Global Economic and Trade Outlook Marine Money Conference

June 23, 2016

Mickey D. Levy Chief Economist, Americas and Asia Berenberg Capital Markets, LLC +1 646 445 4842 mickey.levy@berenberg-us.com

Moderate Growth in Global Output and Trade Flows

• World economic growth expected to remain moderate in 2016-2017 o US: 2.5% growth--but weak business investment and production o Europe: comfortable 1.5% growth amid ongoing political and social

challenges o Japan: struggles continue, inadequate reforms, exports falling o China: strong but decelerating growth, transition toward consumption,

services o Emerging markets: commodity importers fine, exporters suffer

• International trade has slowed relative to global growth since 2008-2009: o China’s transition away from export-related manufacturing o Very weak business investment spending in advanced nations o EM adjusting to lower commodity prices o Mounting threats to trade; rising protectionism 2

Moderate Global Growth; Trade Share Ebbs

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China Transitions toward Consumption and Services as Export-Related Manufacturing Hub Cools

• Rising unit labor costs and stronger currency cut China’s international competitiveness

• Domestically-produced exports flatten; “re-exports” shipped through China fall

• imports of commodities and capital goods fall

• China’s domestic consumption and services remain strong

• A larger portion of China’s demand is met by domestic production

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Oil and Commodity Prices: Calm Following Jarring Adjustment?

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Economic Trends in US, Europe and Japan

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Evolving Trends in Shares of Global Trade

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Central Banks to Keep Rates Low

• Leading global central banks keep policy rates at historical lows

• Negative rates by ECB and BoJ are not stimulating economies and are harming banks

• US Fed decidedly dovish—will raise rates very gradually, maintaining negative real rate

• Central Banks stick to macro models that have not captured behavioral changes

• Expect low policy rates to persist

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Bond Yields at Historic Lows

• Low global bond yields reflect: o CBs’ low or negative rates, o Quantitative easing, forward

guidance o Failure of CBs to stimulate

economies • Also: risk aversion, low inflationary

expectations • Weak capital spending persists despite

low real costs of capital • Expect bond yields to stay relatively

low

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The Policy Environment: Tough on Trade

• Backtracking on efforts to lower trade barriers and enact global agreements

• Reflects populist sentiment that focuses on those harmed by competition rather than the benefits to overall economic performance o Stems from slower growth, pockets of high unemployment, flat wages

• US leading Presidential candidates are stridently anti-free trade o Clinton, Trump take different approaches but propose initiatives that

would erect barriers and increase costs of international trade • US Congress provides checks and balances on powers to tax and spend

o Congress also has heavy influence over trade tariffs and quotas o Few checks on Presidential power to regulate and influence through

administrative law • Expect tough policy environment with tilt toward protectionism

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Disclaimers

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This document was compiled by the above mentioned authors of the economics department of Berenberg Capital Markets LLC (hereinafter also referred to as “BCM”). BCM has made any effort to carefully research and process all information. The information has been obtained from sources which we believe to be reliable such as, for example, Thomson Reuters, Bloomberg and the relevant specialised press. However, we do not assume liability for the correctness and completeness of all information given. The provided information has not been checked by a third party, especially an independent auditing firm. We explicitly point to the stated date of preparation. The information given can become incorrect due to passage of time and/or as a result of legal, political, economic or other changes. We do not assume responsibility to indicate such changes and/or to publish an updated document. The forecasts contained in this document or other statements on rates of return, capital gains or other accession are the personal opinion of the author and we do not assume liability for the realisation of these. This document is only for information purposes. It does not constitute a financial analysis, investment advice or recommendation to buy financial instruments. It does not replace consulting regarding legal, tax or financial matters. This document is classified as objective for the purposes of FINRA rules. Please contact Berenberg Capital Markets LLC (+1 617.292.8200), if you require additional information. This document is meant exclusively for institutional investors and market professionals, but not for private customers. It is not for distribution to or the use of private investors or private customers. Remarks regarding foreign investors The preparation of this document is subject to regulation by US law. The distribution of this document in other jurisdictions may be restricted by law, and persons, into whose possession this document comes, should inform themselves about, and observe, any such restrictions. Copyright BCM reserves all the rights in this document. No part of the document or its content may be rewritten, copied, photocopied or duplicated in any form by any means or redistributed without BCM’s prior written consent. © July 2015 Berenberg Capital Markets LLC

Contacts - Research

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EQUITY RESEARCH Internet www.berenberg.com E-mail: firstname.lastname@berenberg.comRESEARCHAEROSPACE & DEFENCE CAPITAL GOODS (cont.) INSURANCE TECHNOLOGYAndrew Gollan +44 20 3207 7891 Horace Tam +44 20 3465 2726 Trevor Moss +44 20 3207 7893 Jean Beaubois +44 20 3207 7835Charlotte Keyworth +44 20 3753 3013 Simon Toennessen +44 20 3207 7819 Iain Pearce +44 20 3465 2665 Georgios Kertsos +44 20 3465 2715Ross Law +44 20 3465 2692 Sami Taipalus +44 20 3207 7866 Gal Munda +44 20 3465 2746

CHEMICALS Tammy Qiu +44 20 3465 2673AUTOMOTIVES Sebastian Bray +44 20 3753 3011 LUXURY GOODSAdam Hull +44 20 3465 2749 Andrew Heap +44 20 3207 7918 Zuzanna Pusz +44 20 3207 7812 TELECOMMUNICATIONSPaul Kratz +44 20 3465 2678 John Klein +44 20 3207 7930 Usman Ghazi +44 20 3207 7824

Evgenia Molotova +44 20 3465 2664 MEDIA Siyi He +44 20 3465 2697BANKS Robert Berg +44 20 3465 2680 Laura Janssens +44 20 3465 2639Adam Barrass +44 20 3207 7923 CONSTRUCTION Laura Janssens +44 20 3465 2639 Paul Marsch +44 20 3207 7857James Burbridge +44 20 3753 3014 Lush Mahendrarajah +44 20 3207 7896 Alastair Reid +44 20 3207 7841 Michael Summerville +44 20 3207 7914James Chappell +44 20 3207 7844 Robert Muir +44 20 3207 7860 Sarah Simon +44 20 3207 7830Andrew Lowe +44 20 3465 2743 Olivia Peters +44 20 3465 2646 THEMATIC RESEARCHEoin Mullany +44 20 3207 7854 Michael Watts +44 20 3207 7928 METALS & MINING Nick Anderson +44 20 3207 7838Peter Richardson +44 20 3465 2681 Alessandro Abate +44 20 3753 3029 Chris Armstrong +44 20 3207 7809Jonathan Sharpe +44 20 3753 3031 FOOD MANUFACTURING AND H&PC Fawzi Hanano +44 20 3207 7910 Asad Farid +44 20 3207 7932

Yordana Mavrodieva +44 20 3207 7817 Yuriy Vlasov +44 20 3465 2674BEVERAGES Fintan Ryan +44 20 3465 2748 TOBACCOJavier Gonzalez Lastra +44 20 3465 2719 James Targett +44 20 3207 7873 MID CAP GENERAL Jonathan Leinster +44 20 3465 2645Batuhan Karabekir +44 20 3465 2631 Robert Chantry +44 20 3207 7861Adam Mizrahi +44 20 3465 2653 GENERAL RETAIL Gunnar Cohrs +44 20 3207 7894 UTILITIES

Conrad Bartos +44 20 3753 3053 Sam England +44 20 3465 2687 Robin Abrams +44 20 3465 2635BUSINESS SERVICES, LEISURE & TRANSPORT Michelle Wilson +44 20 3465 2663 Ned Hammond +44 20 3753 3017 Andrew Fisher +44 20 3207 7937Najet El Kassir +44 20 3207 7836 Benjamin May +44 20 3465 2667 Lawson Steele +44 20 3207 7887Stuart Gordon +44 20 3207 7858 HEALTHCARE Anna Patrice +44 20 3207 7863Simon Mezzanotte +44 20 3207 7917 Scott Bardo +44 20 3207 7869 Simona Sarli +44 20 3207 7834Josh Puddle +44 20 3207 7881 Jakob Berry +44 20 3465 2724 Julia Scheufler +44 20 3753 3016

Alistair Campbell +44 20 3207 7876 Owen Shirley +44 20 3465 2731CAPITAL GOODS Graham Doyle +44 20 3465 2634Sebastian Kuenne +44 20 3207 7856 Klara Fernandes +44 20 3465 2718 REAL ESTATE ECONOMICSPhilippe Lorrain +44 20 3207 7823 Tom Jones +44 20 3207 7877 Kai Klose +44 20 3207 7888 Carsten Hesse +44 20 3753 3001Rizk Maidi +44 20 3207 7806 Louise Pearson +44 20 3465 2747 Tina Munda +44 20 3465 2716 Kallum Pickering +44 20 3465 2672

Laura Sutcliffe +44 20 3465 2669 Holger Schmieding +44 20 3207 7889

Contacts - Sales

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EQUITY SALES E-mail: firstname.lastname@berenberg.comSPECIALIST SALES UK SWITZERLAND, AUSTRIA & ITALY PARISAUTOMOTIVE & THEMATICS Alexandra Clément +44 20 3753 3018 Andrea Ferrari +41 44 283 2020 Vincent Klein +33 1 58 44 95 09Chris Armstrong +44 20 3207 7809 Fabian De Smet +44 20 3207 7810 Carsten Kinder +41 44 283 2024 Antonio Scuotto +33 1 58 44 95 03BANKS & DIVERSIFIED FINANCIALS Toby Flaux +44 20 3465 2745 Gianni Lavigna +41 44 283 2038Iro Papadopoulou +44 20 3207 7924 Karl Hancock +44 20 3207 7803 Jamie Nettleton +41 44 283 2026 TRADINGCHEMICALS, CONSTRUCTION & CAP GOODS Sean Heath +44 20 3465 2742 Benjamin Stillfried +41 44 283 2033 LONDONJina Zachrisson +44 20 3207 7879 David Hogg +44 20 3465 2628 Edward Burlison-Rush +44 20 3753 3055CONSUMER STAPLES Peter Kaineder +44 20 3753 3062 SALES TRADING Richard Kenny +44 20 3753 3083Rupert Trotter +44 20 3207 7815 James Matthews +44 20 3207 7807 HAMBURGCONSUMER DISCRETIONARY David Mortlock +44 20 3207 7850 David Hohn +49 40 350 60 761 ELECTRONIC TRADINGVictoria Maigrot +44 20 3753 3010 Eleni Papoula +44 20 3465 2741 Gregor Labahn +49 40 350 60 571 Daniel Eichhorn +49 40 350 60 391HEALTHCARE Bhavin Patel +44 20 3207 7926 Lennart Pleus +49 40 350 60 596 Matthias Führer +49 40 350 60 597Frazer Hall +44 20 3207 7875 Richard Payman +44 20 3207 7825 Marvin Schweden +49 40 350 60 576MEDIA & TELECOMMUNICATIONS George Smibert +44 20 3207 7911 Tim Storm +49 40 350 60 415 CRMJulia Thannheiser +44 20 3465 2676 Anita Surana +44 20 3207 7855 Linus Weidner +49 40 350 60 798 Jessica Jarmyn +44 20 3465 2696

Paul Walker +44 20 3465 2632 Philipp Wiechmann +49 40 350 60 346 Edwina Lucas +44 20 3207 7908SALES Christoffer Winter +49 40 350 60 559 Greg Swallow +44 20 3207 7833BENELUX FRANCEMiel Bakker +44 20 3207 7808 Thibault Bourgeat +33 1 5844 9505 LONDON CORPORATE ACCESSMartin de Laet +44 20 3207 7804 Alexandre Chevassus +33 1 5844 9512 Mike Berry +44 20 3465 2755 Lindsay Arnold +44 20 3207 7821Alexander Wace +44 20 3465 2670 Dalila Farigoule +33 1 5844 9510 Stewart Cook +44 20 3465 2752 Jennie Jiricny +44 20 3207 7886

Clémence Peyraud +33 1 5844 9521 Mark Edwards +44 20 3753 3004 Stella Siggins +44 20 3465 2630GERMANY Benjamin Voisin +33 1 5844 9507 Tristan Hedley +44 20 3753 3006Michael Brauburger +49 69 91 30 90 741 Peter King +44 20 3753 3139 EVENTSNina Buechs +49 69 91 30 90 735 SCANDINAVIA Christoph Kleinasser +44 20 3753 3063 Laura Hawes +44 20 3753 3008André Grosskurth +49 69 91 30 90 734 Frederik Angel +44 20 3753 3055 Chris McKeand +44 20 3207 7938 Suzy Khan +44 20 3207 7915Florian Peter +49 69 91 30 90 740 Marco Weiss +49 40 350 60 719 Simon Messman +44 20 3465 2754 Charlotte Kilby +44 20 3207 7832Joerg Wenzel +49 69 91 30 90 743 AJ Pulleyn +44 20 3465 2756 Natalie Meech +44 20 3207 7831

Paul Somers +44 20 3465 2753 Ellen Parker +44 20 3465 2684Sarah Weyman +44 20 3207 7801

Contacts - BCM

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US SALES SALES E-mail: firstname.lastname@berenberg-us.comBERENBERG CAPITAL MARKETS LLC Kelleigh Faldi +1 617 292 8288 SALES TRADING CRMMember FINRA & SIPC Isabella Fantini +1 646 445 4861 Scott Duxbury +1 646 445 5573 Laura Cooper +1 646 445 7201

Shawna Giust +1 646 445 7216 Christopher Kanian +1 646 445 5576Zubin Hubner +1 646 445 5572 Lars Schwartau +1 646 445 5571 CORPORATE ACCESSJessica London +1 646 445 7218 Bob Spillane +1 646 445 5574 Olivia Lee +1 646 445 7212Ryan McDonnell +1 646 445 7214Emily Mouret +1 415 802 2525 ECONOMICSPeter Nichols +1 646 445 7204 Mickey Levy +1 646 445 4842Kieran O'Sullivan +1 617 292 8292Jonathan Saxon +1 646 445 7202