password “the bnp paribas markets call” · 11/23/2016 · jan-11 jan-12 jan-13 jan-14 jan-15...
TRANSCRIPT
ROBERT MCADIEGlobal Markets Head of Research and Strategy
www.GlobalMarkets.bnpparibas.comPlease refer to important information at the end of the report.BNP Paribas London branch
New York London Singapore Hong Kong Tokyo08:00 13:00 20:00 20:00 21:00
PASSWORD “The BNP Paribas Markets Call”
23NOV
2016
EVERY WEDNESDAYLIVE
All the dial-in details are available at the back of this document
EM economies and assets increasingly vulnerable to higher US rates
Source: Bloomberg, BNP Paribas
2
Current backdrop is unsupportive for EM risky assets:
EM risky assets will be particularly vulnerable to a higher riskpremium as the result of higher yields and steeper curves post USelections.
EM reserves managers are experiencing outflows after years ofaccumulation; one of the questions arising from the current strongUSD will be whether to defend the currencies (and become lesscompetitive towards non USD markets), or let devaluation takeplace at the cost of higher imported inflation.
However, intervention means selling reserves (mostly bonds)denominated in USD, thereby putting more upward pressure onUS rates.
The unwind of carry trades following higher US rates is notwelcome by EM that need to see investments and FDI.
Even if a weaker FX is initially growth supportive, higher rates andwider spreads will tighten financial conditions at a time whengrowth is already slow.
We see differentiation between the EM assets; high beta names(also the more liquid ones) have been sold most aggressively.
Overall position:
Inflation breakevens to rise a lot further.
Nominal and real yields to continue to rise, especially if EM centralbanks need to sell USD bonds to support their own currencies.
Risk assets to correct, especially the more risky ones that hadbeen the recipients of carry trades (like EM).
Note: No change in target this week.
22/11/2016 LDN close 1 Month prognosis
Current vs prognosis
EURUSD 1.062 1.060 -0.16 %
GBPUSD 1.24 1.250 0.84 %
USDJPY 111.18 111.00 -0.16 %
10yr Gilts 136 bp 145 9 bp
10yr Bunds 22.1 bp 40 17.9 bp
10 Tsys 2.30% 2.40% 0.1 %
10yr JGBs 3 bp 0 -3 bp
S&P 2,199 2,025 -7.9 %
SX5E 3,044 2,850 -6.38 %
SX7E 105.9 100.0 -5.56 %
FTSE 100 6,820 6,750 -1.02 %
Nikkei 225 18,163 17,000 -6.4 %
GOLD 1,213 1,175 -3.15 %
Oil (CL1) 48 48 0.78 %
Itraxx Main S26 80bp 83 3 bp
Itraxx Xover S26 341bp 355 14bp
CDX IG S27 76bp 81 5 bp
Economic strength is weakening and a stronger USD will dampen lending
3
Chart 3: This should lead to a widening of CDS…
Chart 1: EM economic strength is weakening… Chart 2: …and a stronger USD should cap future lending
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225
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350
Nov-15 Feb-16 May-16 Aug-16
EM HV 5y CDS average(in bps)
Chart 4: …as well as higher volatility from weaker local FX
65.00
67.50
70.00
72.50
75.00
77.50
80.0015.0
20.0
25.0
30.0
35.0
May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16
MSCI 3mth implied vol(lhs) USD strength vs EM FX basket
(rhs)
Sources: BNP Paribas, Bloomberg, BIS
The differentiation between EM is starting to show
4
Chart 3: By contrast, higher beta FX is much weaker vs USD…
Chart 1: Low beta FX have only suffered marginally vs USD names…
Chart 4: …and rates (or spreads) have widened by more
Chart 2: …and low beta rates have not risen much
1.9
2
2.1
2.2
2.3
1.00
1.25
1.50
1.75
Nov-15 Feb-16 May-16 Aug-16
US 1y Libor(lhs)
Low vol EM Libor
0.96
0.97
0.98
0.99
1.00
1.01
1.02
1.03
Nov-15 Feb-16 May-16 Aug-16
Value 1 USD vs a low vol EM FX basket
0.95
1.00
1.05
1.10
1.15
Nov-15 Feb-16 May-16 Aug-16
Value 1 USD vs a high vol EM FX basket
8.50
8.75
9.00
9.25
9.50
9.75
10.00
10.25
1.00
1.25
1.50
1.75
Nov-15 Feb-16 May-16 Aug-16
US 1y Libor(lhs)
High Vol EM Libor
Sources: BNP Paribas, Bloomberg
After the rise in bond yields, equity premium is too low vs the past 5-year average
5
Table 1: EM equity indices at very expensive levels
Chart 1: Equity Risk Premium vs EM bond index at a five year low
Equity Risk Premium has fallen on a combination of highergovernment bond yields and the lack of profit growth (Chart 1).We think the earning yield derived from equity indices is too low,and either EPS has to improve (which is unlikely in the currentenvironment), or stock prices have to fall.
Equity premium is even lower relative to corporate bond yields(Chart 2), even if markets have not revisited the lows of last year.
Chart 2: Very little pick-up on stocks vs corporate bonds
Sources: BNP Paribas, Bloomberg
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
6.00%
6.50%
Nov-11 Nov-12 Nov-13 Nov-14 Nov-15
MSCI EM cheap relative to 10y gvt bonds
MSCI EM expensive relative to 10y gvt bonds
Country Brazil Russia India China SOAF MEX
Earning yield (E/P) 6.39% 13.95% 5.64% 6.51% 6.17% 5.17%
10y Gvt 11.87% 8.71% 6.60% 2.89% 9.19% 7.33%
ERP ‐5.48% 5.24% ‐0.96% 3.63% ‐3.02% ‐2.16%
Real yield 4.00% 2.61% 2.40% 0.79% 3.09% 4.27%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
Nov-11 Nov-12 Nov-13 Nov-14 Nov-15
MSCI EM cheap relative to 10y corp bonds
MSCI EM expensive relative to 10y corp bonds
Rising USD to keep downward pressure on the renminbi
6
Chart 3: CNY currently appears overvalued…
Chart 1: USD strength = USDCNY higher to keep RMB NEER stable
Chart 4: …resulting in a relatively low current account surplus
Chart 2: Outlook for US rates suggests USDCNY to rise
Cyclical fair value = 7.25 USDCNY
BNP Paribas CLEER (CycLical Equilibrium Exchange Rate) provide a fair value for a currency basedon the relative economic fundamentals Source: Macrobond, BNP Paribas
A strong RMB is triggering ‘capital leakage’ and declining reserves
Chart 3: Onshore-offshore spread encouraging outflows
7
Chart 2: China currency reserves
Chart 4: Devaluation expectations rising, but still subdued
Chart 1: China’s capital outflows are huge
Source: US Federal Reserve, Bloomberg, BNP Paribas
Global implications: Less demand for Treasuries & less stability in Asia
Table 1: Asian markets reacting to expensive USD funding
8
USDCNY is likely to continue to rise as US rates rise. A strongerUSD vs EUR & JPY translates to a higher USDCNY to hold the RMBbasket stable.
Policymakers in China will face two options:1) Curtail the depreciation, meaning the CNY will remain
overvalued and reserves will continue to decline; or2) Conduct a one-off devaluation of the CNY
Chart 2: Private vs official purchases of US TreasuriesChart 1: G3 central banks and China have been biggest bond buyers
Tr USD
CNY KRW MYR TWD SGD THB
2y liborswap
Level 3.41 1.50 3.82 0.88 1.63 1.66bp change (mtd) 35 14 51 16 28 8
CDS Level 124 53 172 ‐ ‐ 97bp change (mtd) 24 12 48 ‐ ‐ 0
% change in ccy vs USD (mtd) 1.8 3.7 5.6 1.4 2.7 1.6% change in equity (mtd) ‐4.4 ‐2.7 ‐2.7 ‐3.2 1.9 ‐2.3St. dev widening of onshore/ offshore spread (mtd, z-score)
‐0.34 ‐0.03 2.37 0.49 0.53 0.07
Level of inflation (% y/y) 2.1 1.3 1.5 1.7 ‐0.2 0.3
Reserves to decline
ECB & BoJpurchases to slow
In 2015 & 2016, reserve manager selling was off-set by private investor purchases
North east Asia appears vulnerable to tightening US policy. Rateshave started to rise, equities have fallen, and onshore-offshorespreads have widened. This comes against a backdrop of subduedinflation pressure.
Higher real rates in the region are likely to weigh on growth and localassets.
BNP Paribas MarFA™ focusing on term premium, real rates and volatilities
9
BNP Paribas MarFA™Short-term Market Factors
identified asShort-term Market Factors
identified asLong-term Macro Factors
identified asLong-term Macro Factors
identified as
1. 10y term premium2. Implied equity vol (VIX)3. Implied FX vol (AUDUSD)
1. US 10y real yields2. US 5y5y inflation expectations3. Global economic activity (average of major PMIs)
US 10y term premium
AUDUSD and SPX vols
US 10y real yields and inflation expectations
Economic activity (Global PMIs) identified as a macro factor
45
50
55
60
65
Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16
CHINA
US
EZ
World
Source: Bloomberg, BNP ParibasBNPP MarFA™ monitors the performance and correlations of 75 assets to identify the main factors driving assets and fair values based on these factors. See Introducing MarFA™: BNP Paribas Market Factor Analysis for further details.
1000
1050
1100
1150
1200
1250
1300
1350
1400
1450
1500
01-Jan-2016 01-Apr-2016 01-Jul-2016 01-Oct-2016
MarFA Macro Gold
2600
2700
2800
2900
3000
3100
3200
3300
3400
3500
01-Jan-2016 01-Apr-2016 01-Jul-2016 01-Oct-2016
MarFA Macro S&P500, Total Returns
BNP Paribas MarFA™ Macro: Equities and gold vulnerable to rising US real yields
Chart 3: Italian bonds appear oversold
Source: Bloomberg, BNP Paribas
10
Chart 2: Deviations from MarFA fair value are short-livedChart 1: US equities appear overbought
Chart 4: Gold to decline further in response to increase real yields
125
127
129
131
133
135
137
139
01-Jan-2016 01-Apr-2016 01-Jul-2016 01-Oct-2016
MarFA Macro Italy 10y, generic price
Fair value based on Macro Factors
MarFA suggests a large risk-premium has been priced into Italian bonds - the 10y bond is trading 4% below its fair value price
Recent rally makes equities appear rich
1400
1900
2400
2900
3400
3900
01-Jan-2016 01-Apr-2016 01-Jul-2016 01-Oct-2016
MarFA Macro MSCI Brazil
Mis-alignments from MarFA fair value tend to be temporary, with corrections typically taking 1-2 months
Rising US 10y real yields suggests gold should decline further
-30
-20
-10
0
10
20
30
40
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
USD
bn /
%
%
US 5y5y real rate (lhs)IIF total debt flows (3-month average, USDbn) (rhs)EM USD credit total return y/y % (rhs)
EM credit: Buy protection on CDX EM The recent US Treasury sell-off has significantly affected EM credit spreads and returns. Given the significant tightening over the year
and the lack of cushion, the rates backup and steepening in the yield curve have hurt EM credit spreads in a similar way to the tapertantrum and April 2015 moves. We believe there is more to go, as the Treasury move is not over.
A liquid way of taking advantage of this view is using the CDX EM index, which covers the top liquid 15 sovereign CDS. It is a purespread product without an underlying rates component (unlike cash). We believe the index could sell off by another two points (CDX EMtrades on price), which is nearly 50bp from current levels. Trade recommendation: Buy protection on CDX EM at 92.35 (270 spread)with a target of 90 (c.325 spread) over the next few weeks. Stop: 93.5 (c.243 spread).
In addition, we believe the CDX EM vs CDX IG ratio, which rose slowly during the mild October sell-off and has now spiked to c.3.6, willmove towards 4 before stabilising. As seen from Chart 2, there were significantly higher ratios during the 2013 taper tantrum, and theEM sell-off in 2015. Trade recommendation: Buy 10mn notional protection of CDX EM and sell 36mn of CDX IG. This is a carryneutral trade and will profit as the ratio decompresses. Target spread ratio 4.
11
Source: Bloomberg, BNP Paribas
Chart 2: CDX EM vs Main and CDX IG
Source: Bloomberg, BNP Paribas
Chart 1: EM credit, US real rates, and fund flows
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2
3
4
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7
8
9
Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16
CDX EM/CDX IG CDX EM (rhs, bp)
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Netherlands: This report is being distributed in the Netherlands by BNP Paribas Fortis SA/NV,Netherlands Branch, a branch of BNP Paribas SA/NV whose head office is in Brussels, Belgium. BNPParibas Fortis SA/NV, Netherlands Branch, Herengracht 595, 1017 CE Amsterdam, is authorised andsupervised by the European Central Bank (ECB) and the National Bank of Belgium and is alsosupervised by the Belgian Financial Services and Markets Authority (FSMA) and it is subject to limitedregulation by the Netherlands Authority for the Financial Markets (AFM) and the Dutch Central Bank(De Nederlandsche Bank).
Portugal: BNP Paribas – Sucursal em Portugal Avenida 5 de Outubro, 206, 1050-065 Lisboa,Portugal. www.bnpparibas.com. Incorporated in France with Limited Liability. Registered Office: 16boulevard des Italiens, 75009 Paris, France. 662 042 449 RCS Paris. BNP Paribas – Sucursal emPortugal is lead supervised by the European Central Bank (ECB) and the Autorité de ContrôlePrudentiel et de Résolution (ACPR). BNP Paribas - Sucursal em Portugal is authorized by the ECB,the ACPR and Resolution and it is authorized and subject to limited regulation by Banco de Portugaland Comissão do Mercado de Valores Mobiliários. BNP Paribas - Sucursal em Portugal is registeredin C.R.C. of Lisbon under no. NIPC 980000416. VAT Number PT 980 000 416.”
Spain: This report is being distributed in Spain by BNP Paribas S.A., S.E., a branch of BNP ParibasS.A. whose head office is in Paris, France (Registered Office: 16 boulevard des Italiens, 75009 Paris,France). BNP Paribas S.A., S.E., C/Ribera de Loira 28, Madrid 28042 is authorised and supervised bythe European Central Bank (ECB) and the Autorité de Contrôle Prudentiel et de Résolution (ACPR)and subject to limited regulation by the Bank of Spain.
United States: This report may be distributed (i) by BNP Paribas Securities Corp. to U.S. personswho qualify as an institutional investor under FINRA Rule 2210(a) (4), or (ii) by a subsidiary or affiliateof BNP Paribas that is not registered as a US broker-dealer only to U.S. persons who are considered“major U.S. institutional investors” (as such term is defined in Rule 15a-6 under the SecuritiesExchange Act of 1934, as amended). U.S. persons who wish to effect transactions in securitiesdiscussed herein must contact a BNP Paribas Securities Corp. representative unless otherwiseauthorized by law to contact a non-US affiliate of BNP Paribas. BNP Paribas Securities Corp. is abroker dealer registered with the Securities and Exchange Commission (“SEC”) and the CommodityFutures Trading Commission (“CFTC”) and member of FINRA, SIPC, NFA, NYSE and other principalexchanges.
Brazil: This report was prepared by Banco BNP Paribas Brasil S.A. or by its subsidiaries, affiliatesand controlled companies, together referred to as "BNP Paribas", for information purposes only anddo not represent an offer or request for investment or divestment of assets. Banco BNP Paribas BrasilS.A. is a financial institution duly incorporated in Brazil and duly authorized by the Central Bank ofBrazil and by the Brazilian Securities Commission to manage investment funds. Notwithstanding thecaution to obtain and manage the information herein presented, BNP Paribas shall not be responsiblefor the accidental publication of incorrect information, nor for investment decisions taken based on theinformation contained herein, which can be modified without prior notice. Banco BNP Paribas BrasilS.A. shall not be responsible to update or revise any information contained herein. Banco BNPParibas Brasil S.A. shall not be responsible for any loss caused by the use of any informationcontained herein.
Israel: BNP Paribas does not hold a licence under the Investment Advice and Marketing Law of Israel,to offer investment advice of any type, including, but not limited to, investment advice relating to anyfinancial products.
DisclaimersBahrain: This document is being distributed in Bahrain by BNP Paribas Wholesale Bank Bahrain, abranch of BNP Paribas S.A. whose head office is in Paris, France (Registered Office: 16 boulevarddes Italiens, 75009 Paris, France). BNP Paribas Wholesale Bank Bahrain is licensed and regulated asa Registered Institution by the Central Bank of Bahrain – CBB. This document does not, nor is itintended to, constitute an offer to issue, sell or acquire, or solicit an offer to sell or acquire anysecurities or to enter into any transaction.
South Africa: BNP Paribas Securities South Africa (Pty) Ltd (Registration number 1996/009716/07) isa licensed member of the Johannesburg Stock Exchange and an authorised Financial ServicesProvider (FSP 29451) in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002.Any view or opinion expressed in this report does not constitute advice and the recipient should obtaintheir own advice prior to making any decision or taking any action whatsoever based hereon.Japan: This report is being distributed to Japanese based firms by BNP Paribas Securities (Japan)Limited or by a subsidiary or affiliate of BNP Paribas not registered as a financial instruments firm inJapan, to certain financial institutions defined by article 17-3, item 1 of the Financial Instruments andExchange Law Enforcement Order. BNP Paribas Securities (Japan) Limited is a financial instrumentsfirm registered according to the Financial Instruments and Exchange Law of Japan and a member ofthe Japan Securities Dealers Association and the Financial Futures Association of Japan. BNPParibas Securities (Japan) Limited accepts responsibility for the content of a report prepared byanother non-Japan affiliate only when distributed to Japanese based firms by BNP Paribas Securities(Japan) Limited. Some of the foreign securities stated on this report are not disclosed according to theFinancial Instruments and Exchange Law of Japan.
Hong Kong: This report is being distributed in Hong Kong by BNP Paribas Hong Kong Branch, abranch of BNP Paribas whose head office is in Paris, France. BNP Paribas Hong Kong Branch isregistered as a Licensed Bank under the Banking Ordinance and regulated by the Hong KongMonetary Authority. BNP Paribas Hong Kong Branch is also a Registered Institution regulated by theSecurities and Futures Commission for the conduct of Regulated Activity Types 1, 4 and 6 under theSecurities and Futures Ordinance.
Singapore: BNP Paribas Singapore Branch is regulated in Singapore by the Monetary Authority ofSingapore under the Banking Act, the Securities and Futures Act and the Financial Advisers Act. Thisreport may not be circulated or distributed, whether directly or indirectly, to any person in Singaporeother than (i) to an institutional investor pursuant to Section 274 of the Securities and Futures Act,Chapter 289 of Singapore ("SFA"), (ii) to an accredited investor or other relevant person, or anyperson under Section 275(1A) of the SFA, pursuant to and in accordance with the conditions specifiedin Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, anyother applicable provisions of the SFA.
South Korea: Branch: BNP Paribas Seoul Branch is regulated by the Financial Services Commissionand Financial Supervisory Service for the conduct of its financial investment business in the Republicof Korea. This report does not constitute an offer to sell to or the solicitation of an offer to buy fromany person any financial products where it is unlawful to make the offer or solicitation in South Korea.Securities: BNP Paribas Securities Korea is registered as a Licensed Financial Investment BusinessEntity under the FINANCIAL INVESTMENT SERVICES AND CAPITAL MARKETS ACT and regulatedby the Financial Supervisory Service and Financial Services Commission. This report does notconstitute an offer to sell to or the solicitation of an offer to buy from any person any financial productswhere it is unlawful to make the offer or solicitation in South Korea.
Taiwan: BNP Paribas Taipei Branch is registered as a licensed bank under the Banking Act andregulated by the Financial Supervisory Commission, R.O.C. This report is directed only at Taiwanesecounterparties who are licensed or who have the capacities to purchase or transact in such products.This report does not constitutean offer to sell to or the solicitation of an offer to buy from any person any financial products where it isunlawful to make the offer or solicitation in Taiwan.
Australia: This material, and any information in related marketing presentations (the Material), isbeing distributed in Australia by BNP Paribas ABN 23 000 000 117, a branch of BNP Paribas 662 042449 R.C.S., a licensed bank whose head office is in Paris, France. BNP Paribas is licensed inAustralia as a Foreign Approved Deposit-taking Institution by the Australian Prudential RegulationAuthority (APRA) and delivers financial services to Wholesale clients under its Australian FinancialServices Licence (AFSL) No. 238043 which is regulated by the Australian Securities & InvestmentsCommission (ASIC).The Material is directed to Wholesale clients only and is not intended for Retailclients (as both terms are defined by the Corporations Act 2001, sections 761G and 761GA). TheMaterial is subject to change without notice and BNP Paribas is under no obligation to update theinformation or correct any inaccuracy that may appear at a later date.
Some or all of the information contained in this document may already have been published onhttps://globalmarkets.bnpparibas.com
© BNP Paribas (2016). All rights reserved.
IMPORTANT DISCLOSURES by producers and disseminators of investment recommendationsfor the purposes of the Market Abuse Regulation:
Although the disclosures provided herein have been prepared on the basis of information we believeto be accurate, we do not guarantee the accuracy, completeness or reasonableness of any suchdisclosures. The disclosures provided herein have been prepared in good faith and are based oninternal calculations, which may include, without limitation, rounding and approximations.
BNP Paribas and/or its affiliates may be [are] a market maker or liquidity provider in financialinstruments of the issuer mentioned in the recommendation.
BNP Paribas and/or its affiliates may provide such services as described in Sections A and B of AnnexI of MiFID II (Directive 2014/65/EU), to the Issuer to which this investment recommendation relates.However, BNP Paribas is unable to disclose specific relationships/agreements due to clientconfidentiality obligations.
Section A and B services include A. Investment services and activities: (1) Reception andtransmission of orders in relation to one or more financial instruments; (2) Execution of orders onbehalf of clients; (3) Dealing on own account; (4) Portfolio management; (5) Investment advice; (6)Underwriting of financial instruments and/or placing of financial instruments on a firm commitmentbasis; (7) Placing of financial instruments without a firm commitment basis; (8) Operation of an MTF;and (9) Operation of an OTF. B. Ancillary services: (1) Safekeeping and administration of financialinstruments for the account of clients, including custodianship and related services such ascash/collateral management and excluding maintaining securities accounts at the top tier level; (2)Granting credits or loans to an investor to allow him to carry out a transaction in one or more financialinstruments, where the firm granting the credit or loan is involved in the transaction; (3) Advice to
Disclaimersundertakings on capital structure, industrial strategy and related matters and advice and servicesrelating to mergers and the purchase of undertakings; (4) Foreign exchange services where these areconnected to the provision of investment services; (5) Investment research and financial analysis orother forms of general recommendation relating to transactions in financial instruments; (6) Servicesrelated to underwriting; and (7) Investment services and activities as well as ancillary services of thetype included under Section A or B of Annex 1 related to the underlying of the derivatives includedunder points (5), (6), (7) and (10) of Section C (detailing the MiFID II Financial Instruments) wherethese are connected to the provision of investment or ancillary services.
BNP Paribas and/or its affiliates do not, as a matter of policy, permit pre-arrangements with issuers toproduce recommendations. BNP Paribas and/or its affiliates as a matter of policy do not permit issuersto review or see unpublished recommendations.
BNP Paribas and/or its affiliates acknowledge the importance of conflicts of interest prevention andhave established robust policies and procedures and maintain effective organisational structure toprevent and avoid conflicts of interest that could impair the objectivity of this recommendationincluding, but not limited to, information barriers, personal account dealing restrictions andmanagement of inside information.
BNP Paribas and/or its affiliates understand the importance of protecting confidential information andmaintain a “need to know” approach when dealing with any confidential information. Informationbarriers are a key arrangement we have in place in this regard. Such arrangements, along withembedded policies and procedures, provide that information held in the course of carrying on one partof its business to be withheld from and not to be used in the course of carrying on another part of itsbusiness. It is a way of managing conflicts of interest whereby the business of the bank is separatedby physical and non-physical information barriers. The Control Room manages this information flowbetween different areas of the bank where confidential information including inside information andproprietary information is safeguarded. There is also a conflict clearance process before gettinginvolved in a deal or transaction.
In addition, there is a mitigation measure to manage conflicts of interest for each transaction withcontrols put in place to restrict the information flow, involvement of personnel and handling of clientrelations between each transaction in such a way that the different interests are appropriatelyprotected. Gifts and Entertainment policy is to monitor physical gifts, benefits and invitation to eventsthat is in line with the firm policy and Anti-Bribery regulations. BNP Paribas maintains several policieswith respect to conflicts of interest including our Personal Account Dealing and Outside BusinessInterests policies which sit alongside our general Conflicts of Interest Policy, along with severalpolicies that the firm has in place to prevent and avoid conflicts of interest.
The remuneration of the individual producer of the investment recommendation may be linked totrading or any other fees in relation to their global business line received by BNP Paribas and/oraffiliates.
IMPORTANT DISCLOSURES by disseminators of investment recommendations for thepurposes of the Market Abuse Regulation:
The BNP Paribas disseminator of the investment recommendation is identified above includinginformation regarding the relevant competent authorities which regulate the disseminator. The nameof the individual producer within BNP Paribas or an affiliate and the legal entity the individual produceris associated with are identified above in this document,
The date and time of the first dissemination of this investment recommendation by BNP Paribas or anaffiliate is addressed above.
Where this investment recommendation is communicated by Bloomberg chat or by email by anindividual within BNP Paribas or an affiliate, the date and time of the dissemination by the relevantindividual is contained in the communication by that individual disseminator.
The disseminator and producer of the investment recommendations are part of the same group, i.e.the BNP Paribas group. The relevant Market Abuse Regulation disclosures required to be made byproducers and disseminators of investment recommendations are provided by the producer for and onbehalf of the BNP Paribas Group legal entities disseminating those recommendations and the samedisclosures also apply to the disseminator.
If an investment recommendation is disseminated by an individual within BNP Paribas or an affiliatevia Bloomberg chat or email, the disseminator’s job title is available in their Bloomberg profile or bio. Ifan investment recommendation is disseminated by an individual within BNP Paribas or an affiliate viaemail, the individual disseminator’s job title is available in their email signature.
For further details on the basis of recommendation specific disclosures available at this link (e.g.valuations or methodologies, and the underlying assumptions, used to evaluatefinancial instruments or issuers, interests or conflicts that could impair objectivityrecommendations or to 12 month history of recommendations history) are available athttps://globalmarkets.bnpparibas.com/gmportal/private/globalTradeIdea. If you are unable toaccess the website please contact your BNP Paribas representative for a copy of thisdocument.