Strategy - Focus List_01Out09_BBD

8/8/2019 Strategy - Focus List_01Out09_BBD

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Strategy

Bradesco S.A. Corretorade Ttulos e Valores Mobilirios (Bradesco Corretora) does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that Bradesco Corretoraand its affiliates 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.

For full disclaimer and definitions, please refer to the end of this report.

Bradesco Corretora Av. Paulista, 1450 7 andar So Paulo, Brazil 5511 3556 3001

Equity Research - BrazilThursday, October 1, 2009

Upsides in Short Supply

For the month of October we are sticking to our strategy of favoring sectorsand companies with greater exposure to the domestic market in our stockpicking. On a year-to-date basis, the Ibovespa index is one of the bestperformers in the world, climbing 63.8% (+114.6% in USD terms), and atcurrent levels we see limited upside for the market (our YE10 target for theIbovespa is 67,000).

We hold to our view that the global economys growth may take some time toreturn to pre-crisis levels, as current economic indicators still point to uncertainconclusions. On the other hand, the Brazilian economy continues to postencouraging indicators, leading our economists to raise the GDP growthestimate for 2010 by 50bps to 3.5%. Inflation is not currently an issue, althoughwe expect interest rates to go up in 2010, most likely after the presidentialelection, which will take place in 2H10.

Changes in the portfolio. For the month of October we have made only twochanges compared to the previous months portfolio, having included BR Malls(BRML3) and So Martinho (SMTO3) and removed Acar Guarani (ACGU3)and ALL (ALLL11).

ADTV 3m

R$mn Target Upside 2009 2010 2009 2010

Top Picks - October

Banco ABC Brasil ABCB4 Outperform 1.7 R$ 12.50 19.0% 10.4 7.7

BR Malls BRML3 Outperform 12.3 R$ 29.00 38.8% 19.1 24.9 14.3 12.2

MMX MMXM3 Outperform 33.5 R$ 16.80 54.1% n.m n.m nm 74.9

NET NETC4 Outperform 29.4 R$ 25.30 22.8% 16.1 16.2 6.8 6.0

OGX OGXP3 Outperform 95.7 R$ 1,668.70 23.2% 144.3 121.2 nm nm

Oi Oper. TMAR5 Outperform 8.8 R$ 85.70 47.3% 6.9 5.5 3.5 3.2

Po de Acar PCAR5 Outperform 29.9 R$ 72.00 44.0% 20.4 15.4 8.7 7.1

So Martinho SMTO3 Outperform 0.9 R$ 29.50 77.7% 14.9 18.1 7.6 6.0

TIM TCSL4 Outperform 17.7 R$ 6.00 36.1% 87.8 12.8 3.5 3.4

VisaNet VNET3 Outperform 137.3 R$ 22.30 26.8% 16.4 13.9 10.2 8.7

Source: Bloomberg, Bradesco Corretora estimates

P/E

Company

EV/EBITDA

Ticker Rating

Price

Equity Analysts:

Carlos Firetti, [email protected] 11 2178 5363

Marcos [email protected] 11 2178 5317

Chief Economist:

Dalton [email protected] 11 2178 4275

Focus List


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Equity Research Brazil: Thursday, October 1, 2009

The Month Ahead Mapping Fundamentals and Beyond

ACTIVITY: Clearly the most important figure on the activity front was GDP data for

the second quarter of 2009, with growth of 7.8% (SAAR). Favorable formal

employment numbers have come out (creation of 242k jobs in August) as well.Remuneration indicators in the labor market are not deteriorating as before (although

some fatigue is still evident). Good economic figures continued with data from the

monthly employment survey, which revealed an 8.1% unemployment rate for the

month of August. However, positive results did not come exactly from occupation: the

number of employed people was flat in both the MoM and YoY comparisons. Retail

sales rose 5.9% YoY in July, with a 0.5% MoM increase, the third in a row, elevating

3-month moving average growth to +0.9% MoM (+0.7% MoM in June). We have not

denied or ignored the improvement in activity indicators. The end of the Brazilian

recession is indeed a reason for celebration, although growth momentum is one part

of the equation; the other one is sustainability. Credit has picked up but credit

demand is still faltering in some sectors. Our strongest concern right now is theremoval of expressive stimuli in the global economy in 2010, which could create

additional fatigue for the economy. All that said, we have revised our forecast for

GDP growth in 2010 to 3.5% from 3%.

INFLATION: Outright deflation in wholesale prices is over, but it is neither fair nor

correct to say that inflation is a concern. The Central Banks Quarterly Inflation

Report has not materially changed the inflation outlook. For the Bacen, IPCA inflation

should be 4.2% in 2009 and 4.4% in 2010. The 4.6% inflation penciled out for 1Q11

was probably the trigger for markets becoming more nervous about interest rates.

We have lower forecasts: 3.9% for 2009 and 4% for 2010. However, we have no

disagreement with 2011 forecasts: 4.6%. Before the release of the Inflation Report

we had imagined the Central Bank raising rates in late 2010, and we stick to that

view. We are not yet seeing a hike in 1H10.

FISCAL: The possibility of deducting investments corresponding to 0.94% of GDP

from the current primary balance target, which effectively reduces the actual target, is

an important precedent. This move ratifies the ongoing fiscal push, increases

concerns about medium-term issues regarding fiscal finances, and gives room for

interest rate futures to bid up (as we saw in late September). Although we share the

view that the lower target will eventually lead to an increase in the debt-to-GDP ratio

or not allow for a decrease as would be the case otherwise, the present conditions ofpublic finances are extremely comfortable in terms of debt dynamics. This comes

from the relief of lower rates. The interest burden is going to be approximately 4.8%

of GDP in 2009, while it has averaged 8.5% in the last 10 years. There is plenty of

room for this administration to use this maneuvering room in 2010. Debt is likely to

remain stable or decline slightly in 2010-2011.

BOP: In Jan-Aug 2009 the current account deficit reached US$9.5bn (1.2% of GDP).

This is roughly 47% the size of the current account generated in the same period of

2008. We reiterate our view that there is not a major problem in the currency level

(REER), since the overall structure of foreign exchange transactions is still highly

unconvertible. Our point is that with more flexible, more open and freer FXtransactions we would have better conditions to gauge the most appropriate path for


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the currency level. Current account deficits that remain very low, as is the case right

now, or that are going to be relatively small, which is going to be the case next year,

are not good arguments for major intervention in the currency or assertions that

Brazil suffers from Dutch disease or some other malfunction in the currency. That

said, it is important to differentiate this overall positive assessment about the BRL

and the present dynamics of abundant flows. The BRL is probably reacting to

extraordinary (as opposed to normal) flows. On the domestic front there is a great

deal of equity operations in the pipeline, and a good number of fixed income

instruments (bonds and debentures) to come to market as well, some of which with

sizeable volumes. That combination of supply of domestic assets and still abundant

liquidity motivated us to come up with a trading call for the BRL: while keeping the

US$1.90/R$1 forecast for year-end, we now see the Brazilian currency moving to

US$1.7/R$1 in the short term.

GLOBAL: Housing indicators in the US have begun to stabilize, but new home sales

are 70% off their peak. Leaders of the developed world pleading for everyone to keepstimuli in place is a perfect indication of the challenges of removing them at this

stage. The global economy is held hostage by the fiscal and monetary stimuli

implemented in 2008 and 2009. Our major concern is faulty credit markets (corporate

credit flat or declining on a YoY basis in the US and Europe is extremely concerning).

CPI inflation is not a problem (we are more worried about deflation and the impacts

of debt spiral in the economy). China is trying harder and harder with ever lower

marginal visible results (industrial production and exports), despite still good (and

debatable) GDP numbers. The recovery is well on track, although a genuine recovery

to sustainable growth levels will have to wait a little more.

CONCLUSIONS/ECONOMY AND MARKETS

EQUITY ENVIRONMENT. Valuations are dear, fund managers are talking more and

more about this, and (forced?) migration to stocks with lower liquidity and relatively

better valuations are happening not necessarily with money seeking these stocks

with gusto. The rally is a reflection of loose monetary policies in a world that is

improving. The flows momentum simply continues. There are numerous equity

issues in the pipeline as well.

INTEREST/BONDS/COPOM. Interest rates will go up in 2010. We have had, and

maintain, this view. The point is timing of the first rate hike. We do not see this

happening in the first quarter, and view the chances of it happening in 2Q10 are low.

We initially imagined the hike happening in the last quarter of 2010. This is still likely

since an initial move a couple of months before the presidential election in 2010 does

not seem to be the most likely outcome. A benign inflation outlook reinforces this

scenario.

USD/BRL. The combination of inflows and bond/equity issues of good names has led

us to a trading call for the BRL: while keeping the US$1.90/R$1 forecast for year-

end, we now see the Brazilian currency moving to US$1.7/R$1 in the short term.

Dalton Gardimam 5511 2178 4275 [email protected]

Denis Blum 5511 2178 4224 [email protected]


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Sector View

Figure 1: Sector Allocation for Ibovespa

Our Weight Our Weight

Ibovespa View Ibovespa Stocks Ticker Ibovespa

Banks 14.0% Under 12.5% Banco do Brasil BBAS3 4.0%Bradesco BBDC4 5.0%

Ita Unibanco ITUB4 3.5%Other Fin. Sector 6.3% Over 8.1% BM&FBovespa BVMF3 2.5%

Redecard RDCD3 2.5%

VisaNet VNET3 3.1%Consumer Goods 4.5% Neutral 4.9% Ambev AMBV4 2.5%

Minerva BEEF3 1.0%Perdigo PRGA3 1.4%

Retail 3.7% Over 4.0% Po de Acar PCAR5 4.0%Oil 18.8% Neutral 19.0% OGX OGXP3 4.0%

Petrobras PETR4 15.0%Steel 11.4% Neutral 11.0% CSN CSNA3 5.5%

Usiminas USIM3 5.5%Mining 18.0% Under 17.0% MMX MMXM3 2.5%

Vale VALE5 14.5%

Pulp and Paper 2.4% Under 0.0%

Real Estate 3.4% Over 4.0% BR Malls BRML3 4.0%

Aerospace 0.7% Under 0.0%Airlines 1.3% Under 0.0%

Telecom - Fixed 3.3% Over 6.0% NET NETC4 4.0%

Oi Part. TMAR5 2.0%

Telecom - Wireless 1.7% Neutral 2.0% TIM Part. TCSL4 2.0%Utilities 6.7% Neutral 6.5% AES Tiet GETI4 2.5%

Tractebel TBLE3 2.5%Transmisso Pta. TRPL4 1.5%

Transports and Logistics 1.3% Over 2.0% ALL ALLL11 2.0%

Sugar and Ethanol 0.5% Over 3.0% Cosan CSAN3 3.0%Petrochemicals 0.9% Under 0.0%

Others 1.0% Under 0.0%

Total 100.0% 100.0% 100.0%

Source: BM&F Bovespa and Bradesco Corretora

Figure 2: Sector Allocation for Ibx-50

Our Weight Our WeightIbx-50 View Ibx-50 Stocks Ticker Ibx-50

Banks 21.9% Under 18.0% Banco do Brasil BBAS3 6.0%Bradesco BBDC4 7.0%

Ita Unibanco ITUB4 5.0%Other Fin. Sector 4.8% Over 6.0% BM&FBovespa BVMF3 2.0%

Redecard RDCD3 2.0%

VisaNet VNET3 2.0%Consumer Goods 6.1% Neutral 6.5% Ambev AMBV4 3.5%

Minerva BEEF3 1.0%Perdigo PRGA3 2.0%

Retail 2.6% Over 3.0% Po de Acar PCAR5 3.0%Oil 26.3% Over 28.0% OGX OGXP3 6.0%

Petrobras PETR4 22.0%Steel 7.6% Neutral 8.0% CSN CSNA3 4.0%

Usiminas USIM3 4.0%Mining 17.5% Under 16.0% MMX MMXM3 2.0%

Vale VALE5 14.0%

Pulp and Paper 0.7% Under 0.0%

Real Estate 1.3% Neutral 1.5% BR Malls BRML3 1.5%

Aerospace 1.0% Under 0.0%Airlines 0.4% Under 0.0%

Telecom - Fixed 1.8% Over 2.5% NET NETC4 1.5%

Oi Part. TMAR5 1.0%

Telecom - Wireless 1.2% Neutral 1.0% TIM Part. TCSL4 1.0%Utilities 4.6% Neutral 5.0% AES Tiet GETI4 2.0%

Tractebel TBLE3 2.0%Transmisso Pta. TRPL4 1.0%

Transports and Logistics 0.6% Over 2.0% ALL ALLL11 2.0%

Sugar and Ethanol 0.3% Over 2.5% Cosan CSAN3 2.5%Petrochemicals 0.8% Under 0.0%

Others 0.4% Under 0.0%

Total 100.0% 100.0% 100.0%

Source: BM&F Bovespa and Bradesco Corretora


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Top Picks

Banco ABC Brasil (ABCB4) ABC Brasil is currently our best bet to play the

banking sector. We favor small banks with a strong presence in the corporate

segment, in which opportunities for niche players like ABC Brasil have risen since therecent mergers of Ita with Unibanco and Santander with ABN. Furthermore, the

bank is already prepared and waiting for better timing to expand its operations in the

SME segment, where there are major growth opportunities and higher return levels.

BR Malls (BRML3) We expect BR Malls shares to present good performance in

the coming weeks as it has fallen short of the sectors average, especially in the last

month. We also believe the company will use ~R$600mn of its current ~R$1bn in

cash to continue growing through acquisitions in the short term, increasing expected

EBITDA and reducing its premium 10.9x EV/EBITDA10 multiple against the sector

average of 9.8x. Moreover, we believe that the companys results will continue to

confirm our good perception of the sector, and is likely to maintain strong salesgrowth. In addition, the company has more liquidity compared to its peers. We have

an Outperform rating for BRML3, with a R$29.00/share target price.

MMX (MMXM3) MMXs expansion project is so promising that the company has

considerable upside potential even taking into account the macroeconomic risks that

still exist in China. We have a TP of R$14.1/share for the company, implying upside

potential of 64%, even though we are assuming iron ore prices dropping 42% over

the next three years. Moreover, there is the possibility of positive triggers in the short

to medium term as the company closes a strategic agreement with Wisco, Chinas

second-largest steel mill, and as the construction of the Sudeste Port begins.

However, fluctuations in the Chinese stock market could add some volatility to

commodities stocks.

NET (NETC4) NET should gain good momentum with its 3Q09 results being

published on October 21. In our view, the company should continue to improve its

performance and grow as pay TV penetration increases in the country, with NET

gaining the most on the back of its highly-competitive triple play bundles (TV +

telephone + broadband). In addition, we believe the company will expand its cross-

selling efforts, increasing penetration of broadband customers in its own pay TV

subscriber base. It is important to note that NETC4 has underperformed the market

(+3.7% in September vs. +8.9% for Ibovespa)

OGX (OGXP3) OGX started its drilling campaign on August 16 in the BM-S-29

block (more specifically, the Abacate-1 prospect) and on September 17 began the

Vesuvio BM-C-43 project. The companys schedule for 2009 involves drilling six

wells, with the announcement of results for four of them, in a process that will convert

potential resources into proven reserves. In light of OGXs team, the accredited

certification company that revised the potential reserve studies and the general

development of the company, we are optimistic about the success rate to be

achieved and the enormous upside potential to be created with the discoveries.


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Oi (TMAR5) We maintain our bet on Oi as a value play trading at low multiples

(3.8x EV/EBITDA10E, vs. international peers trading at 5.1x), implying large upside,

while also being a defensive bet in a more cautious scenario. In our view, the

negative pressure on the companys results due to the merger has already subsided,

and the market should start looking forward to 2010 with synergies amounting to

roughly R$1.0bn, besides a positive outcome from the startup of wireless operations

in So Paulo state, which will permit the company to generate strong FCF (above

20%) that should be used to reduce debt (currently at 2.2x EBITDA 2010).

Po de Acar (PCAR5) We have an Outperform rating for PCAR5 and a R$66.4

target price for YE09 on the back of: (i) potential value addition of R$750mn, or

R$3.00 per share, due to synergies generated from combined operations with Ponto

Frio; (ii) potential value addition from the groups e-commerce business, which has

already risen to second place in the Brazilian market and should reach R$904mn in

sales in 2009 (we are evaluating it at R$1.115bn, or R$4.40 per share); and (iii) our

valuation of the companys real estate assets at R$2.603bn, which, discounting thepresent value of the additional lease expenses it would incur in case it sells its

assets, is estimated at R$1.781bn, or R$7.00 per share. In addition, we see other

hidden values, such as the groups drugstores and gas stations, which we are not

taking into account in our target price but nevertheless evaluate at R$88mn and

between R$103mn and R$145mn, respectively.

So Martinho (SMTO3) Among the listed sugar & ethanol companies, So

Martinho has the highest exposure to ethanol, whose prices were quite compressed

recently. However, due to rainfalls and the normal cycle, ethanol prices have started

to recover and we expect this trend to continue through April 2010. Under this

scenario we expect the entire sector to benefit, although more so for So Martinho,which has greater exposure to the fuel and is leveraged by its own sugarcane

production.

TIM (TCSL4) We believe TIM should continue to outperform Vivo considering that it

is still trading at a discount that should become narrower, as we believe the company

has a greater potential to improve margins and consequently profitability compared to

Vivo. The company is in a turnaround phase, investing in its network and improving

its customer base, focusing on the postpaid segment. Furthermore, synergies with

Intelig, to be tapped only in 2010, should drive EBITDA margins upwards as the

company significantly reduces its interconnection and leased-line expenses. TCSL4

is trading at 3.5x EV/EBITDA10E, lower than Vivos 4.0x.

VisaNet (VNET3) We believe the current valuations for VisaNet have already

priced in most of the negative impact we expect from new regulations and the new

competitive environment. The company has a strong long-term growth case in terms

of volumes and strong competitive positioning that certainly makes it one of the

dominant players in the sector. According to our numbers, VisaNet currently trades at

16.4x P/E 2009 and 13.9x P/E 2010.


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Figure 3: Top Picks for October

Avg. 3m Vol.

Company R$ millionBanco ABC Brasil ABCB4 1.7

BR Malls BRML3 12.3

MMX MMXM3 33.5

NET NETC4 29.4

OGX OGXP3 95.7

Oi Oper. TMAR5 8.8

Po de Acar PCAR5 29.9

So Martinho SMTO3 0.9

TIM TCSL4 17.7

VisaNet VNET3 137.3 Source: Economtica and Bradesco Corretora

Figure 4: Main Recommendations for October Minimum Average Daily Volume of R$10mn

Avg. 3m Vol.

Company R$ millionAmBev AMBV4 41.2

BR Malls BRML3 12.3MMX MMXM3 33.5

NET NETC4 33.5

OGX OGXP3 29.4

Po de Acar PCAR5 95.7

TIM TCSL4 17.7

VisaNet VNET3 137.3 Source: Economtica and Bradesco Corretora


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Performance of Top Picks

Our Performance in September

Figure 5: Top Picks Performance in SeptemberAvg. 3m Vol.

Company R$ million Change%

Acar Guarani ACGU3 6.1 -0.5%

ALL ALLL11 49.9 0.3%

Banco ABC Brasil ABCB4 1.7 11.5%

MMX MMXM3 33.5 29.8%

NET NETC4 29.4 3.9%

OGX OGXP3 95.7 32.2%

Oi Oper. TMAR5 8.8 12.6%

Po de Acar PCAR5 29.9 8.4%

TIM TCSL4 17.7 11.4%

VisaNet VNET3 137.3 6.9%

Portfolio 11.6%

Ibovespa IBOV 8.9% Source: Economtica and Bradesco Corretora

Figure 6: Main Recommendations for September Minimum Average Daily Volume of R$10mn

Avg. 3m Vol.

Company R$ million Change%ALL ALLL11 49.9 0.3%

AmBev AMBV4 41.2 5.0%

MMX MMXM3 33.5 29.8%

NET NETC4 29.4 3.9%

OGX OGXP3 95.7 32.2%

Oi Oper. TMAR5 8.8 12.6%

Po de Acar PCAR5 29.9 8.4%

TIM TCSL4 17.7 11.4%VisaNet VNET3 137.3 6.9%

Portfolio 13.8%

Ibovespa IBOV 8.9% Source: Economtica and Bradesco Corretora


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Analyst Certification

(i)

(ii)

(i)

(ii)

(iii)

(iv)

(v)

Important Disclosures

x 1

x 2

x 3

5

Rating Definition BR

Outperform Expected to outperform the Ibovespa by more than 10%. 74%

Market Perform Expected to perform in the range of 10% above or below the Ibovespa. 88%

Underperform Expected to underperform the Ibovespa more than 10%. 86%

Under Review This indicates that both the target price and the rating are currently being revised. 100%

Restricted The analyst cannot express his/her views on the company. 100%

(1) 10/1/09 73 companies

(2)

Bradesco Corretora and/or its affiliates were making a market in the subject companys(ies) equity securities at the date of this report;4

Each analyst responsible for the preparation and content of this report hereby certifies, pursuant to SEC Regulation AC and applicable laws and regulations of

other jurisdictions, that:

The ratings reflect only the analysts expectation on the future performance of the relevant stock. A Outperform rating does not necessarily represent that the

analyst approves of the company and its management whilst a Underperform rating does not necessarily means that the analyst has a negative view on the

company. Within Bradeco Corretora coverage universe there are sound companies, with good fundamentals as per the market consensus, and fair priced stock,

and would not be Bradeco Corretora investment pick.

Coverage

59%

22%

10%

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pursuant to Brazilian securities exchange commission (Comisso de Valores Mobilirios CVM) Instruction 388/03:

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Company-specific regulatory disclosures

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Bradesco Corretora and/or its affi liates beneficial ly own one percent or more of any class of common equity securit ies of the subject

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research are available upon request. You may obtain this information by contacting your representative or by sending an email to

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Percentage of companies within this rating category for which [investment banking] services were provided within the past 12 months.

Bradesco Corretora ratings

Bradesco Corretora ratings are constantly revised and any temporary inconsistencies between the upside potential that gave rise to any such rating and the

upside potential in connection with the target price are at all times deliberate. The official rating shall prevail.

Any differences between the rating and the target price may occur especially due to the analysts expectations to the effect that any short/medium term factors

that cannot be priced-in yet might lead to inconsistencies between Bradeco Corretora valuation and the stock behavior. The factors Bradeco Corretora

considered include, but are not limited to: Any expectations in connection with quarterly results, market conditions, ownership issues and any expectations

involving mergers and acquisitions.


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Additional Disclosures

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General Disclosures

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Any additional information may be obtained by cont acting your representative or by sending an email to bradescoco [email protected] .br

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appropriate, seek professional advice, including tax advice. Exchange rate movements could have adverse effects on the value or price of, or income

derived from, certain investments.

Th is repor t has been prepared so le ly by Bradesco Corretora and is being provided exclusively for informational purposes. The information, opinions,

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of the securities discussed in this report.

This report , including the estimates and calculat ions of Bradesco Corretora, is based on publ icly available information that i t consider rel iable, but i t do

not represent it is accurate or complete, and should not be relied upon as such.

From t ime to time, Bradesco Corretora or i ts affi liates and officers, directors and employees, not including its analysts may, to the extent permit ted by

law, hold long or short positions, or otherwise be interested in transactions in a ssets directly or indirectly related to this report.

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registration and qualification requirements or other research-related standards of a non-US ju ri sdiction.

a re persons to whom an invita tion o r inducemen t to engage in investment act ivit y (wi th in the mean ing o f sec tion 21 o f the Financia l S er vices andMarkets Act 2000) in connect ion with the issue or sale of any securi ties to which this report relates may otherwise lawful ly be communicated or caused

to be comm unicated (all such persons together being referred to as "relevant persons").

Th is repor t is d irec ted only a t relevant persons and must not be acted on or rel ied on by persons who are not relevant persons. Any investment or investmentactivi ty to which this repor t relates is ava ilab le only to relevant persons and wil l be engaged in only with relevant persons. No pub lic o ffe r o f any secur ities to

which this report relates is being made by Brades co UK or Bradesco Corretora in the United Kingdom or elsewhere in the European Econom ic Area.

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should contact and place orders through Bradesco Securities Inc. at (212) 888-9141.

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No portion of this docum ent may be (i) copied, photocopied or d uplicated in any form, or by any mean s, or (ii) redistributed without prior consen t from

Bradesco Corretora.

are outside the United Kingdom, or

United Kingdom and European Economic Area: I n t he Unit ed Kin gdom and els ewhere in the Euro pean Econom ic Area, this repo rt m ay be m ad e or

communica ted by B radesco S ecu rit ie s UK L imit ed (" B radesco UK"). B radesco UK is autho rized and regu la ted by the F inancia l S er vices A utho rity and its

registered office is at: 20-22 Bedford Row, London, WC 1R 4JS. This report is for distribution only to persons who:

have professional exper ience in matters relat ing to investments fall ing within Art icle 19(5) of the Financial Services and Markets Act 2000 (FinancialPromotion) Order 2005 (as amended, the "Financial Promotion Order");

are persons that are eligible counterparties and professional clients of Bradesco UK;

are persons falling within A rticle 49 (2) (a) to (d) ("high net worth compani es, unincorporated associations etc") of the F inancial Promotion Order;

The fo llowing d isc losures are required under or based on the laws of the jur isd ict ion ind ica ted, except to the extent a lready made above wi th respect to United

States laws and regulations. Brazil: This repor t is d is tr ibuted in Braz il by Bradesco Corretora. A ny investor in B razi l who rece ives this r eport and w ishes to

conduc t transac tions with s tocks analyzed herein should contact and request execution of orders through Bradesco Corretora at (55 11) 3556-3001.


11/11

Bradesco Corretora Research Team

Sectors Analysts AssociatesEconomics Dalton Gardimam 55 11 2178 4275

(Chief Economist) [email protected]

Denis Blum 55 11 2178 4224

[email protected]

Strategy, Banking, Insurance Carlos Firetti, CFA 55 11 2178 5363 Marcos Suzaki 55 11 2178 5317

and Financial Services (Head of Research) [email protected] [email protected]

Rafael Frade 55 11 2178 4056

[email protected]

Oil & Gas, Petrochemicals Auro Rozenbaum 55 11 2178 5315 Bruno Varella 55 11 2178 5310

and Sugar & Ethanol [email protected] [email protected]

Alessandro Mady 55 11 2178 5329

[email protected]

Edigimar Maximiliano 55 11 2178 5327 Luiz Peanha 55 11 2178 5324

[email protected] [email protected]

Consumer Goods and Retail Fabio Monteiro 55 11 2178 5318 Ricardo Boiati 55 11 2178 5326


Rodrigo Santoro55 11 2178 4276

[email protected]

Telecom, Media and Technology Luis Azevedo 55 11 2178 5321 Vitor Pini 55 11 2178 4274


Rodrigo Santoro 55 11 2178 4276

[email protected]

Education Vitor Pini 55 11 2178 4274 Luis Azevedo 55 11 2178 5321


Electric Utilities, Water & Sewage Vladimir Pinto 55 11 2178 5323 Marcelo S 55 11 2178 4273


Steel, Mining, Pulp & Paper Raphael Biderman 55 11 2178 5313 Gina Montone 55 11 2178 4272


Alessandro Mady 55 11 2178 5329

[email protected]

Real State Andr Rocha 55 11 2178 4223

[email protected]

Fixed Income Altair Pereira 55 11 2178 4279 Nathalie Aron 55 11 2178 4225


Individual Investors Jose Francisco Cataldo 55 11 2178 5319 Nathalie Aron 55 11 2178 4225


Transportation, Logistics, Malls and

Small Caps

Institutional Sales Team

Joo Saldanha, CFA [email protected]

Jos Arvelos [email protected] Marcelo Cabral [email protected]

Juvenal Neves [email protected] Alison Kulach [email protected]

Vikram Kapur [email protected]

Jason Myers [email protected]

Shinichiro Fukui [email protected]

Adilson dos Santos [email protected]

Alec Cunningham [email protected]

Ana Carolina Quadros [email protected] Robert Vespa [email protected]

Fernanda Weber Bratz [email protected]

Dauro Zaltman [email protected] Jeffrey Noble [email protected]

Denise Chicuta [email protected] Victor Cortes [email protected]

Keite Bianconi [email protected] Robert Hulme [email protected]

Sales - Local Fixed Income - 55 11 2178 4419 Sales 44 (0)203 178 4170

Bradesco Securities, Inc. New York

FINRA/SIPC Member

Bradesco Corretora CTVM S.A. So Paulo

Sales 55 11 3556 3001

Bradesco Securities UK, Ltd

Sales Trading 01 212 888 9141

Sales 01 212 888 9141

Sales Trading 55 11 3556 3001

Sales - Fixed Income 01 212 888 9141

Sales - Fixed Income - 55 11 2178 6959

Av. Paulista, 1450 7 andar

CEP: 01310 917 So Paulo SP

Documents

Strategy - Focus List_01Out09_BBD