Earning Release

Koninklijke Philips Electronics N.V.’s (NYSE:PHG) 3Q 08 sales were below our and market expectations. Furthermore, EBITDA was below our expectations, primarily due to lower than expected operating performances from the Healthcare, Innovation & Emerging Businesses (I&EB) and Group Management & Services (GM&S) segments in 3Q 08. Going forward, we believe that the ongoing global financial crisis will impact demand in the short term, prompting us to revise our estimates downwards for the next four quarters. However, we believe the common stock is undervalued at current levels and therefore, reiterate our BUY rating. Although the current price supports a BUY rating, given our reduced fundamental expectations and as a result of our anticipated negative currency impact over the long term, we maintain our current HOLD rating for the ADR over our 6-24 month investment horizon.

News

On 10 October 2008 ACE Limited (NYSE:ACE) reported its preliminary financial results for 3Q 08. Management expects operating income per share to be in range of US$1.44-US$1.48 and net realized and unrealized losses of US$1.5 bn due to deterioration in its fixed income and equity portfolio. However, we believe ACE’s strong capital position can sustain losses arising from investments and that it is well placed to capitalize on opportunities arising from other failing insurance companies. Therefore, at current levels, we maintain our positive fundamental outlook. We maintain our current BUY rating for the European stock based on our fundamental outlook. We do not expect a significant currency impact on the European stock over our investment horizon.

British American Tobacco PLC’s (AMEX:BTI) common stock has declined significantly since our 2Q 08 update report, reflecting investor concerns over the current financial crisis and general market weakness. However, we maintain our positive fundamental outlook for BAT’s common stock over our investment horizon and, hence, reiterate our BUY rating for BAT’s common stock. As we continue to expect a negative currency impact on the ADR over our investment horizon, we maintain our HOLD rating for BAT’s ADR.

Bayer AG (OTC:BAYRY) has experienced a significant decline in the price of its common stock since our 1Q 08 update report, primarily due to the significant slowdown in the US economy and general weakness prevailing in global financial markets. However, we maintain our positive outlook for the company based on the company’s efforts to improve its operating margin. In addition, we expect strong performances from its key products; Nexavar and Kogenate. Hence, we reiterate our BUY rating for the common stock. Despite our expectation of a negative currency impact on the ADR in the long term, we upgrade our ADR rating from a HOLD to a BUY based on our fundamental outlook and the current ADR price no longer supporting our HOLD rating.

China Life Insurance Company Ltd.’s (NYSE:LFC) common stock price has declined significantly since our last update report, reflecting weakness in Chinese and global stock markets. However, we believe that the company is fundamentally well positioned to weather the financial crisis, with a forecast of 50% y-o-y premium income growth issued on 12 October 2008 and a dominant market share. We believe that the recent decline in the common stock provides an attractive investment opportunity at current levels. Therefore, we maintain our current BUY rating for the China Life common stock. We maintain our current BUY rating for the ADR based on our fundamental outlook for the company.

Crucell N. V.’s (NASDAQ:CRXL) common stock experienced a significant decline of 27.3% since our 2Q 08 update report, dated 05 September 2008, primarily due to slowdown in the US economy and anticipated low global economic growth, coupled with turbulence in global financial markets. However, we maintain our positive outlook for the company after the recent agreement between Crucell and Lonza biological PLC (Lonza) for the manufacture, sale and distribution of the Permexcis cell culture medium developed by Crucell, as discussed in our company news alert dated 26 September 2008. Moreover, the current common stock price no longer supports our HOLD rating. Therefore, we upgrade the common stock from a HOLD to a BUY. Although we continue to anticipate significant negative currency impact on the ADR over our investment horizon, we upgrade the ADR from a HOLD to a BUY based on our fundamental outlook.

Elan Corporation PLC’s (NYSE:ELN) ADR price has experienced a significant decline of 19.7% since our 2Q 08 update report, dated 04 August 2008, primarily due to weakening investor sentiments in light of an anticipated recession in the US economy and the current uncertainty in global financial markets. However, we maintain our positive outlook for the company as we expect the company’s flagship drug; Tysabri, to support future revenues. Hence, we reiterate the ADR a BUY at current price levels. We reiterate our BUY rating for the European stock based on our positive fundamental outlook for the company and our expectation of a significant positive currency impact on the European stock over our investment horizon.

Manulife Financial Corporation’s (NYSE:MFC) common stock price has declined significantly since our previous update report, reflecting broad-based weakness in global financial markets and its impact on insurance stocks. Fears that governments’ attempts to shore up financial institutions would not lead to a return to liquidity in the credit markets augmented the fall. We believe that the company is sufficiently fundamentally strong to weather the impact of current conditions and our long term fundamental outlook for the company remains positive. As a result we maintain our current BUY rating for the Manulife common stock. Although we expect a significant negative currency impact on the NYSE stock over our investment horizon, we upgrade the NYSE stock from a HOLD to a BUY based on our fundamental outlook and the significant price decline.

Prudential PLC’s (NYSE:PUK) common stock price has declined significantly since our previous update report, reflecting broad-based weakness in global financial markets and its impact on insurance stocks, and is in line with the performance of the UK financial market. Considering the current volatility in the financial markets we are likely to revise our target price downwards in our next update report. However, we believe the company, which is the largest insurance company in the UK, is well positioned to weather the impact of the current conditions, and believe that the recent decline in the common stock has left the stock undervalued. Therefore, we maintain our current BUY rating for the Prudential common stock. We maintain our current BUY rating for the ADR stock based on our fundamental outlook for the company. We do not anticipate a significant currency impact on the ADR over our investment horizon.

Qiagen N.V. (NASDAQ:QGEN) experienced a significant decline in its NASDAQ Common stock price since our 2Q 08 update due to the significant slowdown in the US economy and general weakness prevailing in global financial markets. However, we maintain our positive outlook for the company as we expect strong demand for its products in the Consumable segment, further augmented by Instrument sales, going forward. Hence, we reiterate our BUY rating for the NASDAQ Common stock. We maintain our BUY rating for Qiagen’s European stock as we continue to expect a positive currency impact on the European stock over our investment horizon.

Reed Elsevier N.V.’s (NYSE:ENL) common stock price has declined significantly since our 1H 08 update report, including a sharp fall on 10 October 2008, reflecting weakness in equity indices and economic uncertainty. However, we believe that this decline has left the company significantly undervalued and therefore maintain our current BUY rating for the common stock on fundamental grounds. We continue to anticipate a negative currency impact on the ADR over the next 6-24 months. Therefore, we maintain our HOLD rating.

Sanofi-Aventis S.A.’s (NYSE:SNY) common stock experienced a significant decline of 22.3% since our 2Q 08 update report, dated 19 August 2008, primarily due to slowdown in the US economy and anticipated low global economic growth, coupled with turbulence in global financial markets. Although, our fundamental outlook for the company remains unchanged, we upgrade the common stock from a HOLD to a BUY as the current price no longer support our HOLD rating. Despite our expectation of a negative currency impact on the ADR over the long term, we upgrade our current ADR rating from a SELL to a BUY over our 6-24 months investment horizon based on the fundamental outlook and the current ADR price no longer supporting a SELL rating.

Warner Chilcott Ltd.’s (NASDAQ:WCRX) common stock experienced a significant decline of 24.0% since our 2Q 08 update report, dated 12 September 2008, due to general weakness prevailing in global equity markets. However, our fundamental outlook for the company remains unchanged as we believe the company will post strong growth in revenues driven by products such as Leostrin 24 FE, Femcon FE, Doryx and Taclonex. Hence, we reiterate our BUY rating for the common stock. Based on our fundamental outlook and anticipated positive currency impact on the European stock over our investment horizon, we reiterate the European stock a BUY.

XL Capital (NYSE:XL) common stock price rallied on 10 October 2008, following the company’s announcement that it expects its book value per share to be approximately US$21.00-22.50 in 3Q 08, which has alleviated investor concerns that the company could perform even more weakly. However, we continue to have fundamental concerns regarding the company and intend to reduce our estimates and target price in our next update report. Consequently, we maintain our current HOLD rating even though the current target price implies a BUY rating. We maintain our current HOLD rating for the European stock based on our fundamental outlook. We do not expect a significant currency impact on the European stock over our investment horizon.

The Allied Irish Banks PLC (NYSE:AIB) common stock has depreciated significantly since our 1H 08 update report, reflecting concerns over the impact of the financial crisis on the banking sector, as well as the recession in the Irish economy. In light of the country’s economic outlook, we remain concerned about the bank’s near term prospects. Therefore, we maintain our HOLD rating, even though our target price implies a BUY. We continue to expect a negative currency impact on the ADR over our investment horizon. Therefore, we maintain our HOLD rating for the ADR.

On 10 October 2008, Aluminum Corporation of China Ltd. (NYSE:ACH) announced that it may have to cut production at its higher-cost facilities due to falling aluminum prices. However, it plans to compensate by ramping up production at lower-cost facilities. We expect to lower our estimates and target price in our next full update report, considering the recent slump in aluminum prices, although we do not believe any further drop in aluminum prices would be sustainable. Given the severity of the common stock’s fall in recent months, we continue to see upside potential and therefore maintain our BUY rating.The Hong Kong dollar is pegged to the US dollar. Therefore, we do not anticipate any currency impact on the ADR over our investment horizon. In line with our fundamental outlook, we reiterate the ADR a BUY.

The Banco Santander Central Hispano S.A. (NYSE:STD) common stock price has declined significantly since our previous update report, reflecting investor concerns over turmoil in the financial sector. However, our long term outlook remains positive, and we believe the recent decline in the stock price has created an investment opportunity. Therefore, we maintain our BUY rating. We continue to anticipate a negative currency impact on the ADR over our investment horizon. Therefore, we downgrade the ADR from a BUY to a HOLD.

The Banco Bilbao Vizcaya Argentaria S.A. (NYSE:BBV) common stock price has declined significantly since our previous update report, reflecting investor concerns over turmoil in the financial sector. Given the sensitivity of the banking sector to the unfolding financial crisis, as well as the slowdown in the global economy, we are concerned about the near term prospects for the common stock. Therefore, although our target price implies a BUY, we downgrade the common stock from a BUY to a HOLD. We continue to anticipate a negative currency impact on the ADR over our investment horizon. Therefore, we downgrade the ADR from a BUY to a HOLD.

BT Group PLC (NYSE:BT) common stock has depreciated significantly since our last update report, dated 20 August 2008, which we believe reflects weakness in global equity markets. However, as we do not expect further downside from these levels based on our strong fundamental outlook and given the current price levels, we maintain our BUY rating for the common stock. Although we expect a negative currency impact on the ADR over the long term, as the target price supports a BUY current levels we maintain our current rating on the ADR.

Comphania Paranaense de Energia – COPEL’s (NYSE:ELP) preferred stock price has declined significantly since our 2Q 08 update report, primarily reflecting the ongoing turmoil in global financial markets. However, we believe that the company remains fundamentally strong and will benefit from strong electricity demand in Brazil. Therefore, we do not anticipate a change in our current BUY rating for the COPEL preferred stock. We expect to revert to a 6-24 month investment horizon to value this stock as we no longer anticipate a significant currency impact on the ADR over the next 6-12 months. Although we now anticipate a significant negative currency impact on the ADR in the long term, we do not anticipate a change in the current ADR rating based on our fundamental outlook.

The Credit Suisse Group (NYSE:CS) common stock price has declined significantly since our previous update report, reflecting investor concerns over turmoil in the financial sector. Considering Credit Suisse’s exposure to the US mortgage market, we remain concerned about its near term prospects. Therefore, although our target price implies a BUY, we downgrade the common stock from a BUY to a HOLD, until we revalue the bank in our next full update report. As we continue to anticipate a negative currency impact on the ADR, we maintain our HOLD rating.

Dassault Systemes S.A.’s (NASDAQ:DASTY) common stock price has witnessed a significant decline since our 2Q 08 update report dated 08 September 2008, led by the worsening state of equity markets worldwide on account of a challenging global economic environment and the US and European financial markets crisis. Although at current levels our target price does not support our HOLD rating, taking into account the current uncertain market conditions and a challenging economic environment, we do not expect a change in our current rating for the Dassault common stock. Although the target price does not support our SELL rating at current levels, we maintain the ADR a SELL as we expect a significant negative currency impact over the next 6-24 months.

Dr. Reddy’s Laboratories Limited (NYSE:RDY) has experienced a significant decline in its common stock price since our 1Q 09 update report, primarily associated with the significant slowdown in the US economy and weakness in global financial markets. However, going forward, we believe the launch of the generic version of Imitrex will have a positive impact on the company’s revenue growth and improve the company’s margins. Hence, we reiterate our BUY rating for the common stock. Despite our expectation of a negative currency impact on the ADR over our investment horizon, we upgrade our ADR rating from a HOLD to a BUY based on our fundamental outlook and the current ADR price no longer supporting a HOLD rating.

Deutsche Telekom AG’s (NYSE:DT) common stock has experienced a significant decline in price since our last update report, reflecting weak market sentiments and prevailing economic uncertainty in US and European markets. However, based on DT’s market leadership, roll-out plans for DSL in Germany and an anticipated increase in profit margins going forward, we retain our positive outlook for the company. Therefore, we believe that the recent decline provides an attractive investment opportunity at current levels. Hence, we maintain our BUY rating for the common stock. Although we anticipate a negative currency impact in the long term, we upgrade our ADR rating from a HOLD to a BUY as we anticipate the fundamental upside to offset the negative currency impact in the long term.

E.ON AG’s (OTC:EONGY) common stock price has declined significantly since our last update report, which we believe primarily reflects weakness in equity markets worldwide. However, we remain optimistic regarding the company’s fundamentals given its strong presence in European Energy markets and benefits expected to accrue from recent acquisitions. In view of this we maintain our positive outlook for the common stock and believe that the current price levels provide an attractive investment opportunity. Although we continue to anticipate a negative currency impact on the ADR over the long term, we do not anticipate a change in our current ADR rating given our positive fundamental outlook.

Fomento Economico Mexicano, S.A.B de C.V’s (NYSE:FMX) common stock has declined significantly since our 2Q 08 update report, primarily due to slowdown in the US economy and the recent turmoil in global financial markets. However, going forward, we expect strong performances from Coca-Cola Femsa and Femsa Camercio to drive top-line growth. As the current common stock price supports our BUY rating and in light of our positive outlook for the company, we reiterate our BUY rating for the common stock. Although we expect a negative currency impact on the ADR over our investment horizon, as we maintain our positive fundamental outlook for the company and as the current ADR price supports our current rating, we maintain our BUY rating for the ADR.

GlaxoSmithKline PLC (NYSE:GSK) has experienced a significant decline in its common stock price since our 2Q 08 update report, primarily associated with the significant slowdown in the US economy and general weakness prevailing in global financial markets. Furthermore, due to the continued loss of market share to generic products, we believe the company will experience moderate revenue growth. Hence, we maintain our neutral outlook for the company. However, at current price levels, we believe the common stock offers an attractive investment opportunity and, hence, we upgrade the common stock from a HOLD to a BUY. Despite our expectation of a negative currency impact on the ADR over our investment horizon, we upgrade the ADR from a HOLD to a BUY based on our fundamental outlook for the company and the current ADR price no longer supporting a HOLD rating.

Hutchison Telecommunications International Limited’s (NYSE:HTX) common stock has experienced a significant decline in price since our last update report, reflecting weak market sentiments and prevailing economic uncertainty in global equity markets. However, based on HTIL’s significant levels of cash on its balance sheet, healthy revenue growth and anticipated growth from operations in Israel and Indonesia, we retain our positive outlook for the company. Thus, we believe that the recent decline creates an attractive investment opportunity at current levels. Hence, we maintain our BUY rating for the common stock. We are likely to maintain our BUY rating, based on our fundamental outlook. The Hong Kong dollar is pegged to the US dollar.

The ICICI Bank Limited (NYSE:IBN) common stock price has depreciated significantly since our previous update report, primarily due to investor concerns over the bank’s financial strength, although these concerns have been dismissed by Management. Given the effect of the financial crisis on the global economy, we expect to lower our estimates and target price when we revalue the bank in our next full update report. However, at current levels, we continue to see upside potential and therefore maintain our BUY rating. We expect to revert to a 6-24 month investment horizon in our next full update report, as we now anticipate a significant negative currency impact on the ADR over the long term, due to appreciation of the US dollar against the Indian rupee. Therefore, we downgrade the ADR from a BUY to a HOLD.

China Eastern Airlines Corporation Ltd. (NYSE:CEA) expects a wider loss than previously envisaged for the first nine months of FY 2008, according to a recent announcement by the company, reflecting falling passenger traffic and, until recently, higher domestic fuel prices. Furthermore, the ongoing global financial crisis is expected to subdue China’s air travel market going forward. Although the common stock target price supports a BUY at current levels, we maintain our SELL rating as we are likely to revise our target price significantly downwards in our next update report. We maintain our SELL rating as we are likely to revise our target price downwards in our next update report. The Hong Kong dollar is pegged to the US dollar.

Cott Corporation’s (NYSE:COT) NYSE common stock has declined significantly since our supplement to the update report, reflecting general weakness in global equity markets. Going forward, in light of the difficult economic environment and the declining Carbonated Soft Drinks (CSD) market in North America, we remain sceptical over Management’s much anticipated turnaround for the company. Therefore, although the target price supports a BUY rating at current levels, we maintain our HOLD rating for the common stock. Although the target price supports a BUY rating at current levels, we downgrade the Canadian stock rating from a BUY to a HOLD based on the weak fundamental outlook for the company.

Delhaize Group’s (NYSE:DEG) common stock price has depreciated significantly since our last update report, reflecting the ongoing global financial markets crisis. Going forward, we expect the company to experience difficulties given the challenging economic environment and rising unemployment across the majority of the company’s operating geographies. Therefore, we reiterate a HOLD rating for the company, despite the target price supporting a BUY at current levels. Although the target price supports a BUY rating at current levels, we maintain our HOLD rating for the ADR in light of a negative currency impact and weak long term fundamental outlook.

Imperial Tobacco PLC’s (NYSE:ITYBY) common stock price has declined significantly since our last update report, reflecting investor concerns over the ongoing global financial crisis. However, we remain optimistic regarding Imperial’s common stock over the medium to long term, given the company remains on track to achieve its FY 2008 guidance and the resilient nature of the tobacco industry. Hence, we reiterate our BUY rating. Although we expect a negative currency impact on the ADR, as the US dollar strengthens against Sterling over our investment horizon, we maintain our BUY rating given our fundamental outlook.

Korea Electric Power Corporation (NYSE:KEP) common stock price fell to achieve our SELL rating target price on 10 October 2008. Although the current price now supports a BUY rating, we upgrade the common stock rating from a SELL to a HOLD only, until we completely revalue the common stock in our next update report. As we continue to anticipate a negative currency impact on the ADR over our investment horizon, we maintain our SELL rating based on our fundamental outlook.

We believe the recent depreciation in Koninklijke Ahold N.V.’s (OTC:AHONY) common stock is primarily associated with the recent volatility in global financial markets and slowdown in the US economy. Going forward, we expect revenues from the US retail market to decline due to greater competition and slowdown in the US economy. Hence, in light of these factors and weak investor sentiments, we reiterate our HOLD rating for the common stock, even though the common stock supports a BUY rating. Although, the current ADR price supports a BUY rating, we maintain our HOLD rating for the ADR as we anticipate a negative currency impact on the ADR over our investment horizon, in addition to our fundamental outlook for the company.

On 13 October 2008, Lloyds TSB Group (NYSE:LYG) announced that it has lowered its offer for Halifax Bank of Scotland (HBOS) to 0.605 Lloyds shares per HBOS share. Meanwhile, the bank is to raise GBP5.5 bn in additional capital, issuing ordinary and preference shares to the UK government. We remain concerned about the impact of the financial crisis on the UK economy and on the bank’s common stock price. Therefore, we maintain our HOLD rating, even though our target price implies a BUY. We continue to expect a negative currency impact on the ADR over our investment horizon. Therefore, we maintain our HOLD rating.

Open Text Corporation’s (NASDAQ:OTEX) common stock price has witnessed a significant decline since our 4Q 08 and FY 2008 update report, dated 03 October 2008, led by the worsening state of equity markets worldwide on account of a challenging global economic environment and the US and European financial markets crisis. Although the target price does not support a HOLD rating at current levels, taking into account the current uncertain market conditions and challenging economic environment, we do not expect a change in our current rating for the Open Text NASDAQ common stock. As we continue to anticipate a significant positive currency impact on the Canadian stock in the coming 6-24 months, we maintain our BUY rating for the Canadian stock.

Orbotech Limited (NASDAQ:ORBK) has revised its 3Q 08 revenue and earning estimates downward, primarily due to the highly uncertain global economic scenario, leading to hold back of deliveries from its customers. In view of this, we now hold a cautious outlook for the company and, therefore, downgrade the NASDAQ common stock from a BUY to a HOLD, until we fully revalue the company in our next update report. Although we continue to anticipate a significant positive currency impact on the European stock over our 6-24 month investment horizon, we downgrade our European stock rating from a BUY to a HOLD in view of our cautious fundamental outlook.

On 10 October 2008 PartnerRe Limited (NYSE:PRE) reported a preliminary outlook for 3Q 08. Management expects non-life combined ratio to be in the range of approximately 95%-96% and shareholder’s equity to be approximately US$4.0-4.1 bn on 30 September 2008. We believe the company has a sufficiently strong capital position to sustain losses arising from investments and meet hurricane losses. Therefore, at current levels, we maintain our positive fundamental outlook. Based on our fundamental outlook for the company we maintain our current BUY rating for the European stock. We do not expect a significant currency impact over our investment horizon.

Perfect World Co. Ltd’s (NASDAQ:PWRD), ADR has declined significantly since our 2H 08 update report, including a sharp fall on 10 October 2008, reflecting weakness in equity indices and economic uncertainty. However, we believe that this decline has left the company significantly undervalued and we therefore maintain our current BUY rating for the ADR on fundamental grounds. We reiterate the European ADR a BUY as we continue to anticipate a positive currency impact on the European ADR in the medium to long term.

Petrobras Energía Participaciones S.A.’s (NYSE:PZE) common stock price has declined significantly since our last update report, reflecting a widespread sell-off in equity markets and investor concerns regarding a possible slowdown in demand for hydrocarbons. While the target price no longer supports a HOLD rating at current levels, given our muted outlook for top-line growth, we maintain our current rating until we reassess the stock. Although the target price supports a BUY rating at current levels, as we now anticipate a negative currency impact on the ADR over the medium term, coupled with our fundamental outlook, we downgrade our ADR rating from a BUY to a HOLD.

Repsol YPF’s (NYSE:REP) common stock price has declined significantly since our 2Q 08 update report, reflecting weakness in equity indices and oil price decline due to economic uncertainty. We believe that this decline has left the company significantly undervalued and therefore upgrade our common stock rating for Repsol from a HOLD to a BUY on fundamental grounds. Given our fundamental outlook and the current price level we upgrade our current ADR rating from a HOLD to a BUY. We do not expect a significant currency impact on the ADR over our investment horizon.

On 13 October 2008, Royal Bank of Scotland Group PLC (NYSE:RBS) announced that it will raise GBP20 bn in fresh capital, through a GBP15 bn rights offer of ordinary shares, as well as the sale of GBP5 bn in preference shares to the UK treasury. However, we remain concerned about the impact of the financial crisis on the UK economy and on its banks, in particular. Considering this, we expect to lower our estimates and target price when we revalue the bank in our next full update report. Therefore, although our present target price implies a BUY, we maintain our HOLD rating. We continue to expect a negative currency impact on the ADR over our investment horizon. Therefore, we maintain our HOLD rating.

Sinopec Shanghai Petrochemicals Co., Ltd.’s (NYSE:SHI) common stock price has declined significantly since our 1H 08 update report, reflecting the impact of a widespread sell-off in equity markets and investor concerns regarding a possible slowdown in demand for hydrocarbons and therefore refined oil products. We expect the ongoing decline in crude oil prices to significantly benefit the company’s operating margin, going forward. Hence, we believe that the company’s stock price is undervalued at current levels and therefore upgrade our rating for SPC’s common stock from a HOLD to a BUY. Given our fundamental outlook, we upgrade the ADR from a HOLD to BUY. The Hong Kong dollar is currently pegged to the US dollar.

StatoilHydro A.S.A.’s (NYSE:STO) common stock price has declined significantly since our 2Q 08 update report, reflecting a heavy sell off in the global equity markets and investor concerns regarding a possible slowdown in hydrocarbon demand amidst worries of a weakening global economy. However, we believe the anticipated production growth and margin improvement aided by lower hydrocarbon prices will support StatoilHydro’s future financial performance. Hence, we believe the company remains fundamentally strong and maintain our BUY rating for StatoilHydro’s common stock. Although we now anticipate a negative currency impact1 on StatoilHydro’s ADR, given our fundamental outlook we maintain our BUY rating for the ADR.

Total S.A.’s (NYSE:TOT) common stock price has declined significantly since our 2Q 08 update report, including a sharp fall on 10 October 2008, reflecting weakness in equity indices and oil price decline due to economic uncertainty. However, we believe that this decline has left the company significantly undervalued and therefore maintain our current BUY rating for the common stock on fundamental grounds. Given our fundamental outlook and the current price level we maintain a BUY rating for the ADR. We do not expect a significant currency impact on the ADR over our investment horizon.

Unilever PLC’s (NYSE:UL) common stock price has declined significantly since our last update report, reflecting the slowdown in the US economy and the ongoing global financial crisis. Going forward, we expect revenues to decline, due to an anticipated leveling-off in product prices and declining consumer demand from the Americas and Europe. Although the target price support a BUY rating at current levels, as a result of our negative outlook and current market conditions, we reiterate the common stock a HOLD. Although the target price supports a BUY rating at current levels, in light of a negative currency impact over the long term we reiterate the ADR a SELL.

United Utilities Group PLC’s (OTC:UUGRY) common stock price has declined significantly since our last update report, reflecting weakness in equity indices and economic uncertainty. We believe that this decline has left the company significantly undervalued and therefore we upgrade our common stock rating from a HOLD to a BUY. Although we continue to anticipate a negative currency impact on the ADR over our investment horizon, we maintain our BUY rating based on our fundamental outlook.

Vodafone Group PLC’s (NYSE:VOD) common stock has declined significantly since our last update report dated 27 June 2008, which we believe reflects general weakness in global equity markets. Going forward, we expect EBITDA margin to decline due to an increase in cost of sales and selling and distribution expenses, as a percentage of revenues. In addition, we expect EBIT margin to decline due to an anticipated increase in operating expenses, as a percentage of revenues. Thus, in light of these factors and weak market sentiment we temporarily downgrade the common stock from a BUY to a HOLD until our next update report. We downgrade the ADR from a BUY to a HOLD due to an anticipated negative currency impact on the ADR over the long term in addition to our fundamental outlook.

New Valuations

Although ING Groep N.V.’s (NYSE:ING) top-line was below our estimate, its bottom-line was higher than we anticipated due to lower-than-expected underlying expenditure and income tax expenses. Going forward, we are encouraged by ING’s plans to expand in high-growth markets, for example through its acquisition of Turkish pension fund Oyak Emeklilik. The group is also pressing ahead with its efforts to divest non-core businesses, receiving regulatory approval to spin off part of its Mexican business, Seguros ING S.A. de C.V. and subsidiaries, to AXA. The group’s efforts to refocus on core businesses should reinforce margins. Although we remain concerned about the potential impact of turmoil in financial markets on banking stocks in the near term, our long term fundamental outlook is positive. Therefore, we believe that the recent decline in the common stock provides an attractive investment opportunity.

Montpelier Re Holdings Limited (NYSE:MRH) has announced a preliminary loss estimate of US$130 mn from hurricanes Gustav and Ike. Estimated losses are significantly higher than our previous expectations. Consequently, we have increased our combined ratio estimate for 3Q 08. The company also has significant exposure to Mortgaged-backed Securities (MBS) and Asset-backed Securities (ABS), and we have lowered our net investment income estimate for 3Q 08. Considering current weakness in financial markets we have also revised estimates downwards for FY 2009. Consequently, we maintain a neutral outlook for Montpelier Re’s NYSE common stock over a 6-12 month period.

National Bank of Greece S.A. (NYSE:NBG) reported healthy top-line growth in 2Q 08, supported by lending growth in Greece, coupled with a growing footprint in Turkey (through Finansbank) and Southeastern Europe (SEE). NBG’s efficiency ratio continued to improve, as top-line growth offset an increase in total operating expenses, supporting the bottom-line in turn. Considering NBG’s expansion plans in Turkey and SEE, coupled with its cost control initiatives, we believe the recent fall in the common stock price represents a solid investment opportunity.

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Disclaimer
Independent International Investment Research PLC supplies this research via Pronet Analytics.com Ltd. (’Pronet’). Pronet is Regulated and Authorized by the Financial Services Authority (FSA) and registered with the Securities Exchange Commission (SEC). You are reminded that investment advice provided by Pronet is for your general information and use and is not intended to address your particular requirements. Any advice or recommendations contained in this report may not be suitable for you and are not intended to be relied upon by you in the making (or refraining from making) any specific investment or other decision. Such decisions should only be made on the basis of independent advice from an appropriately qualified adviser. Pronet Analytics.com Ltd. and Independent Financial Markets Research Ltd. are subsidiaries of Independent International Investment Research PLC (the ‘Group’). Research analysts working for the Group are subject to stringent confidentiality and security policies and are located in secure-access premises which may be in the proximity of professionals conducting similar work for other firms. The Group is not nor has been nor will be engaged in investment banking and does not make markets in any of the securities covered in this report or have any investment banking relationship with the firm whose security is covered in this report. No employee or contractor of the Group is permitted to personally buy or sell stock in the company covered in this report, and neither the analysts responsible for this report nor any related household members are officers, directors, or advisory board members of any covered company. No one at a covered company is on the Board of Directors of the Group or any of its affiliates. This report is not a solicitation to buy or sell any security and past performance is no guarantee of future results.
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