INVESTMENT NAVIGATORASIA EDITION

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M A R C H 2 0 2 0

CONTENTS

FOCUS OF THE MONTH 4

CIO INSIGHTS -

FOCUS TOPIC 5

GDP & CPI FORECASTS 7

EQUITIES 8

FIXED INCOME 9

FOREX 10

ALTERNATIVES & COMMODITIES 11

IN-HOUSE ANALYSIS SERVICE FOR AN OPTIMISED PORTFOLIO 12

WORDS FROM THE DPM DESK 13

SUSTAINABLE INVESTING 14

4

FOCUS OF THE MONTH

5

C O V I D i s A c c e l e r a t i n g Tr e n d s i n S m a r t S u s t a i n a b l e C i t y a n d H e a l t h c a r e I n n o v a t i o n

HIGHTLIGHTS• In the aftermath of the outbreak, governments are likely to invest more resources to review

the public health system, finding ways on prevention, early detection, diagnosis and effectivetreatment, as well as mitigating risk of economic disruptions for the next epidemic.

• This will create strong needs for more sophisticated and tech-savvy smart living and morerobust public healthcare infrastructure, with the support from new technology and innovation.

• Potential areas of beneficiaries are: (1) Increasing use of online platforms, (2) Furtheringdevelopment in humanless delivery, industrial automation and smart logistics, (3) Integratingbig data analytical solutions for public health system, and (4) Adopting faster healthcaretechnology applications.

What are the potential areas of beneficiaries?

C I O I N S I G H T S - F O C U S T O P I C

The current COVID outbreak exposes the shortfall in public health system in many countries. Thequarantine and precautionary measures change consumer behaviors and force companies to exploreremote working business models. Businesses and consumers have been shifting further from offline toonline. The epidemic further accelerates trend in digital connectivity.

As the affected countries are currently paying huge economic costs and many businesses are facingtremendous short term challenges, in the aftermath of the outbreak, governments are likely to investmore resources to review the public health system, finding ways on prevention, early detection, diagnosisand effective treatment, as well as mitigating risk of economic disruptions for the next epidemic.

This will create strong needs for more sophisticated and tech-savvy smart living and more robust publichealthcare infrastructure, with the support from new technology and innovation. Internet of things (IoT),big data, blockchain, artificial intelligence (AI) and 5G are new technologies that have been developingvery quickly in recent years. The COVID outbreak will spark their commercial applications, new innovationsand new business models to enhance smart city and smart healthcare much further.

Increasing use of online platforms – During the outbreak, new business ideas are already happening.For instance, property developers in China are selling new properties in the virtual world with onlinediscount sales campaign due to the closure of property showrooms. E-commerce, online education,online services and online entertainment are catching up to replace traditional offline businesses.There will also be more new business models that adopt virtual reality (VR) and augmented reality(AR).

Furthering development in humanless delivery, industrial automation and smart logistics – Usage ofrobots and machines have become more prevalent than ever in delivery, industrial and logistics amidreducing human-to-human interactions during the outbreak. The epidemic is adding incentives forentrepreneurs to join the megatrend of IoT and AI to improve industrial automation. The autonomousdriving system will also enable new logistics capability.

66

Integrating big data analytical solutions for public health system – Governments will be keen to create asafer and more health-conscious environment. There will likely be more data sharing, leverage of big dataand commercial application of super big data to provide better monitoring, early detection and preventionof the risk of another epidemic in the future.

Adopting faster healthcare technology applications – There are now some examples of using 5Gtechnology to do remote diagnosis of COVID-19 patients. Broader use of remotediagnosis/therapy/treatment is set to take off.

Post the COVID epidemic, governments will identify multiple shortfalls on healthcare as well as the economyas a whole during the outbreak. They are likely to allocate additional resources and efforts trying to fill thegaps. With some governments already increasing fiscal spending that targets to build a more sustainable city,the epidemic will only accelerate and magnify the urgency to build up new, smart and sustainableinfrastructure for the economies. Many governments would need to co-operate with the corporate sector tocreate new business and governance models. This implies increasing opportunities for companies with therelevant capability to commercialize certain disruptive technologies with an emphasis on the sustainabledesign and elements.

Smart sustainable cities of the future

As we foresee structural changes on the public health system and towards smart and sustainableeconomies, there will be very exciting opportunities years ahead in these areas after coming out from theunfortunate event of COVID epidemic. Any deep market corrections are good buying opportunities for thesemegatrend investment themes.

Source: Gartner (E) estimates, Morgan Stanley, BNP Paribas WM as of 28 Feb 2020

C I O I N S I G H T S - F O C U S T O P I C

58% 59% 60% 61%63% 64% 65%

50% 51% 52%54% 55% 56%

58%

21% 22% 23%25%

27%29%

31%

10%

20%

30%

40%

50%

60%

70%

2016 2017 2018e 2019e 2020e 2021e 2022e

World WideUSChina

Software and IT Services as % of Enterprise IT Spending

Online Shopping as % of Total Retail Sales

Source: Euromonitor, Morgan Stanley, BNP Paribas WM as of 28 Feb 2020Note: 2018 data

COVID is accelerating the digital connectivity trend

6.7%

8.6%

8.8%

10.0%

10.8%

11.0%

13.7%

17.0%

18.4%

24.0%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Switzerland

Japan

France

Australia

Taiwan

Germany

US

UK

China

South Korea

7

C I O I N S I G H T S – G D P & C P I F O R E C A ST S

K E Y E C O N O M I C V I E W S

Growth

Inflation

GDP (YoY%) CPI (YoY%)2019f 2020f 2021f 2019f 2020f 2021f

Dev

elop

ed

US 2.3 1.6 1.8 1.8 2.2 1.9

Japan 1.0 -0.4 0.5 0.5 0.6 0.3

Eurozone 1.2 0.7 1.5 1.2 0.9 1.1

UK 1.4 1.0 1.5 1.8 1.5 1.8

Developing Asia* 5.6 5.8 5.9 2.7 3.0 3.2

Nor

th A

sia China 6.1 4.5 5.8 2.9 3.2 1.5

Hong Kong* 0.3 1.5 2.5 3.0 2.6 2.6

South Korea 2.0 1.8 2.5 0.5 0.9 1.4

Taiwan* 2.0 1.9 2.1 0.8 1.1 1.4

Sout

h As

ia

India 5.8 5.5 6.0 4.3 4.5 4.5

Indonesia 5.0 4.9 5.2 3.2 3.3 3.1

Malaysia 4.5 3.9 4.5 1.0 2.1 2.2

Philippines* 5.7 6.2 6.4 2.5 2.3 3.1

Singapore* 0.5 1.0 1.6 0.7 1.0 1.3

Thailand 2.9 2.2 3.2 0.9 0.9 1.2

Source: BNP Paribas Group Economic Research, BNP Paribas Global Markets forecasts as of 28 Feb 2020* IMF data and forecasts as of 28 Feb 2020

• The impact of Covid-19 will be stronger than the trade uncertainty that dominatedlast year. We believe the economic impact of Covid-19 will be temporary, but wecannot predict the extent of the contagion and its duration. The wider the virusspreads and the longer the outbreaks last, the more likely the shock is to triggersecond-round effects, and hence a more enduring drag on the global economy.

• Recent developments of contagion in Italy, South Korea and Iran has suggested thatthe coronavirus is no longer isolated to just Asia or China. Latest economic data suchas PMI in China have also supported our view that the short-term economic impactfrom Covid-19 will be more significant than the SARS, especially given the growingimportance of China in the global economy.

• Overall, we expect global growth in 2020 to be 0.4 pp lower at 2.6% due to Covid-19.We see a stronger contrast between a weak H1 2020 and a more pronounced recoveryin H2, although the increase in number of cases and deaths outside of China suggeststhat the shape of the recovery is more likely to be a U than a V.

• China’s consumer inflation expanded at its fastest pace in more than eight years, aspork prices soared due to the coronavirus epidemic and stronger demand over theLunar New Year period. CPI YoY rose 5.4% in January, up from a 4.5% in December,and at its highest point since October 2011. Meanwhile, the producer price index (PPI)rose 0.1% YoY in January, an improvement on the -0.5% in December. The closure offactories during the last week of January for the Lunar New Year period was likely thereason for the insignificant impact on factory gate prices, although this should likelychange in the next month.

COUNTRY COUNTRY

POSITIVE NEUTRAL NEGATIVE POSITIVE NEUTRAL NEGATIVE

SECTOR SECTOR

8

C I O I N S I G H T S – E Q U I T I E S

G L O B A L :P O S I T I V E

A S I A : N E U T R A L

Source: MSCI indices in local currency terms, Bloomberg, Datastream, BNP Paribas Wealth Management, as of 28 Feb 2020

Real EstatesCommunication

HealthcareTechnology▲Energy

Utilities▼Consumer

Staples

FinancialsMaterialsIndustrials▼Consumer

Discret

SingaporeSouth Korea

India

TaiwanThailandMalaysia

PhilippinesIndonesia

China

FinancialsEnergy

CommunicationsConsumer Discret.

TechnologyUtilities

MaterialsReal EstateHealthcare

IndustrialsConsumer Staples

USEurozone

UKEM

Japan

• We recently discussed about the possible likelihood of a short term unwinding given the overcrowded USequity market. On the last week of February, we finally experienced a huge unwinding of growth stocks in abig market sell-off. The sharpness of the plunge was a result of how far US equities had climbed and thecatalyst was the escalating concerns over COVID-19, particularly given wider spread in Italy, South Koreaand Iran. This triggered the global market risk-off and the rush to safe haven assets.

• We downgrade Consumer Staples from Positive to Neutral and Consumer Discretionary from Neutral toNegative in Asia. The coronavirus outbreak has significantly reduced consumer demand in F&B, tourism,offline retail and hospitality sector, when gathering and events are successively cancelled in China, Japanand Korea. This could possibly spread to other Asian countries in March so near-term outlook remains lessoptimistic.

1-month (%) YTD (%) 2019 (%) Forward PE

(x)Trailing PB

(x)

Dividend Yield (%)

2020f

EPS Growth (%)

2020f

EPS Growth

(%) 2021f

ROE (%) 2020f

Deve

lope

d US -8.3 -8.3 29.1 19.5 3.7 2.2 7.7 11.8 19.4Japan -9.6 -11.1 16.0 13.9 1.3 2.4 -8.7 12.6 6.7Eurozone -8.0 -9.7 22.4 14.9 1.7 3.1 11.0 9.6 9.5UK -9.8 -12.9 10.8 13.1 1.7 4.6 3.2 7.0 9.3

Asia Ex-Japan -2.9 -7.2 15.4 13.4 1.6 2.7 14.0 14.8 11.7

Nor

th A

sia China 1.2 -3.8 20.6 12.3 1.8 2.7 11.0 14.0 11.5

Hong Kong -1.1 -5.8 6.6 14.8 1.2 3.0 3.8 10.0 9.6South Korea -5.5 -7.8 14.4 11.5 1.0 2.2 30.7 26.3 10.6Taiwan -1.7 -5.6 28.3 15.4 2.0 3.7 15.9 11.2 14.3

Sout

h As

ia

India -6.3 -7.1 8.5 18.5 3.0 1.3 23.3 16.2 12.2Indonesia -8.4 -12.4 3.0 14.9 2.5 2.9 10.6 10.4 17.3Malaysia -3.7 -7.4 -6.1 15.3 1.5 3.5 5.9 6.4 9.0Philippines -5.6 -12.9 5.2 14.7 1.9 1.6 8.7 11.1 11.5Singapore -5.0 -7.1 8.5 12.7 1.2 4.0 2.9 5.9 8.4Thailand -11.5 -15.8 -1.9 15.4 1.8 3.1 11.2 9.2 9.9

9

POSITIVE NEUTRAL NEGATIVE POSITIVE NEUTRAL NEGATIVE

A S I A ( U S D ) C R E D I T : N E U T R A L

C I O I N S I G H T S – F I X E D I N C O M E

G L O B A L B O N D : N E G AT I V E

Hong KongSingapore

IndiaPhilippinesSouth Korea

IndonesiaChina

- -Short-term UST Invest. Grade

EMD (LC)EMD corp (HC)

High YieldEMD sov (HC)

Long-term USTGerman govies

Source: Barclays indices, Bloomberg, BNP Paribas Wealth Management as of 28 Feb 2020

• The sudden surge in the number of COVID-19 cases out of China (in particular Italy, South Korea andIran) stoked fears of a larger impact on the global economy during the last week of February. US 10Ytreasury yields fell to record low of 1.116% in February, and has progressively trended below 1% in thefirst week of March as investors continue to rush towards safe heaven assets.

• The US Federal Reserve announced an emergency cut on 3rd March, lowering the federal funds rate by50bps to 1% - 1.25%, against the 'evolving risks' coronavirus poses to economic activity. This is the firstrate cut the Fed has done outside its normal schedule of policy meetings since the financial crisis in2008, albeit markets were already fully pricing it in at the upcoming policy meeting in March. The Fedreiterated that they will be closely monitoring developments and will act as appropriate to support theeconomy. Following the cut, the markets reacted with some skepticism and has gone on to price in anadditional 50bp for the meeting on 18th March.

• Asia hard currency credit performed well in February, up 1.3% for the month, even as the widening ofcredit spreads offset gains somewhat. We remain cautiously positive on Singapore credit. They aregenerally considered “expensive”, but are no doubt still the safest bond assets in the region.

Total Return (%) Yield-to-Worst (%)1-Month YTD 2019

Asia

Asia USD Bond 1.3 2.9 11.0 3.0

Asia Local Currency Bond -0.7 -0.6 12.1 2.9

China 1.3 2.7 10.3 3.4

Hong Kong 1.8 3.9 8.9 2.6

India 0.6 2.1 12.0 3.6

Indonesia 1.0 2.3 18.2 3.2

Singapore 1.6 3.5 10.1 2.4

South Korea 1.6 3.3 7.7 1.7

Philippines 1.2 3.2 14.4 2.5

Othe

rRe

gion

s US 10-year Treasuries 2.6 5.3 6.3 1.1

US Investment Grades (IG) 1.8 3.8 8.7 1.7

US High Yield (HY) -1.4 -1.4 14.3 6.2

Emerging Market USD Bond 1.2 2.7 11.5 3.7

POSITIVE NEUTRAL NEGATIVE

10

C I O I N S I G H T S – F O R E X

1 2 - M O N T H F O R E X V I E W

F O R E X F O R E C A STS

JPYEURAUDSGD

GBPHKD

IDRTHBMYR

INRTWD

Spot 3-month 12-monthAs of 28 Feb 2020 View Target View Target

Dev

elop

ed

USD Index 98.13 = 97.9 - 95.5Japan 107.9 + 108 + 106Eurozone 1.098 = 1.10 + 1.14UK 1.277 = 1.29 = 1.30Australia 0.645 + 0.68 + 0.70Canada 1.342 + 1.30 + 1.30

Asia

Ex-

Japa

n

China 6.990 = 7.00 + 6.80Hong Kong* 7.793 = 7.83 = 7.83South Korea 1,214.5 + 1,180 + 1,150Taiwan* 30.28 = 30.3 = 29.5India 72.17 = 72.0 = 72.0Indonesia* 14,348 = 14,000 + 13,700Malaysia 4.215 = 4.15 + 4.10Philippines* 50.98 = 50.0 + 49.0Singapore 1.396 + 1.37 + 1.35Thailand* 31.55 + 29.10 + 29.00

Source: BNP Paribas Wealth Management as of 28 Feb 2020*BNP Paribas Global Markets forecast as of 28 Feb 2020 Note: + Positve / = Neutral / - Negative

CNH

• The Chinese RMB was down this year on the back of the coronavirus outbreak, and broke 7.0.Quantifying the economic impact of the epidemic remains difficult, depending on how thevirus develops from here and its duration. We expect GDP growth to be very badly hit in Q1,and the negative impact to continue in Q2. Thus far, the Chinese government has provided acombination of monetary and fiscal support, albeit the effectiveness remains to be seen. Wedo not expect the USDCNY to move above 7.0 as the shock is already priced in. We see theUSDCNH remaining steady and keep our target at 7.00 over the next 3 months.

JPY

• JPY underwent a sharp depreciation in February and lost 3.46% due to weak GDP and PMIdata, which hinted towards a recession. Our 2020 growth outlook for Japan has since beenlowered to -0.4% for the year, especially since the Japanese economy is set to be one of themost severely impacted by the coronavirus outbreak, due to weaker Chinese demand, supplychain disruptions and a hit to inbound tourism. Indeed, the safe heaven status of JPY saw astrengthening during the last week of February as markets risk off, recovering more thanwhat it had lost and ending the month just slightly strong than in January.

USDCADCNHKRWPHP

POSITIVE NEUTRAL NEGATIVE POSITIVE NEUTRAL NEGATIVE

EXPECTED RANGE

11

C I O I N S I G H T S – A LT E R N AT I V E S & C O M M O D I T I E S

A LT E R N AT I V E SC O M M O D I T I E S

C O M M O D I T I E S

A LT E R N AT I V E S

OIL

• Oil prices declined sharply due to worries about the global demand in the wake ofthe coronavirus outbreak. The situation is aggravated by the lack of storagecapacities in Asia. Its impact should however be temporary and we still expect Brentprices to go back in the $60-70/b range in H2 2020. OPEC+ restraints, possible supplydisruptions (Libya, Iraq), a slower US shale supply growth and better economicmomentum should help a price recovery in the 2nd part of the year.

GOLD

• On the short term, gold is overbought and vulnerable to a consolidation/correction.On the medium term, we remain positive on gold as its key fundamentals remain inplace: negative/low and still decreasing real bond yields, ongoing central bankpurchases and moderate supply. Gold jumped to 1680$/oz as the Coronavirus spreadoutside China. We still like to hold an exposure to gold in our portfolios as a hedgeagainst tail risks, be they inflation, financial instability or geopolitical. We expect goldto trade in the $1535-1735/oz range in the coming months.

GLOBAL MACRO

• We stay positive on global macro. Risk-on bets were generally punished into monthend, while long government bonds (on the view of a Fed on hold) and long US Dollarbenefited from risk aversion. Systematic trend following strategies outperformed forthe full month of January, but were down during the last two weeks of January. Losseson equities were partially offset by gains on fixed income, precious metals andcurrencies. Most CTAs have maintained short positions on the EURUSD which werehighly rewarding lately.

EVENT DRIVEN

• We remain positive on Event Driven. Merger Arbitrage was up on the back of thetightening of deal spreads for some transactions. Despite heightened market volatilitytowards month-end, most deal spreads remained stable or tightened. Managers areoptimistic that the US/China trade war truce and the signing of the Brexit agreementshould spur a pickup in M&A activity

Source: BNP Paribas Wealth Management as of 28 Feb 2020

Oil USD 60 – 70Gold USD 1535 - 1735

GoldOil

Base metal - - Global MacroLong/short

equityEvent Driven

Relative-valueUK REITs

Global REITS

• BNP Paribas Portfolio Optimizer is an internally developed methodology used by the Bank to advise clients.

• The underlying technology is built on the arbitrage pricing theory. Our model supposes that economic andfinancial factors (i.e. unanticipated rate of inflation, changes in risk premiums, P/E ratios, etc.) can helpexplain changes in risks and expected returns associated with financial assets, and can provide anestimation of assets’ theoretical fair prices.

• BNP Paribas Portfolio Optimizer methodology will first apply our strategic asset allocation views andsecondly identify proposed investments within the Bank’s investment universe which is a larger universethan instruments shown in this document. The objective of this two-step approach is to propose a portfolioin line with a targeted value at risk. It considers both historical data and the Bank’s forecasts.

• We regularly monitor and update a set of financial instruments, which covers most asset classes. Thoseinstruments are regrouped within the Bank’s investment universe which is regularly updatedcorresponding to our tactical and the strategic views on major financial assets.

• The proposed portfolio, obtained using the BNP Paribas Portfolio Optimizer methodology, is the portfoliowhich is aligned with our market views in accordance with a specific investment profile. More concretely,the proposed portfolio takes into account the Bank’s investment universe instruments, and combininghistorical risk data and combines risk correlations between instruments to provide a proposed portfoliothat meets a target risk metric, therefore targeting maximum potential diversification. The risk metric ofthe proposed portfolio falls within a certain value at risk range, which is set based on a specific investmentprofile. This risk metric range depends on market conditions (i.e. it is not fixed), and is revised from time totime by the Bank when necessary.

12

I N - H O U S E A N A LY S I S S E R V I C E -FOR AN OPTIMISED PORTFOLIO

95

100

105

110

115

120

125

CONSERVATIVE

MODERATE

BALANCED

DYNAMIC

VERY DYNAMIC

Performance

Months

+10.5%

+10.7%

+9.8%

+8.3%+9.3%

Source: BNP Paribas, as of 28 February 2020Optimised Model Portfolio simulated returns are in USD terms, including dividends, coupons, and currency impact, rebalanced at end of each month.

SIMULATED PERFORMANCE OF OPTIMISED MODEL PORTFOLIOS

per risk profile

13

D I S C R E T I O N A R Y P O R T F O L I O M A N A G E M E N TWORDS FROM THE DPM DESK

There is positive correlation between companies that are superior in addressing ESG issues and shareprice performance

ESG indices have consistently outperformed its respective benchmarks

THE EXPERTISE OF THE DISCRETIONARY PORTOFLIO MANAGEMENT TEAMCOULD HELP YOU REALISE YOUR INVESTMENT OBJECTIVES

We start a series explaining different components of a multi-asset portfolio. This month we focus on debunking myths about Global Sustainable Responsible Investment, Equities

TRUST IS THE CORNERSTONE OF DPM SERVICES

REALITY

Sustainable investing is not just a short term fad but has been on the rise for many years. Sustainabilityis also growing in importance for all companies, across all industries. Increasingly, society is expectingfrom businesses more than just delivering a product and making profits but also how it makes a positivecontribution to society.

90% of companies consider a sustainability strategy necessary to be competitive today but merely 25%have sustainability incorporated in their business model.

Sustainable investing now represents about 30% of all professionally managed assets globally.Sustainable investing assets stood at $30.7 trillion at the start of 2018, a 34% increase over 2 years.

MYTH #2 – Sustainable investing is just a fadREALITY

MYTH #1 – Sustainable investing penalizes performance

Source: MSCI, Datastream, figures as are of 31 December 2019. Note: The above information is for illustration only and may be subject to change.

MSCI ACWIMSCI ACWI ESG

MSCI EM ESG

MSCI EM

60

70

80

90

100

110

120

130

140

150

Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 Dec 17 Jun 18 Dec 18 Jun 19 Dec 19

MSCI AC World IndexMSCI AC World ESG IndexMSCI Emerging Market ESG IndexMSCI Emerging Market Index

Source: Global Sustainable Investment Alliance 2018

14

S U STA I N A B L E I N V E ST I N G

We analyse the impact of a company’s activity on the environment (E), on employees, customers and civilsociety (S) and whether the company has good governance (G). We exclude sectors harmful to humans andthe environment (controversial weapons, thermal coal, tobacco) and

A sustainability rating scale from 1 to 10 clovers is given to each company

A SOLID ESG METHODOLOGY TO ASSESS THE SUSTAINABILITY OF EACH INVESTMENT

WHY SUSTAINABLE INVESTING

WHAT ARE OUR KEY STRENGTHS?

A GLOBAL MEGATREND• Sustainable investing now represents 30% of

all professionally managed assets globally, with AUM at $30.7 trillion in 2018, a 34% increase in the last 2 years1.

• Major institutional investors are adopting an ESG framework to investing, from Calpers in the US to the Norway sovereign fund in Europe and GPIF in Japan. An estimated $20 trillion of asset growth will flow into ESG funds from millennials, women and pensions/endowments2

NEW GROWTH OPPORTUNITIES• Sustainability is the new business.• Climate change mitigation and adaptation

have pushed companies to create new business models and new products.

• Growth opportunities include the energy transition (energy storage, smart meters), mobility (electric/hydrogen vehicles), green infrastructure, health and well being (biomedical, nutrition), waste management, blue economy, agribusiness4.

BETTER RISK ADJUSTED RETURNS • Various academic researches have shown that

ESG investing provide better informed decisions and better risk-adjusted returns.

• From the Stockholder to the Stakeholder: How Sustainability Can Drive Financial outperformance’ by Oxford University and Arabesque Partners shows that out of 2200 studies there is 90% positive or neutral relationship between ESG criteria and financial performance3.

• Climate risk is now becoming investment risk.

THE WIDE SPECTRUM OF ESG INVESTING5

• ESG Investing is not only about investing in thematic funds (climate change, water or sustainable food).

• Investors can choose various ESG strategies, from exclusions to best-in-class, diversified multi-asset to impact investing.

• Many asset managers are now integrating ESG factors to their traditional investment process (ESG integration)

Founding member of the UN Principles for Responsible Banking, commitment for Positive Banking Initiative

#3 participant worldwide in the green bonds market with 9.8 billion EUR in green bonds as book runner.

#1 financer of renewable energy projects in Europe and #3 in Asia Pacific

EUR 47 billion in SRI funds assets managed by BNP Paribas Asset Management

GLOBAL LEADERSHIP OF BNP PARIBAS GROUP IN SUSTAINABILITY

SUSTAINABLE INVESTING COULD HELP YOU ACHIEVE YOUR FINANCIAL & NON FINANCIAL OBJECTIVES

INVESTING FOR FINANCIAL RETURNS, ENVIRONMENTAL & SOCIAL BENEFITS

Source: BNP Paribas Wealth Management

Source: BNP Paribas Wealth Management

DISCLAIMER

This document is provided in Singapore by BNP Paribas, acting through its Singapore branch, and in Hong Kong by BNPParibas, acting through its Hong Kong branch. BNP Paribas is a public limited company (société anonyme) incorporated inFrance with liability of its members limited. BNP Paribas, acting through its Hong Kong branch is a licensed bank regulatedby the Hong Kong Monetary Authority, a Registered Institution under the Securities and Futures Ordinance of Hong Kong(Cap. 571), and registered with the Securities and Futures Commission (SFC) to carry on Types 1, 4, 6 and 9 regulatedactivities in Hong Kong (SFC CE Reference: AAF564). BNP Paribas, acting through its Singapore branch (UEN/Registration No:S71FC2145G), is a licensed bank regulated by the Monetary Authority of Singapore. BNP Paribas Wealth Management is thebusiness line name for the Wealth Management activity conducted by BNP Paribas. “BNP Paribas Wealth Management”(UEN/Registration No 53347235X) is a business name registered in Singapore under the Business Names Registration Act2014.

This document is produced for general information only and should not be used as reference for entering into any specifictransaction, and the information and opinions contained herein should not be relied upon as authoritative or taken insubstitution for the exercise of judgment by any recipient or the seeking of independent professional advice (such asfinancial, legal, accounting, tax or other advice) by any recipient. This document is not intended to be an offer or asolicitation to buy or to sell or to enter into any transaction. In addition, this document and its contents is not intended tobe an advertisement, inducement or representation of any kind or form whatsoever. BNP Paribas reserves the right (but isnot obliged) to vary the information in this document at any time without notice and, save to the extent provided otherwisein Clause 6.5 of the Terms and Conditions applicable to your account, BNP Paribas shall not be responsible for anyconsequences arising from such variation.

The terms set forth herein are intended for discussion purposes only and are subject to the final expression of the terms ofthe transaction, if the investor decides to proceed with the transaction. The final terms of the transaction will be set forthin the final term sheet, any applicable agreement and/or confirmation. Please also refer to the disclosure and otherimportant information concerning our fees, charges and/or commissions as set out in the Fee Schedule.

Although the information and opinions provided herein may have been obtained or derived from published or unpublishedsources considered to be reliable and while all reasonable care has been taken in the preparation of this document, BNPParibas does not make any representation or warranty, express or implied, as to its accuracy or completeness and, save tothe extent provided otherwise in Clause 6.5 of the Terms and Conditions applicable to your account, BNP Paribas shall notbe responsible for any inaccuracy, error or omission. All analysis, estimates and opinions contained in this documentconstitute BNP Paribas’ own judgments as of the date of this document, and such expressions of opinion are subject tochange without notice. Information provided herein may contain forward-looking statements. The words "believe","expect", anticipate", "project", "estimate", "predict", "is confident", "has confidence" and similar expressions are alsointended to identify forward-looking statements. These forward-looking statements are not historical facts but based onthe current beliefs, assumptions, expectations, estimates, and projections of BNP Paribas in light of the informationpresently available, and involve both known and unknown risks and uncertainties. These forward-looking statements arenot guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyondcontrol and are difficult to predict. Consequently, actual results could differ materially from those expressed, implied orforecasted in these forward looking statements. Investors should form their own independent judgment on any forward-looking statements and seek their own advice from professional advisers to understand such forward-looking statements.BNP Paribas does not undertake to update these forward looking statements. Where investors take into account anytheoretical historical information regarding the performance of the product/investment, investors should bear in mind thatany reference to past performance should not be taken as an indication of future performance. BNP Paribas is not givingany warranties, guarantee or representation as to the expected or projected success, profitability, return, performance,result, effect, consequence or benefit of any investment/ transaction. Save to the extent provided otherwise in Clause 6.5 ofthe Terms and Conditions applicable to your account, no BNP Paribas group company or entity therefore accepts anyliability whatsoever for any loss arising, whether direct or indirect, from the use of or reliance on this document or any partof the information provided.

Structured transactions are complex and may involve a high risk of loss including possible loss of the principal invested. Ifany product mentioned in this document is a structured product which involves derivatives, do not invest in it unless youfully understand and are willing to assume the risks associated with it. If you are in any doubt about the risks involved inany product/transaction, you should seek independent professional advice.

DISCLAIMER (CONTINUED)

Prior to the terms, conditions and features of the product/investment as well as the risks and merits of entering into anytransaction/investment, and consult with their own legal, regulatory, tax, financial and accounting advisors before makingthe investment. Investors/subscribers should fully understand the features of the investment, be financially able to bear aloss of their investment and be willing to accept such risk. Save as otherwise expressly agreed in writing, (a) where BNPParibas does not solicit the sale of or recommend any financial product to the investor/subscriber, BNP Paribas is notacting as financial adviser of the investor/subscriber in any transaction, and (b) in all cases, BNP Paribas is not acting asfiduciary of the investor/subscriber with respect to any transaction.

BNP Paribas and/or persons associated or connected with it may effect or have effected a transaction for their own accountin a product/an investment described in this document or any related product before or after this document is published.On the date of this document, BNP Paribas and/or persons associated or connected with it and their respective directorsand/or representatives and/or employees may take proprietary positions and may have a long or short position or otherinterests or make a market in a product mentioned in this document, or in derivative instruments based thereon, and maypurchase and/or sell the investment(s) at any time in the open market or otherwise, whether as principal or as agent or asmarket maker. Additionally, BNP Paribas and/or persons associated or connected with it may have within the previoustwelve months acted as an investment banker or may have provided significant advice or investment services to thecompanies or in relation to a product mentioned in this document.

This document is confidential and intended solely for the use of BNP Paribas and its affiliates, their respective directors,officers and/or employees and the persons to whom this document has been delivered. It may not be distributed, published,reproduced or disclosed by any recipient to any other person, nor may it be quoted or referred to in any documntering intoany transaction, each investor/subscriber should fully understand ent, without the prior written consent of BNP Paribas.

Hong Kong: This document is distributed in Hong Kong by BNP Paribas, acting through its Hong Kong branch only toProfessional Investors within the meaning of Part I of Schedule 1 to the Securities and Futures Ordinance of Hong Kong(Cap. 571). The products or transactions described in this document may not be authorised in Hong Kong and may not beavailable to Hong Kong investors.

Singapore: This document is distributed in Singapore by BNP Paribas, acting through its Singapore branch only toAccredited Investors within the meaning of the Securities and Futures Act, Chapter 289 of Singapore only and is notintended for investors in Singapore who are not such Accredited Investors and should not be passed on to any suchpersons. Some products or transactions described in this document may not be authorised in Singapore and may not beavailable to Singapore investors.

Save to the extent provided otherwise in Clause 6.5 of the Terms and Conditions applicable to your account, information inthis document is for general circulation to the intended recipients only and is not intended to be a recommendation orinvestment advice to recipients hereof. A recipient of this document should seek advice from its/his own professionaladviser regarding the suitability of the products or transactions (taking into account the recipient's specific investmentobjectives, financial situation and particular needs) as well as the risks involved in such products or transactions before acommitment to purchase or enter into any product or transaction is made.

Please note that this document may relate to a product or products where BNP Paribas is issuer, and in such instance thisdocument or certain information contained therein may have been prepared by BNP Paribas in its capacity as productissuer (“Issuer Document”). Where an Issuer Document is provided to you by BNP Paribas, acting through its Hong Kongbranch or BNP Paribas, acting through its Singapore branch in its capacity as distributor, it shall also be subject to Clause6.5 of BNP Paribas Wealth Management’s prevailing Terms and Conditions applicable to your accounts (“T&Cs”). To theextent that there are any inconsistency between the terms of an Issuer Document and Clause 6.5 of the T&Cs, the lattershall prevail.

Generally, please take note that various potential and actual conflicts of interest may arise from the overall investmentactivities or the roles of the parties involved in any investment product or transaction, their investment professionalsand/or their affiliates. In particular, the counterparty / issuer / provider or its related entities or affiliates can offer ormanage other investments which interests may be different to the interest of your investments in that investment productor transaction; or for cases where the product counterparty or issuer is BNP Paribas or its related entity or affiliate, BNPParibas may also act as distributor, guarantor, calculation agent and/or arranger of the same product.

By accepting this document you agree to be bound by the foregoing limitations.

In case there is a Chinese version of this document and there is any discrepancy between the English and Chinese versions,the English version shall prevail.

© BNP Paribas (2020). All rights reserved.

SOURCES

1. Source: GSIA http://www.gsi-alliance.org/wp-content/uploads/2019/03/GSIR_Review2018.3.28.pdf)

2. Source: Bank of America .

https://www.bofaml.com/content/dam/boamlimages/documents/articles/ID19_1119/esg_matters.pdf)

3. Source: BNP Paribas/

https://wealthmanagement.bnpparibas/en/expert-voices/risk-return-properties-investment-

strategies.html

4. Source BNP Paribas- P.Rousseau presentation – A sustainable jouney : a new economic model)

5. Source: BNP Paribas Wealth Management

https://wealthmanagement.bnpparibas/lu/en/what-we-do/your-values/positive-impact.html

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