Transcript Slide 1

BT Monthly Markets
Chart Pack – March 2008
An overview of movements in global financial markets
Global share markets weaker again in March
 Global share markets remained under pressure
throughout March amid continued market volatility and
question marks over the outlook for the US economy.
They weren’t helped either by news that Bear Sterns,
once the fifth biggest securities firm in the US, needed to
be bailed out after speculation about its financial
soundness prompted customers and creditors to
withdraw $17 billion of assets.
 The Australian share market was also weaker in
March, with the S&P/ASX 300 Accumulation Index
closing the month down 3.42%. It was the fifth month in
a row that the local market has posted a negative return.
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The Australian share market closed March down
3.42% and was 14.61% lower over the March quarter
S&P/ASX All Ordinaries Index – March quarter 2008
6,500
6,350
6,200
6,050
5,900
5,750
5,600
5,450
5,300
5,150
5,000
31/12/2007
Source: BT Financial Group, Datastream
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31/01/2008
29/02/2008
31/03/2008
Key Australian economic news – March
 The Reserve Bank of Australia left interest rates on hold at 7.25% following its
early April meeting. After rates hikes in February and March, the decision to
leave the official cash rate unchanged had been widely expected.
 The current account deficit widened to a record $19.4 billion in the December
quarter, up from $16.4 billion in the previous quarter.
 The local labour market continued to strengthen in February, with the
unemployment rate falling to just 4.0%; its lowest level since December 1974.
 The Australian economy grew by 0.6% in the December quarter, in line with
market expectations. Annual growth eased to 3.9% pa, down from 4.9% pa in
the September quarter.
Source: BT Financial Group
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The Australian dollar was weaker against the major
currencies in March
 The Australian dollar lost ground on the major currencies over the month as
global growth concerns weighed on commodity prices. However, the local
currency remains at high levels and this is likely to be the case over the
coming months, particularly with the interest rate differential between here
and the US looking likely to widen even further in that time.
 At the end of March:
A$1 bought
Source: BT Financial Group
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US$0.91.33
-2.0%
€0.5784
-5.8%
91.10
-6.0%
The Australian dollar versus the US dollar…
Currency markets – A$ per US dollar
1.0000
0.9500
0.9000
0.8500
0.8000
0.7500
0.7000
0.6500
0.6000
0.5500
0.5000
Mar-03
Sep-03
Mar-04
Sep-04
Mar-05
Source: BT Financial Group. Figures at 31 March 2008.
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Sep-05
Mar-06
Sep-06
Mar-07
Sep-07
Mar-08
the Euro…
Currency markets – A$ per Euro
0.6500
0.6350
0.6200
0.6050
0.5900
0.5750
0.5600
0.5450
0.5300
Mar-03
Sep-03
Mar-04
Sep-04
Mar-05
Source: BT Financial Group. Figures at 31 March 2008.
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Sep-05
Mar-06
Sep-06
Mar-07
Sep-07
Mar-08
and the Yen
Currency markets – A$ per Yen
110
105
100
95
90
85
80
75
70
Mar-03
Sep-03
Mar-04
Sep-04
Mar-05
Source: BT Financial Group. Figures at 31 March 2008.
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Sep-05
Mar-06
Sep-06
Mar-07
Sep-07
Mar-08
Official world interest rate movements – March
 The US Federal Reserve cut interest rates by 0.75% in March, taking the
official Fed Funds rate to just 2.25%. Elsewhere, the Reserve Bank of
Australia (early April), the Bank of England, the European Central Bank and
the Bank of Japan all left their rates unchanged.
Current rate
Last moved
Australia
7.25%
Mar 2008
US
2.25%
Mar 2008
Europe (ECB)
4.00%
Jun 2007
Japan
0.50%
Feb 2007
United Kingdom
5.25%
Feb 2008
Source: BT Financial Group
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Direction of
last move
Global share market returns
31 March 2008
1 year
3 years (pa)
5 years (pa)
S&P 500 Index (US)
-6.91%
3.86%
9.29%
Nasdaq (US Tech.)
-5.89%
4.46%
11.19%
Nikkei 225 (Japan)
-27.55%
2.39%
9.46%
Hang Seng (Hong Kong)
15.39%
19.12%
21.49%
DAX (Germany)
-5.52%
14.54%
21.94%
CAC (France)
-16.45%
4.99%
12.45%
FTSE 100 (UK)
-9.61%
5.22%
9.55%
S&P/ASX 300 Accum. Ind.
-7.21%
13.82%
18.02%
S&P/ASX Small Ordinaries
-7.62%
15.72%
22.10%
S&P/ASX 300 Listed Prop.
-24.16%
4.94%
9.58%
Global
Australia
Source: BT Financial Group
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Short-term asset class performance
1-year rolling returns to 31 March 2008 (%)
2008
2007
2006
2005
2004
2003
2002
2001
Best performing
asset class for the
year
2000
1999
1998
1997
1996
1995
1994
1993
Australian
cash
6.99
6.21
5.80
5.56
5.11
4.91
4.77
6.36
5.24
5.09
5.41
7.14
7.89
6.21
5.08
6.45
Australian
bonds
4.29
3.70
6.74
4.80
4.17
10.09
2.35
11.82
1.79
6.65
15.68
12.56
12.80
2.37
6.00
18.06
Australian
property
-24.16
28.62
18.48
19.97
13.94
13.84
17.38
13.03
2.91
4.26
28.76
19.95
4.71
1.82
17.38
17.21
Australian
shares
-7.21
22.03
30.22
25.40
23.83
-11.93
12.42
3.48
14.25
10.86
17.51
13.62
20.92
-2.33
23.13
8.69
International
bonds
6.45
-4.87
3.28
4.16
-10.14
10.59
-8.07
21.95
4.01
15.51
24.56
1.01
-1.26
8.50
8.15
25.49
International
shares
-14.56
1.47
27.96
8.80
13.74
-33.38
-12.67
-7.05
27.06
18.40
56.60
9.13
12.51
4.56
14.05
22.56
Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property
Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in A$
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Short-term asset class performance (cont’d)
1-year returns to 31 March 2008 (%)
31 March 2007
31 March 2008
3.7
4.3
Australian bonds
Listed property
28.6
-24.2
22.0
Australian shares
-7.2
-4.9
Global bonds
Global shares
6.5
1.5
-14.6
Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property
Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in A$
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Long-term asset class performance
31 March 2008
$24,000
$22,500
$21,000
$19,500
Australian shares
$18,000
$16,500
$15,000
Listed property
$13,500
$12,000
Global shares
Australian bonds
$10,500
$9,000
$7,500
Cash
$6,000
$4,500
$3,000
$1,500
$0
85
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
Note: Accumulated returns based on $1,000 invested in December 1984
Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property
Index, UBS Composite 0+ years index, Citigroup World Government Bond, Unhedged in A$
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Oil prices spiked to over US$111 a barrel in March but
later fell back on concerns over global growth
Oil prices – US$ per barrel
$110
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
88
89
90
91
92
93
94
95
96
97
98
99
00
01
Source: BT Financial Group. West Texas Intermediate oil price at 31 March 2008.
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02
03
04
05
06
07
08
Summary

The underlying strength of the Australian economy looks set to continue,
though any significant deterioration in global growth will obviously have an
adverse effect locally.

Whether or not the RBA pulls the trigger on another rate hike in May will
depend largely on the outcome of the March quarter inflation data. Rising
inflation has been a concern for the Bank for some time now, so a significant
rise in the CPI figures could well see the Bank raise rates for a third time this
year.

The Australian dollar looks set to remain at high levels in the near-term,
though the threat of a slowdown in global growth will mean a rougher ride.

Gains in global share markets, including here in Australia, are likely to remain
under pressure in the first half of 2008.
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