BT Monthly Markets Chart Pack – August 2009

1. BT Monthly Markets Chart Pack – August 2009 An overview of movements in global financial markets

2. Global share markets advanced for a second month in a row in August... • Global share markets advanced for a second month in a row after stronger economic data provided further evidence that the global recession may be nearing an end. A surprise decline in the US unemployment rate provided the clearest signal yet that the US economy is beginning to improve. This proved to be a catalyst for market rallies in the UK (+6.5%), Europe (+5.2%) and Japan (+1.3%). The US market closed the month 3.4% higher. • The Australian share market continued to move higher in August, with the S&P/ASX 200 Accumulation Index up another 6.6%. Rising consumer confidence and better-than-expected jobs numbers prompted speculation that June quarter GDP figures could again be positive.

3. …and continue to perform well over the long-term, despite some major market events Impact of major market events on global shares since 1987 Jul 01 Tech Wreck Jun 07 US Sub-prime Crisis Sep 01 Attack on Twin Towers Jul 98 Russian Bond Crisis Aug 97 Asian Currency Crisis Nov 89 Fall of the Berlin Wall Feb 94 Bond Market Crash Mar 03 Troops enter Iraq Jan 91 Gulf War Global shares measured by the MSCI World ex-Australia (net dividends) Index in A$. Source: BT Financial Group, MSCI

4. The Australian share market closed 6.6% higher in August S&P/ASX 200 Accumulation Index – year to 31 August 2009 Source: BT Financial Group, Premium Data

5. Key Australian economic news – August • As expected, the Reserve Bank of Australia left interest rates on hold at 3.00% following its early September meeting as the economy continues to show signs of improvement. The Bank also hinted that interest rates will soon begin to rise, with some analyst’s predicting a 0.25% hike as early as November this year. • Australia’s international trade balance recorded a A$441 million deficit in June. The result was less than the market had expected and follows a downward revision to May’s deficit from A$375 million to A$556 million. • The Australian economy did the impossible in July and gained 32,200 jobs. This enabled the unemployment rate to remain steady at 5.8%. • The Westpac/Melbourne Institute’s consumer sentiment survey jumped a further 3.7% in August – it’s third consecutive monthly gain. • Likewise, the National Australia Bank’s business conditions survey showed a significant improvement in July, reaching its highest level since May 2008. Source: BT Financial Group

6. The Australian dollar gains a further 1.1% against the US dollar in August • The Australian dollar (A$) extended last month’s gains by adding a further 1.1% against the US dollar (US$) in August. The local currency closed at US$0.8446 cents on the back of the improving outlook for the Australian economy and increasing speculation that domestic interest rates will soon begin to rise. • The A$ is now up 41% against the US$ since hitting a low of US$0.60 cents in October last year and looks set to test the US$0.90 cent mark within the next couple of months. • At the end of August: A$1 bought US$0.8446 +1.1% €0.5894 +0.5% ¥78.56 -0.6% Source: BT Financial Group

7. The Australian dollar versus the US dollar… Currency markets – A$ per US dollar Source: BT Financial Group. Figures at 31 August 2009

8. the Euro… Currency markets – A$ per Euro Source: BT Financial Group. Figures at 31 August 2009

9. and the Yen Currency markets – A$ per Yen Source: BT Financial Group. Figures at 31 August 2009

10. Official world interest rate movements – August • August was yet another quiet month in terms of interest rate movements, with all the major central banks leaving their respective benchmark rates on hold. Source: BT Financial Group

11. Global share market returns 31 August 2009 Source: BT Financial Group

12. Short-term asset class performance 1-year rolling returns to 31 August 2009 (%) Best performing asset class for the year Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Barclays Capital Global Aggregate Bond Index hedged to $A , UBS Bank Bill 0+ years

13. Short-term asset class performance (cont’d) 1-year returns to 31 August 2009 (%) 31 August 2008 31 August 2009 Australian bonds Listed property Australian shares Global bonds Global shares Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Barclays Capital Global Aggregate Bond Index hedged to $A

14. Long-term asset class performance 31 August 2009 Australian shares Listed property Australian bonds Global shares Cash Note: Accumulated returns based on $1,000 invested in December 1984 Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, UBS Bank Bill 0+ years

15. Oil prices closed the month flat as a rise in US stockpiles offset ongoing weakness in the US dollar Oil prices – US$ per barrel Source: BT Financial Group. West Texas Intermediate oil price at 31 August 2009

16. Summary • At BT, we believe the Australian economy is currently in a moderate recession and we expect this will continue into next year. • Whilst economic data is expected to soften in the near-term, we don’t see this as a reflection of financial markets. It’s our view that we’ve seen the worst of the current downturn and that global markets will continue to recover over the coming months. • We believe that share markets, including our own, hit the bottom in early March of this year, though we still expect them to remain volatile in the near-term. • Shares are currently trading at historically low levels and we believe they represent good value for investors with a long-term investment horizon. • The trend in the A$ is likely to remain up in the near-term, particularly as commodity prices strengthen and the US$ continues to weaken. It’s likely that the local currency will hit US$0.90 cents in the near-term.

17. This presentation has been prepared by BT Financial Group Limited (ABN 63 002 916 458) ‘BT’ and is for general information only.  Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described.  The presentation has been prepared without taking into account any personal objectives, financial situation or needs.  It does not contain and is not to be taken as containing any securities advice or securities recommendation.  Furthermore, it is not intended that it be relied on by recipients for the purpose of making investment decisions and is not a replacement of the requirement for individual research or professional tax advice.  BT does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this presentation.  Except insofar as liability under any statute cannot be excluded, BT and its directors, employees and consultants do not accept any liability for any error or omission in this presentation or for any resulting loss or damage suffered by the recipient or any other person.  Unless otherwise noted, BT is the source of all charts; and all performance figures are calculated using exit to exit prices and assume reinvestment of income, take into account all fees and charges but exclude the entry fee.  It is important to note that past performance is not a reliable indicator of future performance. This document was accompanied by an oral presentation, and is not a complete record of the discussion held. No part of this presentation should be used elsewhere without prior consent from the author. For more information, please call BT Customer Relations on 132 135 8:00am to 6:30pm (Sydney time)