CEEMEA & Latam Daybookpg.jrj.com.cn/acc/Res/CN_RES/INVEST/2017/12/22/e63... · 12/22/2017 · +1 212 250-8640 Munira Kharva Industrial +27 11 775 7433. Eduardo Vieira Head of EM

Deutsche Bank Markets Research

Global

Periodical

CEEMEA & Latam Daybook

Date 22 December 2017

Friday,22 December 2017

________________________________________________________________________________________________________________ Deutsche Bank AG/London

Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 083/04/2017. THE CONTENT MAY NOT BE DISTRIBUTED IN THE PEOPLE’S REPUBLIC OF CHINA (“THE PRC”) (EXCEPT IN COMPLIANCE WITH THE APPLICABLE LAWS AND REGULATIONS OF PRC), EXCLUDING SPECIAL ADMINISTRATIVE REGIONS OF HONG KONG AND MACAU

Pascal Moura

Head of Research

(+971) 4 4283-864 [email protected]

Mairead Smith

Equity Focus

(+44) 20 754-71054 [email protected]

CEEMEA Companies COMPANY UPDATE Gazprom (Buy, TP RUB170.00) - Management provides 2017 revenue/ earnings guidance in line with forecasts GeoPark Limited - Cash Flow Accretive Argentine Acquisition Fits in Corporate Strategy

LATAM Companies TARGET PRICE CHANGE Banco de Chile (Hold, TP USD91.00) - Prepared for stronger growth, but already priced-in

MACRO Special Report - Russia in pictures: Uneven recovery but growth expected to improve in 2018 EMEA Snap - Czech Republic: The hawk that vanished (for now) US Economic Notes - Tax receipts may be hinting at higher wage growth

SOLAR UPDATE

VALUATION CEEMEA and Latam valuation tables

Stock Performance(US$)–Gainers & Losers (CEEMEA) Top 10 Ticker Price %Chg

Tekfen Holding TKFEN TI 4.3 8.8 Mediclinic

MDC LN 8.4 6.9

Ooredoo Group ORDS QD 26.2 6.4 Mediclinic MEI SJ 8.2 6.2 STAR SRR SJ 1.3 5.7 Naspers NPN SJ 271.8 4.2 BidCorp BID SJ 23.9 4.1 Vakifbank VAKBN TI 1.7 3.7 MTS MTSS RX 4.6 3.4 Life HC LHC SJ 2.1 3.1 Bottom 10 Ticker Price %Chg Shoprite SHP SJ 16.2 -5.2 Peregrine PGR SJ 2.0 -4.9 Super Group SPG SJ 3.2 -4.6 Barclays Africa Group BGA SJ 13.7 -4.2 Imperial IPL SJ 19.4 -3.9 Global Ports GLPR LI 3.8 -3.8 Massmart MSM SJ 10.4 -3.6 The Foschini Group

TFG SJ 14.0 -3.3

Sanlam SLM SJ 6.6 -3.2 Amplats AMS SJ 26.7 -3.0

Stock Performance(US$)–Gainers & Losers (LATAM) Top 10 Ticker Price %Chg

Itau Unibanco ITUB US 12.9 3.8 Petrobras PETR3 BS 5.0 3.7 Petrobras PETR4 BS 4.8 3.5 Cia Hering HGTX3 BS 7.4 2.7 Santander Brasil BSBR US 9.6 2.6 Bradesco BBD US 10.2 2.3 B2W BTOW3 BS 5.6 2.0 CCU CCU UN 29.0 2.0 JBS JBSS3 BS 2.8 1.7 Vale VALE UN 12.1 1.5 Bottom 10 Ticker Price %Chg Embotelladora

AKO/B UN 28.7 -3.2

Santander Chile BSAC US 31.0 -2.8 Falabella FALAB CI 9.7 -2.5 Credicorp BAP US 200.1 -2.4 Liverpool LIVEPOLC MM 6.4 -2.2 Grupo Aeromexico AEROMEX*

1.6 -2.0

Bolsa Mexicana BOLSAA MM 1.7 -2.0 Gentera GENTERA*

0.8 -2.0

Credito Real CREAL* MM 1.3 -2.0 Cencosud CENCOSUD CI 2.9 -1.9

Source::Bloomberg Finance LP

Distributed on: 22/12/2017 05:00:17 GMT

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Russia / CIS LatamIvan Kachkovski Financials +44 207 5411735 Ryan Todd Oil & Gas +1 212 250 8342Pavel Kushnir Oil & Gas +971 4 361 1732 Xavier Marchand Building materials +44 207 545 1400Masha Kahn TMT +1 212 250 9619 Chris Terry Metals & Mining +1 212 250 5434Marc Hammoud Healthcare +971 4 4283910 Tito Labarta Financials/Banks +1 212 250 5944Grant Sporre Commodities +44 207 545 8170 Joana Barros-Magalhaes Financials/Banks +1 212 250 1002Aleksandar Stojanovski Transport +971 4 361 1786 Michael Linenberg Airline +1 212 250 9254Lloyd Walmsley Internet +1 212 250-7063

Marcel Moraes Retail +1 904 271 2470Elina Ribakova Economist +44 207 547 1340 Masha Kahn TMT +1 212 250 9619

Catherine O' Brien Loyalty Programs +1 212 250 8949South Africa Jose Yordan Food&Beverage/Retailing +1 212 250 5528Pavel Kushnir Oil & Gas +971 4 361 1732 Myles Walton Aerospace Defense +1 212 250 5528Caron Bramwell Retail, Real Estate, Food Producer +27 11 775 7069Ryan Eichstadt Retail, Real Estate, Food Producer +27 11 775 7249Sean Holmes Retail, Real Estate, Food Producer +27 11 775 7292 Drausio Giacomelli Chief Economist +1 212 250 7355Letlotlo Lenake Healthcare +27 11 775 7299 Sebastian Brown Senior Economist Mexico & Chile +1 212 250 8191John Kim TMT +27 11 775 7013 Cesar Arias Senior Economist Andean countries +1 212 250-0664Patrick Mann Metals & Mining +27 11 775 7268 Jose Carlos de Faria Senior Economist Brazil +55 11 2113 5185Mathias Pfeifenberger Paper +43(1)53181-153 Hongtao Jiang Head of EM Sovereign Credit +1 212 250-2524Stefan Swanepoel Banks/Financials +27 11 775 7369 Jed Evans Head of EM Analytics +1 212 250-8605Larissa van-Deventer Insurance/Financials +27 11 775 7049 Guilherme Marone EM Derivative and Latam Strategist +1 212 250-8640Munira Kharva Industrial +27 11 775 7433 Eduardo Vieira Head of EM Corporates +1 212 250-7568

Sebastian Brown Latam FX Strategist +1 212 250 8191Danelee Masia Economist +27 11 775 7267

GreeceJames Brand Utility +44 207 5474705

Turkey Robert Grindle Telecommunication +44 207 54548490Kazim Andac Banks, Strategy +90 212 3190315 Ivan Kachkovski Banks +44 207 5411735Athmane Benzerroug Construction, RE +90 212 3190324 Tomasz Krukowski O&G +48 22 579 8732Marc Hammoud Telco +971 4 4283910 Priyal Mulji Construction +44 207 5472094

Kubilay Ozturk Economist +44 207 5458774 George Saravelos FX Strategist +44 207 5479118

CE3 Middle EastJames Brand Utility +44 207 5474705 Ryan Ayache Banks +971 4 428 3261Kazim Andac Banks, Strategy +90 212 3190315 Athmane Benzerroug Construction, Infrastructure, Utilities +971 4 428 3938Ivan Kachkovski Financials +44 207 5411735 Marc Hammoud Telco, Healthcare +971 4 4283910Tomasz Krukowski Consumer, O&G, Industrials +48 22 579 8732 Aleksandar Stojanovski Chemicals/Consumer/Transport/Strategist +971 4 361 1786Carlos Galindo Economist +44 207 547 6269 Elina Ribakova Economist +44 207 547 1340Gautam Kalani Economist +44 207 545 7066 Alizerra Kharazi MENA +44 207 5450083

Emerging EMEA/Latam ResearchHead of Company Research Pascal Moura +971 44283864

Source: Deutsche Bank

22 December 2017


Deutsche Bank AG/London Page 3

ASIAN MARKET

TOP STORIES Asia Petrochemical – 2018 outlook: supply discipline prolonged cycle, non-PE even better (Vitus Leung) http://pull.db-gmresearch.com/p/2368-C908/289662787/Asia_Petrochemical.pdf

RECOMMENDATION CHANGES Thai Downstream Energy – Another good year ahead (Wattana Punyawattanakul) http://pull.db-gmresearch.com/p/653-7198/288851837/2450d8cf-03ed-403f-af0c-6741763dc896_604.pdf

ESTIMATES AND TARGET PRICE CHANGES BlueScope Steel (BSL.AX, Hold) – Pre-Christmas 1H upgrade, 2H outlook strong (Paul Young) http://pull.db-gmresearch.com/p/919-B824/288896979/0900b8c08dff3a30.pdf Bajaj Corp (BACO.BO, Buy) – Version 2.0 (Manoj Menon) http://pull.db-gmresearch.com/p/639-8C22/289018179/0900b8c08dfe5cc3.pdf

MACRO/STRATEGY DBDaily – Bond sell-off pauses...for now (Ken Crompton) http://pull.db-gmresearch.com/p/8341-6D22/290644658/DB_DbDailyAPAC_2017-12-21_1fd786da-e5c9-11e7-9a85-b733c16602a5_604.pdf Japan FX Insights – JPY guide 2018 (15): USD/JPY outlook (Taisuke Tanaka) http://pull.db-gmresearch.com/p/916-6ABC/289015247/DB_DEJAViewFX_2017-12-21_138cb80f-54eb-46cb-bcd5-0ada3989535b_604.pdf Japan FX Insights – JPY guide 2018 (14): Foreign direct investment (Taisuke Tanaka) http://pull.db-gmresearch.com/p/916-38A9/288116317/DB_DEJAViewFX_2017-12-21_f1a3a7f4-4049-4ec7-84a0-31c2e3bdd664_604.pdf Japan Monetary Policy Watch – Monetary policy outlook for 2018 (Kentaro Koyama) http://pull.db-gmresearch.com/p/674-FD1E/288529582/DB_MonPcyWatch_2017-12-21_0900b8c08dfd2089.pdf Data Flash (New Zealand) – NZ - Q3-17 GDP (Phil Odonaghoe) http://pull.db-gmresearch.com/p/840-2658/287305772/f9f2963e-9e9b-4a6f-a116-023a57cb1abc_604.pdf Philippine Strategy – Hold that TRAIN! President to veto some provisions (Rafael Garchitorena) http://pull.db-gmresearch.com/p/2211-F5CC/287631372/0900b8c08dff505b.pdf Data and Events Calendar – 2018 US Economic Data and Events Calendar (Brett Ryan) http://pull.db-gmresearch.com/p/5870-E3E6/289874666/e01d0b83-bece-4633-b6db-dd4afb9c70ae_604.pdf US Economic Notes – Tax receipts may be hinting at higher wage growth (Brett Ryan) http://pull.db-gmresearch.com/p/7421-6D39/289191280/DB_USEconDly_2017-12-21_bff860ae-e4d3-11e7-9a85-b733c16602a5_604.pdf

HONG KONG / CHINA China Oil & Gas Monthly – Strong O&G demand led by teapots and winter gas shortage (Johnson Wan) http://pull.db-gmresearch.com/p/715-D3F5/287301689/cb1f6d28-e38f-11e7-9a85-b733c16602a5_604.pdf

JAPAN Bank Sector – Impact of Talk of Ending NIRP (Yoshinobu Yamada) http://pull.db-gmresearch.com/p/256-DBBF/288687862/0900b8c08dff5420.pdf Construction Sector – Construction shares not undervalued (Yoji Otani) http://pull.db-gmresearch.com/p/204-F36B/287696784/0900b8c08dff55ec.pdf Consumer Electronics Industry – Watch industry: Swiss watch export value +6% YoY (Hiroshi Taguchi) http://pull.db-gmresearch.com/p/261-6878/289585323/0900b8c08dffc65f.pdf Shinsei Bank (8303.T, Hold) – Card loan business restructuring: Why we see it as neutral for the shares (Yoshinobu Yamada) http://pull.db-gmresearch.com/p/257-5621/287936732/0900b8c08dff822f.pdf

AUSTRALIA AWE Ltd (AWE.AX, Hold) – AWE Board recommend takeover bid by Mineral Resources (John Hirjee) http://pull.db-gmresearch.com/p/865-5596/287344088/0900b8c08dff323a.pdf

22 December 2017


Page 4 Deutsche Bank AG/London

AUSTRALIA DuluxGroup (DLX.AX, Sell) – FY18 guidance affirmed; AGM trading update (Mark Wilson) http://pull.db-gmresearch.com/p/215-512F/288403938/0900b8c08dff6ce2.pdf Incitec Pivot Ltd (IPL.AX, Buy) – Priorities and outlook unchanged; AGM update (Mark Wilson) http://pull.db-gmresearch.com/p/233-F9F4/288495338/0900b8c08dff7a5e.pdf Trilogy International (TIL.NZ, Buy) – Proposed acquisition (Christopher Byrne) http://pull.db-gmresearch.com/p/215-26E4/287313404/0900b8c08dff20e3.pdf

KOREA/TAIWAN Korea Biosimilars – November Inflectra and Renflexis figures still disappoint (Sanghi Han) http://pull.db-gmresearch.com/p/652-0AB2/288023430/0900b8c08dff4597.pdf

ASEAN Siam Cement (SCC.BK, Buy) – Ceramic tile restructuring, listing; is the door now open for more? (Wattana Punyawattanakul) http://pull.db-gmresearch.com/p/539-98B3/287581332/e18ee814-bdd8-4d1d-a565-26f0b73e5f10_604.pdf

APAC Equities - APAC Research In Focus UPCOMING DB CONFERENCES dbAccess China Conference - 8-12 Jan@Beijing, China

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EPS changes

NAME COUNTRY DB EPS FY1 DB EPS FY2 DB EPS FY3 RECOMMENDATION TARGET PRICE

From To Change IBES

DB vs IBES

(%) From To Change IBES

DB vs IBES

(%) From To Change IBES

DB vs IBES

(%) From To From To Change

CEEMEA

Yapi Kredi Bank Turkey 0.4 0.4 +9.3 0.5 -16.3 0.5 0.5 +9.7 0.6 -16.2 0.5 0.5 +4.1 0.7 -34.4 Hold Hold 3.8 3.8

Commercial Bank of

Qatar 4.2 4.4 +3.4 7.2 -39.2 4.8 4.5 -5.5 7.8 -42.4 5.1 Hold Hold 58.0 48.0 -17.2

Vakifbank Turkey 0.7 0.7 +2.0 0.7 7.1 0.8 0.8 +2.1 0.8 4.6 0.9 0.9 +2.8 0.9 -5.0 Hold Hold 4.7 4.7

Netcare South Africa 2.1 2.1 -0.0 2.3 -10.3 2.3 2.3 -0.0 2.8 -15.4 2.7 2.7 -0.0 3.0 -9.9 Buy Buy 41.0 39.0 -4.9

Santander Mexico Mexico 2.3 2.2 -2.0 11.8 -81.2 2.6 2.5 -2.9 14.6 -82.9 Hold Hold 9.0 9.0

CCU Chile 365.5 350.6 -4.1 667.9 -47.5 400.9 376.2 -6.2 703.1 -46.5 446.9 422.4 -5.5 761.4 -44.5 Hold Hold 25.0 22.0 -12.0

Mr Price South Africa 9.8 9.3 -5.1 10.4 -10.3 11.0 10.0 -9.6 12.4 -19.6 13.0 11.5 -11.2 15.1 -23.7 Buy Buy 254.0 192.0 -24.4

Norilsk Nickel Russia 1.9 1.8 -7.1 2.4 -24.9 1.2 1.1 -7.9 2.6 -58.3 1.4 1.4 -0.1 3.0 -53.7 Hold Hold 13.0 12.9 -0.8

Koc Holding Turkey 1.2 1.3 +9.0 1.1 17.0 Hold Hold 13.3 13.4 +0.8

LATAM

Banco de Chile Chile 5.8 5.6 -3.3 3,755.6 -99.8 6.3 6.2 -0.6 6.8 6.6 -3.7 Hold Hold 87.0 91.0 +4.6

ASIA

Hanwha Chemical Korea 2,789.3 5,361.9 +92.2 1,483.1 261.5 2,525.8 5,676.8 +124.8 5,788.7 Hold 34,000.

Lotte Chemical Korea 44,419. 63,022.

+41.9 23,420.

169.1 44,044.

63,149.

+43.4 24,111.

161.9 60,127.

Hold 377,00

PTT Global Chemical Thailand 7.4 8.2 +9.6 6.7 21.7 7.7 8.2 +7.6 7.9 8.2 +3.8 Hold Buy 77.0 95.0 +23.4

HSBC Holdings Plc Hong Kong 0.7 0.7 +1.4 0.9 -25.0 0.7 0.8 +6.4 1.1 -28.0 0.8 0.8 +7.2 Hold Hold 72.0 72.0

IRPC PCL Thailand 0.5 0.5 +1.0 0.4 48.3 0.7 0.7 +1.0 0.7 0.8 +3.2 Buy Buy 7.0 7.9 +12.9

SPC - H China 0.5 0.5 +0.6 0.2 201.2 0.6 0.5 -11.8 0.6 0.6 -10.3 Buy Buy 5.8 5.2 -10.3

Siam Cement Thailand 44.9 45.0 +0.3 39.4 14.2 46.5 47.5 +2.2 46.7 1.6 46.5 48.6 +4.6 Buy Buy 605.0 605.0

Thai Oil Pcl Thailand 10.7 10.0 -6.2 5.8 74.3 10.4 10.4 +0.4 9.5 9.3 -2.2 Hold Hold 99.0 99.0

Chandra Asri Indonesia 0.0 0.0 -9.5 0.0 0.0 -11.6 0.0 0.0 -7.8 Hold Hold 5,124.0 5,310.0 +3.6

Kumho Petrochemical Korea 6,357.3 5,535.3 -12.9 9,749.9 -43.2 8,432.2 6,766.0 -19.8 7,493.3 Buy 110,00

Bajaj Corp India Buy Buy 525.0 600.0 +14.3

Source: Bloomberg Finance`

22 December 2017



Solar Portfolio

19-Dec-17

Companies RIC Buy/Sell Promoted Entry Price Current Price Performance

CE3

X5 RETAIL GROUP PJPq.L Buy 19/10/2017 40.26 40.62 0.89%

MENA

TELECOM EGYPT ETEL.CA Buy 01/10/2017 12.95 13.55 4.63%

NMC HEALTH NMC.L Buy 01/10/2017 2,751.00 2,908.00 5.71%

SAUDI TELECOM COMPANY 7010.SE Buy 01/10/2017 70.50 68.60 -2.70%

HERFY 6002.SE Buy 23/10/2017 46.74 48.50 3.77%

Russia

ROSNEFT ROSN.MM Buy 15/11/2017 303.74 302.95 -0.26%

SASOL SOLJ.J Sell 27/10/2017 40,874.81 42,496.00 -3.97%

TRANSNEFT TRNF_p.MM Buy 21/11/2017 180,959.09 179,500.00 -0.81%

South Africa

HYPROP HYPJ.J Buy 01/10/2017 10,572.00 10,346.00 -2.14%

Turkey

AKBANK AKBNK.IS Buy 01/10/2017 9.40 9.34 -0.64%

VAKIFBANK VAKBN.IS Sell 01/10/2017 6.27 6.19 1.28%

YAPI KREDI BANK YKBNK.IS Buy 01/10/2017 4.32 4.23 -2.08%

Source: Bloomberg Finance LP

21 December 2017

Oil & Gas

Gazprom

Rating

Buy

Valuation & Risks

Oil & GasPrice at 20 Dec 2017 (RUB) 132.50

Price Target (RUB) 170.00

52-week range (RUB) 157.97 - 115.35

Company UpdateEmerging EuropeRussia

Company

Gazprom

Reuters Bloomberg Exchange Ticker

GAZP.MM GAZP RX MCX GAZP

Date21 December 2017

Management provides 2017 revenue/earnings guidance in line with forecasts2017 rouble EBITDA could climb by 10-15% yoyAccording to Interfax, First Deputy CEO of Gazprom Andrei Kruglov has guidedthat, in rouble terms, the company’s revenues could grow by 5% yoy and EBITDAby 10-15% yoy in 2017. EBITDA margin might reach 20-25%, which is near the2016 level. This compares to our forecasts of revenue growth of 6.0% yoy, EBITDAgrowth of 10.4% yoy, and EBITDA margin of 22.2%. According to a BloombergFinance LP consensus, revenues could grow by 6.5% yoy, EBITDA by 14.8% yoy,and EBITDA margin might reach 23.0%. Kruglov did not provide guidance for2017 net profit as it is highly sensitive to FX gains/losses that will be determinedbased on year-end exchange rates. While in 2016 the rouble appreciation providedmaterial support to Gazprom's bottom line earnings, there are fewer reasonsto expect that in 2017, according to Kruglov. In 2016, Gazprom's FX gain wasRUB454bn. For 2017 we forecast just RUB25bn.

Previous earnings guidance (in 2015 and in 2016) materialisedThe guidance quality is relatively high. A year ago, Kruglov announced that,in USD terms, the company’s 2016 revenues might decline by 10% yoy andEBITDA by more than 30% yoy. Actual 2016 USD revenues fell by 8% yoy andEBITDA declined by 32% yoy (for details see Gazprom - Management's commentsunderscore our negative view published on 19 December 2016). In December2015, Kruglov provided guidance that EBITDA would amount to USD30bn. Itamounted to USD28.5bn for that year (for details refer to Gazprom providesearnings guidance for 2015 below expectations from 28 December 2015).

Positive FCF unlikely in 2017Kruglov has announced that generating positive FCF in 2017 will be a difficult taskfor objective reasons: due to a capex acceleration in 2H17. Additionally, the levelof cash generation or burning will depend on the working capital movement inthe final quarter of 2017, according to the CFO. We note that in 9M17 Gazprom'sworking capital (adjusted for changes in short-term and long-term deposits)increased by RUB94bn, including by RUB161bn in 3Q17 when inventory levelswent up due to the need to pump gas into underground storage for the upcomingwinter season. Inventory levels should come down as gas from storage is used tosupply consumers in 4Q17 and 1Q18. We have assumed in our Gazprom modelthat working capital falls by RUB62bn in 4Q17 but still grows by RUB33bn in full-year 2017. Significant moves up or down compared to that level could affect thelevel of FCF in 2017, which we currently forecast at -RUB251bn (-USD4.33bn),including the effect of capitalised interest.

Pavel Kushnir

Research Analyst

+971-4-361 1732

Price/price relative

Gazprom MICEX Index (Rebased)

2015 2016 2017100

150

200

250

Performance (%) 1m 3m 12m

Absolute 2.0 8.4 -14.7

MICEX Index -1.3 2.2 -5.5Source: Deutsche Bank

Key indicators (FY1)

ROE (%) 6.4

ROA (%) 4.3

Net debt/equity (x) 19.7

Book value/share (USD) 9.3

Price/book (x) 0.2

Net interest cover (x) –

EBIT margin (%) 13.0Source: Deutsche Bank

22 December 2017 CEEMEA & Latam Daybook


Emerging Markets

HY Corporate Credit Energy

Company

GeoPark Limited Date 21 December 2017

Cash Flow Accretive Argentine Acquisition Fits in Corporate Strategy

Xavier Olave

Research Analyst

(+1) 212 250-6135

[email protected]

Eduardo Vieira

Research Analyst

(+1) 212 250-7568

[email protected]

My Bui

Research Associate

(+1) 212 250-5725

[email protected]

Consistent with the company’s conservative growth strategy (targeting Argentina and diversification of production base), we expect GeoPark’s recently announced acquisition to be cash flow accretive from the get go On December 19, 2017, GeoPark announced the acquisition of three blocks (100% WI) in the hydrocarbon-rich Neuquen Basin from Pluspetrol, for USD52mn; the transaction adds 2,700boed (70% light oil; 30% gas) of conventional production and 12-14mn boed of 2P reserves (plus incremental exploration resources), and importantly should be FCF positive in 2018. On a consolidated basis, the acquisition would increase production capability by ~9%; Geopark produces 30k boed, and the deal provides upside to our 32.5k boed production forecast for 2018 (could potentially exit 2018 with production ~40k boed). As of 3Q17, the company had USD135mn in cash & equivalents, making this bolt-on acquisition comfortably manageable. Diversification of the company’s production base and the company’s more robust production profile could potentially move the company in-line with rating increase thresholds over the next 12-18 months (rated B/B STA/STA by S&P and Fitch).

EBITDA positive contribution starting in 2018; FCF accretive due to no first year capex requirements and NOLs Assuming a netback of USD14-USD15/boed and a declination rate of 15%, would imply annualized incremental EBITDA generation of ~USD12mn with significant upside. Once the company ramps-up investment in the three production blocks (likely a 2019 event) it could potentially increase production to 4,000k+ boed. In conjunction, there is potential to improve cash operating costs by ~15%, and the company should be able to shift more production towards lucrative natural gas production (including potentially tight gas). In terms of 2018, given the transaction won’t close until sometime in 1Q18, incremental EBITDA could range between USD8-10mn for the year depending on deal-close timing. Positively, in 2018, the company will not have capex requirements, and will be able to utilize NOL carryforwards, meaning the deal should be FCF accretive from Day 1.

Could see similar transactions going forward, but would not expect anything transformational that could harm the company’s credit profile Positively, the company has made it clear it intends to continue to grow while maintaining a conservative credit profile. We could potentially see other similar tuck-in transactions going forward, and as part of its growth plans the company will continue to evaluate opportunities in Mexico and Brazil (onshore), and is searching for a partner in Peru (Morona Block). Larger opportunities would require a strong partner.



21 December 2017

Banking / Finance

Banco de Chile

Rating

Hold

Valuation & Risks

Banking / FinancePrice at 20 Dec 2017 (USD) 94.59

Target price 91.00

52-week range 96.06 - 68.45

Forecast ChangeLatin AmericaChile

Company

Banco de Chile

Reuters Bloomberg Exchange Ticker

BCH.N BCH US NYS BCH

Date21 December 2017

Prepared for stronger growth, butalready priced-inRoadshow highlights continued strong profitabilityWe recently spent some time on the road with Rodrigo Aravena, Chief Economistand Head of Institutional Relations, and Pablo Mejia, Head of Investor Relations.The bank thinks that the worst part of the economic cycle is behind them and thatthe economy can grow closer to 3% next year with possible upside risk followingthe election of a market friendly president. As such, loan growth should increase,margins can rise from slightly higher inflation and a better loan mix, asset qualityshould be under control, and efficiency can improve, given the bank's focus ondigital banking. We think ROE should remain near 19% (even with a higher tax ratein 2019), but also think this is already reflected in the stock's premium valuationof 15.7x '18E P/E and 2.9x '18E P/BV. Maintain Hold.

Market was focused on election, bank was focused on digital strategySince the roadshow was held just prior to the final round of elections, most of thequestions revolved on the potential outcomes. However, management was keento highlight the bank's digital strategy, which is focused on identifying customerneeds. Indeed, the bank is prepared to offer different products based on clients'different life events and uses 70 different variables that allow account managersto offer different products and discounts to each individual family. Furthermore,50% of consumer loans are now done directly on-line, which should allow thebank to continue to optimize its branch network and improve efficiency.

Higher tax rate is biggest headwind, but manageableThe bank's tax rate should increase to 23-24% following the payment of CentralBank debt in early 2019. However, we think this can be offset by slightly strongergrowth and margins, following the election of Sebastian Piñera as president,which can boost GDP growth above 3% (DBe of 3.4% in 2018). We reduce our2017 net income estimate by 3% to Ch$561bn to reflect a weak October resultfrom lower inflation, reduce 2018 by 1% to Ch$619bn, and reduce 2019 by 4%to Ch$652bn to reflect a higher tax rate of 23% instead of 17%. We now expectrecurring earnings growth of 3% in 2017, 10% in 2018, and 5% in 2019 with ROEsof 18.8%, 19.3%, and 18.8%, respectively.

Slightly higher PT of $91/ADR from $89 on lower COE, but still no upsideWe increase our PT to reflect a slightly lower COE of 10.0% from 10.1% onlower country risk. It is based on the GGM with 19% ROE and 5% growth. Mainupside risks include stronger growth, higher inflation, and better efficiency. Maindownside risks include premium valuation and asset quality deterioration.

Tito Labarta

Research Analyst

+1-212-250-5944

Key changes

TP 87.00 to 91.00 ↑ 4.6%Source: Deutsche Bank

Price/price relative

Banco de Chile Chile Stock Mkt Select (Rebased)

Jan '16 Jul '16 Jan '17 Jul '17

100

50

75

Performance (%) 1m 3m 12m

Absolute 12.4 7.1 37.3

Chile Stock Mkt Select 8.9 5.5 31.9Source: Deutsche Bank

Key indicators (FY1)

ROE (%) 18.8

ROA (%) 1.7

Equity/assets (%) 9.4

Dividend yield (%) 3.5

P/BV (x) 3.2

P/E (x) 17.3Source: Deutsche Bank



Emerging Markets Russia

Special Report Economics

Date 21 December 2017

Russia in pictures: Uneven recovery but growth expected to improve in 2018

Elina Ribakova

Chief Economist

(+44) 20 7547-1340

[email protected]

Q3 real GDP growth disappointed at 1.8% YoY, declining 0.7pps fromprevious quarter. On the supply side, the slowdown in Q3 was led by thetransportation sector and industry. The industry slowdown had beenpronounced averaging 1.1% YoY, 2.8pps lower than the average in Q2.Strong retail trade and improving agricultural output appear to havesupported growth. On the demand side, strong wage growth, improvingconsumer confidence, lower savings by households induced by decliningreal rates, improving household credit and declining inflation all are likelyto have contributed to the strong momentum in household demand in Q3.Earlier peak in corporate profits is supportive for investments, albeit at alower pace than in Q2 which was also aided by restocking.

In November, retail sales and IP disappointed. Both retail sales and IPgrowth rates surprised on the downside in November, falling 0.4pps and3.6pps respectively to 2.7% YoY and -3.6% YoY. Real wages growthremained constant at 5.4% YoY. As a result, real disposable incomedeclined by 0.3%, a positive surprise, as compared to -1.7% fall in October.

The worrying divergence between real wages and disposable income. Therecovery in real wages growth since 2016 has not translated intoimproving real disposable income growth in Russia and the gap betweenthe two is widening. The latter kept deteriorating in 2016, mainly onaccount cuts in government social security payments and higher taxes oncertain items. In fact, real disposable income seems to be following thereal pension payments growth trajectory since 2016. The on-time spike indisposable income in Jan-17 was mainly on account of a jump in pensionpayments, and has since then subsided.

Relative improvement in forward-looking indicators of demand. Themonthly indicator of consumer confidence along with almost all sub-components improved or remained constant in November. The steepesthike was in the “personal financial situation during next year” sub-component.

Inflation continued to trend down. Inflation fell to a new low of 2.5% YoYin November (2.5% consensus forecast). Core inflation also decelerated to2.4% YoY (2.3% consensus). Inflation expectations remain volatile, buthave fallen sharply in November to a new historical low of 8.7% (9.9% inOctober) Deflationary trend is likely to continue on the back of falling foodinflation, mainly due to increased supply and shortage of storage, andaided by exchange rate strength into the year-end.

The CBR surprised the markets in December by easing more than expected(DB and market consensus for 25bps) and took its key policy rate to 7.75%.The statement and press conference made emphasis on the fact that thehigher than expected easing was primarily driven by the "extension of theagreement to reduce oil production, [which brought] pro-inflationary risksdown over a one-year horizon". As the CBR progresses towards a moreneutral stance, we believe it is likely to become increasingly more datadriven. Thus, given our growth and inflation projections, we maintain ourcall for further easing next year, in 25bps steps, likely skewed to H1-2018.

The new budget envisages a reduction in the fiscal deficit to 1.3% of GDPin 2018, with expenditures envisaged to decline faster than revenues. Thegovernment plans to index public sector wages to inflation beginningJanuary 2018. We think that the new 3-year budget should reduce thebudget break-even oil price from Urals USD 60 to USD 40, which would bea very strong positive for Russia's risk premium.

Divergence between wage and

disposable income growth

-15

-10

-5

0

5

10

15

20

Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Real wages Real disposable income

% YoY, 3mma

Source: Haver Analytics, Deutsche Bank

Real GDP growth outlook

-15

-10

-5

0

5

10

15

20

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Household consumption GovernmentNPISH GFCFChange in inventories Net exportsErrors & Omissions Real GDP, % YoY

Contribution to real GDP growth, pp

Forecasts

Source: CBR, Deutsche Bank



21 December 2017

EMEA Snap

Emerging EuropeCzech Republic

Economics

EMEA SnapDate21 December 2017

Czech Republic: The hawk thatvanished (for now)

■ The CNB's Bank Board decided to keep interest rates unchanged. Thetwo-week repo rate (2W repo rate) was maintained at 0.50%, the discountrate at 0.05% and the Lombard rate at 1%.

■ The average evolution of the Czech Koruna during Q4 was strongerthan the CNB's expectations. This fact, together with lack of meaningfulslippage of actual data from current CNB's forecasts were the mainreasons behind the decision today.

■ The CNB delivered some tightening this month via macro-prudentialmeasures aimed to curb overheating in housing loans growth. Beyondcontaining risks to financial stability, the tightening of the buffers helpsdampen the feedback loop between property prices, housing loans,imputed rents and core inflation.

■ We continue to expect two 25bps hikes in 2018 (one more hike thanactually implied in the CNB's baseline). Upside risks for the call continueto be wage growth surprises and risks that the current (minority)government overspends to stay afloat. For now however, our inflationprojections remain unsupportive of an aggressive rate hike cycle in 2018.

Kubilay Ozturk

Chief Economist

+90-212-3170124

Carlos Galindo

Research Analyst

+44-207-547-6269



21 December 2017

US Economic Notes

North AmericaUnited States

Economics

US Economic NotesDate21 December 2017

Tax receipts may be hinting at higherwage growthCommentary: Employee withheld income tax receipts are one of our favoriteeconomic indicators because they are timely and not subject to revision. Eachday, the Treasury releases the amount of withheld income and employment taxesdeposited into its accounts the previous business day. While the daily readingsare highly volatile, when we smooth the data to distill the quarterly trend, theybecome a decent real-time proxy for nominal income growth. The recent readingson tax receipts point to a noticeable pick up in underlying income growth andmay even be signaling a long-awaited improvement in wage growth.

In order to identify the underlying trend in an otherwise noisy data set, we sum theprevious 60 days of tax receipts and calculate the year-over-year growth rate ofthe 60-day totals. We then take the 60-day moving average of the year-over-yeargrowth rates.1 As we can see in the figure below, the latest data show tax receiptsgrowing at 5.9% - a sturdy improvement relative to the 4.5% growth rate aroundthis time last year. While there is little debate that the labor market is nearingfull employment, if not already beyond that point, policymakers have continuedto fret lack-luster wage growth. Tax receipts may be providing an important cluein this regard.

Aggregate income growth is a function of employment gains, wage growth andhours worked. While the tax receipts data do not allow us to identify exactly whichof these components is driving the trend, the monthly employment report allowsus to make some assumptions. Most striking to us is that the recent accelerationin tax receipts has coincided with a modest deceleration in job gains. Recall thatnonfarm payroll growth topped out in February 2015 at 2.3% and has since slowedto 1.4% as of November. This is typical at this point in the business cycle asjob growth tends to slow as excess labor slack is absorbed. Indeed, nonfarmpayrolls are up 2.07 million over the last 12 months, down from a 2.3 million gainover the 12 months ending in November of last year. This means that the risein income growth evident in tax receipts is either being driven by wage growth,hours worked, or a combination of the two.

While hours worked rose a tenth in November to 34.5, the year-to-date averagehas been 34.4, the same as it was in November 2016. However, the year-over-yeargrowth rate of average hourly earnings, according to the BLS, was just 2.47% lastmonth, down from 2.65% this time last year. In other words, while tax receiptspoint to a meaningful pick up in the pace of income growth, the nonfarm payroll

Brett Ryan

Senior US Economist

+1-212-250-6294

Matthew Luzzetti, Ph.D.

Senior Economist

+1-212-250-6161

Justin Weidner

Economist

+1-212-469-1679

1 Note that we also adjust the data for changes in the tax code and our methodology can be furnishedupon request.



22 December 2017



SOLAR UPDATE A SOLAR idea has been removed from the Deutsche Bank Research Website. Demoted Stock: Al Rajhi Bank (1120.SE) Analyst: Ryan Ayache Comment: This idea has been automatically demoted, as it was created more than 6 months ago. Long-Term Fundamental Rating: Buy Latest research: http://gm.db.com/ger/region/SolarLatestResearch.eqsr?ricCode=1120.SE Company disclosure: http://gm.db.com/ger/disclosure/Disclosure.eqsr?ricCode=1120.SE The views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s) about the subject issuer and the securities of the issuer. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report.

22 December 2017



SOLAR UPDATE A SOLAR idea has been removed from the Deutsche Bank Research Website. Demoted Stock: Saudi British Bank (1060.SE) Analyst: Ryan Ayache Comment: This idea has been automatically demoted, as it was created more than 6 months ago. Long-Term Fundamental Rating: Buy Latest research: http://gm.db.com/ger/region/SolarLatestResearch.eqsr?ricCode=1060.SE Company disclosure: http://gm.db.com/ger/disclosure/Disclosure.eqsr?ricCode=1060.SE The views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s) about the subject issuer and the securities of the issuer. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report.

22 December 2017



Economic Calendar Country GMT Release DB Expected Actual Consensus Previous

Friday, 15 December

TR 07:00 Unemployment rate (Sep) 10.6%rate

HU 07:30 Current account balance(monthly) (Oct), EUR, m EUR606.4m

HU 08:00 Construction (Oct) 23.80%

RU 08:00 Money supply (Dec), RUB, tr, chg RUB9.2tr

RU 10:30 CBR Monetary policy committee meeting (Dec) 8.00%rate 8.25%rate

IL 12:00 CPI (Nov) -0.2% (0.4%) 0.3% (0.2%)

PE 12:00* GDP (Oct), nsa -3.50% -3.20%

CO 12:00 Industrial production (Oct) (-0.5%) (-1.9%)

RU 12:00* Industrial production (Nov)* 0.00%

IL 12:00 PMI (Nov), Index 53.2

CO 12:00 Retail sales (Oct) -1.40% -1.40%

PE 12:00* Unemployment (Nov) 6.1%rate 6.2%rate

US 13:30 NY Fed Empire State Survey (Dec), Index 17.5 18.6 19.4

PL 14:00 Central budget balance(Ytd) (Nov), PLN, bn PLN2.7bn

US 14:15 Capacity Utilization (Nov) 77.2%rate 77.2%rate 77.0%rate

US 14:15 IP (Nov) 0.20% 0.30% 0.9% (2.9%)

Monday, 18 December

BR 07:00 FGV CPI IPC-S (Dec) 0.30% 0.39%

CZ 08:00 PPI (Nov) -1.10%

CO 12:00* Current Account Balance (Q3), USD, m -USD2,708.00m

RU 12:00* PPI (Nov)* -7.60%

CO 12:00 Trade Balance (Oct), USD, m -USD274.5m

PL 13:00 Avg. gross wages (Nov), nsa -7.40%

US 15:00 NAHB Housing Market Index (Dec), Index 69 70 70

Tuesday, 19 December

IL 07:00 12M fwd avg CPI forecasts (Dec) -0.80%

RU 13:00 Disposable income (Nov) -1.30%

PL 13:00 Industrial production (Nov), nsa -12.30%

HU 13:00 MPC meeting (Dec) 0.90%rate 0.90%rate 0.90%rate

PL 13:00 PPI (Nov) -3.00%

PL 13:00 Retail sales (Nov) -8.00%

RU 13:00 Retail sales (Nov) -3.00%

RU 13:00 Unemployment rate (Nov) 5.1%rate

US 13:30 Building Permits (Nov), k 1,290.0k 1,275.0k 1,297.0k

US 13:30 Housing Starts (Nov), k 1,270.0k 1,230.0k 1,290.0k

US 13:30 BoP (Q3), USD, bn -USD118.0bn -USD123.1bn

Wednesday, 20 December

BR 04:00 FIPE CPI weekly (Dec) 0.73%

HU 08:00 Avg. gross wages (Oct), nsa -13.60%

BR 09:30 Current account - monthly (Nov), USD, m -USD2,200.0m -USD343.0m

MX 11:00 Aggregate supply and demand (Q3) -2.60%

MX 11:00 Retail sales (INEGI) (Oct) -0.30%

AR 12:00* Budget Balance (Nov), ARS, m -ARS32,495.0m

RU 13:00 Weekly CPI (Dec) 0.10%

EG 14:00* GDP (Q3) 6.00% 7.30%

US 15:00 Existing Home Sales (Nov), m 5.50m 5.52m 5.48m

AR 16:00 GDP - constant total (Q3) -4.20% -2.70% Source: Deutsche Bank

22 December 2017



Indices Region/Country Index Price local Vol ($m) Price Performance in %($ Terms)

21-Dec-17 1D 1 W 1 M Ytd 3 Y 5 Y 10 Y

EM MSCI EMF 59,958.65 na 1.0 0.6 -2.3 25.8 25.8 29.3 18.6

EMEA MSCI EMEA 538.94 na 1.7 1.0 -2.0 10.3 14.7 18.8 3.4

LatAm MSCI LatAm 84,403.90 na 2.7 2.8 0.7 17.4 27.9 12.2 10.2

Asia MSCI Asia 908.74 na 0.6 0.2 -2.9 31.2 28.3 38.8 29.3

CEEMA

Czech Republic PX 1,077.70 18 -95.4 1.2 2.2 37.8 18.2 -9.1 -48.5

Greece ASE 793.12 125 0.4 3.1 10.0 37.6 -11.6 -21.2 -87.3

Hungary BSE 39,140.22 26 0.2 1.1 -1.2 34.7 130.6 79.3 -0.7

Israel TA-25 1,486.14 185 0.5 2.2 5.2 11.0 11.9 30.2 38.3

Poland WIG 63,477.25 207 0.2 1.3 -0.2 43.9 20.9 15.9 -19.6

Russia RTS$ 1,126.97 595 -0.2 -2.3 -1.8 -2.2 46.7 -25.5 -50.9

Turkey ISE 100 111,271.95 1540 0.7 2.9 9.4 31.0 -19.6 -31.9 -35.9

Bahrain BHSEASI 1,281.10 2 169.2 1.2 1.4 179.2 -9.1 23.7 28.4

Egypt CASE 14,668.59 23 -0.1 -0.1 5.8 21.5 -32.2 -6.7 NA

Jordan ASEGI 2,128.97 6 40.1 -0.8 1.2 38.2 -0.5 11.0 -17.7

Kuwait KWSEIDX 6,413.72 36 0.5 1.3 3.0 13.1 -3.5 -0.3 -52.7

Oman MSM30 5,063.33 2 -0.1 0.0 -0.3 -12.4 -15.6 -10.9 -44.0

Qatar DSM20 8,621.34 67 5.0 5.0 11.0 -17.4 -28.3 2.1 -8.9

Saudi Arabia TASI 7,209.71 923 1.6 1.9 6.4 0.0 -15.3 4.7 -35.8

UAE, Abu Dhabi ADSMI 4,349.15 15 -0.2 0.2 0.9 -4.3 -3.7 66.0 NA

UAE, Dubai DFMGI 3,365.09 111 0.0 0.3 -1.3 -4.7 -10.6 110.1 -41.3

South Africa JSE All Share 58,771.79 5789 1.3 7.4 5.3 25.1 8.1 1.3 10.4

ASIA

China HSCCI 4,302.88 537 0.4 0.0 -1.3 19.0 0.7 -4.9 -28.6

China A-Shares SHASHR 3,459.68 25846 1.1 0.2 -3.0 11.8 -0.1 44.5 -28.0

India BSE 30 33,756.28 139 -0.1 1.7 1.9 34.1 21.5 50.4 8.4

Indonesia JSE CI 6,183.39 356 1.2 0.9 2.6 30.4 15.5 29.6 90.0

Korea KOSPI 2,429.83 4838 -1.7 -1.6 -3.3 32.8 27.5 21.1 11.8

Malaysia KLCI 1,751.21 214 0.3 -0.4 3.2 17.2 -13.1 -20.8 2.3

Pakistan KSE 28,524.78 63 0.1 0.0 -6.2 -17.4 15.5 112.5 52.8

Philippines MSE CI 8,378.28 56 0.2 -0.9 1.6 20.4 4.3 17.3 94.5

Taiwan TWSE 10,488.97 3024 -0.1 -0.4 -2.5 22.2 22.3 35.2 43.1

Thailand SET 1,736.91 950 -0.1 0.8 1.9 23.6 15.4 18.6 120.4

LATAM

Argentina MERVAL 28,480.71 25 1.5 4.2 4.0 52.2 72.8 185.3 137.4

Brazil BOVESPA 75,133.43 2002 2.4 5.3 -0.3 23.4 22.3 -22.2 NA

Chile IPSA 5,450.83 141 -1.4 9.4 7.2 41.7 40.7 -2.3 41.0

Colombia IGBC 11,216.96 42 0.5 1.7 4.1 11.8 -23.1 -54.0 -29.8

Mexico IPC 48,503.31 272 0.2 0.6 -0.9 15.5 -12.7 -24.7 -7.1

Peru IBVL 19,240.39 6 -68.4 2.0 -4.0 26.4 20.5 -26.1 -1.0

Venezuela BVC 1,280.33 1127 -90.2 1.2 83.1 -96.0 21109.6 118297.5 743866.9 Source: Bloomberg Finance LP

22 December 2017



Currencies Country Currency Last Price Price Performance Forecasts 21-Dec-17 1D 1 W 1 M Ytd 3 Y 5 Y 3M 6M 12M

EMEA

Czech Republic CZK 21.7 0.5 -0.6 0.4 -15.1 -3.9 13.6 21.7 21.6 20.8

Hungary HUF 263.1 -0.1 -1.4 -1.0 -10.3 2.5 19.6 268.4 270.9 262.5

Israel ILS 3.5 -0.2 -1.0 -0.7 -9.2 -10.9 -7.0 3.5 3.5 3.4

Poland PLN 3.5 0.0 -1.3 -1.0 -15.4 1.3 14.1 3.5 3.5 3.4

Russia RUB 58.6 -0.2 -0.3 -0.2 -4.5 5.6 89.8 57.3 57.1 56.7

Turkey TRY 3.8 -0.2 -1.3 -3.1 8.2 64.5 112.4 4.1 4.2 4.4

South Africa ZAR 12.7 0.3 -3.7 -8.6 -7.4 9.7 48.3 14.2 14.0 13.0

ASIA

China CNY 6.6 0.0 -0.4 -0.5 -5.3 5.6 5.7 6.7 6.7 6.7

India INR 64.1 -0.1 0.0 -1.3 -5.7 1.4 16.2 64.5 65.0 66.0

Indonesia IDR 13,557.5 -0.1 -0.2 0.2 0.8 8.7 38.3 13,750.0 13,870.0 14,050.0

Korea KRW 1,078.6 0.0 -0.9 -0.8 -10.7 -1.6 0.4 1,080.0 1,060.0 1,050.0

Malaysia MYR 4.1 0.1 0.0 -0.8 -9.1 16.6 33.1 4.3 4.4 4.6

Pakistan PKR 110.7 0.0 0.8 5.1 5.9 9.8 13.5 na na na

Philippines PHP 50.2 0.0 -0.6 -0.8 0.9 12.1 22.1 51.1 51.7 52.3

Taiwan TWD 29.9 -0.2 0.0 0.0 -7.1 -5.4 2.9 30.0 29.8 29.9

Thailand THB 32.7 0.0 0.5 -0.1 -8.7 -0.5 6.8 32.6 32.6 33.0

LATAM

Argentina ARS 17.8 0.6 1.9 1.6 11.2 107.3 262.4 18.3 19.0 20.3

Brazil BRL 3.3 0.6 -0.2 2.1 1.7 24.5 59.2 3.2 3.3 3.3

Chile CLP 621.7 0.2 -2.2 -1.9 -6.8 1.6 30.9 635.0 630.0 620.0

Mexico MXN 19.4 1.1 1.5 3.6 -6.0 32.3 50.0 19.4 19.4 19.5

Colombia COP 2,961.7 -0.1 -1.2 -0.7 -1.3 27.5 66.8 2,999.1 3,012.6 3,039.4

Peru PEN 3.3 -0.3 -0.5 0.5 -2.9 9.5 27.0 3.2 3.2 3.3

Other Nations

Euro EUR 0.8 0.1 -0.8 -0.7 -11.2 3.0 11.0 0.9 0.9 0.8

UK GBP 0.7 0.4 -0.2 -0.6 -7.8 16.7 21.0 0.8 0.8 0.8

Switzerland CHF 1.0 0.4 -0.3 0.6 -2.9 0.4 7.9 1.0 1.0 1.0

Japan JPY 113.4 0.1 0.7 1.6 -3.0 -5.7 34.7 117.0 118.0 120.0

Hong Kong HKD 7.8 -0.1 0.1 0.1 0.9 0.5 0.9 7.8 7.8 7.8 Source: Bloomberg Financial LP

22 December 2017



Commodities

Price local Performance (% )

Forecasts

21-Dec-17 1D 1 W 1 M Ytd 3 Y 5 Y 10 Y 2016E 2017E 2018E

BASE METAL

Aluminium ($/mt) 2,148.0 1.2 4.0 2.1 26.9 12.4 4.2 -10.7 1788 1728 1670

Copper ($/mt) 7,086.0 0.6 2.9 4.6 28.0 12.2 -8.8 8.5 5900 5725 6800

Nickel ($/mt) 12,011.0 0.3 4.2 4.3 20.5 -22.9 -31.4 -53.9 10625 11250 12500

Iron Ore($/mt) 69.8 0.0 na 13.4 -10.6 3.1 -48.8 na 69 54 56

Zinc ($/mt) 3,223.0 0.2 1.3 0.7 25.8 51.9 58.7 41.3 3100 2538 2100

Tin ($/mt) 19,450.0 0.6 1.7 -0.6 -7.8 1.3 -16.5 19.3 20510 19613 19408

OIL

WTI (Oil) 58.3 0.5 1.8 3.1 8.6 7.8 -35.0 -35.9 54 60 62

PRECIOUS METAL

Gold ($/Oz.) 1,266.5 -0.1 0.9 -2.1 9.9 5.7 -23.1 59.0 1203 1255 1288

Palladium Spot $/Oz 1,039.5 0.9 1.3 4.4 52.6 31.1 53.0 193.6 748 783 850

Platinum Spot $/Oz 916.1 -0.4 2.4 -3.9 1.4 -23.7 -40.9 -39.5 996 1125 1250

Silver Spot $/Oz 16.1 -0.6 0.4 -6.8 1.4 1.6 -46.1 13.5 17.2 18.5 19.0 Source: Bloomberg Financial LP

CE

EM

EA

& Latam

Dayb

oo

k

22

Decem

ber 20

17

Deu

tsche B

ank A

G/Lo

nd

on

P

age 19

Macro Data GDP Growth

(YoY %)

GDP Nominal ($bn)

GDP per Capita ($)

CPI

(YoY %)

CA Balance

(% GDP)

Fiscal Balance

(% GDP)

Total Govt Debt

(% GDP)

Total Ext Debt

(% GDP)

Country 2017E 2018E 2017E 2017E 2017E 2018E 2017E 2018E 2017E 2018E 2017E 2018E 2017E 2018E

CEEMEA

Czech Republic 4.2 3.4 217 20518 2.5 2.4 0.6 0.4 1 0.8 35.1 33.3 61.9 51.5

Egypt 4.1 4.5 NA NA 23.5 22.5 -6.1 -4.4 -10.9 -9.1 101.2 88.8 NA NA

Hungary 3.9 3.5 137 13950 2.3 2.5 3.8 3.1 -2.3 -2.4 72.0 70.6 92.5 89.7

Israel 3.3 3.5 352 40353 0.2 0.8 3.7 3.0 -1.9 -2.6 60.3 60.3 24.4 22.2

Kazakhstan 3.3 2.8 NA NA 7.3 6.5 -5.3 -3.8 -6.5 -2.0 NA NA NA NA

Poland 4.2 3.8 521 13724 2.0 2.2 -1.4 -1.7 -2.3 -2.5 51.0 50.8 72.3 72.4

Russia 1.7 1.9 1555 10589 3.7 3.6 2.9 3.1 -2.5 -1.4 13.9 16.1 33.9 32.5

Saudi Arabia 0.1 1.1 NA NA -0.2 5.0 0.6 0.4 -8.603 -7.244 17.0 20.7 NA NA

South Africa 1.0 1.7 352 6196 5.3 4.7 -2.5 -3.1 -4.3 -3.9 54.2 57.0 37.1 33.6

Turkey 5.7 4.9 833 10493 11.1 10.2 -5.1 -4.8 -1.9 -2.5 28.9 29.2 51.7 53.5

United Arab Emirates 1.3 3.4 NA NA 2.1 2.9 2.1 2.1 -3.7 -2.2 20.7 20.8 43.9 NA

ASIA

China 6.8 6.3 12132 8607 1.7 2.7 1.2 1.1 -4 -4 37.5 38.4 13.0 13.2

India 6.3 7.5 2506 1918 3.2 4.5 -1.5 -1.7 -3.2 -3 69.7 68.4 19.8 18.8

Indonesia 5.0 4.8 1016 3854 3.8 3.7 -1.4 -0.8 -2.5 -2.7 28.9 30.6 30.8 28.0

Korea 3.2 2.9 1520 29812 2.0 1.7 5.3 4.4 0.7 0.7 41.2 41.2 27.0 24.7

Malaysia 6.0 5.7 314 9793 3.8 2.7 3.0 2.6 -3.0 -2.8 66.3 65.7 62.3 54.6

Philippines 6.5 5.7 313 2978 3.2 3.2 0.1 -2.2 -2.5 -2.7 44.3 43.9 23.4 21.9

Taiwan 2.6 2.3 567 24076 0.6 1.3 12.4 10.2 -0.5 -0.7 38.2 38.8 31.7 31.0

Thailand 3.8 3.9 449 6777 0.7 1.4 10.0 8.1 -2.0 -2.9 38.0 38.7 31.8 31.6

LATAM

Argentina 3.0 3.3 625 14 27.5 20.0 -3.8 -4.1 -6.2 -5.2 45.2 49.7 31.2 30.9

Brazil 1.1 2.6 2018 9726 3.4 3.2 -0.4 -1.2 -8.2 -7.4 75.5 76.6 27.5 26.9

Chile 1.5 3.4 276 15 2.2 2.3 -1.2 -1.3 -3.2 -2.9 24.8 26.7 61.5 60.6

Colombia 1.6 2.6 306 6196 4.3 3.0 -3.6 -3.5 -3.7 -3.3 45.3 46.1 41.9 41.9

Mexico 1.9 2.2 1404 11 6.0 4.6 -1.5 -2.2 -1.8 -2.2 48.0 47.3 29.5 23.0

Peru 2.7 4.0 213 6708 2.9 1.8 -1.1 -1.7 -3.0 -3.5 25.5 27.6 38.0 37.2

Venezuela -12.0 -6.0 215 6850 652.7 2349.3 -0.4 -1.3 -18.5 -18.7 23.0 19.7 65.3 66.8

CEEMEA 2.6 2.9 3966 115823 6.8 7.1 -0.5 -0.4 -4.2 -3.5 32.8 33.8 45.7 44.4

ASIA 6.1 6.0 18816 87815 2.3 3.1 1.4 1.1 -3.2 -3.2 42.3 42.8 18.0 17.5

LATAM 1.7 2.7 5057 29520 6.9 5.4 -1.5 -2.1 -5.1 -4.8 55.2 56.1 33.3 31.2

EM 4.8 4.9 27839 233158 3.8 4.3 0.6 0.4 -3.6 -3.5 43.3 43.9 24.7 23.8

US 2.3 2.6 NA NA 2.1 2.1 -2.9 -3.2 -3.6 -2.8 NA NA NA NA

Europe 2.3 2.3 NA NA 1.5 1.4 3.3 2.7 -1.1 -0.9 NA NA NA NA

Japan 1.5 1.0 NA NA 0.3 0.4 4.1 4.5 -3.5 -3.0 NA NA NA NA Source: Deutsche Bank, IMF

22 December 2017



Interest Rates Yield Change in bps

(%) 1 M 1 Y

Czech Republic CZK_SW05/6MF/ICAP 0.91 -12 33

Hungary HUF_SW05/6MF 1.12 -26 -35

Israel ILS_SW05 0.82 -10 5

Poland PLN_SW05/6MF/ICAP 2.28 -14 29

Russia RUB_SW05/ICAP 6.80 -33 -140

Saudi Arabia SAR_SW05 3.05 -51 -16

South Africa - ZAR_SW05 7.35 -12 -118

Turkey TRY_SW05 10.77 -15 103

Argentina - ARG ARS BONAR V 3.82 292 84

Brazil - BRL PRE 5Y 10.84 66 -154

Chile - CLP SWAP 5Y 3.38 -7 -72

Colombia - COP_USD_SWAP 5Y 5.14 -18 -161

Mexico - MXN TIIE 5Y 7.16 -11 168

Peru - PEN Nominal/PERUGB AUG 20 4.14 -25 -124 Source: Deutsche Bank

Country Risk 10Yr Credit Default Swap(Bps) (CEEMEA)


Country Risk 10Yr Credit Default Swap(Bps)


22 December 2017



P/BV valuation – By Countries GEM Country Current P/BV Current P/BV versus

country's 10-year historical average P/BV

Current P/BV relative to EM P/BV , versus 10-

year historical average

EM 1.79 4.7% 0.0%

DM 2.44 24.0% 15.5%

US 3.31 33.9% 24.2%

Brazil 1.74 4.5% 0.8%

Chile 2.03 -0.7% -5.8%

China 2.07 10.1% 6.8%

Colombia 1.33 -20.9% -24.9%

Czech Republic 1.45 -17.7% -20.5%

Egypt 3.04 41.7% 35.6%

Greece 0.66 -39.6% -41.9%

Hungary 1.76 38.7% 33.0%

India 3.25 5.9% 0.5%

Indonesia 3.07 -13.4% -17.5%

Korea 1.18 -2.1% -6.5%

Malaysia 1.65 -17.4% -22.3%

Mexico 2.41 -12.5% -18.1%

Peru 2.33 -25.3% -26.9%

Philippines 2.60 -4.4% -11.3%

Poland 1.43 2.8% -2.1%

Qatar 1.46 -25.6% -29.3%

Russia 0.82 -13.2% -14.8%

South Africa 2.63 7.5% 0.7%

Taiwan 1.92 5.6% -0.5%

Thailand 2.25 9.2% 2.3%

Turkey 1.46 -6.5% -11.5%

UAE 1.48 13.8% 6.1% Source: Deutsche Bank

P/BV valuation – By EM Sector

GEM Sector Current P/BV Current P/BV versus

sector's 10-year historical

average P/BV

Current P/BV relative to EM

P/BV , versus 10-year

historical average

EM 1.79 4.7% 0.0%

Consumer Discretionary 2.24 5.0% -1.2%

Consumer Staples 3.99 11.6% 3.6%

Energy 0.95 -18.9% -20.3%

Financials 1.30 -14.4% -17.7%

Health Care 4.10 12.7% 4.5%

Industrial 1.44 -10.8% -14.6%

Information Technology 3.22 46.7% 38.2%

Materials 1.49 -6.0% -8.6%

Real Estate 1.50 9.6% 1.3%

Telco 2.00 -13.2% -17.8%

Utilities 1.09 -5.2% -10.9% Source: Deutsche Bank

22 December 2017



CEEMEA valuation 12/21/17 Daily YTD Price P/BV (x) Div Yld % (US$ m)Company Ticker Rating Price Change % Change % Target 2017E 2018E 2017E 2018E 2017E 2017E Mkt Cap

Banks

Abu Dhabi Comm Bank ADCB.AD Buy 6.75 -0.4 -2.2 8.80 15.6 16.3 8.9 7.9 1.2 6.2 9523

Akbank AKBNK.IS Hold 9.40 0.5 11.1 10.40 16.6 16.1 7.1 6.6 1.1 2.4 9855

Al Rajhi Bank 1120.SE Buy 64.59 -0.5 2.6 72.20 16.6 15.6 11.4 11.4 1.9 3.5 27987

Alawwal bank 1040.SE Hold 11.90 -0.8 -14.7 11.10 10.3 10.7 9.7 8.7 1.0 2.2 3627

Alinma Bank 1150.SE Hold 18.98 -0.9 25.7 17.15 10.0 10.0 13.2 12.6 1.4 3.4 7535

Alior Bank ALRR.WA Buy 78.86 0.6 72.0 93.50 8.6 12.1 17.5 11.2 1.5 0.0 2884

Arab National Bank 1080.SE Hold 24.99 -1.0 12.9 25.30 12.6 11.2 8.1 8.6 1.0 3.6 6663

Bank Pekao PEO.WA Buy 129 -0.7 21.5 150.00 9.1 9.7 15.7 14.6 1.5 6.7 9597

Bank Saint-Petersburg BSPB.MM Sell 54.70 -0.6 -14.3 32.00 5.2 NA na na 0.4 NA 411

Banque Saudi Fransi 1050.SE Hold 29.15 2.6 11.7 28.80 13.4 11.6 8.8 9.9 1.1 3.6 9334

Barclays Africa Group BGAJ.J Buy 174 -4.2 11.4 180.00 15.2 14.4 8.8 8.3 1.3 5.9 11611

Capitec Bank CPIJ.J Sell 1,070 2.1 66.3 360.00 25.7 25.4 29.9 25.7 7.8 1.2 9746

CIB COMI.CA Hold 74.02 0.5 3.0 73.00 36.3 33.1 10.3 8.9 2.9 2.2 4788

Dubai Islamic Bank DISB.DU Buy 6.19 -0.8 11.1 7.30 22.4 21.1 8.3 8.5 1.7 7.4 8313

Emirates NBD ENBD.DU Buy 8.15 0.6 -4.0 12.75 16.7 16.0 6.2 5.9 0.9 5.8 12334

First Abu Dhabi Bank FAB.AD Hold 10.25 0.0 7.1 11.40 12.2 12.5 10.7 9.9 1.2 5.1 30290

Garanti GARAN.IS Buy 10.12 1.1 22.8 11.40 16.2 16.0 6.9 6.2 1.1 2.9 11141

Halkbank HALKB.IS Hold 10.39 -2.0 2.8 15.00 16.7 15.3 3.2 3.1 0.5 2.0 3404

ING Bank Slaski INGP.WA Sell 211 0.3 54.2 191.50 12.1 12.6 18.9 16.4 2.4 1.2 7748

Isbank ISCTR.IS Hold 6.67 2.3 19.0 7.70 14.2 13.7 5.3 5.0 0.8 3.9 7867

mBank MBK.WA Sell 479 -1.4 68.9 430.00 7.9 8.4 18.2 15.7 1.4 0.0 5730

National Bank of Kuwait NBKK.KW Buy 727 0.3 13.1 850.00 11.1 13.9 13.8 10.1 0.0 3.7 14002

NCB 1180.SE Hold 50.94 0.1 19.6 48.50 17.2 16.4 11.2 11.1 1.8 3.1 27124

Nedbank NEDJ.J Hold 248 -2.0 12.5 235.00 14.5 14.7 9.9 9.1 1.5 4.9 9350

PKO Bank Polski PKO.WA Hold 43.80 -0.3 84.0 41.50 9.0 9.1 16.8 15.5 1.6 1.3 15489

Qatar National Bank QNBK.QA Buy 130 0.3 -10.9 150.00 20.7 19.1 8.5 7.9 1.6 3.4 32761

RAKBANK RAKB.AD Hold 4.65 0.0 -6.1 5.05 10.8 11.9 9.5 8.7 1.0 6.5 2122

Riyad Bank 1010.SE Hold 12.70 0.0 10.0 11.55 10.5 9.9 9.1 9.7 1.0 5.1 10159

Samba Financial Group 1090.SE Hold 23.74 -0.2 -2.5 25.00 11.8 11.0 8.4 8.7 1.0 4.0 11998

Saudi British Bank 1060.SE Buy 28.17 0.6 12.7 29.00 13.2 11.8 9.3 9.9 1.3 2.7 11267

Sberbank SBER.MM Buy 224 -0.9 35.1 310.00 24.4 23.1 6.6 5.9 1.4 0.0 83701

Standard Bank SBKJ.J Buy 191 -0.3 36.2 180.00 16.6 16.6 11.3 10.6 1.9 4.6 24448

TCS TCSq.L Sell 18.55 0.5 75.8 7.30 31.1 29.8 19.7 16.4 5.2 1.4 3388

Vakifbank VAKBN.IS Hold 6.51 3.7 38.3 6.90 15.8 14.7 4.3 4.0 0.7 0.7 4266

VTB VTBRq.L Sell 1.71 -0.2 -28.4 0.80 2.3 NA na na 0.4 0.0 11068

Yapi Kredi Bank YKBNK.IS Hold 4.20 -0.1 13.2 4.80 12.2 12.4 5.6 4.9 0.6 0.0 4785

Consumer Discretionary

Al Tayyar 1810.SE Buy 27.01 -2.1 -26.4 45.00 5.4 4.9 7.5 7.4 0.9 3.7 1510

Alhokair 4240.SE Hold 29.99 -2.0 -18.5 42.00 9.7 9.0 19.5 14.2 2.2 0.0 1679

CCC CCCP.WA Buy 281 0.4 64.8 340.00 21.0 15.2 31.2 20.4 6.9 0.9 3167

Cyfrowy Polsat CPS.WA Hold 24.36 1.0 17.1 28.00 7.0 6.5 14.6 12.6 1.3 1.3 4408

Herfy 6002.SE Buy 47.81 0.2 -38.7 70.00 10.4 9.5 13.2 12.0 3.5 4.5 825

Imperial IPLJ.J Buy 247 -3.9 45.9 210.00 7.1 6.5 11.6 12.3 2.4 3.5 3773

Jarir Marketing 4190.SE Hold 144 -0.5 24.5 137.00 15.8 14.5 16.1 14.9 7.6 4.9 3457

LPP LPPP.WA Hold 9,020 0.8 88.0 8,000.00 17.3 14.7 29.0 24.7 6.4 0.4 4679

Mr Price MRPJ.J Buy 240 -2.3 62.4 242.00 17.4 14.7 20.3 20.4 9.1 2.9 4832

Naspers NPNJn.J Buy 3,451 4.2 85.0 4,687.00 1,637.1 302.1 39.0 37.2 7.8 0.2 117215

Richemont CFRJ.J Buy 114 0.4 36.3 105.00 17.3 14.1 28.6 22.6 2.8 2.1 50827

SACO 4008.SE Hold 113 2.9 32.8 90.00 15.3 13.6 19.1 17.1 5.1 4.0 724

STAR SRRJ.J Buy 15.90 5.7 -22.8 29.00 9.8 8.1 26.5 23.3 1.0 3.0 4321

Super Group SPGJ.J Buy 40.50 -4.6 13.2 46.00 6.1 5.0 11.7 10.4 1.7 1.6 1111

The Foschini Group Ltd TFGJ.J Buy 178 -3.3 20.8 178.00 10.3 9.1 13.6 14.3 4.1 4.0 2976

Truworths TRUJ.J Buy 89.11 -0.3 20.8 93.00 9.2 8.9 12.7 12.1 4.3 5.0 3007

Woolworths Holdings Ltd WHLJ.J Hold 62.20 -0.2 -5.4 59.00 8.9 9.0 17.7 14.5 3.1 5.1 4709

Consumer Staples

Almarai 2280.SE Sell 54.68 -0.6 1.2 48.00 16.0 15.5 24.4 23.4 3.8 1.3 14580

AVI AVIJ.J Buy 110 -1.2 30.0 110.00 13.4 12.1 18.5 17.7 7.4 3.5 2816

BidCorp BIDJ.J Hold 304 4.1 33.9 305.00 15.4 13.8 22.2 21.2 4.3 1.6 7952

British American Tobacco BTIJ.J Buy 855 2.1 18.6 600.00 14.2 na 18.4 na 0.2 3.4 115873

Clicks Group Ltd CLSJ.J Hold 181 -1.2 69.0 154.00 20.1 17.7 25.8 30.8 13.0 1.0 3368

Dino DNP.WA Buy 75.20 -1.6 144 76.00 20.9 16.3 32.2 24.5 8.2 0.0 2086

Eurocash EUR.WA Hold 27.25 1.3 -18.1 34.00 10.2 9.8 28.2 22.1 3.8 2.7 1071

Lenta LNTAq.L Hold 5.84 0.7 -28.8 6.80 7.4 6.5 13.0 11.0 2.3 0.0 2842

Magnit MGNT.MM Hold 6,290 0.7 -39.7 7,500.00 8.2 7.2 15.7 15.1 2.8 4.0 10157

Magnit MGNTq.L Hold 26.41 0.6 -39.8 30.40 9.6 8.5 19.1 18.4 3.5 3.3 12487

Massmart MSMJ.J Buy 132 -3.6 13.2 125.00 9.5 8.6 19.8 17.4 4.2 2.5 2254

Othaim 4001.SE Hold 120 -0.1 21.7 116.00 15.0 13.0 19.1 16.8 3.8 1.7 1438

Pick'n Pay Stores PIKJ.J Hold 66.50 -0.4 12.7 62.00 12.0 9.9 28.6 22.0 8.0 2.4 2526

Pioneer PFGJ.J Hold 134 -0.6 -6.3 125.00 17.7 10.4 27.1 15.7 3.9 2.7 1957

Shoprite SHPJ.J Hold 206 -5.2 29.9 237.00 10.9 10.0 19.4 20.0 4.2 2.5 8817

Spar Group Limited SPPJ.J Hold 193 -1.4 5.2 200.00 12.3 11.2 18.3 18.5 5.7 3.4 2935

Tiger Brands TBSJ.J Hold 450 0.5 22.1 440.00 14.5 13.2 18.6 17.7 4.4 2.3 5883

X5 Retail Group PJPq.L Buy 39.31 1.2 21.1 55.00 8.2 6.8 18.3 14.2 3.9 1.4 10674

EV/EBITDA (x) P/E (x)

EV/EBITDA for Banks has been replaced by ROE The Daily and YTD % Price changes refer to the change in US dollar value of the stock Source: Deutsche Bank, Companies

22 December 2017




Diversified Financials

Alexander Forbes AFHJ.J Buy 6.75 -0.3 -8.3 7.75 na na 12.6 10.8 na 5.8 671

Brait BATJ.J Buy 41.00 -1.5 -49.4 62.00 na na na na na NA 1634

Coronation CMLJ.J Sell 71.59 -2.2 9.7 68.00 12.3 12.3 17.1 14.9 11.9 6.2 1973

FirstRand FSRJ.J Hold 64.14 -1.9 30.3 51.00 3.6 3.6 10.8 12.8 3.3 4.0 28336

Investec INVP.L Buy 532 0.5 7.5 590.00 0.0 0.0 11.7 9.8 0.0 4.5 6392

Investec INLJ.J Buy 90.00 0.2 7.1 110.00 1.2 1.2 9.6 9.3 1.3 4.9 6384

JSE JSEJ.J Buy 153 -1.5 0.7 144.00 12.6 10.0 14.1 11.7 4.3 3.7 1034

Moscow Exchange MOEX.MM Buy 109 -2.4 -9.2 185.00 4.6 4.4 10.9 10.7 1.9 7.3 4147

Peregrine PGRJ.J Buy 25.50 -4.9 -8.2 31.75 na na 12.7 9.9 na 4.5 424

RMB Holdings Ltd RMHJ.J Buy 74.96 -0.4 21.9 63.00 2.8 2.8 12.0 11.4 2.6 4.3 8336

Transaction Capital TCPJ.J Buy 16.30 -2.1 21.8 16.75 3.1 3.1 14.8 12.2 2.9 2.1 767

Energy

Dana Gas DANA.AD Hold 0.69 -1.4 27.8 0.62 20.0 20.5 na na 0.5 0.0 1309

Gazprom GAZP.MM Buy 132 -0.4 -10.8 170.00 4.0 3.9 4.1 3.6 0.2 6.6 49705

Gazprom Neft SIBN.MM Hold 244 -0.2 19.2 235.00 4.1 3.6 4.9 3.9 0.8 4.4 19643

Gulf Int'l Services GISS.QA Buy 17.80 0.3 -43.3 27.00 9.2 7.5 24.5 10.6 0.9 5.4 901

LUKOIL LKOH.MM Buy 3,333 -1.0 1.1 3,900.00 3.4 3.4 6.8 6.9 0.7 5.8 40572

Novatek NVTKq.L Hold 119 2.6 -8.7 140.00 11.1 11.4 14.5 16.6 2.8 2.1 35784

Rosneft ROSN.MM Buy 294 0.4 -23.7 370.00 5.8 5.1 6.5 5.3 0.9 3.4 53173

Sasol SOLJ.J Hold 413 1.9 11.8 380.00 6.2 7.0 11.0 12.2 1.2 3.8 19869

Surgutneftegaz SNGS.MM Hold 28.19 0.7 -4.7 29.00 2.9 3.3 4.4 5.4 0.3 2.2 20902

Surgutneftegaz SNGS_p.MM Buy 28.38 -1.1 -7.4 32.00 2.9 3.4 4.5 5.5 0.3 2.1 21043

Tatneft TATN.MM Hold 472 -0.9 15.7 520.00 5.0 5.2 8.9 8.5 1.4 4.9 18140

Transneft TRNF_p.MM Buy 176,000 0.2 -6.9 250,000.00 3.8 3.5 6.0 6.0 0.7 4.7 21410

Health Care

Aspen APNJ.J Hold 277 0.6 5.5 305.00 14.0 12.1 21.0 17.6 2.6 1.0 9954

IDH IDHC.L Hold 4.61 -0.9 36.6 3.21 19.9 16.7 28.9 23.8 5.5 3.1 692

Life HC LHCJ.J Hold 27.00 3.1 -10.5 30.60 9.3 8.9 13.5 14.8 2.8 4.0 2719

MDMG MDMGq.L Buy 10.10 0.0 7.7 13.80 10.6 10.4 17.0 17.2 3.1 1.7 756

Mediclinic MEIJ.J Hold 105 6.2 -13.0 93.50 12.4 13.7 29.7 20.5 0.0 1.6 6078

Mediclinic International MDCM.L Hold 630 6.9 -10.4 502.00 12.6 13.9 29.1 23.4 0.0 1.5 6201

Netcare NTCJ.J Hold 23.91 1.3 -18.9 29.20 8.6 8.1 12.2 11.5 2.7 4.2 2574

NMC Health NMC.L Buy 2,817 2.5 97.8 3,920.00 24.5 19.3 37.0 26.2 7.1 0.4 7801

SPIMACO 2070.SE Buy 29.55 -1.0 -27.5 50.00 16.4 15.1 13.9 13.0 1.1 3.4 946

Industrials

Arabtec Holding ARTC.DU Hold 2.38 -1.2 -55.4 2.96 13.8 10.8 35.5 31.2 2.3 0.0 972

Barloworld BAWJ.J Hold 157 -2.4 43.6 150.00 5.9 5.0 11.6 12.9 1.6 2.4 2602

Bidvest BVTJ.J Hold 212 -1.9 26.3 168.00 9.1 9.3 14.7 14.6 3.3 3.0 5570

DP World DPW.DI Buy 24.20 -0.7 38.2 28.00 10.3 9.4 15.6 14.1 2.1 1.7 20086

Drake & Scull DSI.DU Sell 2.24 -0.9 16.6 1.13 na na na na 4.0 0.0 1013

Enka Insaat ENKAI.IS Hold 5.83 0.5 0.2 5.70 7.8 6.3 8.7 7.4 1.0 3.1 6418

Global Ports GLPRq.L Hold 3.75 -3.8 -6.3 4.50 6.7 5.9 8.7 7.8 1.8 0.0 716

Globaltrans GLTRq.L Buy 9.40 -0.9 48.5 9.50 5.4 4.6 12.0 9.9 2.0 9.2 1680

Industries Qatar IQCD.QA Buy 98.89 1.9 -16.6 125.00 49.4 41.3 15.0 13.6 1.6 4.2 16291

Orascom Construction OC.DI Hold 8.25 0.0 57.4 7.60 4.1 4.8 8.4 6.9 2.6 0.0 972

Tekfen Holding TKFEN.IS Hold 16.57 8.8 137 10.70 8.1 8.0 9.9 9.7 2.2 1.9 1607

Insurance

Discovery DSYJ.J Sell 183 2.3 72.4 125.00 na na 22.2 19.2 na 1.2 9289

Liberty LBHJ.J Buy 124 -0.9 20.7 125.00 na na 11.1 9.9 na 6.4 2729

MMI MMIJ.J Hold 20.86 0.0 -4.5 20.00 na na 9.6 8.9 na 8.2 2636

Old Mutual OMLJ.J Buy 38.34 1.4 20.2 44.00 na na 0.1 0.1 na 355.0 14410

PZU PZU.WA Hold 42.04 -1.5 49.7 44.00 na na 12.8 12.4 na 4.7 10270

RMI RMIJ.J Hold 45.04 -1.1 22.2 41.00 na na 15.4 12.7 na 2.9 5272

Sanlam SLMJ.J Buy 84.00 -3.2 44.2 84.00 na na 16.0 13.9 na 3.9 13541

Santam SNTJ.J Hold 258 1.4 19.3 285.00 na na na na na na na



22 December 2017




Materials

Amplats AMSJ.J Buy 339 -3.0 38.4 420.00 8.7 6.9 37.8 18.9 2.3 0.0 6998

AngloGold Ashanti ANGJ.J Buy 120 0.9 -14.8 175.00 7.2 4.9 62.2 15.0 1.5 0.0 3915

Antofagasta PLC ANTO.L Sell 968 1.2 55.5 800.00 6.9 6.8 17.6 18.2 1.8 3.1 12747

Gold Fields GFIJ.J Buy 51.83 -0.2 28.4 65.00 4.1 4.5 17.2 26.7 1.0 2.0 3351

Harmony HARJ.J Hold 22.30 2.1 -23.6 25.00 7.0 2.4 13.6 7.4 0.3 4.5 769

Impala Platinum IMPJ.J Hold 30.02 -0.7 -24.1 45.00 7.4 5.7 na 184.7 0.5 0.3 1698

Lonmin Plc LONJ.J Sell 14.16 0.3 -34.8 4.90 na na na na 0.2 0.0 315

Ma'aden 1211.SE Sell 51.14 -0.3 31.2 31.00 23.7 17.8 91.6 49.5 2.3 0.0 15934

Nampak NPKJ.J Hold 15.90 -0.3 -7.5 18.50 4.5 4.2 14.8 9.5 1.1 0.0 802

Northam NHMJ.J Hold 49.17 -2.0 31.1 56.00 22.9 10.0 na 56.3 2.1 0.0 1355

Pfleiderer Group SA PFLP.WA Hold 35.88 0.3 15.0 40.00 6.2 5.6 24.8 15.4 2.3 2.8 657

RBPlat RBPJ.J Hold 27.52 -0.1 -16.5 36.00 20.0 17.6 88.6 33.3 0.5 0.0 417

SABIC 2010.SE Hold 102 -0.6 11.3 95.00 8.0 7.4 15.5 15.0 1.8 3.9 81417

Sibanye-Stillwater SGLJ.J Hold 14.56 2.6 -38.1 20.00 5.2 2.8 na 8.6 1.3 2.1 2095

Real Estate

Aldar Properties ALDR.AD Buy 2.18 -0.4 -17.1 3.00 5.8 6.3 7.2 7.6 0.7 5.0 4667

Attacq ATTJ.J Buy 19.47 0.3 24.5 22.00 29.6 26.9 20.5 17.1 1.0 0.0 1078

Damac Properties DAMAC.DU Hold 3.30 -1.2 43.5 3.20 4.4 4.1 5.7 5.5 1.4 7.6 5436

Dar Al Arkan 4300.SE Hold 13.13 0.5 114 6.00 29.7 27.4 53.1 43.5 0.8 0.0 3781

Emaar Development EMAARDEV.DU Hold 5.08 -2.5 -11.9 5.50 4.0 3.6 7.2 6.3 3.7 20.9 5533

Emaar Economic City 4220.SE Hold 13.77 -0.4 -19.7 12.10 62.7 46.4 80.9 49.8 1.3 0.0 3121

Emaar Malls EMAA.DU Buy 2.08 -2.3 -21.2 2.70 11.8 10.8 13.7 12.5 1.6 4.8 7371

Emaar Properties EMAR.DU Hold 7.11 -0.4 1.8 8.60 7.0 7.1 9.2 8.8 1.1 2.9 13861

Emira Property Fund EMIJ.J Hold 13.74 1.4 3.9 14.50 12.4 12.2 14.1 10.3 0.8 0.0 540

Emlak REIT EKGYO.IS Hold 2.71 -0.2 -16.2 3.19 5.5 5.8 5.3 5.6 0.8 0.0 2699

Equites EQUJ.J Hold 20.75 -0.3 41.8 21.50 18.2 12.5 7.8 16.8 1.4 0.0 485

Fortress FFBJ.J Hold 41.20 -0.1 37.6 42.00 20.7 19.6 10.6 17.4 1.0 0.0 3393

Fortress Income Fund Ltd FFAJ.J Hold 18.40 1.9 19.9 18.80 12.8 12.4 5.5 8.2 0.5 0.0 1658

Growthpoint GRTJ.J Hold 27.40 0.8 14.3 27.00 14.0 13.2 17.0 13.1 0.9 0.0 6175

Hyprop HYPJ.J Buy 113 0.1 4.0 125.00 17.7 17.9 18.9 14.7 1.1 0.0 2203

Octodec Investments Ltd OCTJ.J Hold 17.90 0.3 -12.3 18.00 10.3 9.4 8.6 7.1 0.6 0.0 368

Palm Hills Developments PHDC.CA Hold 3.84 0.5 25.9 3.80 9.5 7.0 13.2 8.3 1.3 0.0 497

Redefine Properties Ltd RDFJ.J Hold 10.53 1.4 1.6 11.50 16.7 15.0 13.0 11.4 1.0 0.0 4192

Resilient Property Income Fund Ltd RESJ.J Hold 147 0.1 38.6 140.00 36.1 35.5 17.2 22.6 1.8 0.0 4642

SA Corporate Real Estate Fund SACJ.J Hold 4.81 2.0 -7.6 4.80 12.4 12.5 9.8 9.2 0.8 0.0 879

SODIC OCDI.CA Hold 19.46 -2.7 32.9 17.20 9.0 6.1 9.3 7.8 1.5 0.0 370

TMG Holding TMGH.CA Buy 9.66 -0.5 8.1 11.00 13.3 12.5 15.4 14.2 0.7 1.6 1118

Vukile Property Fund Ltd VKEJ.J Buy 20.75 2.1 20.0 24.00 14.2 12.5 11.1 12.9 1.1 0.0 1125

Telecommunication Services

Digi Communications DIGI.BX Hold 37.00 -0.9 -5.6 41.00 5.0 4.9 19.2 13.7 9.0 0.0 947

Etisalat ETEL.AD Sell 17.20 -0.6 -8.5 15.10 6.0 5.7 13.8 13.4 3.3 5.3 40731MegaFon MFONq.L Hold 9.20 -1.5 -2.6 10.70 4.6 4.5 13.6 11.4 2.5 5.3 5122Mobily 7020.SE Sell 14.38 -0.5 -40.1 12.00 5.4 5.2 na na 0.7 0.0 2952MTN Group MTNJ.J Buy 132 1.2 13.4 136.00 6.9 6.3 28.5 19.9 2.2 5.3 18752MTS MBT.N Hold 9.92 2.3 8.9 10.60 4.7 5.0 9.5 10.1 5.0 9.1 9702Ooredoo Group ORDS.QA Hold 96.20 6.4 -6.3 107.00 4.2 3.7 12.6 10.7 1.3 4.2 8391Ooredoo Oman ORDS.OM Buy 0.52 0.8 -21.5 1.15 1.8 na 7.4 na 1.3 9.7 876Saudi Telecom Company 7010.SE Buy 68.70 0.0 -5.2 80.00 5.0 5.0 12.9 13.5 2.2 5.8 36637Telecom Egypt ETEL.CA Buy 13.23 -1.8 15.6 16.90 6.1 5.3 7.4 6.3 0.7 7.6 1266Telkom SA Ltd TKGJ.J Hold 46.73 -1.8 -31.8 49.00 2.7 3.2 9.2 9.1 0.9 9.0 1892Turk Telekom TTKOM.IS Hold 6.32 0.2 10.6 6.00 5.2 4.6 12.3 8.5 4.4 0.0 5798Turkcell TCELL.IS Buy 15.04 2.5 42.6 17.10 6.7 5.8 12.6 10.3 2.3 9.4 8646Vodacom VODJ.J Buy 146 1.3 3.7 163.00 7.6 7.3 17.3 16.4 8.9 5.4 16924

UtilitiesCEZ CEZP.PR Buy 497 -0.8 36.2 550.00 7.8 7.7 13.6 18.8 1.0 6.6 12242Qatar Electricity & Water QEWC.QA Hold 178 -1.8 -22.5 215.00 13.2 12.7 11.9 10.8 2.2 4.2 5320



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Latam valuation 12/21/17 Daily YTD Price P/BV (x) Div Yld % (US$ m)Company Ticker Rating Price Change % Change % Target 2017E 2018E 2017E 2018E 2017E 2017E Mkt Cap

Banks

Banco de Chile BCH.N Hold 94.00 -0.6 33.4 91.00 18.8 19.3 17.4 15.8 3.1 3.5 15580

Banco do Brasil BBAS3.SA Buy 31.19 0.5 9.2 41.00 11.7 11.9 6.7 5.9 0.9 3.4 27013

Bancolombia CIB.N Hold 40.21 1.3 9.6 45.00 10.7 12.0 11.9 9.9 1.3 3.1 9669

Banorte GFNORTEO.MX Buy 107 -1.8 10.9 143.00 16.6 17.6 13.1 11.3 2.4 5.0 15235

Bladex BLX.N Hold 27.86 0.6 -5.4 25.00 8.5 9.3 13.1 11.6 1.1 5.6 1095

Bradesco BBD.N Hold 10.20 2.3 17.1 11.00 14.3 16.6 10.1 8.8 1.8 3.2 62068

Credicorp BAP.N Buy 200 -2.4 29.8 242.00 19.4 18.9 14.6 12.7 2.4 5.1 15959

Itau Unibanco ITUB.N Buy 12.45 0.0 21.1 16.00 20.0 20.9 11.0 10.1 2.1 5.4 80979

Santander Brasil BSBR.N Hold 9.39 0.0 5.6 10.00 13.3 17.1 13.0 11.6 2.2 6.7 35206

Santander Chile BSAC.N Hold 30.97 -2.8 41.6 29.00 18.7 18.2 16.2 15.5 2.9 3.6 14590

Santander Mexico BSMX.N Hold 7.62 0.0 6.0 10.00 15.7 15.6 11.8 10.9 1.7 4.4 10329

Consumer Discretionary

Arezzo&Co ARZZ3.SA Hold 51.70 0.5 103 32.00 20.8 18.1 29.9 26.8 6.8 2.9 1388

B2W BTOW3.SA Hold 18.46 2.0 78.0 16.50 16.2 11.5 na na 2.2 0.0 2570

Cia Hering HGTX3.SA Hold 24.60 2.7 60.0 23.00 14.7 12.7 17.4 16.9 3.1 5.4 1199

Falabella FAL.SN Hold 6,044 -2.5 21.9 7,000.00 18.1 17.0 29.6 26.4 3.2 2.4 23669

Liverpool LIVEPOLC1.MX Buy 125 -2.2 -10.9 187.50 10.1 8.7 18.2 14.1 2.0 0.6 8655

Lojas Americanas LAME4.SA Hold 15.67 1.3 -9.4 18.80 11.1 9.7 71.3 34.3 11.3 0.1 6799

Lojas Renner LREN3.SA Hold 34.01 0.7 44.3 34.00 16.2 13.7 32.7 27.3 7.8 1.0 7310

Megacable MEGACPO.MX Buy 82.32 -1.3 26.2 94.00 9.6 8.7 17.1 15.2 2.9 2.0 3644

Multiplus MPLU3.SA Buy 33.92 -0.9 -1.3 54.00 6.5 5.6 10.5 10.3 18.9 9.5 1663

Smiles Fidelidade SA SMLS3.SA Buy 72.51 -0.3 -22.6 97.00 11.5 10.5 11.7 13.0 10.4 8.1 2714

Consumer Staples

Almacenes Exito IMI.CN Buy 16,480 -0.1 12.1 23,400.00 6.8 6.3 33.8 20.9 0.8 1.2 2491

AmBev ABEV.N Hold 6.24 0.0 27.1 6.15 16.8 14.4 29.3 24.7 8.2 3.9 97991

Arca Continental AC.MX Hold 132 -0.6 30.0 106.00 10.8 8.2 24.2 18.8 3.3 1.8 11998

BRF S.A. BRFS.N Hold 10.81 0.0 -26.8 15.50 8.4 6.7 28.3 15.2 2.1 0.5 8637

Carrefour Brasil CRFB3.SA Buy 14.60 -1.2 -7.0 20.50 7.3 7.2 20.0 18.7 2.4 0.0 8742

CBD-GPA PCAR4.SA Buy 73.52 1.2 32.0 107.00 8.2 7.9 34.0 27.3 2.4 0.4 5895

CCU CCU.N Hold 28.96 2.0 38.0 25.00 11.0 10.1 25.1 21.7 2.9 2.1 5350

Cencosud CEN.SN Hold 1,797 -1.9 2.5 2,000.00 8.9 8.3 18.1 17.4 1.2 1.7 8216

Chedraui CHDRAUIB.MX Hold 36.49 0.7 4.6 40.00 6.5 5.5 17.8 15.6 1.2 0.0 1812

Coca-Cola Femsa KOF.N Hold 69.14 0.1 8.8 72.50 9.2 8.4 20.1 18.9 2.4 2.5 14525

Concha y Toro VCO.N Buy 37.00 0.0 14.2 38.00 11.9 9.6 19.0 14.3 1.7 2.2 1382

Embotelladora Andina AKOb.N Buy 28.69 -3.2 27.7 32.00 10.1 8.8 24.8 20.9 3.3 2.5 4526

Femsa FMX.N Buy 92.70 0.0 21.6 109.00 10.2 8.8 30.8 23.7 2.6 1.4 33170

Gruma GRUMAB.MX Buy 242 -1.3 -2.0 320.00 10.7 9.5 17.0 15.4 4.0 1.3 5402

Grupo Bimbo BIMBOA.MX Buy 42.98 -1.1 -2.7 58.00 9.5 7.8 27.5 20.0 3.1 0.7 10414

JBS JBSS3.SA Hold 9.18 1.7 -20.8 11.50 5.0 4.2 5.4 5.6 0.9 0.4 7522

Kimberly-Clark de Mexico KIMBERA.MX Buy 33.75 -1.0 -3.8 41.00 13.7 12.2 24.6 20.8 15.7 4.7 5366

Minerva BEEF3.SA Buy 10.37 0.6 -16.1 24.25 6.2 5.0 20.7 33.5 5.7 6.2 708

Natura NATU3.SA Hold 31.90 0.7 36.3 26.50 10.9 9.6 29.5 23.5 10.3 0.8 4158

Soriana SORIANAB.MX Hold 39.91 -0.8 -5.6 44.00 7.3 6.4 15.9 13.8 1.2 0.0 3701

Wal-Mart de Mexico WALMEX.MX Hold 46.52 -0.4 33.6 47.20 14.3 13.1 24.8 22.6 5.3 5.3 41848

Diversified Financials

B3 BVMF3.SA Buy 22.28 0.8 32.8 28.00 17.1 14.5 24.5 19.9 0.7 1.4 13730

Bolsa Mexicana BOLSAA.MX Buy 33.66 -2.0 31.3 45.00 11.3 10.4 16.4 15.6 na 3.9 1028

Credito Real CREAL.MX Buy 24.85 -2.0 -3.3 36.00 1.1 1.1 6.1 5.3 1.0 1.0 502

Gentera GENTERA.MX Hold 15.93 -2.0 -49.2 20.00 1.6 1.6 9.2 11.6 1.5 4.8 1332

Energy

Petrobras PETR3.SA Hold 16.65 3.7 -3.4 20.80 6.3 5.4 19.7 8.5 1.1 0.1 93838

Petrobras PETR4.SA Hold 15.86 3.5 4.9 20.80 5.3 4.4 19.1 8.3 0.8 0.2 62531

Industrials

Avianca Holdings S.A. AVH.N Buy 8.06 -1.1 -16.4 11.00 17.2 16.4 5.9 5.7 6.1 2.4 8071

Azul S.A. AZUL.N Buy 23.84 0.0 10.9 31.00 23.5 19.2 78.4 57.4 11.0 0.0 7521

Copa Holdings, S.A. CPA.N Buy 138 0.0 52.1 142.00 10.6 9.2 15.6 13.0 3.0 1.4 5862

GOL S.A. GOL.N Buy 8.61 0.8 -36.8 11.00 10.1 9.1 76.8 92.6 na 0.2 2992

Grupo Aeromexico AEROMEX.MX Hold 30.29 -2.0 -17.5 35.00 8.0 5.5 na 9.2 1.5 0.0 1097

LATAM Airlines Group S.A. LTM.N Buy 13.59 -1.7 66.6 17.00 9.8 8.3 38.9 16.1 2.7 0.8 8241

Volaris VLRS.N Hold 8.66 0.0 -42.4 12.00 356.1 53.4 na 100.8 17.5 0.0 8763

Information Technology

Cielo CIEL3.SA Hold 23.10 -0.7 -18.6 26.00 12.9 12.1 15.9 15.2 4.1 1.0 18969

Insurance

Porto Seguro PSSA3.SA Buy 36.23 -0.1 32.4 38.00 na na 11.9 10.7 1.7 3.4 3539

Materials

Antofagasta PLC ANTO.L Sell 968 1.2 55.5 800.00 6.9 6.8 17.6 18.2 1.8 3.1 12747

Cemex CX.N Buy 7.54 0.3 -6.1 9.60 8.0 7.0 20.5 13.6 1.3 0.0 10814

Vale VALE.N Buy 11.87 0.0 55.8 12.00 5.9 5.2 9.9 9.7 1.3 2.4 61424

Telecommunication Services

America Movil AMX.N Buy 17.02 -1.3 35.4 21.00 6.0 5.6 19.2 17.4 4.1 0.9 56085

Telefonica Brasil VIV.N Buy 15.09 -1.6 17.4 21.00 6.4 5.9 18.0 14.7 1.2 5.3 25482

TIM Participacoes TSU.N Buy 19.20 0.7 63.7 22.00 5.3 4.7 26.8 19.2 1.7 0.5 9294



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Appendix1

Important Disclosures *Other information available upon request Prices are current as of the end of the previous trading session unless otherwise indicated and are sourced from local exchanges via Reuters, Bloomberg and other vendors . Other information is sourced from Deutsche Bank, subject companies, and other sources. For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr. Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the "Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to review this information before investing. Analyst Certification

The views expressed in this report accurately reflect the personal views of the undersigned lead analyst about the subject issuers and the securities of those issuers. In addition, the undersigned lead analyst has not and will not receive any compensation for providing a specific recommendation or view in this report. Pascal Moura/Mairead Smith

Equity rating key Equity rating dispersion and banking relationships

Buy: Based on a current 12- month view of total share-holder return (TSR = percentage change in share price from current price to projected target price plus pro-jected dividend yield ) , we recommend that investors buy the stock.

Sell: Based on a current 12-month view of total share-holder return, we recommend that investors sell the stock

Hold: We take a neutral view on the stock 12-months out and, based on this time horizon, do not recommend either a Buy or Sell.

Newly issued research recommendations and target prices supersede previously published research.

46 % 46 %

8 %37 % 32 %

18 %0

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Buy Hold Sell

Global Universe

Companies Covered Cos. w/ Banking Relationship

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Additional Information

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Deutsche Bank AG Mainzer Landstrasse 11-17 60329 Frankfurt am Main Germany Tel: (49) 69 910 00

Deutsche Bank AG Filiale Hongkong International Commerce Centre, 1 Austin Road West,Kowloon, Hong Kong Tel: (852) 2203 8888

Deutsche Securities Inc. 2-11-1 Nagatacho Sanno Park Tower Chiyoda-ku, Tokyo 100-6171 Japan Tel: (81) 3 5156 6770

Deutsche Bank AG London 1 Great Winchester Street London EC2N 2EQ United Kingdom Tel: (44) 20 7545 8000

Deutsche Bank Securities Inc. 60 Wall Street New York, NY 10005 United States of America Tel: (1) 212 250 2500

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CEEMEA & Latam Daybookpg.jrj.com.cn/acc/Res/CN_RES/INVEST/2017/12/22/e63... · 12/22/2017 · +1 212 250-8640 Munira Kharva Industrial +27 11 775 7433. Eduardo Vieira Head of EM