larc2014 - spotlight on mexico
TRANSCRIPT
1 SWIFT Latin American Regional Conference (LARC) - 2014 28-28 May 2014
Jairo
Namur
SWIFT
USA
Sergio Luna Alexis Milo
Banamex-Citi
Mexico
Deutsche Bank
Securities
Mexico
Spotlight on Mexico
Spotlight on Mexico
#LARC2014
@swiftcommunity
2
La Economía Mexicana a la Luz de las Reformas Estudios Económicos, Banamex-Citi
Mayo 2014
Sergio Luna
Director de Estudios Económicos
+52 55 2226-6799
3
PIB (Variación anual, %)
México: Los Promedios son Engañosos
Fuente: INEGI.
PIB Regional (Índice, 1994=100)
Fuente: INEGI.
-8
-6
-4
-2
0
2
4
6
8
94 96 98 00 02 04 06 08 10 12
50
100
150
200
250
94 96 98 00 02 04 06 08 10 12
Querétaro Nuevo León Total nacional Guerrero
4
Restricciones Políticas
Fuente: Banamex.
Mayoría en el Congreso (Millones de personas)
“Productividad”Legislativa (Número de votos/iniciativas)
0
10
20
30
40
50
60
70
LVII(1997 -2000)
LVIII(2000 -2003)
LIX(2003 -2006)
LX(2006 -2009)
LXI(2009 -2012)
LXII(2012 -2015)
PRI PAN
PeñaCalderónFOXZedillo
Mayoría Calificada
Mayoría Absoluta
0
50
100
150
200
250
300
350
LVII(1997 -2000)
LVIII(2000 -2003)
LIX(2003 -2006)
LX(2006 -2009)
LXI(2009 -2012)
LXII(2012 -2015)
Votaciones Iniciativas Votadas
PeñaCalderónFOXZedillo
5
Objetivo de Reformas: Aumentar la Productividad
Fuentes de crecimiento
(Promedio 1992-2009, variación annual, %)
Fuente: Banamex e INEGI.
1.24
0.43
-0.64
0.40
Capital Trabajo PTF
Convencional TI
*México: Radio, TV y otros servicios informativos.
Telecomunicaciones (Promedio 1992-2009, %)
-6
-4
-2
0
2
4
6
8
Alemania Japón EUA España México*
Educación (Promedio 1992-2009, %)
Fuente: Banamex, estimaciones propias con datos de INEGI y the KLEMS project.
-2.0
-1.5
-1.0
-0.5
0.0
0.5
España Alemania Japón EUA México
Minería y Canteras (Promedio 1992-2009, %)
* México: extracción de petróleo y gas.
-4
-3
-2
-1
0
1
2
3
Alemania España EUA México México* Japón
6
Reforma Energética: Implicaciones de Inversión
Materialización de los flujos de inversión será gradual, en
lugar de un proceso discreto: probablemente alcancen su
máximo alrededor de 2018
Las estimaciones varían pero los flujos de inversión
posiblemente serán relevantes macroeconómicamente:
• De Producción y Exploración convencionales,
estimamos de 15 a 20 mmd por año
• La inversión en actividades “aguas abajo” podrían
materializarse más rápido, y contribuirían a detonar la
competitividad manufacturera
• La reforma también incluye al sector eléctrico: su
atractivo como destino de inversión es también
bastante considerable
En suma, la inversión fija bruta podría incrementarse en
2% del PIB, con impactos de crecimiento impulsados por la
demanda que implican fácilmente un crecimiento adicional
del PIB en al menos un 1%.
Flujos de Inversión Proyectada (enfoques “Top-Down”) (millones de dólares)
Fuente: Banamex
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2015 2016 2017 2018 2019
PMX Citi CCE PEMEX
GFDI / WGDP Tend. FDI Promedio Media Ajustada
7
Implicaciones “Renacimiento” Manufacturero
Costo de energía como proporción de los costos totales de producción; sectores
seleccionados
Fuente: INEGI y Banamex
(Promedio 2007 a 2001)
0
1
2
3
4
5
6
7
8
Manufacturas (total)
Equipo de transporte
Bienes electrónicos
Maquinaria y equipo
Productos de metales básicos
8
Tipo de Cambio Real (Índice 2000=100)
Crédito Bancario al Sector Privado (% del PIB)
Fuente: Indicadores de Desarrollo Mundial, Banco Mundial. Fuente: BIS.
Reforma Energética: Impactos Macroeconómicos
0
20
40
60
80
100
120
140
Brasil China México Rusia
0
40
80
120
160
Brasil China Mexico Rusia
9
Implicaciones: Sectores Sensibles al Crédito
Precios Departamentos (Costo por m2, Dls.)
Ventas de Autos (Por cada 1,000 personas)
Turismo: Egresivo (Milliones de personas)
Fuente: Banamex con datos de Indicadores de Desarrollo Mundial: Viajes y Turismo. Banco Mundial.
Fuente: Banamex con datos de la Guía de Propiedad Mundial. Fuente: Banamex con datos del Reporte Gloval de Autos. Economía Global, Scotiabank, Abril 30, 2014.
0
3,000
6,000
9,000
12,000
15,000
18,000
Brasil China México Rusia
0
5
10
15
20
25
Brasil China México Rusia
0
20
40
60
80
100
Brazil China Mexico Russia
10
Nota Legal
El presente reporte ha sido elaborado por analistas miembros del Departamento de Estudios Económicos y Sociopolíticos de Banco Nacional de México, S.A,
integrante del Grupo Financiero Banamex ("Banamex- Citigroup") que lo suscribe, con base en información de acceso público no verificada de forma independiente
por parte de Banamex-Citigroup. En este reporte se incluyen opiniones y/o juicios personales del analista que lo suscribe, a la fecha del reporte, los que no
necesariamente representan, reflejan, expresan, divulgan o resumen el punto de vista, opinión o postura de Banamex-Citigroup respecto de los temas o asuntos
tratados o previstos en el presente. Asimismo, la información contenida en este reporte se considera veraz y precisa. No obstante lo anterior, Banamex-Citigroup no
asume responsabilidad alguna respecto de su veracidad, precisión, exactitud e integridad, ni de las opiniones y/o juicios personales del analista que se incluyen en
el presente reporte. Las opiniones y cotizaciones contenidas en el presente reporte corresponden a la fecha de este texto y están sujetas a cambios sin previo aviso
como resultado de la volatilidad del mercado o por cualquier otra razón. El presente reporte tiene carácter únicamente informativo y Banamex-Citigroup no asume
responsabilidad alguna por el contenido del mismo. Las opiniones y cotizaciones de mercado aquí contenidas y los criterios utilizados para la elaboración de este
reporte no deben interpretarse como una oferta de venta o compra de valores, asesoría o recomendación, promesa o contrato alguno para realizar operación
alguna. Banamex-Citigroup no asume compromiso u otorga garantía alguna, ya sea expresa o tácitamente, acerca de ninguna de las opiniones aquí contenidas, por
ello, Banamex- Citigroup no será responsable en ningún caso por daños y perjuicios de cualquier tipo o naturaleza, derivados de o relacionados con la información
contenida en este reporte o uso de este sitio de Internet. Corresponde de forma exclusiva al lector del presente reporte, tomar cualquier decisión de inversión sobre
la base de la propia evaluación (interna o a través de un asesor profesional independiente) de los beneficios económicos y riesgos inherentes (legales, financieros y
de cualquier otra naturaleza), así como los aspectos legales y fiscales asociados a la operación de que se trate, y determinar con base en dicha evaluación si es
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reporte. La información contenida en el presente reporte, es propiedad exclusiva de Banamex-Citigroup, por lo que no podrá ser objeto de reproducción o
distribución total o parcial alguna, sin la previa autorización por escrito de Banamex-Citigroup. El presente reporte se distribuye por Banamex-Citigroup
exclusivamente en los Estados Unidos Mexicanos. Por ello, está prohibida su distribución o transmisión por cualquier medio a aquellos países y jurisdicciones en
los que la difusión del presente reporte se encuentre restringida o prohibida por las leyes aplicables. El incumplimiento a esta prohibición podría ser objeto de
sanciones conforme a la legislación aplicable. Los analistas que contribuyen con la presente publicación pueden o no mantener inversiones, directa o por
interpósita persona, en los valores o instrumentos financieros derivados cuyo subyacente sean valores objeto de este reporte de análisis. El análisis contenido en
el presente reporte refleja exclusivamente el punto de vista de los analistas responsables de su elaboración, a su vez, estos últimos no perciben compensación
alguna de personas distintas a Banamex-Citigroup o personas morales que pertenezcan al mismo Grupo financiero. El presente reporte tiene como destinatarios a
clientes, autoridades gubernamentales, miembros de la academia, prensa y público en general. El presente reporte, en adición a otros elaborados por nuestra
Dirección, se encuentra disponible en http://www.banamex.com/economia_finanzas/es/estudios_economicos/resumen.htm.
Deutsche Bank
DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI(P) 148/04/2014
Mexico View Alexis Milo Chief Economist - Deutsche Bank Mexico
SWIFT Latin American Regional Conference Mexico City – May 28, 2014
Emerging Markets Research
Deutsche Bank Securities
Identifier Deutsche Bank
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Source: INEGI
Mexico’s GDP growth (1981-2014, %YoY)
2.10
2.45
-8
-6
-4
-2
0
2
4
6
8
10
19
81/0
1
19
81/0
4
19
82/0
3
19
83/0
2
19
84/0
1
19
84/0
4
19
85/0
3
19
86/0
2
19
87/0
1
19
87/0
4
19
88/0
3
19
89/0
2
19
90/0
1
19
90/0
4
19
91/0
3
19
92/0
2
19
93/0
1
19
93/0
4
19
94/0
3
19
95/0
2
19
96/0
1
19
96/0
4
19
97/0
3
19
98/0
2
19
99/0
1
19
99/0
4
20
00/0
3
20
01/0
2
20
02/0
1
20
02/0
4
20
03/0
3
20
04/0
2
20
05/0
1
20
05/0
4
20
06/0
3
20
07/0
2
20
08/0
1
20
08/0
4
20
09/0
3
20
10/0
2
20
11/0
1
20
11/0
4
20
12/0
3
20
13/0
2
20
14/0
1
Mexico has grown below potential in the last decades
12
2010 DB Blue template
Identifier Deutsche Bank
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Source: INEGI
Total Factor Productivity (%YoY)
-0.33
-6
-5
-4
-3
-2
-1
0
1
2
3
4
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12e
20
13e
5
10
15
20
25
30
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Public
Private
Total Investment (% GDP)
Productivity growth and investment partly explain low
growth
13
2010 DB Blue template
Identifier Deutsche Bank
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Source: DB Research
Energy
Financial
Fiscal
Telecomm
Education
Labor
2.0
3.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
No reform Reform
FDI
(% of GDP)
9.9
6.2
0
2
4
6
8
10
12
No reform Reform
Electricity price
(USD cents per Kw/h)
5.0 3.5
0
2
4
6
No reform Reform
Natural gas price
(USD per Th cubic feet)
Reforms are expected to increase
productivity and investment
14
2010 DB Blue template
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Fundamentals were already there:
• Trade
• Demographic structure
• Exchange rate regime
• External balance
• Inflation and nominal system
• Public finances
• Banking system
15
2010 DB Blue template
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Source: INEGI and DB Research
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
70%
19
93/0
419
94/0
319
95/0
219
96/0
119
96/0
419
97/0
319
98/0
219
99/0
119
99/0
420
00/0
320
01/0
220
02/0
120
02/0
420
03/0
320
04/0
220
05/0
120
05/0
420
06/0
320
07/0
220
08/0
120
08/0
420
09/0
320
10/0
220
11/0
120
11/0
420
12/0
320
13/0
2
Trade (Imports + Exports as % of GDP)
Mexico and US cycles (%YoY)
An open economy closely integrated with the US
-15%
-10%
-5%
0%
5%
10%
19
894
19
904
19
914
19
924
19
934
19
944
19
954
19
964
19
974
19
984
19
994
20
004
20
014
20
024
20
034
20
044
20
054
20
064
20
074
20
084
20
094
20
104
20
114
20
124
20
134
IP US
GDP US
GDP MX
16
2010 DB Blue template
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Source: INEGI, CONAPO and US Bureau of Labor
0
20
40
60
80
100
120
1950 1960 1970 1990 1995 2000 2005 2010 2020 2030 2040 2050
60+ yrs 15 to 59 yrs 0 to 14 yrs
MEXICO
US
10.5
11.0
11.5
12.0
12.5
13.0
13.5
14.0
14.5
20
05/0
1
20
05/0
3
20
06/0
1
20
06/0
3
20
07/0
1
20
07/0
3
20
08/0
1
20
08/0
3
20
09/0
1
20
09/0
3
20
10/0
1
20
10/0
3
20
11/0
1
20
11/0
3
20
12/0
1
20
12/0
3
20
13/0
1
20
13/0
3
20
14/0
1
Demographic bonus and skilled labor
Population (%)
Workers employed in Manufacturing (million)
17
2010 DB Blue template
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Source: INEGI, Banxico and Bank for International Settlements (BIS)
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
Jan-8
0
Jul-8
1
Jan-8
3
Jul-8
4
Jan-8
6
Jul-8
7
Jan-8
9
Jul-9
0
Jan-9
2
Jul-9
3
Jan-9
5
Jul-9
6
Jan-9
8
Jul-9
9
Jan-0
1
Jul-0
2
Jan-0
4
Jul-0
5
Jan-0
7
Jul-0
8
Jan-1
0
Jul-1
1
Jan-1
3
-0.4
0.1
0.6
1.1
1.6
2.1
2.6
1998 2001 2004 2007 2010 2013
Brazil China
Chile Colombia
Korea India
Mexico Poland
Russia Czech Rep.
An efficient exchange rate regime and a liquid FX market
FX and headline CPI inflation (correlation coefficient)
Global FX market volume share (%)
*Shares add 200% since two currencies are involved in
each transaction
18
2010 DB Blue template
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Source: INEGI, National Authorities and DB Research
0
1
2
3
4
5
6
7
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
BRA
CHL
CHN
COL
KOR
PHL
HUN
IND
INDO
ISR
MAL MEX
PER
POL
RCH
SA
THA
TUR
-5
0
5
10
15
20
25
30
-8 -6 -4 -2 0 2 4 6
Current account, % of GDP
Nominal FX depreciation
May13-Apr14, %
Current account balance (% of GDP)
CA balance and FX depreciation (% of GDP and %)
No external imbalances have piled up
19
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Source: INEGI and SHCP
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
Jan-8
0
Aug-8
1
Ma
r-8
3
Oct-
84
Ma
y-8
6
De
c-8
7
Jul-8
9
Feb
-91
Sep-9
2
Apr-
94
No
v-9
5
Jun-9
7
Jan-9
9
Aug-0
0
Ma
r-0
2
Oct-
03
Ma
y-0
5
De
c-0
6
Jul-0
8
Feb
-10
Sep-1
1
Apr-
13 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
19
891
19
901
19
911
19
921
19
931
19
941
19
951
19
961
19
971
19
981
19
991
20
001
20
011
20
021
20
031
20
041
20
051
20
061
20
071
20
081
20
091
20
101
20
111
20
121
20
131
Total
(% of GDP)
Inflation seems anchored and public finances are sound
Headline CPI inflation (%)
Public debt (%)
Peso-denominated
(% of total)
20
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Source: CNBV and Banxico
NPL
Bank loans
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
Jan-0
4
Jul-0
4
Jan-0
5
Jul-0
5
Jan-0
6
Jul-0
6
Jan-0
7
Jul-0
7
Jan-0
8
Jul-0
8
Jan-0
9
Jul-0
9
Jan-1
0
Jul-1
0
Jan-1
1
Jul-1
1
Jan-1
2
Jul-1
2
Jan-1
3
Jul-1
3
Jan-1
4
Bank loans: Total and non-performing (%YoY and % of total)
A banking system with good capital ratios
0
2
4
6
8
10
12
14
16
18
20
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Complementary
Basic
Capital ratio (ICAP, %)
21
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Concluding remarks:
• The structural reforms will likely have an
impact in the medium term
• The reforms highlighted sound
fundamentals already present in the
Mexican economy
• We expect growth to accelerate as the
global economy recovers
• A favorable position with respect to EMs
22
2010 DB Blue template
Identifier Deutsche Bank
May 28th , 2014, Alexis Milo, +52(55)52018534 , [email protected]
2010 DB Blue template
Additional information available upon request
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
Analyst Certification
The views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s). 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. Alexis Milo
23
Appendix 1 Important Disclosures
Identifier Deutsche Bank
May 28th , 2014, Alexis Milo, +52(55)52018534 , [email protected]
2010 DB Blue template
Regulatory Disclosures 1. Important Additional Conflict Disclosures Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the “Disc losures Lookup” and “Legal” tabs. Investors are strongly encouraged to review this information before investing. 2. Short-Term Trade Ideas Deutsche Bank equity research analysts sometimes have shorter-term trade ideas (known as SOLAR ideas) that are consistent or inconsistent with Deutsche Bank’s existing longer term ratings. These trade ideas can be found at the SOLAR link at http://gm.db.com. 3. Country-Specific Disclosures
Australia & New Zealand: This research, and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act and New Zealand Financial Advisors Act respectively.
Brazil: The views expressed above accurately reflect personal views of the authors about the subject company(ies) and its(their) securities, including in relation to Deutsche Bank. The compensation of the equity research analyst(s) is indirectly affected by revenues deriving from the business and financial transactions of Deutsche Bank. In cases where at least one Brazil based analyst (identified by a phone number starting with +55 country code) has taken part in the preparation of this research report, the Brazil based analyst whose name appears first assumes primary responsibility for its content from a Brazilian regulatory perspective and for its compliance with CVM Instruction # 483. EU countries: Disclosures relating to our obligations under MiFiD can be found at http://www.globalmarkets.db.com/riskdisclosures. Japan: Disclosures under the Financial Instruments and Exchange Law: Company name - Deutsche Securities Inc. Registration number - Registered as a financial instruments dealer by the Head of the Kanto Local Finance Bureau (Kinsho) No. 117. Member of associations: JSDA, Type II Financial Instruments Firms Association, The Financial Futures Association of Japan, Japan Securities Investment Advisers Association. This report is not meant to solicit the purchase of specific financial instruments or related services. We may charge commissions and fees for certain categories of investment advice, products and services. Recommended investment strategies, products and services carry the risk of losses to principal and other losses as a result of changes in market and/or economic trends, and/or fluctuations in market value. Before deciding on the purchase of financial products and/or services, customers should carefully read the relevant disclosures, prospectuses and other documentation. "Moody's", "Standard & Poor's", and "Fitch" mentioned in this report are not registered credit rating agencies in Japan unless “Japan” is specifically designated in the name of the entity. Qatar: Deutsche Bank AG in the Qatar Financial Centre (registered no. 00032) is regulated by the Qatar Financial Centre Regulatory Authority. Deutsche Bank AG - QFC Branch may only undertake the financial services activities that fall within the scope of its existing QFCRA license. Principal place of business in the QFC: Qatar Financial Centre, Tower, West Bay, Level 5, PO Box 14928, Doha, Qatar. This information has been distributed by Deutsche Bank AG. Related financial products or services are only available to Business Customers, as defined by the Qatar Financial Centre Regulatory Authority. Russia: This information, interpretation and opinions submitted herein are not in the context of, and do not constitute, any appraisal or evaluation activity requiring a license in the Russian Federation. Kingdom of Saudi Arabia: Deutsche Securities Saudi Arabia LLC Company, (registered no. 07073-37) is regulated by the Capital Market Authority. Deutsche Securities Saudi Arabia may only undertake the financial services activities that fall within the scope of its existing CMA license. Principal place of business in Saudi Arabia: King Fahad Road, Al Olaya District, P.O. Box 301809, Faisaliah Tower - 17th Floor, 11372 Riyadh, Saudi Arabia. United Arab Emirates: Deutsche Bank AG in the Dubai International Financial Centre (registered no. 00045) is regulated by the Dubai Financial Services Authority. Deutsche Bank AG - DIFC Branch may only undertake the financial services activities that fall within the scope of its existing DFSA license. Principal place of business in the DIFC: Dubai International Financial Centre, The Gate Village, Building 5, PO Box 504902, Dubai, U.A.E. This information has been distributed by Deutsche Bank AG. Related financial products or services are only available to Professional Clients, as defined by the Dubai Financial Services Authority.
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Identifier Deutsche Bank
May 28th , 2014, Alexis Milo, +52(55)52018534 , [email protected]
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Risks to Fixed Income Positions Macroeconomic fluctuations often account for most of the risks associated with exposures to instruments that promise to pay fixed or variable interest rates. For an investor that is long fixed rate instruments (thus receiving these cash flows), increases in interest rates naturally lift the discount factors applied to the expected cash flows and thus cause a loss. The longer the maturity of a certain cash flow and the higher the move in the discount factor, the higher will be the loss. Upside surprises in inflation, fiscal funding needs, and FX depreciation rates are among the most common adverse macroeconomic shocks to receivers. But counterparty exposure, issuer creditworthiness, client segmentation, regulation (including changes in assets holding limits for different types of investors), changes in tax policies, currency convertibility (which may constrain currency conversion, repatriation of profits and/or the liquidation of positions), and settlement issues related to local clearing houses are also important risk factors to be considered. The sensitivity of fixed income instruments to macroeconomic shocks may be mitigated by indexing the contracted cash flows to inflation, to FX depreciation, or to specified interest rates – these are common in emerging markets. It is important to note that the index fixings may -- by construction -- lag or mis-measure the actual move in the underlying variables they are intended to track. The choice of the proper fixing (or metric) is particularly important in swaps markets, where floating coupon rates (i.e., coupons indexed to a typically short-dated interest rate reference index) are exchanged for fixed coupons. It is also important to acknowledge that funding in a currency that differs from the currency in which the coupons to be received are denominated carries FX risk. Naturally, options on swaps (swaptions) also bear the risks typical to options in addition to the risks related to rates movements.
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Identifier Deutsche Bank
May 28th , 2014, Alexis Milo, +52(55)52018534 , [email protected]
Global Disclaimer The information and opinions in this report were prepared by Deutsche Bank AG or one of its affiliates (collectively "Deutsche Bank"). The information herein is believed to be reliable and has been obtained from public sources believed to be reliable. Deutsche Bank makes no representation as to the accuracy or completeness of such information.
Deutsche Bank may engage in securities transactions, on a proprietary basis or otherwise, in a manner inconsistent with the view taken in this research report. In addition, others within Deutsche Bank, including strategists and sales staff, may take a view that is inconsistent with that taken in this research report.
Opinions, estimates and projections in this report constitute the current judgement of the author as of the date of this report. They do not necessarily reflect the opinions of Deutsche Bank and are subject to change without notice. Deutsche Bank has no obligation to update, modify or amend this report or to otherwise notify a recipient thereof in the event that any opinion, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. Prices and availability of financial instruments are subject to change without notice. This report is provided for informational purposes only. It is not an offer or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. Target prices are inherently imprecise and a product of the analyst judgement.
The financial instruments discussed in this report may not be suitable for all investors and investors must make their own informed investment decisions. Stock transactions can lead to losses as a result of price fluctuations and other factors. If a financial instrument is denominated in a currency other than an investor's currency, a change in exchange rates may adversely affect the investment. Past performance is not necessarily indicative of future results. Deutsche Bank may with respect to securities covered by this report, sell to or buy from customers on a principal basis, and consider this report in deciding to trade on a proprietary basis.
Derivative transactions involve numerous risks including, among others, market, counterparty default and illiquidity risk. The appropriateness or otherwise of these products for use by investors is dependent on the investors' own circumstances including their tax position, their regulatory environment and the nature of their other assets and liabilities and as such investors should take expert legal and financial advice before entering into any transaction similar to or inspired by the contents of this publication. Trading in options involves risk and is not suitable for all investors. Prior to buying or selling an option investors must review the "Characteristics and Risks of Standardized Options," at http://www.theocc.com/components/docs/riskstoc.pdf If you are unable to access the website please contact Deutsche Bank AG at +1 (212) 250-7994, for a copy of this important document.
The risk of loss in futures trading and options, foreign or domestic, can be substantial. As a result of the high degree of leverage obtainable in futures and options trading, losses may be incurred that are greater than the amount of funds initially deposited.
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