Earning Release

Novo Nordisk A.S. (NYSE:NVO) reported modest y-o-y revenue growth in 4Q 09, in line with our expectations. Performance at operating level was in line with our expectation while net level performance fell short of our expectations for 4Q 09. Going forward, we expect new products such as Victoza to drive top-line growth. However, we believe the common stock is fairly priced at current levels. Consequently, we reiterate our HOLD rating for the common stock. We will reassess our target price and rating in our 4Q 09 and FY 2009 update report. We maintain our BUY rating for the ADR based on our expectation of a significant positive currency impact on the ADR over our 6-24 month investment horizon and our positive fundamental outlook for the company. We will reassess our target price and rating in our 4Q 09 and FY 2009 update report.

Southern Copper Corporation (NYSE:PCU) reported better-than-expected net sales and operating and net performance in 4Q 09. Consequently we expect to marginally revise our estimates upwards and therefore at current levels we upgrade our 6-12 month NYSE common stock rating from a SELL to a HOLD. We will reassess our target price and rating in our next update report. The Peruvian stock trades in US dollars. As a result, we do not anticipate any currency impact over the coming 6-12 months. Based on our fundamental outlook, we upgrade our rating from a SELL to a HOLD. We will reassess our target price and rating in our next update report.

New Valuations

Westpac Banking Corporation (NYSE:WBK) The Australian economy grew by 0.5% y-o-y in 3Q 09 at a faster pace than 0.4% in 2Q 09 and 0.3% in 1Q 09. The Reserve Bank of Australia (RBA) is upbeat on Australian economic recovery and in November 2009 expected GDP to grow by 1.18% in 2009, followed by 2.75% in 2010 and 3.25% in 2011. Furthermore, the Australian Performance of Manufacturing Index (PMI) increased 2.5 points to 51 in January 2010 from 48.5 in December which indicates expansion in manufacturing activity and signals potential growth in the economy. Improving economic conditions were also reflected in higher lending by Australian banks. Lending in December increased the most in 11 months at 0.3% over the previous month. We expect banking credit to continue its growth momentum, going forward, building on the expected recovery in economic conditions. Moreover, RBA kept the bank rate unchanged at 3.75% in its policy announcement today. The unexpected rate freeze is expected to keep interest rates low, which should spur credit demand and should sustain Westpac's NIM in the short term. However, we expect rising interest rates, going forward, which should impact Westpac's NIM Westpac continues to lead its peer group (comprising Commonwealth Bank of Australia, Australia & New Zealand Banking Group and National Australia Bank Ltd.) in terms of operating performance. Westpac’s FY 2009 ROE at 13.2% is better than the peer group average of 12.1%. Its high ROE is supported by a Net Interest Margin (NIM) of 2.6%, higher than the peer group average of 2.3%. Furthermore, Westpac’s efficiency ratio (cost-to-income) ratio is lower at 42.7% than the peer group average of 44.2%. However, although Westpac's Tier 1 capital ratio had improved from 7.8% in FY 2008 to 8.1% in FY 2009, it continues to be lower than the peer group average of 8.9%. Given expectations of sustained economic recovery, we expect Westpac to sustain moderate to high credit growth. Furthermore, considering the bank’s efforts to grow its branch network and expected synergies from the St. George merger, we expect Westpac to achieve improved performance going forward. However, the cost of funding is expected to firm upwards, going forward, as guided by the management, and may impact NIM, which is expected to limit performance improvement.

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