BT Monthly Markets Chart Pack – February 2010

An overview of movements in global financial markets

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Global share markets were mixed in February...

Global share markets proved to be a mixed bag in February as concerns over the debt levels of some European countries, particularly Greece, countered a speech by US Federal Reserve Chairman, Ben Bernanke, in which he said that US interest rates will remain low for some time yet. Share markets were higher in the UK (+3.2%) and the US (+2.9%) but lower in Europe (-1.7%) and Japan (-0.7%).

The Australian share market made good gains in February, with the S&P/ASX 200 Accumulation Index closing the month 2.1% higher. The result came after stronger jobs numbers and better-than-expected bank earnings overshadowed concerns that the Euro-zone’s sovereign debt problems will stall the global recovery.

3

Global shares measured by the MSCI World ex-Australia (net dividends) Index in A$.Source: BT Financial Group, MSCI

Impact of major market events on global shares since 1987

…but continue to perform well over the long-term, despite some major market events

700

1,200

1,700

2,200

2,700

3,200

3,700

4,200

4,700

5,200

5,700

6,200

Feb-88 Feb-90 Feb-92 Feb-94 Feb-96 Feb-98 Feb-00 Feb-02 Feb-04 Feb-06 Feb-08 Feb-10

Jan 91Gulf War

Feb 94Bond Market Crash

Aug 97Asian Currency Crisis

Jul 98Russian Bond Crisis

Jul 01Tech Wreck

Sep 01Attack on Twin Towers

Jun 07US Sub-prime Crisis

Nov 89Fall of the Berlin Wall Mar 03

Troops enter Iraq

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Source: BT Financial Group, Premium Data

S&P/ASX 200 Accumulation Index – year to 28 February 2010

The Australian share market closed 2.1% higher in February

21,000

22,500

24,000

25,500

27,000

28,500

30,000

31,500

33,000

34,500

36,000

28/02/2009 28/04/2009 28/06/2009 28/08/2009 28/10/2009 28/12/2009 28/02/2010

5

Key Australian economic news – February

The RBA raised interest rates by 0.25% following its early March meeting, taking the official cash rate to 4.00%. The move comes after three consecutive months of rates rises at the end of last year.

The Westpac/Melbourne Institute’s consumer sentiment survey fell 2.6% in February, despite the RBA’s decision to leave interest rates on hold that month.

The Australian economy added 52,700 jobs in January – the most for any month in three years – which pushed the local unemployment rate down to just 5.3%.

After jumping 1.5% in November, retail trade fell 0.7% in December to close the year 2.1% higher.

Housing finance dropped by 2.7% in December but still ended the year 19.5% higher thanks in part to the Government’s first home owner’s grant.

Source: BT Financial Group

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The Australian dollar rose against the US dollar in February

The Australian dollar (A$) rose against the US dollar in February, gaining 1.2% on the back of stronger commodity prices and expectations that the Reserve Bank will continue to raise interest rates over the near-term.

  The A$ is now up 49% against the US$ since hitting a low of US$0.6012 cents

back in October 2008.

At the end of February:

A$1 bought US$0.8948 +1.2%

€0.6568 +2.9%

¥79.46 -0.5%

Source: BT Financial Group

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Currency markets – A$ per US dollar

Source: BT Financial Group. Figures at 28 February 2010

0.6300

0.6600

0.6900

0.7200

0.7500

0.7800

0.8100

0.8400

0.8700

0.9000

0.9300

0.9600

0.9900

Feb-05 Aug-05 Feb-06 Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10

The Australian dollar versus the US dollar…

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Currency markets – A$ per Euro

the Euro…

0.4900

0.5050

0.5200

0.5350

0.5500

0.5650

0.5800

0.5950

0.6100

0.6250

0.6400

0.6550

0.6700

Feb-05 Aug-05 Feb-06 Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10

Source: BT Financial Group. Figures at 28 February 2010

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and the Yen

55

60

65

70

75

80

85

90

95

100

105

110

Feb-05 Aug-05 Feb-06 Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10

Currency markets – A$ per Yen

Source: BT Financial Group. Figures at 28 February 2010

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Official world interest rate movements – February

Interest rates in the major economies remained unchanged in February. The Reserve Bank of Australia raised the official cash rate by 0.25% (to 4.00%) in early March.

Current rate Last movedDirection of last move

Australia 4.00% Mar 2010

US 0% - 0.25% Dec 2008

Europe (ECB) 1.00% May 2009

Japan 0.10% Dec 2008

United Kingdom 0.50% Mar 2009

Source: BT Financial Group

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Source: BT Financial Group

28 February 2010

Global share market returns

1 year 3 years (pa) 5 years (pa)

Global

S&P 500 Index (US) 50.25% -7.75% -1.70%

Nasdaq (US Tech.) 62.45% -2.52% 1.76%

Nikkei 225 (Japan) 33.79% -16.83% -2.92%

Hang Seng (Hong Kong) 60.86% 1.60% 7.74%

DAX (Germany) 45.65% -5.88% 5.17%

CAC (France) 37.24% -12.40% -1.63%

FTSE 100 (UK) 39.80% -4.62% 1.51%

Australia

S&P/ASX 200 Accum. Ind. 44.70% -3.21% 6.68%

S&P/ASX Small Ordinaries 63.05% -8.30% 4.28%

S&P/ASX 300 Listed Prop. 42.60% -24.31% -7.44%

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Short-term asset class performance

Source: S&P/ASX 200 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

1-year rolling returns to 28 February 2010 (%) Best performing asset class for the year

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995

Australian cash

3.48 7.12 6.83 6.16 5.80 5.57 5.03 4.86 4.91 6.35 5.17 5.11 5.49 7.28 7.87 5.98

Australian bonds

3.45 14.45 2.37 4.10 6.79 5.60 2.75 9.63 3.85 12.48 1.54 7.10 13.60 12.49 14.57 -1.31

Australian property

42.60 -58.24 -27.20 33.45 17.42 25.77 14.98 10.23 14.54 14.28 4.68 2.75 25.78 18.74 12.02 -3.19

Australian shares

45.06 -37.26 -0.76 23.77 23.08 29.57 25.77 -14.70 6.28 9.63 18.06 9.21 13.72 11.65 23.83 -7.87

International bonds

10.79 6.22 7.74 5.41 6.16 7.33 6.95 12.24 7.35 11.51 1.10 8.21 11.06 11.00 15.90 2.36

International shares

9.03

-22.15 -16.60 8.93 20.97 8.42 13.37 -32.73 -13.23 0.29 20.20 23.81 41.85 11.82 19.36 -2.81

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Source: S&P/ASX 200 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

1-year returns to 28 February 2010 (%)

Short-term asset class performance (cont’d)

9.0

10.8

45.1

42.6

3.5

-22.2

6.2

-37.3

-58.2

14.5

28 February 2009

28 February 2010

Australian bonds

Listed property

Australian shares

Global bonds

Global shares

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Long-term asset class performance

Note: Accumulated returns based on $1,000 invested in December 1984Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, UBS Bank Bill 0+ years

28 February 2010

Australian bonds

Listed property

Australian shares

Cash

Global shares

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Source: BT Financial Group. West Texas Intermediate oil price at 28 February 2010

Oil prices – US$ per barrel

Oil prices closed February 9.3% higher amid reports that global demand will rise throughout 2010

$0

$15

$30

$45

$60

$75

$90

$105

$120

$135

$150

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

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