Global Market Overview

1. Global Market Overview • “Old economy” stocks continued to be sold down in many countries. Technology, media and telecommunications stocks led several national stockmarkets, including Hong Kong, Canada, Mexico, France, Spain, Germany and Sweden to new highs. • Several Internet-related IPOs performed spectacularly well. • Bond markets tracked sideways. • In spite of intervention by the Bank of Japan, the Yen rose by around 1% against the US$. • The price of oil (i.e. the April futures contract at NYMEX) rose to post-Gulf War highs of US$34.32 before softening towards the end of the week. • USA/Canada • The fall in the stock prices of Procter & Gamble and other major consumer product companies caused the Dow Jones Industrial Average and the S&P 500 composite to fall by 4.2% and 1.0% respectively. The NASDAQ composite rose through 5,000 for the first time and was up 2.7% for the week as a whole. The Russell 2000 Index advanced by 1.0%. • Nortel Networks and BCE led Canada’s TSE-300 index to rise 0.3% to record highs. • The Labour Department said that business productivity surged at a 6.4% in 4Q99: this was well above the 5% originally estimated. Unit labour costs dropped by 2.5%, the largest fall in seven years. • During February, non-farm payrolls grew by 43,000, or by much less than had been expected. The unemployment rate rose for the first time since June to 4.1%. • In a speech at Boston College, Federal Reserve Chairman Alan Greenspan said that the USA’s prosperity would be endangered unless supply and demand were bought into balance. This was widely taken as indicating that US$ interest rates will rise further until there is clear evidence that the economy is slowing. • The Federal Reserve’s Beige Book found that rising prices of energy and other commodities were squeezing the profit margins of many companies. • Procter & Gamble’s stock price slumped by almost a third when the company warned that earnings would fall by 10-11% in the present quarter. The company blamed higher input costs, price competition and logistical problems. • Bank One, the fourth-largest banking group, issued a profit warning because of sub-par performance of its First USA credit card unit. Bank One’s stock dropped by 8%. • Occidental Petroleum boosted its annual production by a third, and increased its reserves by 850mn barrels, through the purchase of Altura, the onshore joint venture of Shell and BP Amoco, for US$3.6bn. • The stock price of Canadian bus operator Laidlaw dropped by 25% following the announcement that Safety Kleen, a US waste management company in which it holds a 44% stake, has suspended three of its top executives. Safety Kleen is investigating its accounting policies and possible irregularities. • UK • Oil, pharmaceuticals and media stocks lifted the FTSE 100 index by 1.3% during the week. • The largest ever realignment of the FTSE 100 index was announced. Nine stocks are to be moved from the FTSE 250 to the FTSE 100: C&W Communications, Freeserve, Thus, Psion, Baltimore Technologies, Nycomed Amersham, Celltech, Capita and EMAP.

2. UK cont. • The stocks to be demoted to the FTSE 250 are Wolseley, Imperial Tobacco, Thames Water, PowerGen, Scottish & Newcastle, Whitbread, Hanson, Associated British Foods and Allied Domecq. Allied Domecq’s profits last year exceeded those of all the new entrants. • As expected, the Bank of England’s Monetary Policy Committee left its key repurchase rate unchanged at 6%. • British Aerospace’s stock price fell by 3% even though the company reported a stronger-than-expected 12% rise in pre-tax earnings for 1999 and indicated that it is considering further acquisitions in the USA and/or a share buy-back. • British Telecom’s stock price rose 7% following its announcement that it is looking to spend US$253mn in a joint venture to develop a global network of mobile phones with Internet access. • Continental Europe • Several continental European stockmarkets advanced to record highs early in the week. Germany’s DAX (up 0.2%) and France’s CAC-40 (down 0.1%) indices were held back by falls in the share prices of Deutsche Telekom and Credit Lyonnais respectively. • Unemployment in Germany fell from 10.1% in January to 10.0% in February. The number of unemployed people dropped 34,000 to 3.92mn. • Eurostat said that 4Q99 economic growth was 0.9% in both Euroland and the EU-15. • Greece formally applied to join EMU from 1 January 2001. The Bank of Greece lowered all of its key interest rates by 50-75 basis points. The 14-day deposit rate now stands at 9.25%. • Nordic banking giant MeritaNordbanken confirmed that it plans to buy Unidanmark, the second-largest bank in Denmark (with around 25% of the deposits in that country), for around €6bn. • Deutsche Bank and Dresdner Bank announced a €30bn merger to form the world’s largest banking group with assets of €190bn. They will ultimately sell their retail banking operations. This deal should eliminate most of the cross shareholdings between the banks and Allianz, Germany’s largest insurer. • Ahold, the pre-eminent food retailer of the Netherlands, acquired US Foodservice, one of the largest distributors of fresh, frozen and packaged foods in the USA, for US$2.7bn and the assumption of US$925mn in debt. • Spanish banking giant BBVA announced that it would merge its online bank Uno-e with Irish-based internet bank First-e. Some analysts estimate the value of the combined group at €2.4bn. • The absence of write-offs relating to the financial crises in East Asia and Russia accounted for much of the strong rises in earnings for 1999 posted by Credit Lyonnais, BNP and UBS. • German chemical company BASF said that it would spend €2bn to buy back 7% of its shares. This is one of the largest-ever stock buy-backs to be announced in Germany. • Dutch cable operator United Pan-Europe Communications announced plans to buy SBS Broadcasting of Luxembourg for €2.9bn in stock. SBC operates radio and TV stations in 10 European countries and distributes content in many of the areas in which UPC operates. • The stock price of Dutch publisher Wolters Kluwer plunged by 26% after the company warned that its earnings would be flat in 2000, having risen by 16% in 1999. Wolters Kluwer’s chairman resigned over differences with the board in relation to corporate strategy.

3. Japan • The sharp falls in Softbank, Hikari Tsushin and Sony overshadowed the Japanese stockmarket. The Nikkei 225, Topix 100 and TSE 2nd Section indices fell by 0.9%, 2.9% and 3.1% respectively over the week. • The Economic Planning Agency reported that core machinery orders rose by 0.8% in January. Most commentators had been looking for an 8% decline. Surveys by the Ministry of Finance found that the pace of decline of business investment slowed, and general business sentiment improved, in 4Q99. • The Bank of Japan intervened in currency markets to buy the Yen and to sell the US$ after the Yen rose to a record 100.95 against the Euro. • US investment group Ripplewood Holdings announced the establishment of a ¥400bn (US$3.7bn) investment fund in conjunction with Marriott International that will buy hotels in Japan and operate them under Marriott’s management. • Softbank said that it had formed two investment funds, of US$550mn and US$450mn respectively, to finance Internet start-up ventures in the UK and continental Europe. • The stock price of Crayfish, a provider of E-Mail and other Internet services, rose 400% on the first day of trading on Nasdaq. The stock price dropped 36% two days later when the company listed on the TSE Mothers market. Asia Pacific ex Japan • Telecommunications stocks led Hong Kong’s Hang Seng Index to record highs before profit taking capped its gains at 3.2%. Taiwan’s stockmarket, which was overshadowed by the forthcoming election, retreated by 1.6%. In South Korea, the KOSPI fell by 6.5% in volatile trading. Singapore’s Straits Times index slipped by 1.0%. • Commonwealth Bank announced an A$9.4bn (US$5.8bn) friendly take-over of Colonial. This deal, which is Australia’s largest-ever take-over, will produce the country’s biggest financial services company with total assets of A$220bn (US$132bn) and a capitalisation of around A$30bn (US$18bn) • Hong Kong’s budget for 2000 features a 2.5% rise in spending and a deficit of HK$6.2bn (US$795mn). The government will look to privatise the Mass Transit Railroad. No new taxes have been introduced. • Hongkong.com, a web portal that is owned by Chinadotcom, closed 259% above its issue price in its first day of trading on the Growth Enterprise Market. • Soaring imports, especially of capital goods, was the main factor in Taiwan’s US$21mn trade deficit, its first for 14 months, in February. In February 1999, Taiwan ran a trade surplus of US$1.05bn. • A consortium led by US oil services company Nabors bought bankrupt South Korean steel maker Hanbo Iron & Steel for US$480mn. • Both South Korea and Malaysia reported lower trade surpluses in January. In South Korea, the key issue was rising imports; in Malaysia, a slowdown in the rate of growth of exports. • Advanced Info Service, the largest provider of cellular phone services in Thailand, said that it would raise Bt.8bn (US$211mn) in a debenture issue. AIS is the eighth major Thai company to source funds from capital markets by way of a bond issue this year. Bank lending remains sluggish. • All 22 staffers in the compliance group of the Philippine Stock Exchange resigned. This move was to protest the Exchange’s exoneration of a number of stockbrokers implicated in the scandal surrounding the trading of securities of gaming company BW Resources. The Philippine SEC suspended all trading on the Exchange for one day.

4. Other Emerging Markets • Mexico’s stockmarket rose to record highs (and by 0.2% over the week) following Moody’s announcement that it would lift its rating of the Mexican government to investment grade. Brazil’s Bovespa index fell by 1.9% in a week shortened by the carnival holiday. Concerns over further rises in US$ interest rates caused Argentina’s Merval index to fall by 5.5% • US energy/infrastructure giant Enron agreed to bail out bankrupt building company Bufete. Bufete’s creditors own 90% of its stock having forgiven half of its US$400mn in debts. • Spanish bank BBVA said that it would buy 30% of Bancomer, Mexico’s second-largest bank and merge it with its existing operations in the country. The result will be Mexico’s largest financial services group with US$37bn in assets. BBVA and its Mexican partners will invest US$1.2bn in the combined group. • Argentina posted a fiscal deficit of US$798mn in February. This compares with a deficit of US$337mn in February 1999. Interest expenses increased 41% to US$791mn. • Thanks to higher energy and transport prices, inflation in Chile accelerated to 3.3% in February. The central bank is targeting inflation of 3.5%. • The net profit of South African diamond giant De Beers rose from US$617mn in 1998 to US$952mn in 1999. Sales of rough diamonds through the Central Selling Organisation rose by 57%. Retail markets for diamonds achieved the strongest growth for a decade. • The Turkish government raised US$1.26bn from the sale of a 51% stake in petrol distributor Petrol Ofisi. • Several positive economic indicators boosted Hungary’s stockmarket and the Forint. Industrial output was up 18.5% year-on-year in January. The current account deficit slipped from €151mn in January 1998 to €82mn in January 1999. • Growing confidence that the (probable) re-election of President Vladimir Putin would accelerate the process of economic reform boosted the Russian stockmarket by another 18.4%. LONDON Baring Asset Management Limited (regulated by IMRO) 155 Bishopsgate, London EC2M 3XY, England Telephone +44(0)207-628-6000, Facsimile +44(0)207-214-1659 Telex 885888 BAMUK G E-mail: uk.sales@baring-asset.com PARIS Baring Asset Management France 35 avenue Franklin Roosevelt, 75008 Paris, France Telephone +331-5393-6000 Facsimile +331-4289-4161 E-mail: france.sales@baring-asset.com FRANKFURT Baring Asset Management AG Friedrichstraße 2-6, 60323 Frankfurt, Germany Telephone +49 69 7169 1888 Facsimile +49 69 7169 1899 E-mail: germany.sales@baring-asset.com HONG KONG Baring International Fund Managers Limited & Baring Asset Management (Asia) Limited 19th Floor, Edinburgh Tower, 15 Queen's Road Central, Hong Kong Telephone +852-2841-1411 Telex 60460 BIIHK HX Facsimile +852-2526-7129 E-mail:asia.sales@baring-asset.com BAHRAIN Baring Asset Management Limited Bahrain Representative Office, Suite 801, Bahrain Commercial Complex, P.O. Box 10937, Manama, Bahrain Telephone +973-533-396 Facsimile +973-533-397 E-mail:middleeast.sales@baring-asset.com BOSTON Baring Asset Management Inc High Street Tower, 125 High Street Suite 2770, Boston Massachusetts 02110-2723, USA Telephone +617-951-0052 Facsimile +617-951-1376 Registered with the SEC All indices source: Datastream 28/02/00-03/03/00 in base currency. Other data from publicly available sources including print media and government releases. This document , provided as a service to professional investors/advisers is issued by Baring Asset Management Limited which is regulated by IMRO/FSA in the United Kingdom and by investment advisor affiliates of Baring Asset Management Limited in other jurisdictions. In the United Kingdom it is distributed only to persons meeting IMRO's Ordinary Business Investor definition and must not be passed on to Private Customers in any territory. It is published for private reference purposes only and is neither an offer nor a solicitation to buy or sell any investment referred to herein. The issuer and any other company in the BAM Group may have acted upon or used research recommendations before they have been published. The contents of this document are based upon sources of information believed to be reliable but no guarantee, warranty or representation, expressed or implied, is given as to their accuracy or completeness. This document may include forward-looking statements which are based on our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. Baring Asset Management Limited and its affiliates/staff may own or have positions in any investment mentioned herein or any investment related thereto and from time to time add to or dispose of any such investment.