May13 Cs

Global Research Private Banking Investment horizon: 6-12+ months
Research Monthly
May 2013
Buy
CS Top 30 stock: Google Google released a strong earnings report recently, boosted by mobile advertising, with YouTube set to be a long-term contributor. Global Real Estate Investment Trusts (REITs) We favor US and Asian REITs in particular. A basket of equally weighted 12-month forwards in CNY, SGD and MXN versus USD and EUR, with a target of 105 and a stop loss of 97.5. Diversify out of traditional hard currencies.
Buy
Buy
Investment Strategy
Liquidity supports stocks, credits, real estate and hedge funds

page 3
This months featured topic
Investment theme
Investment theme
What else could the ECB do?
page 9
Gold whats next after the sell-off?

page 10
Cyprus: Country-specific rather than systemic risk

page 11
Important disclosures are found in the Disclosure appendix. Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For a discussion of the risks of investing in the securities mentioned in this report, please refer to the following Internet link: https://research.credit-suisse.com/riskdisclosure
30/04/2013
Credit Suisse - Research Monthly
Editorial
Giles Keating Head of Research for Private Banking and Wealth Management giles.keating@credit-suisse.com, +41 44 332 22 33
In this issue
Investment Strategy
Liquidity supports stocks, credits, real estate and hedge funds page 3 Investment summary
Economics page 5
Expansion continues despite brief slowdown Global liquidity is growing rapidly, yields on low-risk assets are low, and investors are being pushed into equities and riskier credits. Many investors see this as unsustainable, but we see two stages the first lasting maybe for the next couple of years or so in which equity markets rise much further (with temporary corrections), while credit markets stay strong. Only after that would major instability and much weaker markets appear. During the first stage, we envisage a virtuous circle, as ample liquidity and rising asset prices influence the real economy, helping unemployed labor and capital back into productive use, thus boosting corporate earnings and actually helping to justify the earlier rise in asset valuations. This process is already underway in the USA. Housing is recovering strongly and, although GDP growth may appear lackluster, it is actually rather impressive given the powerful fiscal headwinds. As these fade, the economy will be exposed to the full force of the Feds liquidity, and the resulting acceleration in growth should justify high asset prices. Europe is further behind, but is slowly going down the right road; Japan lags even more. In the second stage, this process gets out of hand. Equity prices will likely rise further than justified, even with a still-improving economy, and central banks are likely to withdraw liquidity too slowly. And Treasuries will be vulnerable as inflation appears, initially probably not for labor but for oil, where the underlying supply-demand situation remains very tight (despite todays temporary weakness), though US shale oil and gas may postpone the day of reckoning. So there are risks of instability, but they look to be a long time away. For now, we think investors should focus on the positive effects of the liquidity flood.
page 7

Investment theme
page 9

Investment theme
page 10

Fixed income
page 11
Environment for credit investments remains favorable page 12

Equities
US equities show resilience

Alternative investments
page 14
Hedge funds and real estate more attractive than commodities page 16
Foreign exchange
Chinese renminbi appreciation set to extend Risk disclaimer

page 19
page 17
Editorial deadline: 30 April 2013
Investment Strategy
30/04/2013
Investment Strategy
Liquidity supports stocks, credits, real estate and hedge funds
overweights and underweights in their portfolios, and following a selective strategy centered around specific themes such as those presented in our Top Investment Ideas for 2013. Top Investment Ideas for 2013 update Our Idea No. 1 (Beyond cash) has continued to develop well, with a positive single-digit performance over Q1. We keep the overall status on Green with a slightly more cautious stance toward USD bonds. We also keep all our stock ideas on Green in expectation of Idea No. 2 (Recovery stocks) starting to outperform the index more clearly in an environment more favorable to cyclicals in the coming months. With our Idea No. 3 (Dividends and beyond), we refrain from any major rotation in our stock selection at this point. Many US companies continue to offer the most solid dividend prospects, in our view. The prospect at some point of a slow and cautious exit of the Fed from its current policy is likely to go hand-in-hand with stronger growth, which should mitigate potential negative effects. Our more niche Idea No. 4 (New gas and oil sources) has disappointed due to the negative effect of the slowing mini-cycle on oil, but we expect a rebound and maintain the Green status for now. Our view is also still positive for Idea No. 5 (US real estate). We expect homebuilder stocks to recover, given the strong housing starts data. In our Idea No. 6 (New hard currencies), we now exclude KRW from the selection of emerging currencies we favor for long positions, but continue to focus on CNY, SGD and MXN. Equities: Overweight Japan and the USA Whereas technical patterns were already positive for Japanese stocks, fundamentals have now turned supportive too. Japans current earnings momentum is one of the strongest. We now recommend overweighting the region, along with the USA. Europe stands in contrast, with relatively weak earnings momentum against the backdrop of depressed domestic European demand. But we believe the European Central Bank is preparing new measures aimed at boosting credit activity in Europe that is likely to help European equities recover from their underperformance over the last quarter. We therefore keep our neutral recommendation for the region. We have made no fundamental changes to our thematic choices (Top Investment Ideas No.s 24). Fixed income: Hard currency emerging market and selected high-yield bonds We maintain our general preference for short-maturity credits. Emerging market bonds in hard currencies came under pressure in Q1, with investors clearly preferring local currency bonds to emerging market stocks or hard-currency bonds. Higher spreads now offer better entry opportunities and we include emerging market hard-currency bonds among our preferred fixed income segments again. In our Top Investment Idea No. 1, however, we have changed the status of the USD-portion to Yellow to reflect more limited yield compression potential from current levels.
Credit activity is still insufficient in Europe; the ECB is set to take the next monetary easing steps.
Stocks, credits, real estate and hedge funds offer better value than non-yielding assets in a world of lower systemic risks.
FX volatility and low rate differentials support FX hedging; currency diversification is helpful.
Nannette Hechler-Fayd'herbe Head of Global Financial Markets Research nannette.hechler-fayd'herbe@credit-suisse.com, +41 44 333 17 06
Liquidity abundance, asset scarcity and specific risks In the past few weeks, it seemed as if little would trouble the generally resilient investor sentiment in the financial markets, with, for example, the US stock market reaching historical highs (compared to gold, which has embarked on a bumpier ride). Rather than a sign of complacency, we think investor behavior is a reflection of generally improving financial and systemic health, as well as the imbalance between an over-abundance of liquidity available for investing and a lack of assets offering reasonable value to investors. While indicators point to a temporary slowdown, structural economic fundamentals are improving, and are thus providing a generally supportive environment for stocks, credits and real estate all of which offer better alternatives to non-yielding cash in our view. But as the market becomes more fully valued, we are seeing more differentiation toward specific risks. We believe investors can benefit from implementing more accentuated regional and sectoral
Investment Strategy
30/04/2013
Alternative Investments: Directional hedge funds and real estate Among alternative funds, hedge funds particularly directional long-short-style hedge funds and real estate continue to benefit from current conditions, and we are reaffirming our Top Idea No. 5 (US real estate). In contrast, the outlook for commodities is more mixed. Commodities are cyclical and benefit from economic upswings, but they are a non-yielding investment at the same time. Gold has come particularly under pressure over the past few weeks, consistent with lower systemic risks, less demand for safe-haven assets and the rotation from non-yielding into yielding assets. Gold now trades at undervalued levels and monetary policy is still supportive, but technical patterns suggest further downside is possible. We think this substantiates a neutral outlook. Currencies: Volatility and narrow rate differentials support FX hedging Since the beginning of the year, foreign exchange volatility has increased, but still remains low by historical comparison, while rate differentials have remained narrow. For investors with global asset portfolios, this supports FX hedging since the costs of hedging are relatively low, while currency risks have increased. For CHF, we expect the 1.20 floor against the EUR to remain credible. We continue to favor emerging market currencies that benefit from current account surpluses, are undervalued and/or offer interest rate advantages. This includes CNY, SGD and MXN. However, we are removing KRW from our target currency investments. (26/04/2013)
Strategic asset allocation (SAA) The neutral allocations serve as a guideline and represent the average weighting over an entire market cycle. Since the global strategy is based on a medium-term investment horizon, it deviates from the neutral position. We recommend an overweight in equities and alternative assets, particularly hedge funds and real estate (selected markets). Conversely, we recommend underweighting fixed income investments and liquidity.
Fixed Income
Benchmark (BM) SAA Cash Fixed Income Equity Alternative BM 5% 80% 0% 15% SAA 2% 80% 0% 18%
Income
Balanced
Capital Gain
Equities
Source: Credit Suisse
Investment Strategy
30/04/2013
Investment summary
Short interest rates 3M Libor / 10-year government bonds
3M Libor in % CHF EUR * USD GBP JPY Spot 0.02 0.21 0.28 0.50 0.16 3M 0.0-0.2 0.1-0.3 0.3-0.5 0.5-0.7 0.1-0.3 12M 0.0-0.2 0.1-0.3 0.3-0.5 0.5-0.7 0.1-0.3 10Y bonds Spot 0.57 1.21 1.66 1.68 0.59 3M 0.7-0.9 1.3-1.5 1.7-1.9 1.7-1.9 0.6-0.8 12M 1.1-1.3 1.7-1.9 1.9-2.1 2.2-2.4 0.8-1.0
Equities: Selected indices

Index S&P 500 SMI FTSE-100 Euro Stoxx 50 Nikkei 225 MSCI EM China H-Shares Price 1,582.24 7,856.32 6,426.42 2,683.43 13,884.13 1,022.36 10,834.08 MTD (%) 0.8% 0.5% 0.2% 2.3% 12.6% -1.0% -0.6% YTD (%) 12.8% 15.2% 8.5% 2.2% 33.6% -3.1% -4.8% 12M fair value 1,518 7,325 6,317 2,654 14,500 1,071 13,000 12M outlook Overweight Underweight Neutral Neutral Neutral Neutral Neutral
Prices as of 26/04/2013; 12M fair value: scenario analysis available; 12M outlook: relative to MSCI World Index (USD) Source: Bloomberg, Credit Suisse
Spot rates are closing prices as of 26/04/2013. Forecast date: 18/04/2013. * 3M Euribor Source: Bloomberg, Credit Suisse
Foreign exchange Bonds: Selected indices

Spot Index YTM (%) 2.6 1.6 0.7 3.2 4.7 5.3 5.5 Spread to benchmark (bp) 116 126 45 142 297 n.a. 483 Total return YTD (%) 1.6 1.7 0.5 4.3 0.0 1.7 4.3 12M TR outlook EUR/USD USD/CHF EUR/CHF USD/JPY EUR/JPY EUR/GBP GBP/USD EUR/SEK AUD/USD USD/CNY
Spot rates: London close 26/04/2013 Source: Bloomberg, Credit Suisse
3M 1.31-1.35 0.92-0.96 1.23-1.27 100-104 134-138 0.89-0.93 1.44-1.48 8.58-8.62 0.98-1.02 6.05-6.25
12M 1.31-1.35 0.94-0.98 1.26-1.30 103-107 138-142 0.90-0.94 1.43-1.47 8.58-8.62 0.96-1.00 5.90-6.10
1.30 0.94 1.23 98 128 0.84 1.55 8.57 1.03 6.17
USD (CS LUCI) EUR (CS LEI) CHF (CS LSI) GBP(CS LEI) EM HC (JPM EMBI Global) EM LC hedged in USD (JPM GBI) High Yield (CS HY Index)
Prices as of 26/04/2013
Source: Bloomberg, Credit Suisse
Real GDP growth and inflation Commodities

Spot Gold (USD) Silver (USD) Platinum (USD) Oil (USD)
Spot prices: London close 26/04/2013 Source: Bloomberg, Credit Suisse
GDP growth 3M 1,300 22.5 1,475 93 12M 1,450 21 1,600 100 in % CH EMU USA UK Japan 2012 1.0 -0.6 2.2 0.2 2.0 2013E 1.5 -0.3 2.0 0.8 1.4 2014E 2.0 1.1 2.5 1.5 1.2 1,467.04 24.14 1,489.70 93.00
Inflation 2012 -0.7 2.5 2.1 2.8 0.0 2013E -0.1 1.8 1.6 2.8 -0.4 2014E 1.0 1.8 2.1 2.5 1.8
Source: Bloomberg, Credit Suisse
Global Research asset category strategy

By region/strategy Fixed income Equities Overweight: USA; Underweight: Europe. Overweight: USA and Germany. Underweight: Switzerland, Latam and Australia. Overweight: Industrial metals and Energy. Underweight: Precious metals and Agriculture. Overweight: USA, Asia-Pacific and Germany. Focus on natural resources, SME LBOs, emerging markets and private debt funds. We maintain our positive stance on global macro and directional strategies. EUR/USD , USD/CHF , GBP/USD , USD/JPY . Comments and comparison of weightings We maintain our focus on shorter maturities. We recommend focusing on medium and low-quality corporates. Valuations still attractive versus bonds. Easy money supportive. We stay positive, watching for a break of key technical resistance at 1,600 on S&P. Tactically neutral amid temporary growth slowdown. In the longer term, attractive valuations should help the asset class, allowing for moderate upside. Equities: Valuations richer, but some upside potential strategically. Direct real estate: Attractive rental carry. We favor small/mid-sized LBOs, emerging markets and private debt funds. We overweight directional strategies, such as EMs and longshort. We maintain our positive stance for global macro. We expect EUR/USD to rise to 1.33. BoJ easing set to weaken JPY.
Source: Credit Suisse Investment Committee/Global Research
Tactical 16 M
Strategic 612+ M
Commodities
Real estate Private equity Hedge funds Foreign exchange
Investment Strategy
30/04/2013
Top Investment Ideas for 2013

Fixed Income 1. Beyond cash: Credit not duration Status Action Buy short dated AA- to BBB financials and A to BB non-financials (excluding auto) in CHF, EUR and GBP. Hold USD exposure. Rationale/update Cash should continue to be unremunerative (near-zero yields) in most markets. Corporate bonds of short maturities still offer a reasonable yield pick-up versus cash, given essentially stable default rate expectations for 2013. Conservative investors should focus on investment grade credits. We keep the overall constructive status with a slightly more cautious stance toward USD-bonds.
Equities 2. Recovery stocks Buy US consumer, M&A and cyclical stocks. We recommend US consumer stocks and recovery stocks benefiting from the US and Asian recovery. We also expect to see robust M&A activity. Among our three ideas, we view the US consumer idea as less aggressive compared with the US recovery and M&A ideas. The US recovery idea benefits from an outperformance of cyclical stocks. We are still of the view that the recovery idea will materialize in 2013. For investors who are interested in absolute returns and have expectations of relatively high cash flow disbursements from dividends. Furthermore, this month, we upgrade global convertibles with a focus on high yield. Oil and gas companies with new exploration technologies or which have interest in as yet unexploited shale gas, tight oil, deepwater oil, etc. We expect the recent underperformance, which was impacted by the negative oil price sentiment, to reverse over the coming months.
3. Dividends and beyond
Buy high-dividend-yielding stocks and stocks generating high free cash flow as well as convertibles, particularly high yield. Invest in upstream energy stocks.
4. New gas and oil sources
Alternative Investments 5. US real estate Invest in commercial and residential real estate, REITs as well as homebuilding-related stocks. Easy monetary policy, limited construction activity in recent years, solid economic growth and very affordable home prices should support US real estate. German real estate also appears relatively inexpensive and can benefit from capital inflows.
Foreign Exchange 6. The new hard currencies Buy selected Asian currencies and other selected emerging market currencies funded in EUR or USD. Buy MXN, BRL, TRY, PLN and RUB vs. GBP. We continue to recommend diversification into selected EM currencies out of traditional hard currencies like EUR and USD. However, we remove KRW from our list of selected EM currencies. Further, we view GBP as increasingly becoming a new funding currency, especially for long positions in preferred EM currencies.
Key to status symbols: green = attractive investment opportunities continue to invest in theme; yellow = keep holdings but do not add to existing positions; red = reduce /exit existing positions.
Economics
30/04/2013
Economics
Expansion continues despite brief slowdown
USA softer after strong Q1; underlying trend robust Despite weaker job growth, US real wage gains remain healthy and lower inflation should offer further support. Interest rates are at near-record lows across a wide range of relevant credit categories (e.g. cars, mortgages, etc.) and this should also help. In addition, we still expect stronger business investment and the continuation of the housing recovery to support growth more visibly in the coming quarters. While the debt ceiling debate is set to resurface in the coming months, fiscal uncertainty should actually recede further. Europe: Financial stress easing further; recovery lagging Agreement on the Cyprus bailout and slightly improved political stability in Italy following the re-election of President Napolitano have contributed to renewed sharp declines in government bond yields in Italy and Spain. This remains very important to lower funding costs and to support the real economy. Possibly combined with new European Central Bank initiatives (please see this months featured topic on page 7 for details), this could finally bring easier credit conditions and support demand. Significant public spending cuts have been negative for growth and often failed to bring the hoped-for deficit reductions. European politicians appear to be willing to tolerate less drastic tightening going forward, which could contribute to the return to gradual growth that we continue to expect. Bold BoJ policy with a significant impact The Bank of Japan has made a much bolder announcement than expected. The significant increase of asset purchases this year and next has continued to weigh strongly on the Japanese yen and should result in stronger export and domestic demand growth. However, additional structural reform efforts (e.g. increased female labor market participation) are required to ensure a lasting return to growth. Emerging markets: Soft patch in China, but outlook solid While the latest Chinese growth data have been weaker than expected (Q1 GDP growth of 7.7% YoY), we view this as part of an expected transition to slower but still-solid trend growth. Given lower inflation, Chinese policy is likely to remain growth supportive. Indicators in Brazil still point to downside risks. Paired with more favorable food price dynamics, this should limit policy-rate tightening after the Central Bank of Brazil raised rates by 25 basis points to 7.5% in April. While lower commodity prices dampen inflation, they also imply less immediate impetus for net commodity exporters like Russia. (25/04/2013)
The drop in commodity prices reflects weaker growth, but should support a reacceleration as it dampens inflation and allows policy to remain expansionary.
Europe remains a laggard, but less financial stress is key for a return to gradual growth.
Thomas Herrmann thomas.herrmann@credit-suisse.com, +41 44 333 50 62
The drop in some key commodity prices (e.g. oil) reflects the temporary weakness in global growth. However, lower commodity prices also act as an automatic stabilizer as they imply lower inflation, which strengthens purchasing power and allows central banks to continue very expansionary policy. While fiscal tightening is significant in several individual countries, easy monetary policy should outweigh it on a global level. Despite persistent weakness in the Eurozone and some recent deceleration in both the USA and China, we think global growth is thus likely to strengthen again in the second half of the year.
Economics
30/04/2013
Selected ideas from previous months

April 2013 (26/03/2013) Recommendation BUY Funds with exposure to water. Companies active in water treatment are favored by our Traffic Light system. BUY Vodafone. CS Top 30 company and also M&A 15 candidate. BUY Long/short equity. Gain global equity market exposure with limited downside. BUY A basket of equally weighted 12-month forwards in MXN, BRL, TRY, PLN and RUB versus GBP, with a target of 108 and a stop loss of 96.5. Diversify out of traditional hard currencies. March 2013 (26/02/2013) Recommendation BUY ENI, BG Group, Royal Dutch Shell, Galp, Halliburton, Anadarko and Suncor. Energy stocks set to benefit from the rapid rise of new oil and gas sources. BUY CS Top 30 company: General Electric. A clear call on improving capital spending globally. BUY Simon Property Group: Gain diversified exposure to US retail real estate sector. February 2013 (29/01/2013) Recommendation BUY Quality Japanese exporters: Toyota, Honda, Bridgestone. Beneficiaries of a weaker JPY and US recovery. BUY Google, Intel, Infineon, Lenovo, Oracle, Priceline.com, Qualcomm, Samsung and TSMC. Stocks with a strong market position in secular growth themes, such as Mobile Internet, Cloud Computing, Big Data, Virtualization and Social Media. BUY Megatrend Champions. Invest in our Champions portfolio, which reflects the optimal tactical allocation of megatrend investments, according to our Traffic Light system.
FI Fixed income, EQ Equities, AI Alternative investments, FX Foreign exchange, RE Real estate For further information, including disclosures with respect to any other issuers, please refer to the Credit Suisse Global Research Disclosure site at: http://www.credit-suisse.com/research/disclaimer Source: Credit Suisse
Action to be taken EQ EQ AI FX Add exposure Add exposure Add exposure Add exposure
Action to be taken EQ EQ AI Add exposure Add exposure Add exposure
Action to be taken EQ EQ EQ Add exposure Add exposure Add exposure
30/04/2013
would leave the risk of loan defaults on banks balance sheets, the involvement of institutions like the European Investment Bank to provide partial loan guarantees could help. Another alternative would be a corporate bond purchase program or additional covered bond purchases. A rate cut would offer limited support A cut in the ECBs main refinancing rate, i.e. the rate that banks pay for ECB funding, would directly improve banks profitability by lowering the costs of funding (e.g. LTROs). It may also reduce sovereign bond yields, though the crisis has shown that political and credit risk are far more important yield determinants. There are also significant costs to a rate cut as it may impair money markets and cement the current fragmentation of the financial system. A negative deposit rate is unlikely The ECBs deposit rate, i.e. the rate banks receive for holding money at ECB accounts, could be cut to below zero to induce additional bank lending. However, banks would probably respond by paying back any excess liquidity they might hold. And ECB statements indicate a strong reluctance for such a cut, citing the risk of unintended consequences. Lower sovereign yields are likely to have the biggest effect A recent IMF paper has highlighted the strong link between sovereign bond yields and bank lending rates for Italy, suggesting that lower yield levels should lead lending rates lower with some lag. In this respect, the recent decline in peripheral yield levels is very positive and should show up in bank lending rates in the coming months. (25/04/2013)
The transmission of a low policy rate to Southern Europe remains a key issue. Lower sovereign yields are positive for lending conditions.
The ECB might accept newly created loans, possibly combined with government guarantees, as collateral for cheap funding.
Bjrn Eberhardt bjoern.eberhardt@credit-suisse.com, +41 44 333 57 43
Rates on SME business loans in the Eurozone Up to 1 year; up to EUR 1 m.

in % (SME loans up to 1 year and up to EUR 1 m)
Weak credit a key issue for growth Weak private demand in the Eurozone has led to calls for action by the European Central Bank. This lack of demand is partly being caused by weak credit market conditions and high loan rates for small firms (see chart). As lending surveys reveal, the weak capital positions of banks as well as elevated economic uncertainty are weighing on credit flows, with the former being difficult to address by the ECB. Better bank funding would not remove credit risk The ECB could improve credit flows by broadening the pool of private sector loans acceptable as collateral for funding or making a reduction in the haircuts applied to such loans. As this
8 7 6 5 4 3 2 Jan 03 Jan 05 Jan 07 Jan 09 Jan 11 France, Germany, Netherlands Italy, Spain Greece, Portugal Jan 13
Source: Datastream, Credit Suisse
10
Investment theme
30/04/2013
Investment theme
Gold prices lower in April amid significant outflows. Key technical support at USD 1520 was broken to the downside.
Long-term trend rating is now negative, suggesting further downside risks over the 16 month time horizon. Over 1 year, trading more stable amid favorable valuation.
Tobias Merath Head Commodities & Alternative Investments Research tobias.merath@credit-suisse.com, +41 44 333 13 62
The outlook from here The fundamental outlook for gold is fairly balanced. Monetary policy is expansionary and real interest rates are negative in most countries, which is positive. At the same time, however, inflation is decelerating, which is negative. Overall, with investment flows negative, but monetary policy supportive, we think a neutral fundamental rating is the most appropriate one at this point in time. In contrast to neutral fundamentals, technical indicators are clearly negative. The longer-term trend has broken to the downside. This is significant because, in a downtrend, the default move of a price is lower in the absence of convincing fundamentals. With fundamentals only neutral, we think some risks still persist. However, there is a limit to how far gold prices are likely to fall, in our view. At current levels they are undervalued, according to our Fair Value model. Among other things, our fair value model takes inflation rates, the value of the US dollar and real interest rates into account. A drop below the fair value range indicates some decoupling from these fundamentals, which is usually temporary. Over a 16 month time horizon, we see downside risks in view of the negative trend and merely neutral fundamentals. We advise using rebounds to reduce overweight positions. Over a 612 month time horizon, value considerations are more important and a cheap valuation can compensate somewhat for the negative trend. Our 12-month forecast for gold is USD 1,450. (26/04/2013)
Gold now trading below fair value This should limit downside risks over a 1-year time horizon.
USD/oz
2'500 2'000 1'500
The correction in gold is significant by any measure In April, gold prices fell more than 12% in just two trading days, making this the largest sell-off since at least the 1980s. It is difficult to say exactly what triggered the correction, but the gold market did have to digest some challenging news, e.g. reports that the Cypriot central bank might sell its gold. This triggered initial selling. When the key technical support level at USD 1,520 broke, selling accelerated. The drop below the USD 1,520 level was significant because it marked the last support line for the multi-year uptrend for gold.
1'000 500 0 76 80 84 88 92 96 00 04 08 12 21.04.2013 -1 Stdev

Source: Bloomberg, Credit Suisse /IDC
+1 Stdev Fair value Gold
11
Investment theme
30/04/2013
Investment theme
Comments that Cyprus may serve as a template for future bailouts have been cause for concern that depositor bail-ins may have now become a standard tool. Though policymakers are now obviously willing to also involve depositors if necessary, Cyprus has had a unique set of circumstances: an elevated level of public debt, the fact that haircuts on bank debt would not be sufficient and the extraordinary use of (foreign) deposit funding. Its bailout was thus a country-specific and not a systemic event for the Eurozone, in our view. While we cannot rule out further specific shocks to individual countries or banks, we do not see systemic risk on the horizon in view of the ECBs ongoing support and the expected economic improvement in the Eurozone. Who could be next? Slovenia is the country most at risk, with 50% of its banking sector publicly owned, burdened by substantial losses and dependent on deposit funding. This combination could easily cause deposit outflows should external support become necessary. Nevertheless, owing to its relatively low level of public debt (54% of GDP in 2012), we do not expect a bail-in of depositors if Slovenia needed to be rescued. Maltas banks stand out due to their low deposit funding base of 36%. As a result, they depend highly on wholesale funding. Combined with the relative high bank-asset-to-GDP ratio of 8x and the rising public deficit, this could lead to bankfunding problems. Luxembourg, despite bank assets worth roughly 22 times GDP, is not at risk in our view, owing to sound bank regulation and bank capitalization, the countrys AAA rating, its very low level of public debt and its relatively better economic situation. Italy and Spain both stand out with high deficits and still-rising public debt. These trends might affect the high depositfunding base of Italian and Spanish banks and could raise questions about the stability of the banking system, despite the relatively low bank-asset-to-GDP ratios. Going forward, it remains key that the Eurozone moves ahead with its plans to create a banking union (including bank resolution and supervision) to rebuild confidence in the Southern European banking system. In the meantime, ECB support helps to reduce systemic risk significantly. (26/04/2013)
More haircuts to bonds or deposits cannot be ruled out, but ongoing strong ECB support make such events country-specific rather than systemic.
Slovenia is most at risk for external support; Italy and Spain are limited by high public debt as well as rising deficits. Further capital flight cannot be ruled out.
Christine Schmid christine.schmid@credit-suisse.com, +41 44 334 56 43 Bjrn Eberhardt bjoern.eberhardt@credit-suisse.com, +41 44 333 57 43
Economic indicators for selected Eurozone countries

Cyprus Nominal GDP in EUR bn (2012) Share of Eurozone GDP in % (2012) Public debt as % of GDP (2012) Public deficit as % of GDP (2012) Bank assets as % of GDP (2012) Deposit funding as % of banks' liabilities 17.9 0.2% 85.8% -3.0% 712% 56.9% Slovenia 35.5 0.4% 54.1% -4.0% 144% 72.6% Malta 6.8 0.1% 72.1% -3.3% 788% 36.0% Luxembourg 44.4 0.5% 20.8% -0.8% 2172% 45.3% Italy 1566.0 16.5% 127.0% -3.0% 271% 54.9% Spain 1050.0 11.0% 84.2% -10.6% 337% 63.3%
Sources: Bloomberg, Datastream, Eurostat, Credit Suisse
12
Fixed income
30/04/2013
Fixed income
Environment for credit investments remains favorable
tions are another supportive factor, as they provide additional room for central banks to maintain monetary accommodation. Strategically, we note that although spreads have narrowed materially, we expect them to remain stable over the next 1218 months, or even squeeze tighter in some markets. This should be helped by ultra-low central bank rates and the ongoing economic recovery, both supporting our benign default rate outlook. Since short-term corporate yields, especially in the USA, have little room to decrease further and cash is delivering negative real yields, we even view merely running coupons as an attractive opportunity when comparing short maturity credits to other shorter-dated investments. The risk of rising yields for longer-maturity bonds followed by gradually widening spreads could be an issue in 1218 months or even further afield. This should then coincide with the rising expectations of central banks the US Fed presumably being first and scaling down monetary stimulus.
High-yield credit spreads

bp
Even at record-low absolute yields, corporate and emerging market credit spreads over-compensate for expected defaults.
1'700 1'200 700 200 Apr 03 Apr 05 Apr 07 Apr 09 Apr 11 CS Western Euro HY Non-USD CS US HY Spread hist. avg
Top Investment Idea No. 1: Beyond cash we downgrade USD bond recommendations to yellow status.
Maurice Jiszda maurice.jiszda@credit-suisse.com, +41 44 333 21 41
Source: Bloomberg, Datastream, Credit Suisse / IDC
Softer economic data keeps benchmark yields ultra low The recent patchy economic data releases together with some political Eurozone disturbances have left market participants increasingly concerned about the moderate, but supposedly stable global growth expectations. This uncertainty has triggered renewed safe-haven flows into highest-quality benchmark bonds, sending their yields significantly lower. Hence, both absolute and relative attractiveness have declined in relation to credit-risky fixed income assets. Maintaining our case for credit-risky bonds On aggregate, credit spreads have remained reasonably stable amid some disruptions, with the demand for additional yield pick-up looking strong. Significantly declining inflation expecta-
Beyond cash performance above expectations Our Top 2013 investment idea No. 1: Beyond cash: Credit, not duration delivered returns above our expectations since its inception last December. While keeping our recommendations in EUR, CHF and GBP on green, we have a yellow status for recommendations in USD, and are thus no longer adding to the USD leg of the idea, but holding current exposure. We do this because there is much less room for US short-term yields to fall further or remain around the current level particularly if the US Fed starts trimming monetary accommodation beyond market anticipations, given that the US economy could recover faster than expected. (25/04/2013)
13
Fixed income
30/04/2013
Selected bond recommendations

ISIN Curr. Issuer Rating (1) Coup. Maturity Min.denom./ inc. (in 1000) 5/5 5/5 2/1 200 / 1 200 / 1 200 / 1 200 / 1 150 / 1 100 / 100 100 / 1 100 / 1 100 / 1 1/1 1/1 2/2 2/2 1/1 1/1 10 / 10 10 / 10 150 / 1 50 / 1 100 / 1 1/1 50 / 50 1/1 100 / 1 100 / 1 100 / 1 100 / 100 5,000 / 100 200 / 1 200 / 1 200 / 1 200 / 1 200 / 1 Vol. (m) Ask price (2) 101.75 102.00 YTM/ YTC (%) 1.59 2.89 1.91 3.90 2.25 1.76 2.08 2.91 2.54 1.82 3.04 2.93 2.52 1.91 3.61 3.88 3.07 2.18 2.01 2.61 4.85 2.95 2.98 3.39 3.44 2.77 3.35 5.40 6.49 5.52 7.76 4.15 4.80 5.82 5.12 6.45 Benchm. spread Duration
CHF CH0204477274 CHF CH0197482711 CHF USD US06051GET22 USD US46115HAJ68 USD US34540UAA79 USD USG4721VBK91 USD US22532MAH51 USD US87938WAQ69 USD EUR XS0901738392 XS0914292254 XS0852993285 XS0863482336 XS0905797113 XS0901370691 Others XS0904222782 XS0898705693 XS0921284666 XS0856595961 XS0878575900 EM/Below IG XS0804472057 XS0231264275 XS0893205186 EUR EUR EUR EUR EUR EUR AUD AUD GBP GBP NOK CHF EUR EUR SBERBANK (SB CAP SA) UNICRED BANK IRELAND PLC BANK OF AMERICA CORP (3) INTESA SANPAOLO SPA (3) FORD MOTOR CREDIT CO LLC (3) IMPERIAL TOBACCO FINANCE (3) CREDIT AGRICOLE LONDON (3) TELEFONICA EMISIONES SAU (3) BBVA SENIOR FINANCE SA SNAM SPA INTESA SANPAOLO SPA UNICREDIT SPA RCI BANQUE SA MORGAN STANLEY NESTLE HOLDINGS INC TOTAL CAPITAL CANADA LTD RCI BANQUE SA BNP PARIBAS BMW US CAPITAL LLC RABOBANK NEDERLAND SUNRISE COMMUNICATIONS I (3) MOL HUNGARIAN OIL & GAS VNESHECONOMBANK(VEB) THYSSENKRUPP AG HEIDELBERGCEMENT FIN LUX (3) FRESENIUS FINANCE BV (3) RUSSIAN RAILWAYS (RZD) UNITYMEDIA HESSEN / NRW (3) KONINKLIJKE KPN NV (4, 6) ELECTRICITE DE FRANCE (3, 4, 5) GAZPROMBK (GPB FINANCE) (3) FRANSHION INVESTMENT LTD (3) VIMPELCOM HLDGS (3) WIND ACQUISITION FIN SA (3) YAPI VE KREDI BANKASI (3) SOCIETE GENERALE (3, 7) NR / A3 NR / NR A- / Baa2 BBB+ / Baa2 BB+ / Baa3 BBB / Baa3 A / A2 BBB / Baa2 BBB- / Baa3 A- / Baa1 BBB+ / Baa2 BBB+ / Baa2 BBB / Baa3 A- / Baa1 NR / Aa2 AA- / Aa1 BBB / Baa3 A+ / A2 A / A2 AA- / Aa2 BB- / Ba3 BB+ / NR BBB / Baa1e BB / Ba1 NR / Ba2 BB+ / Ba1 BBB / Baa1 B+ / (P)Ba3 BB / Ba1 BBB+ / A3 BBB- / Baa3 BB / Ba1 BB / Ba3 BB- / (P)Ba3 NR / Ba1 BBB / NR 2.065 3.375 2.000 3.875 2.375 2.050 2.125 3.192 3.250 2.375 4.000 3.375 2.875 2.250 3.875 4.000 3.250 2.375 2.375 2.875 5.625 3.875 3.035 4.000 9.500 2.875 3.374 5.625 6.875 6.000 7.875 4.700 5.200 6.500 5.500 6.625 28/02/2017 25/10/2017 11/01/2018 16/01/2018 16/01/2018 11/02/2018 17/04/2018 27/04/2018 21/03/2016 30/06/2017 09/11/2017 11/01/2018 22/01/2018 12/03/2018 19/07/2018 06/09/2018 25/04/2018 20/11/2019 04/12/2015 29/01/2018 31/12/2017 05/10/2015 21/02/2018 27/08/2018 15/12/2018 15/07/2020 20/05/2021 15/04/2023 14/03/2073 perpetual 25/07/2016 26/10/2017 13/02/2019 30/04/2020 06/12/2022 perpetual 250 185 168 291 130 343 168 113 143 224 254 163 285 269 224 161 79 104 235 112 86 127 479 303 270 303 309 213 252 463 534 332 204 366 398 486 350 544 3.7 4.1 4.4 4.2 4.4 4.5 4.7 4.6 2.7 3.9 4.0 4.3 4.4 4.6 4.6 4.7 4.5 6.0 2.5 4.4 2.9 2.3 4.4 4.7 4.4 6.4 6.9 6.4 5.3 8.8 2.7 4.0 4.9 4.9 7.3 4.2
3,000 100.39 1,500 99.89
1,250 100.55 1,250 101.33 500 100.20 1,250 101.30 1,500 101.95 1,000 102.22 1,711 103.99 1,000 101.93 600 101.58
1,250 101.57 200 150 300 300 500 370 750 101.26 100.57 100.83 101.19 101.18 103.20 102.13
DE000A1HDA43 NOK
1,500 100.90
1,000 100.25 1,600 102.95 500 500 350 400 130.74 100.70 101.70 101.68
DE000A1R08U3 EUR XS0686703736 XS0873432511 XS0919581982 XS0918739318 XS0903872603 FR0011401728 XS0877983642 XS0847609434 XS0889401054 EUR EUR EUR EUR GBP GBP RUB USD USD
1,000 100.17
1,250 105.25 20,000 100.31 500 600 550 102.25 102.00 103.86
USL97437AH77 USD XS0861979440 XS0813929782 USD USD
1,000 102.81 1,500 102.25
1) e = expected rating, subject to final documentation / NR = not rated; 2) Indicated prices as of 26 April 2013; 3) Semi-annual coupon; 4) Corporate subordinated hybrid debt, yield to call, duration to call; 5) first call 29/01/2026; 6) call 14/03/2020; 7) First call 11/06/2018, yield to call, duration to call. For the detailed analysis accompanying the recommendations listed, please refer to the latest Global Research Credit Updates and Investment Ideas. Source: Bloomberg, Credit Suisse
14
Equities
30/04/2013
Equities
US equities show resilience
and Japan have been the strong outperformers, with emerging markets and Europe the underperformers. Unusually for a traditionally defensive market, Switzerland has also been an outperformer. Second, at the sector level, the relative performance between defensives and cyclicals is at historically stretched levels, with defensives outperforming as investors continue to be attracted by high dividend yields. Dividends and beyond Top Idea performs well A common inconsistency between the two trends is the performance of the Metals & Mining sector, which is down 22% over the past three months, partly due to industry-specific capacity concerns and also signs of slower growth in emerging markets. The fall in mining stocks has contributed significantly to the underperformance of cyclicals. At the same time, demand for quality dividend-yielding equities has been strong. For example, our Defensive and Dynamic Dividends selections (part of our Dividends and Beyond Top Idea) have generated a total return of 14% and 13%, respectively, year to date . At the regional level, monetary policy and earnings momentum appear to be the key drivers of markets. Regions where central banks are undertaking new and expansive approaches to monetary policy are going well, with the USA and Japan being the prime examples, though Switzerland and the UK (with a new Governor starting at the Bank of England in July) are also valid. In Europe, monetary policy is offset by both political constraints and fiscal policy, while many emerging market countries are engaging in selective tightening (especially with respect to housing markets). More positive on Japan Global earnings momentum is negative, which is odd in the context of stronger equity markets and better US growth. Japan stands out in that it is the one region with accelerating, positive earnings momentum. Europe and the emerging markets have negative earnings momentum. In the USA, the earnings season is now fully underway, with 260 companies having reported Q1 results by the end of April. The ratio of earnings surprises to announcements is 70%, in line with the long-term average. The trend so far is that earnings surprises appear to be driven by cost-cutting, rather than top-line growth. In summary, our strategic view for equities is positive. At this stage, we hesitate to increase our mild cyclical bias at the sector level, though Metals & Mining appears tempting at least from a tactical point of view. At the regional level, we open up a small overweight position for Japan, offsetting this by downgrading Canada to underweight. The USA remains our key regional overweight. (26/04/2013)
US earnings season largely in line with expectations so far.
Central bank policy a key driver of equities, with our Dividends Top Idea performing well.
Michael O'Sullivan Head of Portfolio Strategy & Thematic Research michael.o'sullivan@credit-suisse.com, +44 20 7883 8228
Buy
CS Top 30 stock: Google Google released a strong earnings report recently, boosted by mobile advertising, with YouTube set to be a long-term contributor.
Broad equity indices have, together with bonds, enjoyed a positive start to the year. At the end of April, the MSCI World was ahead by 7% year to date, not far off a typical years return judging by our CS Investment Returns Yearbook. However, the pattern of returns within broad equity markets has been anything but typical, especially given the background of a recovering global economy. First, at the regional level, the USA
15
Equities
30/04/2013
Global equity sector strategy and top picks

Sector (strategic weight) Industry (strategic weight) Europe (N) / UK (N) Switzerland (U) USA (O) Latin America (U)/ Emerging Europe & Africa (N) Novatek*, Ultrapar*, Pacific Rubiales* Mexichem* BHP Billiton Limited Gamuda* Asia ex Japan (N) / Japan (O)# / Australia (U) Cnooc Ltd
Energy (N)
Energy (N)
Royal Dutch Shell
Anadarko Petroleum, Schlumberger General Electric, Honeywell, Masco+ McDonald's Time Warner Home Depot Coca-Cola Procter & Gamble Baxter International Gilead AbbVie Inc.
Materials (N)
Chemicals (N) Construction Materials (N) Metals & Mining (N) Pulp & Paper (N)
BHP Billiton Schneider Electric, Siemens Diageo Unilever Reckitt Benckiser Fresenius SE Hikma Pharmaceuticals BNP Paribas+
Lonza ABB, Schindler, Georg Fischer Nestl, Lindt & Spruengli+ Tecan Roche (Genussscheine), Novartis, Actelion+ -
Industrials (O)
Capital Goods (O)
Commercial Services & Supplies (N) Transportation, incl. Logistics (N) Consumer discretionary (N) Automobiles & Components (O) Consumer Durables & Apparel, Textiles, Apparel & Luxury (N) Hotels, Restaurants & Leisure (N) Media (N) Retailing (U) Consumer staples (U) Food & Staples Retailing (N) Beverages (U) Food Products (U) Tobacco (U) Household & Personal Products (N) Healthcare (N) Healthcare Equipment & Services (N) Biotechnology (N) Pharmaceuticals (N)
AmBev* Brasil Foods* -
Toyota Motor, Bridgestone, Honda Motor Seven & I+ ITC Limited Astellas Pharma
Financials (N)
Banks (N)
Sberbank*, Itau Unibanco*
China Construction Bank, Sumitomo Mitsui Financial Group, Kasikornbank*, Bank Mandiri*, DBS, HDFC Bank, Mitsubishi UFJ, Mizuho Financial Group -
Diversified Financials (N) Insurance (O)
Allianz, AXA
Zurich Insurance Group, Swiss Re+ -
JPMorgan, Invesco -
Real Estate (N)
Asian Property Development, Henderson Land Development Tencent* Samsung*, Toshiba TSMC+ Softbank
IT (O)
Software & Services (O) Technology Hardware & Equipment (O) Semiconductors & Semiconductor Equipment (O)
Vodafone, Vivendi+ -
Mastercard Intel -
Mail.ru* MTN Group*
Telecom services (U) Utilities (U)
Diversified Telecoms (U) Wireless Telecoms(U) Utilities (U)
This is our sector strategy and top picks as of 29 April 2013 recommended by Credit Suisse, Private Banking division. Our sector/industry strategy shows our sector/industry preferences with recommendations relative to regional benchmarks: Global: (MSCI World in USD), Europe (MSCI Europe in EUR), Switzerland (Swiss Market Index in CHF), USA (S&P 500 in USD), Asia/Pacific (MSCI AC Asia/Pacific in USD). An overweight (underweight) is a recommendation to invest more (less) than in a neutral position indicated by the market-cap weights of the respective benchmarks. The sector/industry weights as well as the neutral positions in figures are available upon request; please contact your relationship manager. The Top Picks is a selection of our favorite stocks within our coverage. The selection was made to reflect the sector/industry and regional preferences. Regular full updates are provided via our Research Monthly publications as well as in our Equity Research reports. Additionally, we publish our adds and drops in our Research Daily publication. Legend: (O) = Overweight, (N) = Neutral, (U) = Underweight. (*) = Emerging Markets top picks. Changes are marked as follows: (+) = additions to the top picks, (#) = changes to sector/industry/country weightings. For further information, including disclosures with respect to any other issuers, please refer to the Credit Suisse Global Research Disclosure site at: http://www.credit-suisse.com/research/disclaimer. Please note that trading facilities in certain securities may be limited. Source: Credit Suisse
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30/04/2013
Hedge funds and real estate more attractive than commodities
moderate upside potential. If global growth picks up again in the second half of the year as we expect, prices could move higher again, particularly for oil. Here, supply growth is decelerating, which is supportive for prices. Hedge funds and private equity: Gaining further traction With a 0.24% performance in March, hedge funds completed a good first quarter (DJ CS Hedge Fund Index: +3.6%). Our Hedge Fund Barometer deteriorated slightly amid tendencies of herding in the individual hedge fund styles. However with liquidity plentiful and volatility low, the overall environment remains positive, in our view. We prefer flexible styles (e.g. global macro) and styles with exposure to equity markets, such as long/short equities. We have also upgraded our assessment for fixed income arbitrage to positive. With this style, investors can gain exposure to the favorable environment for high yield bonds without taking duration risk. In private equity, US funds reported a good performance. For the full year 2012, venture capital funds returned 7.6% and leveraged buyouts returned 13.3%. Over the next five years, we expect similar returns on average (13.5% p.a.), driven by more stable growth and favorable financing conditions. Real estate: Solid outlook for global REITs REITs have held up well in recent weeks, outperforming the overall equity markets. While REIT valuations are no longer inexpensive, we believe investment demand should remain solid. Global REITs offer attractive dividend yields of around 4% on average. Rental growth is slowly bottoming out in many commercial real estate markets worldwide. Regionally, we prefer US and selected Asian REITs due to better economic prospects. (26/04/2013)
We think hedge funds and REITs have the most upside potential, with commodities likely to lag behind.
Solid dividend yields and a recovering US housing market should attract further investment flows into REITs, in our view.
Tobias Merath Head Commodities & Alternative Investments Research tobias.merath@credit-suisse.com, +41 44 333 13 62
Oil price versus OECD inventories Oil inventories are now below average.
Buy
Global Real Estate Investment Trusts (REITs) We favor US and Asian REITs in particular.
mn bbl
USD/bbl
Discrepancies between alternative investments Alternative investments have moved in different directions recently, and we think this could continue. In our view, hedge funds should continue to benefit from positive equity and credit markets, and the recovering US housing market supports REITS. Cyclical commodity markets are not doing as well amid the recent slowdown in economic momentum and is likely to lag behind other alternative investments. Commodities: Only moderate upside over one year Commodities have come under selling pressure recently. Given the current slowdown in economic momentum, it could take a while before the sector recovers. Ultimately, however, we see
250 200 150 100 50 0 -50 -100 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12
160 140 120 100 80 60 40 20 Mar 13 OECD commercial oil inventories, difference to 5Y average Brent price (rhs)
Source: Bloomberg, EIA, Credit Suisse / IDC
17
Foreign exchange
30/04/2013
Foreign exchange
Chinese renminbi appreciation set to extend
out of Switzerland are only likely to resume once the compression of yields ceases. We still expect moderate EUR strength due to the CHF overvaluation. We also retain a bearish outlook on the Australian dollar as the Reserve Bank of Australia has an easing bias and the current soft patch in growth may limit gains in commodity prices. In our view, the current account surplus in China capital inflows and possibly a widening of the trading band are the longterm drivers of moderate CNY appreciation. We expect the Korean won to consolidate in coming months and thus remove it from our diversification basket. But the case for diversification out of traditional hard currencies like USD, EUR and GBP remains in place (Top Investment Idea No. 6: The new hard currencies). Beside selected Asian currencies, we continue to see the Mexican peso trending further upward. (25/04/2013)
JPY should weaken further as BoJ easing is likely lead to capital outflows.
USD model currency portfolio Our USD-based currency portfolio shows an assumed 60% benchmark home bias and 40% exposure to a broader universe of foreign currencies, against which we allocate strategically and tactically, according to our views and portfolio analytics.
CNH PLN TRY NOK SEK PLNCNH TRY
Traditional currencies are burdened with high debt and lack of yield we recommend diversifying into selected emerging market currencies.
Marcus Hettinger Head of Global Forex Research marcus.hettinger@credit-suisse.com, +41 44 333 13 63
NOK SEK FX USD base USD USD USD MXN
EUR EUR
MXN
Buy
A basket of equally weighted 12-month forwards in CNY, SGD and MXN versus USD and EUR, with a target of 105 and a stop loss of 97.5. Diversify out of traditional hard currencies.
Core Diversification Americas USD 60% 0% 0%
Strategic Allocation USD MXN CAD EUR SEK NOK TRY PLN GBP CHF RUB ZAR CNH JPY AUD NZD SGD XAU FX 60% 5% 0% 13% 5% 5% 5% 3% 0% 0% 0% 0% 4% 0% 0% 0% 0% 0%
Tactical Overlay 0% -1% 0% -1% 0% 0% 0% 0% 0% 0% 0% 0% 2% 0% 0% 0% 0% 0%
Optimal Portfolio USD MXN CAD EUR SEK NOK TRY PLN GBP CHF RUB ZAR CNH JPY AUD NZD SGD XAU 60% 4% 0% 12% 5% 5% 5% 3% 0% 0% 0% 0% 6% 0% 0% 0% 0% 0%
The Bank of Japan has eased monetary policy dramatically in April. Although the Japanese yen has already weakened, we think that rising inflation expectations and lower real yields are likely to lead to capital outflows and a weaker yen. The European Central Bank has yet to deliver on major easing. Our fundamental view on EUR/USD remains neutral as rate spreads have narrowed, but capital inflows into the Eurozone remain solid. However, positive technical indicators still point to a moderate rise in euro into the mid 1.30s. The British pound remains surprisingly resilient. But we eventually expect broad GBP weakness as fundamentals like growth and inflation mix and the unsustainable external position remain poor. We have no doubt that the Swiss National Bank will defend the floor at EUR/CHF 1.20 with utmost determination. But capital flows
EMEA
0% 0% 0% 0% 0% 0% 0% 0% 0%
APAC
0% 0% 0% 0% 0%
Gold
FX
0%
40%
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Foreign exchange
30/04/2013
Important information on derivatives

Pricing Option premiums and prices mentioned are indicative only. Option premiums and prices can be subject to very rapid changes: The prices and premiums mentioned are as of the time indicated in the text and might have changed substantially in the meantime. Derivatives are complex instruments and are intended for sale only to investors who are capable of understanding and assuming all the risks involved. Investors must be aware that adding option positions to an existing portfolio may change the characteristics and behavior of that portfolio substantially. A portfolios sensitivity to certain market moves can be heavily impacted by the leverage effect of options. Investors who buy call options risk the loss of the entire premium paid if the underlying security trades below the strike price at expiration. Investors who buy put options risk loss of the entire premium paid if the underlying security finishes above the strike price at expiration. Investors who sell calls commit themselves to sell the underlying for the strike price, even if the market price of the underlying is substantially higher. Investors who sell covered calls (own the underlying security and sell a call) risk limiting their upside to the strike price plus the upfront premium received and may have their security called away if the security price exceeds the strike price of the short call. Additionally, the investor has full downside participation that is only partially offset by the premium received upfront. If investors are forced to sell the underlying they might be subject to taxing. Investors shorting naked calls (i.e. selling calls but without holding the underlying security) risk unlimited losses of security price less strike price. Put sellers commit to buying the underlying security at the strike price in the event the security falls below the strike price. The maximum loss is the full strike price less the premium received for selling the put. Investors who buy call spreads (buy a call and sell a call with a higher strike) risk the loss of the entire premium paid if the underlying trades below the lower strike price at expiration. The maximum gain from buying call spreads is the difference between the strike prices, less the upfront premium paid. Selling naked call spreads (sell a call and buy a farther out-of-the-money call with no underlying security position): Investors risk a maximum loss of the difference between the long call strike and the short call strike, less the upfront premium taken in, if the underlying security finishes above the long call strike at expiration. The maximum gain is the upfront premium taken in, if the security finishes below the short call strike at expiration. Investors who buy put spreads (buy a put and sell a put with a lower strike price) also have a maximum loss of the upfront premium paid. The maximum gain from buying put spreads is the difference between the strike prices, less the upfront premium paid. Buying strangles (buy put and buy call): The maximum loss is the entire premium paid for both options, if the underlying trades between the put strike and the call strike at expiration. Investors who are long a security and short a strangle or straddle risk capping their upside in the security to the strike price of the call that is sold plus the upfront premium received. Additionally, if the security trades below the strike price of the short put, investors risk losing the difference between the strike price and the security price (less the value of the premium received) on the short put and will also experience losses in the security position if they owns shares. The maximum potential loss is the full value of the strike price (less the value of the premium received) plus losses on the long security position. Investors who are short naked strangles or straddles have unlimited potential loss since, if the security trades above the call strike price, investors risk losing the difference between the strike price and the security price (less the value of the premium received) on the short call. In addition, they are obligated to buy the security at the put strike price (less upfront premium received) if the security finishes below the put strike price at expiration.
Risks
Buying calls Buying puts Selling calls
Selling puts Buying call spreads
Selling naked call spreads
Buying put spreads Buying strangles Selling strangles or straddles
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30/04/2013
Risk disclaimer
Investors should consider this report as only a single factor in making their investment decision. For a discussion of the risks of investing in the securities mentioned in this report, please refer to the following Internet link: https://research.credit-suisse.com/riskdisclosure CS may not have taken any steps to ensure that the securities referred to in this report are suitable for any particular investor. CS will not treat recipients as its customers by virtue of their receiving the report. The investments or services contained or referred to in this report may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about such investments or investment services. Nothing in this report constitutes investment, legal, accounting or tax advice or a representation that any investment or strategy is suitable or appropriate to your individual circumstances or otherwise constitutes a personal recommendation to you. The price, value of and income from any of the securities or financial instruments mentioned in this report can fall as well as rise. The value of securities and financial instruments is subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities or financial instruments. Investors in securities such as ADRs, the values of which are influenced by currency volatility, effectively as-
sume this risk. Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility, and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct their own investigation and analysis of the product and consult with their own professional advisers as to the risks involved in making such a purchase. Some investments discussed in this report have a high level of volatility. High volatility investments may experience sudden and large falls in their value causing losses when that investment is realized. Those losses may equal your original investment. Indeed, in the case of some investments the potential losses may exceed the amount of initial investment, in such circumstances you may be required to pay more money to support those losses. Income yields from investments may fluctuate and, in consequence, initial capital paid to make the investment may be used as part of that income yield. Some investments may not be readily realizable and it may be difficult to sell or realize those investments, similarly it may prove difficult for you to obtain reliable information about the value, or risks, to which such an investment is exposed.
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Disclosure Appendix
Analyst certification The analysts identified in this report hereby certify that views about the companies and their securities discussed in this report accurately reflect their personal views about all of the subject companies and securities. The analysts also certify that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Knowledge Process Outsourcing (KPO) Analysts mentioned in this report are employed by Credit Suisse Business Analytics (India) Private Limited. Important disclosures Credit Suisse policy is to publish research reports, as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein. Credit Suisse policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. The Credit Suisse Code of Conduct to which all employees are obliged to adhere, is accessible via the website at:
https://www.credit-suisse.com/governance/doc/code_of_conduct_en.pdf
Guide to analysis
Equity rating allocation as of (30/04/2013)
Investment banking interests only 41.93 % 50 % 5.51 % 2.56 %
Overall BUY HOLD SELL RESTRICTED 40.64 % 52 % 5.12 % 2.24 %
Relative stock performance At the stock level, the selection takes into account the relative attractiveness of individual shares versus the sector, market position, growth prospects, balance-sheet structure and valuation. The sector and country recommendations are "overweight," "neutral", and "underweight" and are assigned according to relative performance against the respective regional and global benchmark indices. Absolute stock performance The stock recommendations are BUY, HOLD and SELL and are dependent on the expected absolute performance of the individual stocks, generally on a 6-12 months horizon based on the following criteria:
For more detail, please refer to the information on independence of financial research, which can be found at:
https://www.credit-suisse.com/legal/pb_research/independence_en.pdf
BUY
The analyst(s) responsible for preparing this research report received compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which is generated by Credit Suisse Investment Banking business.
10% or greater increase in absolute share price variation between -10% and +10% in absolute share price 10% or more decrease in absolute share price In certain circumstances, internal and external regulations exclude certain types of communications, including e.g. an investment recommendation during the course of Credit Suisse engagement in an investment banking transaction. Research coverage has been concluded.
HOLD SELL RESTRICTED
Equity rating history as of (30/04/2013)

Company GOOGLE (GOOG US) Rating BUY BUY BUY BUY BUY BUY Date 19/04/2013 24/01/2013 23/10/2012 20/07/2012 03/05/2012 13/04/2012 TERMINATED
Absolute bond performance The bond recommendations are based fundamentally on forecasts for total returns versus the respective benchmark on a 3-6 month horizon and are defined as follows:
The subject issuer (GOOGLE) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse. Credit Suisse provided investment banking services to the subject company (GOOGLE) within the past 12 months. Credit Suisse has managed or co-managed a public offering of securities for the subject issuer (GOOGLE) within the past three years. Credit Suisse has received investment banking related compensation from the subject issuer (GOOGLE) within the past 12 months. Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject issuer (GOOGLE) within the next three months. As at the date of this report, Credit Suisse acts as a market maker or liquidity provider in the securities of the subject issuer (GOOGLE). Credit Suisse holds a trading position in the subject issuer (GOOGLE). Additional disclosures for the following jurisdictions United Kingdom: For fixed income disclosure information for clients of Credit Suisse (UK) Limited and Credit Suisse Securities (Europe) Limited, please call +41 44 333 33 99. For further information, including disclosures with respect to any other issuers, please refer to the Credit Suisse Global Research Disclosure site at:
https://www.credit-suisse.com/disclosure
BUY HOLD
Expectation that the bond issue will outperform its specified benchmark Expectation that the bond issue will perform in line with the specified benchmark Expectation that the bond issue will underperform its specified benchmark In certain circumstances, internal and external regulations exclude certain types of communications, including e.g. an investment recommendation during the course of Credit Suisse engagement in an investment banking transaction.
SELL RESTRICTED
Credit Suisse HOLT With respect to the analysis in this report based on the HOLT(tm) methodology, Credit Suisse certifies that (1) the views expressed in this report accurately reflect the HOLT methodology and (2) no part of the Firm's compensation was, is, or will be directly related to the specific views disclosed in this report. The Credit Suisse HOLT methodology does not assign ratings to a security. It is an analytical tool that involves use of a set of proprietary quantitative algorithms and warranted value calculations, collectively called the Credit Suisse HOLT valuation model, that are consistently ap-
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plied to all the companies included in its database. Third-party data (including consensus earnings estimates) are systematically translated into a number of default variables and incorporated into the algorithms available in the Credit Suisse HOLT valuation model. The source financial statement, pricing, and earnings data provided by outside data vendors are subject to quality control and may also be adjusted to more closely measure the underlying economics of firm performance. These adjustments provide consistency when analyzing a single company across time, or analyzing multiple companies across industries or national borders. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes the baseline valuation for a security, and a user then may adjust the default variables to produce alternative scenarios, any of which could occur. The Credit Suisse HOLT methodology does not assign a price target to a security. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes a warranted price for a security, and as the third-party data are updated, the warranted price may also change. The default variables may also be adjusted to produce alternative warranted prices, any of which could occur. Additional information about the Credit Suisse HOLT methodology is available on request. CFROI(r), CFROE, HOLT, HOLTfolio, HOLTSelect, HS60, HS40, ValueSearch, AggreGator, Signal Flag and "Powered by HOLT" are trademarks or registered trademarks of Credit Suisse or its affiliates in the United States and other countries. HOLT is a corporate performance and valuation advisory service of Credit Suisse. For technical research Where recommendation tables are mentioned in the report, "Close" is the latest closing price quoted on the exchange. "MT" denotes the rating for the medium-term trend (3-6 months outlook). "ST" denotes the short-term trend (3-6 weeks outlook). The ratings are "+" for a positive outlook (price likely to rise), "0" for neutral (no big price changes expected) and "-" for a negative outlook (price likely to fall). Outperform in the column "Rel perf" denotes the expected performance of the stocks relative to the benchmark. The "Comment" column includes the latest advice from the analyst. In the column "Recom" the date is listed when the stock was recommended for purchase (opening purchase). "P&L" gives the profit or loss that has accrued since the purchase recommendation was given. For a short introduction to technical analysis, please refer to Technical Analysis Explained at:
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Publisher Giles Keating Head of Research for Private Banking and Wealth Management +41 44 332 22 33 giles.keating@credit-suisse.com Oliver Adler Head Economic Research +41 44 333 09 61 oliver.adler@credit-suisse.com Nannette Hechler-Fayd'herbe Head of Global Financial Markets Research +41 44 333 17 06 nannette.hechler-fayd'herbe@credit-suisse.com Giles Keating Head of Research for Private Banking and Wealth Management +41 44 332 22 33 giles.keating@credit-suisse.com Nannette Hechler-Fayd'herbe Head of Global Financial Markets Research +41 44 333 17 06 nannette.hechler-fayd'herbe@credit-suisse.com Thomas Herrmann +41 44 333 50 62 thomas.herrmann@credit-suisse.com Bjrn Eberhardt +41 44 333 57 43 bjoern.eberhardt@credit-suisse.com Tobias Merath Head Commodities & Alternative Investments Research +41 44 333 13 62 tobias.merath@credit-suisse.com Christine Schmid +41 44 334 56 43 christine.schmid@credit-suisse.com Maurice Jiszda +41 44 333 21 41 maurice.jiszda@credit-suisse.com Michael O'Sullivan Head of Portfolio Strategy & Thematic Research +44 20 7883 8228 michael.o'sullivan@credit-suisse.com Marcus Hettinger Head of Global Forex Research +41 44 333 13 63 marcus.hettinger@credit-suisse.com
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Global Research Private Banking Investment horizon: 6-12+ months

Liquidity supports stocks, credits, real estate and hedge funds

This months featured topic

What else could the ECB do?

Gold whats next after the sell-off?

Cyprus: Country-specific rather than systemic risk

Credit Suisse - Research Monthly

What else could the ECB do?

Gold whats next after the sell-off?

Cyprus: Country-specific rather than systemic risk

Environment for credit investments remains favorable page 12

US equities show resilience

Chinese renminbi appreciation set to extend Risk disclaimer

Editorial deadline: 30 April 2013

Credit Suisse - Research Monthly

Liquidity supports stocks, credits, real estate and hedge funds

Credit Suisse - Research Monthly

Source: Credit Suisse

Credit Suisse - Research Monthly

Equities: Selected indices

Foreign exchange Bonds: Selected indices

1.30 0.94 1.23 98 128 0.84 1.55 8.57 1.03 6.17

Source: Bloomberg, Credit Suisse

Real GDP growth and inflation Commodities

Source: Bloomberg, Credit Suisse

Global Research asset category strategy

Real estate Private equity Hedge funds Foreign exchange

Credit Suisse - Research Monthly

Top Investment Ideas for 2013

3. Dividends and beyond

4. New gas and oil sources

Credit Suisse - Research Monthly

Expansion continues despite brief slowdown

Thomas Herrmann thomas.herrmann@credit-suisse.com, +41 44 333 50 62

Credit Suisse - Research Monthly

Selected ideas from previous months

Action to be taken EQ EQ AI Add exposure Add exposure Add exposure

Action to be taken EQ EQ EQ Add exposure Add exposure Add exposure

This months featured topic

Credit Suisse - Research Monthly

This months featured topic

What else could the ECB do?

Bjrn Eberhardt bjoern.eberhardt@credit-suisse.com, +41 44 333 57 43

Rates on SME business loans in the Eurozone Up to 1 year; up to EUR 1 m.

Source: Datastream, Credit Suisse

Credit Suisse - Research Monthly

Gold whats next after the sell-off?

2'500 2'000 1'500

1'000 500 0 76 80 84 88 92 96 00 04 08 12 21.04.2013 -1 Stdev

+1 Stdev Fair value Gold

Credit Suisse - Research Monthly

Cyprus: Country-specific rather than systemic risk

Economic indicators for selected Eurozone countries

Sources: Bloomberg, Datastream, Eurostat, Credit Suisse

Credit Suisse - Research Monthly

Environment for credit investments remains favorable

High-yield credit spreads

Maurice Jiszda maurice.jiszda@credit-suisse.com, +41 44 333 21 41

Source: Bloomberg, Datastream, Credit Suisse / IDC

Credit Suisse - Research Monthly

Selected bond recommendations

3,000 100.39 1,500 99.89

Sberbank, Itau Unibanco