Convención de Finanzas y Mercado de Capitales 2013 · Source: Dealogic. Excludes SPACs, CLEFs, rights offerings, offerings < US$100 mm and the 2010 Petrobras deals. Source: Dealogic

Convención de Finanzas y Mercado de Capitales 2013

October 29, 2013

Citi | Equity Capital Markets

1

1. Global Markets

2

70%

80%

90%

100%

110%

120%

130%

140%

150%

Jan-13 Apr-13 Jul-13 Oct-13

Price P

erf

orm

ance (

%)

Brazil Bovespa U.S. S&P 500 UK FTSE 100 Germany DAX Japan Nikkei 225 MSCI Lat Am

(9%)

13%

17%

39%

(5%)

22%

Developed Markets Outperforming Global Markets 2013 to Date World Index Performance

Source: Factset.

1.7%

2.7%

3.2%

2.5%

3.2%3.4%

1.2%

2.0%2.2%

4.7%5.0%

5.2%

2013E 2014E 2015E

GD

P G

row

th (

%)

U.S. Global Industrial Countries Emerging Markets

Outsized GDP Emerging Market Growth Forecasts GDP Growth % by Region

Source: Citi Research.

Global Environment at Inflection Point

3

GDP Growth CPI Inflation Short Term Interest Rates

Country / Region 2013E 2014E 2015E 2013E 2014E 2015E 2013E 2014E 2015E

Global Macro

Global 2.5 3.2 3.4 2.6 3.0 3.2 2.6 2.8 3.1

Industrial

Countries 1.2 2.0 2.2 1.3 1.9 1.5 0.5 0.5 0.7

Emerging

Markets 4.7 5.0 5.2 4.7 4.6 4.7 4.9 5.1 5.5

US and Euro Zone

US 1.7 2.7 3.2 1.2 1.9 2.1 0.3 0.3 0.5

Euro Zone -.03 0.7 1.0 1.5 1.5 1.4 0.6 0.5 0.5

Emerging Markets

China 7.6 7.2 7.0 2.7 3.0 3.7 3.0 3.0 3.6

Brazil 2.6 2.0 2.0 6.2 6.1 5.9 8.4 9.8 10.3

Mexico 1.2 3.8 4.0 3.7 3.4 3.6 3.9 3.5 3.9

Key Economic Forecasts


4

US Markets At or Near All Time Highs

Source: FactSet.

Major Indices Hit All Time Highs 2013 YTD Price Performance of Major Indices

95%

100%

105%

110%

115%

120%

125%

130%

135%

Jan-13 Feb-13 Apr-13 May-13 Jul-13 Sep-13

S&P 500 NASDAQ DJIA

5

30%

23%

18%

($3)

$7

$3 $3

$5

$4

$2 $2 $3

$2 $2

$3

$2

$3

$2

$1 $1 $1

$2

$2

$2

$0 $0

$1 $1 $2

$2

$3 $4

$3

$2

$4

$2 $2 $2

$1

$3

$2

$1

($0) ($0)

$2

01/02 01/23 02/13 03/06 03/27 04/17 05/08 05/29 06/19 07/10 07/31 08/21 09/11 10/02

Markets Were Volatile During the US Budget Shutdown

Equity Funds Flow Slowed During the Government Shutdown YTD Weekly Funds Flow

Source: Citi.

Markets Retreated as Political Uncertainties Come to Focus Equity Markets Since August

Source: Bloomberg and FactSet.

10%

15%

20%

25%

(6%)

(4%)

(2%)

0%

2%

4%

6%

8%

Aug Sep Oct

Vola

tilityP

rice P

erf

orm

ance

S&P 500 NASDAQ VIX

First week of

negative equity fund

flows since

December 2012

6

Volatility Increased But Market Remained Open

Source: Dealogic.

$4,948

$3,563

$4,129 $4,522

$905

$3,930

09/06 09/13 09/20 09/27 10/04 10/11Week Ending

CONV FO IPO

Avg: $3,274

Modest Issuance through the Shutdown Debate Issuance ($ mm / # of deals)

IPO 0 0 7 9 4 5

FO 6 14 13 15 3 7

Conv. 3 3 2 1 0 3

7

US Valuation Metrics

Source: Citi Research, MSCI, Factset.


95

97

99

101

103

105

107

109

111

113

115

10

11

12

13

14

15

16

Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13

Abs Rel

5%

7%

9%

11%

13%

15%

Sep-11 Sep-12 Sep-13

CY13 CY14 CY15

12 Month Forward P/E

Growth Forecast Trends

8

Europe Equity Market Backdrop

Source: FactSet.

85%

95%

105%

115%

125%

135%

145%


MSCI EAFE FTSE 100 DAX

2013 YTD Price Performance of Major Indices

10

14%

18%

20%

European Default Expectations Lowered

0

200

400

600

800

1,000

1,200

1,400

1,600

Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13

5 Y

r C

DS

Spre

ad (

bps)

Greece Portugal Italy Ireland UK Spain

Source: Bloomberg.

European Sovereign Concerns Moderate 2011 to Date European Sovereign CDS Spreads

Volatility Dampens as European Concerns Subside 2011 to Date

10%

20%

30%

40%

50%

150

250

350

450

550

650

Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13

VIX

Ind

ex (%

)S

pre

ad (

bps)

Spain CDS VIX

Source: Bloomberg and FactSet.

11

European Valuation Metrics



80

85

90

95

100

8

9

10

11

12

13

14


Abs Rel

5%

7%

9%

11%

13%

15%

17%

19%


CY13 CY14 CY15



12

Emerging Markets Equity Market Backdrop

Source: FactSet.

83%

88%

93%

98%

103%

108%

113%

118%

123%


MSCI Emerging Markets MSCI World MSCI Latin America

2013 YTD Price Performance of Major Indices

14

21%

(-5)%

1%

70%

80%

90%

100%

110%

120%

130%

140%

Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13

Price P

erf

orm

ance (

%)

Mexico Bolsa Chile IPSA Peru IGBVL Colombia IGBC Brazil Bovespa S&P 500

8%

(19%)

(8%)

13%

(2%)

38%

Latin America Equity Market Update

Struggling 2013 YTD 2013 to Date LatAm Index Performance

The Latin American Equity Markets have bounced back from their mid-2012 lows.

Source: FactSet.

16


LatAm Indexes Lag the S&P 500 2013 YTD LatAm Index Performance

Source: FactSet.

70%

80%

90%

100%

110%

120%

Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13

Pri

ce P

erf

orm

ance (

%)

Mexico Bolsa Brazil Bovespa Colombia IGBC S&P 500 Chile IPSA

(5%)

18%

(5%)(5%)

(7%)(5%)

(14%)

(11%)

92%

97%

102%

107%

112%

117%

Aug-08 Aug-15 Aug-22 Aug-29 Sep-05 Sep-12 Sep-19 Sep-26 Oct-03

Price

Pe

rfo

rma

nce

(%

)

Mexico Bolsa Brazil Bovespa Colombia IGBC S&P 500 Chile IPSA

2%

7%

(1%)

2%

(7%)

LatAm Indexes Lag the S&P 500 60-Day LatAm Index Performance

Source: FactSet.

17

Latin America Valuation Metrics



70

75

80

85

90

95

100

105

110

6

8

10

12

14

16


Abs Rel



18

0%

5%

10%

15%

20%

25%

30%


CY13 CY14 CY15

Forward P/E EPS Growth

Country / Region 2013E 2014E 2015E 2013E 2014E 2015E

Global

World 14.7 13.1 11.9 9.4 11.8 10.3

Asia 11.5 10.2 9.2 14.4 13.2 10.6

Emerging Markets 11.4 10.2 9.3 10.7 11.2 9.6

US and Euro Zone

US 15.7 14.2 12.9 7.7 10.8 10.5

Euro Zone 14.5 12.8 11.4 8.6 14.0 11.8

Emerging Markets

Latin America 14.2 12.5 11.0 15.0 14.3 12.4

Brazil 12.1 10.8 9.6 21.7 12.7 11.7

Mexico 19.5 16.6 14.4 2.7 17.6 15.1

China 9.6 8.8 7.9 13.8 9.8 11.1

Global Valuation Metrics


19

3. LatAm Equity Capital Markets

20

2008 2009 2010 2011 2012 2012 Same Pd. 2013 YTD# o

f D

eals

/ I

ssuance (

$bn)

IPO Follow-On Convertible

42 / $23 bn

35 / $30 bn23 / $25 bn

48 / $54 bn

61 / $31 bn52 / $29 bn

29 / $17 bn


2013 YTD LatAm Equity Issuance on Pace for a Strong Year # Deals / Proceeds (US $bn)

LatAm Equity Offerings Breakdown by Country By Proceeds (US $bn)

87% 89% 91%

42% 31%

41%

10% 7% 4%

12% 39%

40%

3% 4% 5%

46% 29%

19%

2008 2009 2010 2011 2012 2013 YTD

Brazil Mexico AndeanSource: Dealogic. Excludes SPACs, CLEFs, rights offerings, offerings < US$100 mm and the 2010 Petrobras deals.

Source: Dealogic. Excludes SPACs, CLEFs, rights offerings, offerings < US$100 mm and the 2010 Petrobras deals.

21

71%

2008 to Date LatAm IPO Size Evolution

Median LatAm IPO Size

< $250 mm14%

$250 mm -$500 mm

54%

$500 mm -$1,000 mm

16%

> $1,000 mm16%

$375$404

$388

$288

$464

$379

2008 2009 2010 2011 2012 2013 YTD

($ in m

illio

ns)

2008 to Date LatAm IPO Size Evolution

% of Deals Per Size

LatAm IPO Size Requirements Remains around $300-400mm

Source: Dealogic. Excludes SPACs, CLEFs, and offerings < US $150 mm.

Source: Dealogic. Excludes SPACs, CLEFs, and offerings < US $150 mm.

22

4. Peru Capital Markets

23

Peru Equity Market Outlook

Sector Growth Trend

LSE Performance Trend

381.79

433.97

IGBVL: General Index of the Lima Stock Exchange

ISBVL: Selective Index of the Lima Stock Exchange

Source: LSE. January 4th, 2005 – October 25th, 2013 Period.

Index =

100 in J

anuary

4th

, 2005

25

Market Capitalization by Sector

15% 10% 13% 14% 12% 13% 14% 17%

10%14%

17% 13% 14% 15%19%

21%9% 6%

8%7% 7%

8%

11%

14%

58%56%

53% 56% 58% 54%47%

37%

7% 11%8% 7% 6% 7% 7% 9%

3% 2% 1% 2% 2% 3% 2% 2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012 Sep-13

Financial Diversified Industrial Mining Public Services Other

0

100

200

300

400

500

600

700

800

Jan

-05

Aug

-05

Mar-

06

Oct-

06

May-0

7

Dec-0

7

Jul-

08

Feb-0

9

Sep

-09

Ap

r-10

No

v-1

0

Jun

-11

Jan

-12

Aug

-12

Mar-

13

Oct-

13

IGBVL Index ISBVL Index

Source: LSE as of September 30th, 2013.

33%

57%

76%

10%

24%

-6%

-10%

-14%

-7%

-39%

1%

-7%

2012

YTD-13

Financial

Diversif ied

Industrial

Mining

Public Services

Other

14.3

25.1

49.6

31.9

23.727.1

31.8 30.324.6

0.62

1.26

2.14

1.391.29

1.12

1.40

0.94

0.76

0.0

0.5

1.0

1.5

2.0

0

10

20

30

40

50

60

70

80

2005 2006 2007 2008 2009 2010 2011 2012 Sep-13

ADN in Equity ADN in Debt Instruments ADN in Other Instruments ADO in Equity (Right Scale)

Peru Equity Market Outlook (cont’d)

Liquidity Evolution

Source: LSE.

Avera

ge D

aily

Negotiation (

in U

S$m

m)

Avera

ge D

aily

# o

f Opera

tions (in

thousands)

26

Investors Base

Source: Lima Stock Exchange

As of September 30, 2013 Source: Lima Stock Exchange

As of September 30, 2013

Breackdown by Equity Holdings (Sep-2013) Breackdown by Type of Investor Type (Sep-2013)

(Millions of US$) Pension

Funds1

Mutual

Funds1

Insurance

Companies2

Government

Funds3

Portfolio 35,286 5,952 7,655 N.D.

Appetite for Equity High High Mid Low

Equity Portfolio Size 7,686 289 650 n.a.

Inv. Limit in Equity 10-45-80% 25-50-100% 30% n.a.

Main Institutional Investors

(1) As of September 30 2013

(2) As of July 31, 2013

(3) Citi estimations

27

Resident53%

Non-resident

47%

Institut.33%

Non-Institut.

67%

7.5% 8.1% 8.6%6.2%

7.8%

9.9% 8.2%

8.7%8.5%

2,619 2,981 3,268 3,757 4,288

5,477 5,799

7,190 7,655

2005 2006 2007 2008 2009 2010 2011 2012 Jul 2013

Cash & Deposits Debt Equity Other

Peruvian Pension Fund & Insurance Companies Portfolios

Source: LSE, SBS & SMV as of September 2013

Peruvian Pension Fund Portfolios (US$mm)

28

Peruvian Insurance Company Portfolios (US$mm)

48.3%

47.1%53.6% 36.7%

41.7%

35.0% 29.8%

21.8% 21,920

9,530

14,409

20,371

15,911

24,058

31,177 30,360

37,251 35,286

2005 2006 2007 2008 2009 2010 2011 2012 Sep 2013

ST Debt LT Debt Equity

Recommendations

Bookbuilding vs. Auction

Support/test revised framework for accredited investors

New fast track regulation only to accredited investors

Offering Structure

Aftermarket

Gray Market working well

Overallotment

Research Coverage

Report Publishing Guidelines (Positive initiative to reduce transactional costs - e.g. Lima stock exchange

fee)

31

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Documents

Convención de Finanzas y Mercado de Capitales 2013 · Source: Dealogic. Excludes SPACs, CLEFs, rights offerings, offerings < US$100 mm and the 2010 Petrobras deals. Source: Dealogic