8/6/2019 20110802-NOM-CoD-PMI

1/5

Macro Daily

Tuesday, 02 August 2011 Macro Strategy

Chart of the day: This is getting badIrena Sekulska +44 (0)20 7103 1453 irena.sekulska@nomura.com Owen Job +44 (0) 207 103 4849 owen.job@nomura.com

The July round of Manufacturing PMIs set a negative tone to the start of H2 as our global index flirted with contractionary t erritory. The recent slowdown in global activity recalls the summer of 2010. However, while the US was the centre of concerns back then, this time growth surprise indices suggest a more wide-spread disappointment. In light of the mean-reverting nature of growth surprises, we are likely set for a turn as economists and analysts revise their forecasts in line with recent weakness. That said, assets such as equities have failed to reflect the disappointment in the data and arguably look vulnerable

Source: Nomura, Bloomberg, DataStream Note: The aggregated PMI indices are constructed as a GDP-weighted average of the country PMIs within the respective group. Our global diffusion indices measure the proportion of countries that saw an increase in their PMI vs last month minus the proportion that saw a decease.

The second half of 2011 started with yet another round of disappointing manufacturing data challenging further the idea of atemporary soft patch in global growth. After hitting record highs only a few months ago, our Global PMI Index fell to a two-year low of50.5 in July. Growth in activity flirted with contractionary territory as new business declined for the first time since July 2009.Importantly, the relative optimism of developed market supply managers over the last two years has now collapsed to close the gapwith their more pessimistic EM counterparts (Figure 1). Despite the encouraging rebound in activity in Japan and the apparent easingof supply-chain disruptions, the UK manufacturing sector dipped into contraction, suggesting further weakness in output in Q3 (seeUK comment ). The biggest surprise however was the US ISM, which fell to a near standstill at 50.9, disappointing consensusexpectations by a significant 4.4 percentage points (see US Comment ).

The slowdown in global activity shows some uncanny similarities with the summer of 2010... with one big difference this time itseems worse. Indeed, although the US was the centre of concerns in mid-2010, this time the slowdown appears much more broad-based. Over the last five months, PMIs across the globe have weakened in unison as evidenced by our diffusion index, which dippedfurther into negative territory (Figure 1). Beyond the manufacturing sector, broader economic data also adds to the negative tone our G10 growth surprise indices (Bloomberg: NGISOG10 Index) , which compare the actual data releases to consensusexpectations, have now fallen to levels last seen in the aftermath of the Lehman bankruptcy. Clearly then, forecasters have beenrepeatedly disappointed in most G10 countries and not just the US.

In this gloomy pict ure, there is one bright spot by nature, growth surprises are mean-reverting as forecasters adapt theirexpectations to incorporate the recent bias in the data. Indeed, the G10 surprise index has been in negative territory for 51 days inlight of the average half-life of the series of 48 days, a near-term reversal is then likely. That said, given the prolonged weakness wehave seen recently, this entails economists, equity analysts and central banks revising their forecasts down.

Most importantly, is this negativity already in the price? Not entirely, in our view. Figure 2 compares the 3-month percentage changesin the S&P500 to our G10 surprise indices. Although equity performance has been following growth surprises closely over the pastthree years, it has failed to incorporate the slowdown in the data since mid-April. This is even more surprising in the context oflooming US fiscal sustainability concerns and ongoing European uncertainty. Arguably then, as growth surprises revert to close thecurrent gap, so would equities. This is in line with a broader theme we recently highlighted (see Macro Navigator ) while the

mailto:irena.sekulska@nomura.commailto:irena.sekulska@nomura.commailto:owen.job@nomura.commailto:owen.job@nomura.comhttp://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454717http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454717http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454850http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454850http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454850http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454365http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454365http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454365http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454365http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454850http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454717mailto:owen.job@nomura.commailto:irena.sekulska@nomura.com

8/6/2019 20110802-NOM-CoD-PMI

2/5

immediate debt ceiling risk in the US looks set to be avoided later today, the long-term fiscal challenge remains. It requires a politicaland economic adjustment, which in turn would lead to slower growth and thus should translate into weaker stock markets, in our view.

Macro Radar Screen*Top 1-day macro market movers (vol adjusted using 60-day vol window)

Source: Nomura, Bloomberg,*See note and table at the end of the document for explanations and conventions in asset performance

Yesterday s moves largely reflected two significant developments pulling the market in opposite directions. First, the forthc omingagreement on the debt ceiling in the US led to a positive Asian session in equities and a strong open in Europe. However, a series ofweak manufacturing PMI releases out of the Euro area, the UK (which is now in contractionary territory for the first time sinceSeptember 2009) and, most importantly, the US led to a sharp unwinding in equity positioning and another flight to quality. As aresult, the major equity indices across all time zones are featured among the day s underperformers. In the FX space, the CHF postedanother strong rally vs. the EUR and AUD/JPY sold-off substantially. The reversion in sentiment was also a key factor behind the turn

in periphery bond trading. Spain and Italy opened the day 15bp tighter, however they closed the day 15-20bp wider vs. Germanyacross the curve, as sentiment deteriorated during the day. Finally, core rates were yet again among the main beneficiaries of theISM- induced risk aversion. The day s largest volume adjusted moves in the G4 space were in USD rates, as the curve bull -flattenedfurther by 7bp.

Atop our radar s outperformers were AUD rates, following the RBA s decision to keep the cash target rate unchanged at 4.75%. Asour FX strategists note, the Board s statement itself was more hawkish than the last meeting, indicating that t he RBA has a mildtightening bias (see FX Insights - AUD: RBA review ). Still, the rates market rallied strongly (around 10bp across the curve) andAUD/USD retraced by approximately 1% as the market was slightly long going into the meeting. A set of mixed housing data releasesalso likely contributed to the rates move lower, with home building approvals coming out weaker than expected but house pricesholding up better than expected. Our economists think that these releases are consistent with the view that the housing market isforming a bottom, rather than weakening further (see Australia: Housing is down, but not out ).

On the data front, today s focus is on the US, with Personal Income, Personal spending, PCE deflator and auto sales releasesout. Construction PMI for the UK and Euro zone PPI are the main data releases outside of the US.

Research, trading notes and references Top Stories US - ISM manufacturing index falls to two-year low RBA Statement

Nomura Research Rates Strategy European Rates Daily Call US Rates Daily Call - Weak Data Thesis Has Been Validated; Too Soon to Call a Turn Matsuzawa Morning Report

FX Strategy JPY Weekly AUD: RBA review

Economics US construction increased in June Euro area: Manufacturing PMIs confirmed soft in July

http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454978http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454978http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454953http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454953http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454953http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454850http://www.rba.gov.au/media-releases/2011/mr-11-16.htmlhttp://www.rba.gov.au/media-releases/2011/mr-11-16.htmlhttp://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454991http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454991http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454892http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454892http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454945http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454945http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454696http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454696http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454978http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454858http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454726http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454726http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454858http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454978http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454696http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454945http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454892http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454991http://www.rba.gov.au/media-releases/2011/mr-11-16.htmlhttp://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454850http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454953http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454978

8/6/2019 20110802-NOM-CoD-PMI

3/5

UK - Manufacturing PMI: bleak period Japanese economy and corporations resilient to strong yen Japan-India EPA comes into effect Japan - Japanese economy and corporations resilient to strong yen Australia: Financial market concerns trump inflation worries Australia: Housing is down, but not out

Emerging Markets Research EEMEA Rate Expectations Monitor - What is priced into the market? EMFX Portfolio Update - Exit USD/ZAR shorts, sell EUR/HUF

India: Data suggest slowing growth and sticky inflation Hungary: Trip notes, July 2011 Turkey: An Extraordinary Situation

*Note: The Macro Radar represents asset performance, not an assets impact in terms of risk or economic performance. For most of the above categories, performance has been calculated in terms of prices of the underlying asset, i.e. a higher price entails a positive performance. For example, all outright interest rates are treated with respect to the value of an equivalent underlying bond, i.e. as yields fall the value of an equivalent underlying bond increases, therefore an outperformance of outright swap yields reflects yields declining. Equally, as credit spreads, such as iTraxx tighten, credit outperforms. Note that this treatment, when applied to outright inflation swaps, leads to rising inflation swap yields implying a positive performance, as would be observed in inflation-linked bonds. The exceptions to this rule are spreads, such as curve, fly,swap and cross-currency yield spreads, which are treated as asset s in themselves, i.e. a steeper curve will be seen as a positive performance, a more convex curve will be a positive performance for the fly . The one-day performance refers to the last price available compared to the average price between 7am and 8am London time the previous business day. Macro Radar Screen conventions broken down by asset class

Source: Nomura ANALYST CERTIFICATIONSWe, Irena Sekulska, Owen Job and Lefteris Farmakis, hereby certify (1) that the views expressed in this report accurately reflect our personal viewsabout any or all of the subject securities or issuers referred to in this report, (2) no part of our compensation was, is or will be directly or indirectlyrelated to the specific recommendations or views expressed in this report and (3) no part of our compensation is tied to any specific investmentbanking transactions performed by Nomura Securities International, Inc., Nomura International plc or any other Nomura Group c ompany.

IMPORTANT DISCLOSURES

Online availability of research and additional conf lict-of-interest disclosures Nomura Japanese Equity Research is available electronically for clients in the US on NOMURA.COM, REUTERS, BLOOMBERG and THOMSONONE ANALYTICS. For clients in Europe, Japan and elsewhere in Asia it is available on NOMURA.COM, REUTERS and BLOOMBERG.Important disclosures may be accessed through the left hand side of the Nomura Disclosure web page http://www.nomura.com/research or requestedfrom Nomura Securities International, Inc., on 1-877-865-5752. If you have any difficulties with the website, please email grpsupport-eu@nomura.com for technical assistance.The analysts responsible for preparing this report have received compensation based upon various factors including the firm's total revenues, a portionof which is generated by Investment Banking activities.

ADDITIONAL DISCLOSURES REQUIRED IN THE U.S. Principal Trading: Nomura Securities International, Inc and its affiliates will usually trade as principal in the fixed income securities (or in relatedderivatives) that are the subject of this research report. Analyst Interactions with other Nomura Securities International, Inc Personnel: The fixedincome research analysts of Nomura Securities International, Inc and its affiliates regularly interact with sales and trading desk personnel in connectionwith obtaining liquidity and pricing information for their respective coverage universe .

Valuation Methodology - Global Strategy

A Relative Value based recommendation is the principal approach used by Nomura s Fixed Income Strategists / Analysts when they make Buy(Long) Hold and Sell (Short) recommendations to clients. These recommendations use a valuation methodology that identifies relative value basedon:a) Opportunistic spread differences between the appropriate benchmark and the security or the financial instrument,b) Diverge nce between a country s underlying macro or micro -economic fundamentals and its currency s value andc) Technical factors such as supply and demand flows in the market that may temporarily distort valuations when compared to an equilibrium pricedsolely on fundamental factors.In addition, a Buy (Long) or Sell (Short) recommendation on an individual security or financial instrument is intended to convey Nomura s belief thatthe price/spread on the security in question is expected to outperform (underperform) similarly structured securities over a three to twelve-month time

http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454717http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454935http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454935http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454965http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454965http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454720http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454720http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454979http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454953http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454953http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454838http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454838http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454741http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454741http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454730http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454730http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454691http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454691http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?fid=12103http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?fid=12103http://www.nomura.com/researchhttp://www.nomura.com/researchhttp://www.nomura.com/researchmailto:grpsupport-eu@nomura.commailto:grpsupport-eu@nomura.commailto:grpsupport-eu@nomura.comhttp://www.nomura.com/researchhttp://go.nomuranow.com/research/globalresearchportal/getpub.aspx?fid=12103http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454691http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454730http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454741http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454838http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454953http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454979http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454720http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454965http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454935http://go.nomuranow.com/research/globalresearchportal/getpub.aspx?pid=454717

8/6/2019 20110802-NOM-CoD-PMI

4/5

period. This outperformance (underperformance) can be the result of several factors, including but not limited to: credit fundamentals, macro/microeconomic factors, unexpected trading activity or an unexpected upgrade (downgrade) by a major rating agency.

DISCLAIMERSThis publication contains material that has been prepared by the Nomura entity identified at the top or bottom of page 1 herein, if any, and/or, with thesole or joint contributions of one or more Nomura entities whose employees and their respective affiliations are specified on page 1 herein orelsewhere identified in the publication. Affiliates and subsidiaries of Nomura Holdings, Inc. (collectively, the 'Nomura Group'), include: NomuraSecurities Co., Ltd. ('NSC') Tokyo, Japan; Nomura International plc ('NIplc'), United Kingdom; Nomura Securities International, Inc. ('NSI'), New York,NY; Nomura International (Hong Kong) Ltd. (NIHK ), Hong Kong; Nomura Financial Investment (Korea) Co., Ltd. (NFIK ), Korea (Information onNomura analysts registered with the Korea Financial Investment Association ('KOFIA') can be found on the KOFIA Intranet at http://dis.kofia.or.kr );Nomura Singa pore Ltd. (NSL ), Singapore (Registration number 197201440E, regulated by the Monetary Authority of Singapore); Capital Nomu raSecurities Public Company Limited (CNS ), Thailand; Nomura Australia Ltd. (NAL ), Australia (ABN 48 003 032 513), regulated by the AustralianSecurities and Investment Commission ('ASIC') and holder of an Australian financial services licence number 246412; P.T. Nomu ra Indonesia (PTNI ),

Indonesia; Nomura Securities Malaysia Sdn. Bhd. (NSM ), Malaysia; Nomura International (Hong Kong) Ltd., Taipei Branch (NITB ), Taiwan; NomuraFinancial Advisory and Securities (India) Private Limited (NFASL ), Mumbai, India (Registered Address: Ceejay House, Level 1 1, Plot F, ShivsagarEstate, Dr. Annie Besant Road, Worli, Mumbai- 400 018, India; SEBI Registration No: BSE INB011299030, NSE INB231299034, INF231299034, INE231299034); Banque Nomura France (BNF ); NIplc, Dubai Branch (NIplc, Dubai ); NIplc, Madrid Branch (NIplc, Madrid ) and OO O Nomura, Moscow(OOO Nomura ). THIS MATERIAL IS: (I) FOR YOUR PRIVATE INFORMATION, AND WE ARE NOT SOLICITING ANY ACTION BASED UPON IT; (II) NOT TO BECONSTRUED AS AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY IN ANY JURISDICTION WHERE SUCHOFFER OR SOLICITATION WOULD BE ILLEGAL; AND (III) BASED UPON INFORMATION THAT WE CONSIDER RELIABLE.NOMURA GROUP DOES NOT WARRANT OR REPRESENT THAT THE PUBLICATION IS ACCURATE, COMPLETE, RELIABLE, FIT FOR ANYPARTICULAR PURPOSE OR MERCHANTABLE AND DOES NOT ACCEPT LIABILITY FOR ANY ACT (OR DECISION NOT TO ACT) RESULTINGFROM USE OF THIS PUBLICATION AND RELATED DATA. TO THE MAXIMUM EXTENT PERMISSIBLE ALL WARRANTIES AND OTHERASSURANCES BY NOMURA GROUP ARE HEREBY EXCLUDED AND NOMURA GROUP SHALL HAVE NO LIABILITY FOR THE USE, MISUSE,OR DISTRIBUTION OF THIS INFORMATION.Opinions expressed are current opinions as of the original publication date appearing on this material only and the information, including the opinionscontained herein, are subject to change without notice. Nomura is under no duty to update this publication. If and as applicable, NSI's investmentbanking relationships, investment banking and non-investment banking compensation and securities ownership (identified in this report as 'Disclosures

Required in the United States'), if any, are specified in disclaimers and related disclosures in this report. In addition, other members of the NomuraGroup may from time to time perform investment banking or other services (including acting as advisor, manager or lender) for, or solicit investmentbanking or other business from, companies mentioned herein. Furthermore, the Nomura Group, and/or its officers, directors and employees, includingpersons, without limitation, involved in the preparation or issuance of this material may, to the extent permitted by applicable law and/or regulation,have long or short positions in, and buy or sell, the securities (including ownership by NSI, referenced above), or derivatives (including options) thereof,of companies mentioned herein, or related securities or derivatives. For financial instruments admitted to trading on an EU regulated market, NomuraHoldings Inc's affiliate or its subsidiary companies may act as market maker or liquidity provider (in accordance with the interpretation of thesedefinitions under FSA rules in the UK) in the financial instruments of the issuer. Where the activity of liquidity provider is carried out in accordance withthe definition given to it by specific laws and regulations of other EU jurisdictions, this will be separately disclosed within this report. Furthermore, theNomura Group may buy and sell certain of the securities of companies mentioned herein, as agent for its clients.Investors should consider this report as only a single factor in making their investment decision and, as such, the report should not be viewed asidentifying or suggesting all risks, direct or indirect, that may be associated with any investment decision. Please see the further disclaimers in thedisclosure information on companies covered by Nomura analysts available at www.nomura.com/research under the 'Disclosure' tab. Nomura Groupproduces a number of different types of research product including, among others, fundamental analysis, quantitative analysis and short term tradingideas; recommendations contained in one type of research product may differ from recommendations contained in other types of research product,whether as a result of differing time horizons, methodologies or otherwise; it is possible that individual employees of Nomura may have different

perspectives to this publication.NSC and other non-US members of the Nomura Group (i.e. excluding NSI), their officers, directors and employees may, to the extent it relates to non-US issuers and is permitted by applicable law, have acted upon or used this material prior to, or immediately following, its publication.Foreign-currency-denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of, orincome derived from, the investment. In addition, investors in securities such as ADRs, the values of which are influenced by foreign currencies,effectively assume currency risk.The securities described herein may not have been registered under the US Securities Act of 1933, and, in such case, may not be offered or sold inthe United States or to US persons unless they have been registered under such Act, or except in compliance with an exemption from the registrationrequirements of such Act. Unless governing law permits otherwise, you must contact a Nomura entity in your home jurisdiction if you want to use ourservices in effecting a transaction in the securities mentioned in this material.This publication has been approved for distribution in the United Kingdom and European Union as investment research by NIplc, which is authorizedand regulated by the UK Financial Services Authority ('FSA') and is a member of the London Stock Exchange. It does not constitute a personalrecommendation, as defined by the FSA, or take into account the particular investment objectives, financial situations, or needs of individual investors.It is intended only for investors who are 'eligible counterparties' or 'professional clients' as defined by the FSA, and may not, therefore, be redistributedto retail clients as defined by the FSA. This publication may be distributed in Germany via Nomura Bank (Deutschland) GmbH, which is authorized andregulated in Germany by the Federal Financial Supervisory Authority ('BaFin'). This publication has been approved by NIHK, which is regulated by theHong Kong Securities and Futures Commission, for distribution in Hong Kong by NIHK. This publication has been approved for distribution in Australiaby NAL, which is authorized and regulated in Australia by the ASIC. This publication has also been approved for distribution in Malaysia by NSM. InSingapore, this publication has been distributed by NSL. NSL accepts legal responsibility for the content of this publication, where it concernssecurities, futures and foreign exchange, issued by their foreign affiliates in respect of recipients who are not accredited, expert or institutionalinvestors as defined by the Securities and Futures Act (Chapter 289). Recipients of this publication should contact NSL in respect of matters arisingfrom, or in connection with, this publication. Unless prohibited by the provisions of Regulation S of the U.S. Securities Act of 1933, this material isdistributed in the United States, by NSI, a US-registered broker-dealer, which accepts responsibility for its contents in accordance with the provisionsof Rule 15a-6, under the US Securities Exchange Act of 1934.This publication has not been approved for distribution in the Kingdom of Saudi Arabia or to clients other than 'professional clients' in the United ArabEmirates by Nomura Saudi Arabia, NIplc or any other member of the Nomura Group, as the case may be. Neither this publication nor any copy thereofmay be taken or transmitted or distributed, directly or indirectly, by any person other than those authorised to do so into the Kingdom of Saudi Arabiaor in the United Arab Emirates or to any person located in the Kingdom of Saudi Arabia or to clients other t han 'professional clients' in the United ArabEmirates. By accepting to receive this publication, you represent that you are not located in the Kingdom of Saudi Arabia or that you are a 'professionalclient' in the United Arab Emirates and agree to comply with these restrictions. Any failure to comply with these restrictions may constitute a violation ofthe laws of the Kingdom of Saudi Arabia or the United Arab Emirates.No part of this material may be (i) copied, photocopied, or duplicated in any form, by any means; or (ii) redistributed without the prior written consent ofthe Nomura Group member identified in the banner on page 1 of this report. Further information on any of the securities mentioned herein may beobtained upon request. If this publication has been distributed by electronic transmission, such as e-mail, then such transmission cannot beguaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. Thesender therefore does not accept liability for any errors or omissions in the contents of this publication, which may arise as a result of electronictransmission. If verification is required, please request a hard-copy version.Additional information available upon requestNIPlc and other Nomura Group entities manage conflicts identified through the following: their Chinese Wall, confidentiality and independence policies,maintenance of a Restricted List and a Watch List, personal account dealing rules, policies and procedures for managing conflicts of interest arisingfrom the allocation and pricing of securities and impartial investment research and disclosure to clients via client documentation.

http://dis.kofia.or.kr/http://dis.kofia.or.kr/http://dis.kofia.or.kr/http://www.nomura.com/researchhttp://www.nomura.com/researchhttp://www.nomura.com/researchhttp://www.nomura.com/researchhttp://dis.kofia.or.kr/

8/6/2019 20110802-NOM-CoD-PMI

5/5

Disclosure information is available at the Nomura Disclosure web page:http://www.nomura.com/research/pages/disclosures/disclosures.aspx Nomura International plc Tel: +44 20 7102 10001 Angel Lane, London EC4R 3ABCaring for the environment: to receive only the electronic versions of our research, please contact your sales representative.

http://www.nomura.com/research/pages/disclosures/disclosures.aspxhttp://www.nomura.com/research/pages/disclosures/disclosures.aspxhttp://www.nomura.com/research/pages/disclosures/disclosures.aspx