BT Financial Monthly Chart - April 2010

BT Monthly Markets Chart

Pack – April 2010

An overview of movements in global financial markets

2

Global share markets were mostly lower in April...

Global share markets were mostly lower in April, with losses in Europe (-

3.9%), the UK (-2.2%) and Japan (-0.3%) countered by a relatively strong

gain in the US (+1.5%). Headlines throughout the month were dominated by

doubts over Greece’s ability to repay its debt and whether or not other

European nations will be similarly affected, namely Portugal and Spain.

The Australian share market gave back some of last month’s gains in

April, with the S&P/ASX 200 Accumulation Index closing the month 1.4%

lower. The fall came mainly on the back of renewed debt concerns in

Europe, though expectations of higher interest rates both here and in China

(which has the potential to hurt demand for our commodities) were also

negatives.

3

Global shares measured by the MSCI World ex-Australia (net dividends) Index in A$.

Source: BT Financial Group, MSCI

Impact of major market events on global shares since 1988

…but continue to perform well over the long-term,

despite some major market events

700

1,200

1,700

2,200

2,700

3,200

3,700

4,200

4,700

5,200

5,700

6,200

Apr-88 Apr-90 Apr-92 Apr-94 Apr-96 Apr-98 Apr-00 Apr-02 Apr-04 Apr-06 Apr-08 Apr-10

Jan 91

Gulf War

Feb 94

Bond Market Crash

Aug 97

Asian Currency

Crisis

Jul 98

Russian Bond

Crisis

Jul 01

Tech Wreck

Sep 01

Attack on

Twin Towers

Jun 07

US Sub-prime

Crisis

Nov 89

Fall of the

Berlin WallMar 03

Troops enter

Iraq

4

Source: BT Financial Group, Premium Data

S&P/ASX 200 Accumulation Index – year to 30 April 2010

The Australian share market closed 1.4% lower in

April

24,000

25,500

27,000

28,500

30,000

31,500

33,000

34,500

36,000

30/04/2009 30/06/2009 30/08/2009 30/10/2009 30/12/2009 28/02/2010 30/04/2010

5

Key Australian economic news – April

The Reserve Bank of Australia raised interest rates by a further 0.25% following

its early May meeting, taking the official cash rate to 4.50%. It was the Bank’s

sixth rate rise in the past seven meetings.

Australia’s trade balance was in deficit to the tune of A$2.08 billion in March after

a revised deficit of A$1.70 billion (previously A$1.93 billion) in February.

Inflation continued to rise, with the Consumer Price Index jumping 0.9% in the

March quarter. The market had expected a gain of 0.8%.

Westpac’s leading index – a measure of future economic growth – rose by 0.5%

in February, its highest level since July 2008.

Retail trade rose a modest 0.3% in March following a revised fall of 1.2%

(previously 1.4%) in February.

Source: BT Financial Group

6

The Australian dollar continued to rise against the

US dollar in April

The Australian dollar (A$) made only a modest gain against the US dollar in

April, up 0.8% on the back of stronger economic data and expectations of yet

more interest rate hikes by the Reserve Bank.

The A$ is now up 54% against the US$ since hitting a low of US$0.6012 cents in

October 2008 and may yet hit parity with the US currency later this year,

particularly if the differential between our interest rates and theirs continues to

widen.

At the end of April:

A$1 bought US$0.9244 +0.8%

€0.6957 +2.5%

¥86.72 +1.2%


7

Currency markets – A$ per US dollar

Source: BT Financial Group. Figures at 30 April 2010

0.6300

0.6600

0.6900

0.7200

0.7500

0.7800

0.8100

0.8400

0.8700

0.9000

0.9300

0.9600

0.9900

Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10

The Australian dollar versus the US dollar…

8

Currency markets – A$ per Euro

the Euro…

0.4900

0.5100

0.5300

0.5500

0.5700

0.5900

0.6100

0.6300

0.6500

0.6700

0.6900

0.7100



9

and the Yen

55

60

65

70

75

80

85

90

95

100

105

110


Currency markets – A$ per Yen


10

Official world interest rate movements – April

Interest rates in the major economies remained unchanged in April. The

Reserve Bank of Australia raised the official cash rate by a further 0.25% (to

4.50%) in early May.

Current rate Last moved

Direction of

last move

Australia 4.50% May 2010

US 0% - 0.25% Dec 2008

Europe (ECB) 1.00% May 2009

Japan 0.10% Dec 2008

United Kingdom 0.50% Mar 2009


11


30 April 2010

Global share market returns

1 year 3 years (pa) 5 years (pa)

Global

S&P 500 Index (US) 35.96% -7.15% 0.51%

Nasdaq (US Tech.) 43.32% -0.85% 5.07%

Nikkei 225 (Japan) 25.25% -14.03% 0.09%

Hang Seng (Hong Kong) 36.00% 1.28% 8.70%

DAX (Germany) 28.65% -6.09% 7.95%

CAC (France) 20.80% -13.80% -0.49%

FTSE 100 (UK) 30.86% -4.86% 2.95%

Australia

S&P/ASX 200 Accum. Ind. 32.38% -3.81% 8.43%

S&P/ASX Small Ordinaries 39.26% -8.99% 7.16%

S&P/ASX 300 Listed Prop. 38.87% -23.14% -6.52%

12

Short-term asset class performance

Source: S&P/ASX 200 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property

Index, UBS Composite 0+ years index, Barclays Capital Global Aggregate Bond Index hedged to $A , UBS Bank Bill 0+ years

1-year rolling returns to 30 April 2010 (%) Best performing

asset class for the

year

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995

Australian

cash3.63 6.28 7.10 6.32 5.75 5.61 5.17 4.93 4.71 6.34 5.31 5.07 5.31 7.02 7.80 6.52

Australian

bonds3.29 12.76 3.59 5.01 4.50 7.44 2.64 9.12 4.84 10.30 1.86 6.94 13.99 12.65 12.81 4.73

Australian

property38.87 -57.23 -23.56 33.20 18.04 21.29 11.73 13.25 18.53 11.49 6.70 1.92 29.88 19.11 3.19 6.39

Australian

shares 32.38 -28.82 -5.56 22.18 37.87 22.19 17.96 -6.46 4.05 10.56 6.46 15.90 15.97 15.97 17.01 4.29

International

bonds10.51 7.85 7.43 7.07 3.08 9.79 5.43 12.56 7.84 10.32 0.96 8.71 11.50 11.08 13.20 7.94

International

shares7.36 -22.02 -14.08 6.30 27.70 1.71 12.06 -26.98 -18.30 -4.26 27.91 14.03 55.36 11.05 9.85 7.85

13

Source: S&P/ASX 200 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property

Index, UBS Composite 0+ years index, Lehman Brothers Global Aggregate Bond Index hedged to $A

1-year returns to 30 April 2010 (%)

Short-term asset class performance (cont’d)

7.4

10.5

32.4

38.9

3.3

-22.0

7.9

-28.8

-57.2

12.8

30 April 2009

30 April 2010

Australian bonds

Listed property

Australian shares

Global bonds

Global shares

14

Long-term asset class performance

Note: Accumulated returns based on $1,000 invested in December 1984

Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+

years index, UBS Bank Bill 0+ years

30 April 2010

Australian bonds

Listed property

Australian shares

Cash

Global shares

$0

$1,500

$3,000

$4,500

$6,000

$7,500

$9,000

$10,500

$12,000

$13,500

$15,000

$16,500

$18,000

$19,500

$21,000

$22,500

$24,000

84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

15

Source: BT Financial Group. West Texas Intermediate oil price at 30 April 2010

Oil prices – US$ per barrel

Oil prices rose 2.9% in April on US dollar weakness and

reports that global manufacturing is strengthening

$0

$15

$30

$45

$60

$75

$90

$105

$120

$135

$150

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

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Economy & Finance

BT Financial Monthly Chart - April 2010