dropped 0,8% on profit taking. The Nikkei is up 10% over the last week and trades at its highest level since July 2008. The dollar has gained 6% towards the yen the last week and hit a 99,95 yen to dollar on Thursday, a level not seen in four years. Euro/Yen climbed to 131,10 and reached the highest level seen since 2010. Aussie dollar also soared towards the yen. USD/JPY fell back to 99,50 unable to break through the 100 mark.

In Europe the EU- Commission’s bleak forecast on the economic development inside the Euro zone did not affect the strength of the Euro. Euro/USD is steady around 1,31 – 1.3150. Slovenia with its struggling banking sector, was singled out as a candidate to be next in line for a bail-out after Cyprus. But the banking sectors Italy, Spain and also France remain in the danger zone. The guru investor, George Sorros, stated earlier in the week that he saw Eurobonds as the solution to Europe’s troubled economies and saw a possible German Euro exit as a viable alternative.

President Barack Obama’s latest proposal to solve the US budget crisis by trimming Social Security and other safety-net benefits have is off to a cold response. Republicans, Democrats and even the White House have distanced themselves from the proposal. The reactions illustrate the difficulty of reaching a bargain to reduce spending and tame the deficit. The Republicans said that the President’s offer did not go far enough to cut spending.

In Cyprus the Central Bank has been selling part of its gold reserves to raise around 400 million Euro to help finance part of its bailout, the European Commission announced on Wednesday. Cyprus has totally a reserve of 13,9 tons. 10,35 tons are set to be sold. The transaction had a negative impact on gold prices which following the Cypriot sales fell USD 20 dollar an ounce on Wednesday. The Cyprus Central Bank is selling gold at a time when other central banks are building up their gold reserves as security against monetary easing and big volatility in the currency markets.

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15 APRIL 2013: CHINESE GDP UNEXPECTEDLY SLOWS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The Chinese economic growth unexpectedly lost momentum in the first quarter of 2013 as gains in factory output and consumption weakened; driving stocks and commodities lower on concern of a slowdown in global expansion. Gross domestic product, GDP, rose 7,7% from a year earlier. The GDP numbers did not meet analyst forecasts of 8,0% growth. March industrial production gained less than estimated. Retail-sales growth are, however, in line with forecasts.

The weaker than estimated forecasts put oil prices under new pressure. Brent crude fell to USD 101 a barrel as gold tumbled to a 21-month low. The steep decline in gold and silver prices started last Thursday and gained momentum during Friday night and early Asian trading. Gold hast lost USD 150 an ounce in less than one week and trades at 1441. The gold prices decline follows a bearish note from Goldman Sachs which foresees continued falls in the precious metals and strongly recommend sales.

The depreciation of the Japanese yen, JPY, has halted as US authorities warned Japan against devaluation. USD/JPY licked on 100 mark several days during last week. It is now trading at 97,67. Euro/USD keeps steady at 1.3074. USD/GBP (British pound sterling) stays at 1.5321. Inside the Euro zone it might be quiet before new storm forecasts. European finance ministers adopted last Thursday a 10 Billion Euro bail-out for Cyprus.

The Cypriot government has simultaneously lifted the forecasts of its own contribution to the banking bail-in from Euro 5,8 to the double amount. This will put private account deposits in the Cypriot banks under new hair-cut pressure. The increase in bail-in demand comes on top of rumors that Cyprus is selling major part of its gold reserves. That has added to the downward pressure on gold prices. The Governor of the Cyprus Central Bank, CBB, has voiced concern that the independence of the CBB is under government pressure.

The weaker growth in China adds to concerns that the global recovery is struggling. Monetary easing by injecting money into economic system has led to new records on the stock exchanges, but no new working places are added. There are fears that new record high stock markets barely represent a new bubble. The International Monetary Fund, IMF, is said to consider to lower its forecast for US growth. The guru investor, George Soros, warns that Germany shall be in recession by end of September. Soros is also forecasting a breakup of the Euro either by a unilateral German exit or by member states exiting following the Cyprus crisis.

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16 APRIL 2013: GOLD PRICES COLLAPSE

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Gold collapsed completely yesterday as precious metals plunged to the lowest levels seen in years. Gold trades at USD 1351 an ounce falling 250 dollar in two days. Silver fell from USD 28,25 ending yesterday at 22,50. Oil and other commodity prices sharply declined. Brent crude fell below the critical USD 100 a barrel level at USD 98,42. Stock market plunged as investors dumped risky assets and worries over slowing growth in China and US took hold. After a short spell of relief, Japanese yen, JPY, continued to slide against USD, before rebounding to 97,67 yen to a dollar.

The dramatic development in financial markets follows a worldwide rally in stocks in the first months of 2013 where daily new records on Wall Street have outpaced fundamentals. The monetary easing in the US, Europe and lastly Japan have injected huge capital into stocks without succeeding to create new employment. Risk markets have been rallying at a pace not in line with a tepid global growth recovery. Investor’s sell off of precious metals, commodities and shares might be seen as a last ditch effort to take some profit while markets evert to levels more in line with fundamentals.

Investors are reassessing their portfolio allocations for the second quarter of 2013 on that basis. In this perspective it seems likely that funds would be pulled out of the US stock market also taking European uncertainties into account. US debt might then back as a secure long term investment and reduce demands for an alternative safe-haven as gold. There are therefore valid question marks as to whether the deep plunge in gold will continue and that we are still far from a bottom.

USD/PY recovered during Monday. The dollar fell to 95,67 yen. The Euro hit a low of 125 yen. Both USD and Euro have rebounded. Euro is trading at 126,75 yen. In a market dominated by steep falls and quick rebounds, EURO/USD has traded steady in an interval between 1.3050 and 1.31. In early Asian trading, the Asian-Pacific index, MSCI, has stabilized after a 2% drop in European and US markets yesterday. A bomb explosion killing two and injuring 130 people at the finish line of the Boston marathon added to the downward pressure on the New York exchanges.

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17 APRIL 2013: WALL STREET LIFTED BY GOLD AND EARNINGS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

US-stocks jumped more than one percent on Tuesday recovering after the worst fall since November. Gold prices rebounded from bottom level on USD 1351 and trades at 1379, but selling levels still persist. The US stock indexes were lifted by good earnings from Coca-Cola and Johnson & Johnson. The bullish sentiment was also helped by inflation data which reinforced expectations that he Federal Reserve will keep the stimulus. After two falling days, Asian stock markets are back in positive territory.

Gold prices jumped 30 dollar during yesterday’s session after falling 8,8% on record volume on Monday. Gold reached 1382, but is still under strong selling pressure as investors rushed to dump gold. Gold prices suffered their sharpest fall since the 1980’ies heightening fears among investors that precious metal’s decade long Bull Run has ended. Silver also fell 11% and trades at 23,42. Silver was trading above USD 35 just a few months ago, and reached the USD 50 mark just two years ago.

The gold selling fever initiated in Cyprus where the government last week stated readiness to sell its gold reserves to help finance IMF and ECB demands for bail-out assets. Rumors indicated that other pressed Southern European countries would follow suit. Faltering European demand and weaker than expected Chinese economic data depressed oil prices. Brent crude fell to a nine-month low and reached USD 98 a barrel bottom. Brent has also recovered and trades again above USD 100.

The Japanese yen (JPY) eased in Asian trading this morning as it succumbs to new pressure as gold recovered. The historic plunge in gold prices coupled with fresh concern about China’s economic growth, saw some investors plunge back in yen as a safe haven reversing the downward trend sparked by Bank of Japan’s aggressive stimulus program. USD/JPY trades at 98,19. The USD has lost ground against the euro which has gained momentum after breaking through the stiff technical resistance at 1.3110/20. Euro is at 1.3173 as Euro bulls shrugged off a report on sharp April-fall in German investor sentiment.

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18 APRIL 2013: RISKS ASSETS BROADLY SLIPS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Risks assets broadly slipped on Thursday following overnight drop in US and European equities on fears for global growth. Oil prices have dropped substantially. Brent crude fell two dollars trading below USD 98 a barrel. Iran, has asked for an emergency meeting in OPEC, the organization for oil producing states, to discuss the low oil prices as non-OPEC United States is pumping 7,2 million tons a day. This contributes to the imbalance between market demand and supply. Gold lid further as capital flow out of gold-backed-exchange-traded funds continues.

US-Stocks fell in a broad market selloff yesterday. The decline in stock prices was led by a sharp drop in Apple which tumbled 5,5% to USD 402,80. Apple has fallen USD 250 since its peak last autumn. A key chipmaker, Cirrus, simultaneously presented a disappointing revenue forecast. This together with the slowing demand for Apple products, fuelled market worries about a weakening demand for iPhone and iPad. The financial sector was also hard hit by weaker than expected results from Bank of America.

Wednesday’s losses represented the second day of big sell-off during this week. It adds to fears that the market is starting the pullback analysts have been speculating in for months. Expectations have outdistanced economic fundamentals. Monetary easing has additionally injected fresh speculative capital into equities. This development has led to stock rallies without roots in the real economy creating new bubbles.

Investors’ optimism have been based on expectations of a stronger economic growth in China and a recovery in the US. There are positive signs in both markets, but the world economy is still dragged down by an ever deeper recession inside the Euro zone. The plunge in gold and metal prices and a simultaneous selloff of stocks bear striking similarities with the situation in 2008 where stock markets were running off from realities to end with a hard landing. Bankers’ wild speculations contributed to the misery which led to a financial crisis in the second half of the year where the liberal orientated economic market model was put at serious risk.

Is history in the process of repeating itself?

Nervousness and risk aversion has also plaid into the currency market where the euro come under pressure. Euro/USD fell from Wednesday high on 1.3172 to 1.3043 on talk of more monetary easing by the European Central Bank. USD/JPY trades marginally up at 98,03 indicating a continued slid in the yen and a new test on the symbolic 100 yen a dollar level. The Australian dollar is steady after trimming earlier losses due to the fall in gold and metals and a weaker growth in China.

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19 APRIL 2013: VOLATILITY REFLECTS BEARISH MOOD

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Wall Street fell further yesterday after disappointing forecasts by eBay and other heavy weight US-companies. Present quarterly results raise increased doubt on the market’s recent strength. eBay dropped 5,9%, and Apple shares extended their slide from Wednesday breaking the USD 400 level. The S&P technology index fell 1,4% after two sharp declines earlier in the week. The volatility index, Wall Street’s fear index, gained 6,4 as a reflex of increased market nervousness. Other decliners included Morgan Stanley. The flagship bank fell 5,4% adding to the bearish mood.

As global policymakers started their G-20 meetings in Washington yesterday there is growing concern about currency fluctuations and volatility. Key central banks are printing money and pumping new liquidity into markets. This tends to create more speculative bubbles than working places. The yen (JPY) fell broadly Friday morning after the Japanese Finance Minister stated that Bank of Japan’s (BOJ) aggressive monetary stimulus is aimed at defeating deflation. USD/JPY trades at 98,53 with the dollar raising 0,4%.

As the G20 meeting ends today there are deep worries on what easily can develop into a currency war. In its semi-annual report on currency practices US put Japan on notice. Japan’s economic policies are watched closely to ensure that Japan is not aiming at devaluing the yen to gain competitive advantage. Competitors in South East Asia as South Korea are especially concerned. A rapid raise in dollar versus Yen at these level, seems, however, not likely. USD/JPY has already depreciated 20% since last November. A strong short term gain in USD/JPY might, however, occur after the G-20 meeting is over. G-20 is expected to confirm the pledge from February to avoid competitive currency devaluations.

Euro/USD recovered to 1.3068 after a sharp drop during yesterday. In a meeting on Thursday the EU agreed to move ahead with a system of winding down banks without changing EU law. This would give the EU bank resolution mechanism a stronger legal basis. The resolution comes after a stormy debate in the European Parliament where both the EU Commission and the European Central bank came under heavy fire for their handling of the Cyprus banking crisis. In an interview the EU Commissioner for Economic and Monetary affairs, Olli Rehn, stated that changes to EU-treaties are more a long term goal than a condition for a banking union to operate.

The recent plunge in gold prices have led to a rally in India and China to buy gold and silver coins and products. Retail buyers see the steep fall in prices as a buying opportunity. Gold trades at USD 1398 up from a bottom level on 1322 earlier in the week. Silver has rebounded from USD 22,76 to 23,46. It is, too, early, to say whether we are witnessing a more firm upward trend; or increasing prices shall be seen as a natural technical correction.

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22 APRIL 2013: GOLD REBOUNDS USD/JPY 99,84

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Last week was dominated by an extraordinary fall of USD 250 fall in gold prices and heavy losses in other commodities. Gold demonstrated, however, strong resilience and staged a rebound. Gold is hundred dollar up from the bottom of USD 1322 an ounce last week. Copper is still weak. While Brent crude again trades above USD 100 a barrel. Strong retail buying in Indian and China strengthened gold which was seen as a buying opportunity. Gold reached the USD 1400 mark on Friday and trades at 1422 in Asia. Many investors have kept their strong faith in gold on expectations of high inflation and governments being unable to deal with it, and continues to buy gold.

The G-20 meeting in Washington ended on Friday without any conclusive results. Since 2010 the group has turned from being a cohesive group of the world’s most important economies into a body that spends hours of negotiating the punctuation in a communique. Japan was the focus for attention. In spite of the fact that the Japanese yen, JPY, has depreciated 20% in relation to most currencies since November last year, G-20 accepted Japan’s explanation that its monetary policy is aimed at price stabilization and economic recovery. Its strong monetary easing does not intend to manipulate its exchange rate.

As expected JPY as a result of the meeting, continued to slide in Asia this morning. USD/JPY reached 99,84 and is again licking the symbolic 100 level which most likely is going to be broken during the day encouraged by the Group of 20 endorsing of Japan’s reflationary policies. Following the meeting, players feel comfortable selling the yen further. Asian shares inched higher, but investors remained wary of volatility given the uncertainty of global growth prospects. Global stock markets might be on the verge of a selloff.

The International Monetary Fund, IMF’s forecasts for the G-20 meeting were out of date no sooner than it was presented. Weaker US labor market figures and Chinese economic growth in the first quarter, make it necessary to downgrade growth forecasts for the world economy. The G-20 meeting also given another stark warning that economic forecasts is not any precise science. The Harvard economists Kenneth Rogoff and Carmen Reinhart’s have since 2010 postulated that when debt reaches 90% of Gross Domestic Product, GDP, growth automatically fell. This postulate has been the basis for government’s austerity measures especially in the Euro zone.

An Excel error put serious question marks with the evidence the economist have built their postulate on. For the first time in years it thereby is possible to put questions with postulates presented as science. The austerity measures in Europe are as most other economic theories are based on political attitudes. When such postulates end up in mass unemployment and social misery it might be right time to take a break and ask whether the austerity measures resulting in mass unemployment and social misery are the right prescribed medicine.

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23 APRIL 2013: ASIA FALLS ON WEAKER CHINESE PMI

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Asian shares and other riskier assets lost ground on Tuesday after a preliminary reading showed weaker Chinese manufacturing growth in April. HSBC’s Purchasing Manager’s Index, PMI, fell in April and added to concerns about global growth prospects. HSBC’s report is the first economic indicator for the second quarter of 2013. It follows weaker-than-expected first quarter GDP (Gross Domestic Product) growth and a contraction in export pointing to fragile global demand.

April PMI-numbers fell to 50,5 from 51.6 in March. The numbers are nevertheless higher than February’s 50,4, and in in no way disastrous. The April PMI reinforces, however, market concerns about a stagnating and slowing Chinese economy. Stock market rallies especially in the United States have been based on expectations of a stronger US recovery and Chinese growth. The latest PMI takes some of this belief away and is a strong indication that the stock market rally might be over for now.

Both Hong Kong and Shanghai stocks fell. The Shanghai SEC fell 1,4% and the Japanese Nikkei slipped 0,1% after surging up 2,2 percent on Monday; close to a five-years high. After USD/JPY reached 99,95 on April 11, a breakthrough of the 100 mark has been expected. Instead the USD fell back to 98,60 yen after reaching 99,90 in early trade yesterday. Weak US-housing data weighed in on the strength of the dollar. USD firmed against the Euro trading at 1.3043. Comments from the European Central Bank, ECB, suggest the bank might consider lowering interest rates in light of mass unemployment and low inflation.

Gold has recovered strongly from last week’s tumble trading at USD 1427 an ounce. More gold outflows from exchange-traded funds stress, however, a weakened confidence in the precious metal and possible further drops. While gold is slightly up from Monday, silver is losing ground. Copper prices continue to fall with 0,6% on the London metal exchange. Brent crude stays above USD 100 a barrel, but crude futures are pointing down.

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24 APRIL 2013: APPLE LIFTS ASIA AFTER FALSE TWEET

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Apple climbed 4,9% to USD 425,95 in after closing trade yesterday night after reporting strong second quarter earnings. Apple also unveiled plans to double the amount of capital returned to shareholders after for a long time being heavily criticized for not sharing excessive profits. The Apple quarterly report made stock markets in Asia to rally. Wall Street recovered Tuesday after initial sharp declines sparked by an Associated Press tweet about explosions in the White House.

The false tweet by hackers of two explosions at the White House that injured US President Barack Obama, provoked a steep drop in stocks. The benchmark S&P index fell 16,6 points or close to one percent in 3 minutes. Index values of USD 136 billion were wiped out. Stocks quickly recovered minutes later. The tweet episode illustrates the advantages, but simultaneously the fall outs of an instantaneous pricing technology.

Asian shares advanced on Wednesday on the back of Apple and other solid US quarterly earnings. The Euro came under pressure by soft German data which underscored the fragile state of the euro zone economy. The Asia-Pacific MSCI-index climbed 0,8%. The Australian stock index gained 1.4% along with a firmer Aussie dollar. The positive US numbers also gave a lift to oil and other commodities. Copper is up after several day’s decline. Brent crude trades at USD 100,54 a barrel. Gold (USD 1426) and silver (USD 23,15) prices are up after falling back during yesterday’s trading.

The more positive tone in global equities markets seem to indicate that investors regard continued monetary easing by major central banks as justified. Monetary easing encourages investments in shares. But that also means that stock markets don’t reflect the real economic fundamentals. Equities continue to rally in spite of sluggish manufacturing surveys and weaker economic data from both the US and China, the two major engines in the global economy.

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25 APRIL 2013: NIKKEI EXTENDS ITS SHARP RALLY

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The Japanese Nikkei index extended previous session’s sharp rally in early trade on Thursday. USD/JPY is steady on 99,41 and continues to lick at the magic 100 level. Euro/USD is 1.3046 up 50 points from yesterday when the Euro dipped under 1,30. The week picture inside the Euro zone points towards European Central Bank (ECB) interest rate cut next week. Both New York (NYMEX) and Brent crude are up. Brent trades at 102.18. Gold jumps 20 dollars to 1447 an ounce in Asian trading.

The Japanese ally is driven by expectations that yen weakness will spur strong earnings for local firms. Nikkei is up 0,3% to 167,10. The Asian Pacific, MSCI-index is also up 0,3%, basically on the belief that weak global economic data will encourage central banks to keep their monetary easing economic stimulus policies. US durable goods orders for March were disappointing, and weighed in on the strength of the dollar which is weaker towards Euro, Yen and other major currencies.

The growing expectations for an ECB interest rate cut helped offset the growth concerns highlighted by US durable goods. Durable goods orders posted its biggest drop in seven months in March. Together with a survey highlighting increasing pessimism among German business leaders in April, future forecasts are bearish. The sentiment in Europe is somewhat strengthened by falling bond yields in indebted countries like Italy and Spain. A possible end to the two months political deadlock in Italy, has further strengthened. A 37 years old has been appointed new Premier and the tenure for their 87 years old President is prolonged.

The US government will on Friday present its report on gross domestic product, GDP. The report is expected to show that the economy grew at a 3% annual in the first quarter rebounding from a 0,4 % gain in the final three months of 2013. For the current quarter an expansion of 1,5% is expected. Raising oil and copper prices indicate a turn towards more positive market sentiment. Gold which fell to USD 1322 after losing 250 dollars in two days, have recovered strongly to 1447.

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26 APRIL 2013: GBP, GOLD AND SILVER STRONGLY REBOUND

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

British sterling (GBP) has recovered strongly from the bottom levels of 1.50 reached earlier in April. GBP/USD trades at 1.5432 on better than expected job and economic data, indicating a rebound in GBP’s future. Precious metals are again shining. Silver futures rose 6,5% and trades at USD 24.40 an ounce, two dollars up from the bottom last week. Gold peaked on USD 1476, particularly on Chinese and Indian retailers who see the steep fall in precious metals as a buying opportunity. Also oil and copper prices are higher.

The improved sentiment in commodities and precious metals comes on the top of better US jobless figures. There were 11 000 fewer reported jobless seekers than the week before. The new data is not impressing. The expected 350 000 jobless turned out to be 339 000. The head of the Federal Reserve, FED, Ben Bernanke, dampened optimism stressing market’s volatility and need for emergency measures. While the jobless numbers created a Wall Street rally helped by good quarterly earnings reports, Bernanke talked the equity markets down. Nasdaq and S&P rose modestly nevertheless up for 5th day in row reflecting a stock market running ahead of economic realities.

Asian shares rose again on Friday on the upbeat US labor market data. Samsung posted a record quarterly results in line with expectations ahead of Galaxy S4 debut. The fall in Japanese Yen helped SONY to deliver its best profit in years. The Asian Pacific MSCI-index was up 0,3% reaching a six week high. Analysts see a continued upside in Asia and predict that the stock markets could raise another 10 – 15%. Robust quarterly earnings had Shanghai advance 1 percent. Australian shares benefited by high company yields compared with other countries and was up 0,2%.

The Bank of Japan (BOJ) predicted that the set 2% inflation target will be met in two years. USD/JPY hovers around 99 - 99,50 still unable to reach the 100 mark. Expectations that the European Central Bank, ECB, will lower interest rates from 0,75% at its meeting next week weakened the Euro and strengthened European equities. Market beliefs that global economic stimulus will remain in place helped risk asset markets rebound from a sharp sell-off earlier in April triggered by disappointing US and Chinese manufacturing data.

The German Minister of Finance, Wolfgang Schaeuble, lashed out at the European Commission President, Jose Manuel Barroso, yesterday telling lawmakers that the euro zone’s problems had nothing to do with strict budget discipline. He encouraged “somebody to tell Barroso that”. Schaeuble’s remarks came on the top of a bitter strife between European leaders on the effects of austerity measures hitting especially the periphery of Southern Europe. Germany which favors “balanced budgets” are seen as the major culprit for the austerity measures.

Copyright: MAYZUS Investment Company Ltd

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29 APRIL 2013: GERMANY'S DAX ADDED 4.8% FOR THE LAST WEEK

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Leading stock indexes of Europe and the USA on Friday generally decreased - the British FTSE-100 decreased for -0,26%, the German DAX lost -0,23%, the French CAC lost -0,79%, the American Dow Jones added just +0,08%, S&P500 decreased for -0,20%, Nasdaq Composite lost -0,33%. Accordingly to the published statistics on Friday, growth rates of gross domestic product of the USA in the first quarter of the current year were accelerated, but were slightly worse than market expectations. At the same time the index of consumer confidence in the USA, counted by Michigan University, decreased, but at a size smaller, than was predicted.

As a whole for the past week the American share indexes added 1,1-1,9%, and European rose by 2,2%-4,8%. The German DAX which has added 4,8%, against improvement by the authorities of Germany of forecasts on growth rates of economy became the favorite of week within the European platforms. Bundesbank (the Central Bank of Germany) in the April’s review predicted growth restoration in economy of Germany in the second quarter against situation improvement on a labor market.

Trading session in Asian stock exchanges started without any uniform dynamics, Chinese and Japanese stock exchanges are closed today in connection with national holidays "Labor Day" and "Showa Day" respectively.

At the same time, Australian ASX where the raw materials companies are the major part of the index, remains to be in a green zone, despite the fact that on Friday evening there was quite sharp depreciation of metals. Mainly support is given by the banking sector. In particular the extracting companies Newcrest Mining and BHP Billiton lose around 0,5% of the capitalization while National Australia Bank and Australia and New Zealand Banking Group banks add 1,3% and 0,8% respectively. Significantly worse than the market looks the Kingsgate Consolidated gold mining company, which is losing -14,5%, because of the statement of intention to decrease expenses in connection with a collapse of prices on precious metals.

Today the statement concerning prospects of development of economy of the Asian-Pacific Region was made by representatives of IMF, having reported about fall in forecast on gross domestic product growth from 5,9% to 5,7%. Also experts noted remaining probability of slowdown of the Chinese economy.

Prices of precious metals continue its positive correction after steep falls we have seen not so long time ago, gold is increasing for 1,07% and is traded on a level of 1469,16. Silver is up for 1,88% on a level of 24,20.

Copyright: MAYZUS Investment Company Ltd

[MAYZUS.Neeraj]

30 APRIL 2013: S&P500 INDEX AGAIN APPROACHED ABSOLUTE MAXIMA

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

In the first day of the week the index of the wide market S&P500 closely approached recently established historical maxima and now has chance to continue an ascension on new heights. Following the results of the yesterday’s trading session the S&P500 index increased by 0,72%. Quotations stopped at the level of 1593,61 points. To an absolute record there was not enough one point only. As the closest level of resistance which can be reached within an ascending trend, we will allocate a level of 1610.

Bulls also were positive in the light of coming meetings of key central banks – on the 1st of May will be finished the next meeting of FRS, and on May 2 the decision on an interest rate will be made by European Central Bank. From FRS the investment community expects comments on recent deterioration of macroeconomic statistics and, respectively, promises of extension of QE at least until the end of the year; from the European central bank wait fall of an interest rate which ripened owing to lack of any signs of revival of economy of the region. Speculative expectations of cheap money as usual maintain appetite to risk, and Monday didn't become an exception.

The trading session at Asian stock markets takes place today with mainly positive dynamics, continuing yesterday's growth over the ocean, but the Japanese market which has come back from days off, looks worse than the colleagues. One of the reasons is dynamics in the currency market where USD/JPY pair continues movement under level 98, after it was once again rolled away from a level of 100 last week.

Also a big block of macro statistics has been issued today in Japan, mainly positive, however this factor is mainly ignored by Japanese investors. In particular unemployment rate decreased in March to 4,1%, expenses of households grew by 5,2% in annual calculation, the production PMI index raised to 51,1, and retails of the largest networks grew by 2,4%. Only an industrial production was worse than expectations and grew for March only by 0,2% at forecasts of growth for 0,4%.

In Australia, meanwhile, continues growth of the banking sector, and yesterday's leaders of growth - National Australia Bank and Australia and New Zealand Banking Group add today another 2,5% and 4,5% respectively.

Prices of oil and precious metals are weaker this morning. Brent is on a level 103.55$ per barrel – loosing 0.25%. Gold and silver are on a levels 1460.93 and 23.98 respectively.

Copyright: MAYZUS Investment Company Ltd

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01 MAY 2013: THE RISE IN PRICES FOR HOUSES IN USA BECAME MAXIMUM SINCE 2006

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

In Russia, Europe, China, Hong Kong, South Korea, Brazil the trading session isn't held today in connection with national holidays.

Following the results of the yesterday's session in America the Dow Jones index grew by 0.14%, S&P - for 0,25%, Nasdaq - for 0,66%. As a result Dow Jones value reached level 14 839,80 points, S&P - 1597,57 points, Nasdaq - 3328,79 points.

The index of the London stock exchange FTSE 100 fell to 0,43% and was closed at the level of 6430,12 points. The index of the Parisian stock exchange CAC 40 decreased by 0,31% and was closed at the level of 3856,75 points. The index of the Frankfurt stock exchange DAX rose by 0,51% and at closing made 7913,71 points.

Prior to the yesterday’s trading session opening - the prices of houses in 20 largest American cities were published – the indicator grew by 9.3% that became the best indicator since 2006, and was the positive driver for traders.

Today China will present official statistics on the production. As a rule, the release of these data is accompanied by volatility growth in the FX market, and especially it will be actual for currencies of the countries of the Pacific region, in particular, for Australian dollar.

In the evening, FRS will report the decision on an interest rate. Here everything is quite expected; despite statements of different persons from FRS that is time to reflect on the beginning of turning of the QE program, the policy of ultra-cheap money, most likely, will remain in the foreseeable future.

Prices for oil are decreasing second day in a raw, Brent is traded on a level of 101.25$ loosing 0.77%. Prices for precious metals are stable second day, gold is on a level of 1472.01 and silver on a level of 24.19.

Copyright: MAYZUS Investment Company Ltd

[MAYZUS.Neeraj]

02 MAY 2013: ECB INTEREST CUT SEEMS LIKELY TODAY

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Growing doubts over the health of global economies pushed Asian stocks lower on Thursday after disappointing US economic data pushed Wall Street down. Dow Jones industrial fell 0,92% adding to doubts over the strength of the world’s biggest economy. Slow Chinese demand puts new question marks on China’s economic recovery. The European Central Bank (ECB) is meeting later today. ECB is expected to cut interest rates down to a low of 0,5% in an effort to take the Euro zone out of recession.

The Asian Pacific MSCI-index fell 0,5 percent with Australian shares leading the decline. Miners dragged the AXJO index down 0,8% on fears of lesser Chinese appetite for commodities. The Chinese PMI (Purchasing Managers index) fell in April, but the upward trend continues. It is, however, fragile and has lost momentum due to signs of pausing in the US economy. Market sentiments are split between growth prospect worries and support for sustained monetary stimulus.

There are also worries that a weaker US economic growth may prompt profit taking in Asian equities. Asia has strongly outperformed earlier this year, USD/JPY is trading steady at 97,24 unable to break through the psychological important 100 level. Some analysts expect that yen is going to continue to depreciate after a short breathier. A US trading at 110 yen towards a dollar is perceived.

The dollar has recovered from lows against a basket of six major currencies, DXY, but stayed at lowest levels since late February. The dollar weakness lifted the euro to a two month high of USD 1,3243 on Wednesday. It trades steady around 1.3178 in the opening sessions in Asia. Weak credit demand in the euro zone shall most likely lead to further contraction in the region. This points along with disappointing German PMI in April towards an interest rate cut when ERCB meets later today.

Growing unemployment in the Southern European periphery of Europe and slower growth in Germany, have led to a renewed debate on the austerity measures carried through by The ECB and EU-commission with Germany as the driving national engine. A leading critics of the austerity measures, the economic Nobel laureate, Paul Krugman, says in a recent article that the austerities is far from any sound economics and purely dictated by leading bankers and politicians’ political prejudices. The results are catastrophic for the economy as well as human beings.

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03 MAY 2013: ECB RATE CUTS SUPPORT SHARES

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

Euro/USD lost more than 100 points after the European Central Bank (ECB) decided to cut interest rate with 0,25 % to a historical low of 0,50. The Euro fell immediately on the announcement and trades at 1.3074. The decision received cheers from stock markets which rallied in early Asian trade on Friday. In the US Wall Street was helped by a sharp fall in last week’s jobless claims which fell to its lowest level in five years.

The smaller number of Americans seeking jobless benefits claims was seen as a sign of a healing job market in spite of the presentation a ray of weak economic data lately. US stocks were also helped by a narrowing trade gap in March. The fact that both imports and exports fell, indicate, however, weaker demand, and tells of weakening growth momentum both in the US and globally.

Initial claims for state unemployment benefits dropped with 18 000 last week to seasonally adjusted 324 000. The claims report runs counter to a number of signals of economic activity softening in March and April. The data has no direct bearing on the Labor Department’s monthly employment report which is expected later today. It suggests, however, that employers are feeling less pressure to lay off workers even if they have cut back on hiring.

Oil, copper and gold prices traded higher with Brent crude up 2% to 102,65. The US stock rally was led by tech shares. Facebook delivered better than expected and rose 5%. The ECB decision to cut rates for the first time in 10 months helped market sentiment and bolstered the content of the Federal Reserve (FED) statement Wednesday. FED will continue to buy bonds to keep interest low and spur growth. If necessary FED kept the door open for stepping up the purchases. Also the ECB kept options for further action to stimulate the economy.

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06 MAY 2013: US JOB REPORT EASES FEARS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

The US stock markets reached new highs on Friday. The S&P 500 index smashed through the 1600 mark for the first time in history. All 30 companies on the Dow Jones Industrial Average rose as that benchmark crossed 15 000 for the first time after better than expected jobs reports. Non-farm payrolls increased with 165 000 jobs in April. Analysts forecast was 140 000. The unemployment rate fell to 7,5%, the lowest level since December 2008. Asian stocks spurred higher Monday morning on the US job data.

The better than expected jobs report eased fears about the health of the world’s largest economy which remains on a path of modest, but resilient growth. The Federal Reserve (FED) indicated last week that it is prepared to increase the USD 185 Billion –a-month pace of its third round of quantitative easing. The new figures mean there is little chance for such an increase. The job creation in April was heavily weighted towards the service sector. The production side with construction was shedding 6000 jobs. There is also a dip in average weekly hours from 34,6 to 34,4.

The US job data follow central banks meetings last week. While the US FED expressed readiness to increase monetary easing, the European Central Bank (ECB) informed that if necessary it would consider taking deposit rates negative. The mere fact that the key central banks aired such an opportunity was enough to sustain the rally in stocks, bonds and credit demonstrated by the new records on Wall Street and the positive sentiments in Asia this morning. Decreasing rates meaning that stocks are the most attractive alternative investment.

Oil prices have also been given a boost by the US jobs reports. New York crude (NYMEX) is for the first time in weeks trading above USD 96 a barrel. Brent crude is at 104,50. Copper is in the limelight after a 6,5% rally to USD 7 270 on Friday. Copper has fallen nearly 20 percent in the past three months on worries of a slowing world economy. Japanese yen is falling against the dollar trading at 99,08 yen to a dollar. Euro/USD is at 1.3122.

Copyright: MAYZUS Investment Company Ltd

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07 MAY 2013: BULLISH STOCK MARKETS SET FOR NEW RECORDS

DAILY MARKET REVIEWS

by Arne Treholt Vice-President of Business Development and Investments

US and Asian stocks reached new record highs as the Japan’s Nikkei average soared 2,8% on Tuesday morning. For the first time since June 2008 the Nikkei broke above 14 000 as the market played catch-up from an extended holiday. The strong US jobs data eased concern over the health of Japan’s biggest export market. Japanese exporters as Toyota, Honda and Sony led the rally jumping more than 3%.

In the US the S&P led by Apple and financials pushed further above 1600. The S&P has gained 13,4% since the beginning of the year. Decent earnings together with monetary easing and low interests rates have helped the stock markets to new records. As long as the world’s leading central banks are providing markets with liquidity the stock rally is most likely going to continue at least in the short term.

Asia is today focusing on Australia where markets are waiting for the Central Bank of Australia’s decision on interest rate. Analysts are split on whether the interest rate would be lowered by a quarter point to a record low of 2,75%. A jump in stock prices are then predicted. Australian stocks fall 0,4% prior to the central bank’s verdict. The Asian Pacific, MSCI-index, was as the Korean Kospi slightly down after big upward jumps on Monday.

In the currency market the Euro is on the defensive Euro/USD trading at 1.3077. The head of the European Central Bank (ECB), Mario Draghi, stated yesterday that ECB is watching economic data and is ready to take further action if needed. The upcoming German elections in September make changes in the austerity policies unlikely in spite of Germany being under pressure from other EU-members.

While gold, USD 1465, is losing ground on continued outflows in holdings at the world’s largest gold backed exchange traded funds, SPDR Gold Trust, crude and copper are steady. Brent crude continues to trade above USD 105 a barrel.

Copyright: MAYZUS Investment Company Ltd