Thursday, September 28, 2006

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Thursday, September 28, 2006
Presented by Pi-Kai Hsu
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Federal Reserve Bank

• Dallas Fed President Richard Fisher 9-25
• Recent tightening of the economy has left the US
  with a more sustainable rate of growth that
  could be expected to cut the rate of inflation
  over time

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International Markets

• The dollar slipped on growing expectations that a
  slowing U.S. economy could prompt the Federal
  Reserve to cut interest rates next year.
• Yen weakness reflected dollar strength with the
  consumer-confidence survey.

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Exchange Rates

• U.S. stock indexes hit fresh multi-year highs
  Tuesday after lower oil prices and data showing
  consumer confidence remained at higher levels
  than expected.
• The Nikkei jumped on Wednesday, its biggest
  one-day gain in two months, and other exporters
  gained on fading concerns over the U.S. economy.
• The European index gains were helped by the Euro
  falling back against the dollar, a situation
  which usually helps companies that export to the
  U.S.

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Exchange Rates
U.S. to Euro
U.S. to Yen
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Stock Index - Asia
BSESN vs. SP 500
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Stock Index - Europe
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Consumer Goods Staples Discretionary

• Market Cap 2590.5B (2569.0B)
• P/E 28.75 (27.28)
• ROE 16.35 (16.54)
• Dividend Yield 2.19 (2.25)
• Long Term Debt to Equity 1.17 (1.16)
• Price to Book Value 3.40 (3.58)
• Net Profit Margin 6.75 (6.77)
• Price to Free Cash Flow -18.22 (18.27)

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Consumer Staples

• Wal-Mart opens first of several planned stores in
  Chicago, which could help drive sales of Consumer
  Products
• PG to sell Sure deodorant
• Lawsuit over light cigarettes certified as a
  class action

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Consumer Staples
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Consumer Discretionary

• Sales of new homes increased by 4.1 which may
  drive sales of consumer durables
• GM and Renault-Nissan continue alliance talks
• A-B names August Busch IV as President/CEO
• Univision sale is approved

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Consumer Discretionary
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Industrial - Services

• The International Securities Exchange announced
  the official launch of its Historical Options
  Tick Data offering (ISE HOT Data), the first in
  its suite of new market data products.
• PR Newswire has integrated LivePerson, Inc.'s
  click-to-talk technology, Timpani Voice, into its
  suite of web-based customer communications
  channels.
• U.S. companies account for an estimated 2.5
  million call center positions, according to data
  from Canaccord Adams. About 300,000 of the jobs
  are outsourced to call-center operators.

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Industrial - Services

• Market Cap 3023.0B (2950.4B)
• P/E 26.26 (26.39)
• ROE 13.94 (14.82)
• Dividend Yield 1.3 (1.29)
• Long Term Debt to Equity 1.36 (1.16)
• Price to Book value 4.68 (8.69)
• Net Profit Margin 5.54 (5.57)
• Price to Free Cash Flow -146.6 (66.31)

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Industrial - Goods

• Owens Corning (OWENQ.OB) today announced that
  Judge Judith Fitzgerald of the United States
  Bankruptcy Court for the District of Delaware
  approved the company's Plan of Reorganization.
• Foster Wheeler Ltd. said Thursday its joint
  venture with Korea's Hyundai Engineering and
  Construction Co. was awarded a lump-sum
  engineering, procurement and construction
  contract from Saudi Aramco for the Khurais Gas
  Facility.

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Industrial - Goods

• Market Cap 1257.5B
• P/E 23.2
• ROE 15.46
• Dividend Yield 2.02
• Long Term Debt to Equity 1.7
• Price to Book value -31.35
• Net Profit Margin 7.08
• Price to Free Cash Flow 28
• Recently, the performance in industrials are
  better than SP 500.

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Financials

• US Treasury Secretary urged China to open its
  financial sector to foreign competition, stating
  possibility of trade action against China was
  real
• The Financials Sector accounted for about 10 of
  UK economy last year

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Financials

• Market Cap 5818B (5540 B)
• P/E 14.12 (14.18)
• ROE 16.12 (16.79)
• Dividend Yield 2.79 (2.56)
• Long Term Debt to Equity 2.26 (2.69)
• Price to Book Value 2.86 (2.86)
• Net Profit Margin 14.74 (12.83)
• Price to Free Cash Flow -10.12 (-15.65)

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Utilities

• Duke Energy Corp. has signed a broadband deal
  with Ambient Corp. to provide internet broadband
  technology to customers via Duke's power lines.
• North Jersey residents now have a unique
  opportunity to pursue careers in the gas delivery
  and electric generation and distribution
  industries, thanks to a new partnership between
  Passaic County Community College and PSEG.
• California Gov. Schwarzenegger has signed a bill
  requiring California's investor-owned utilities
  such as Pacific Gas and Electric, Southern
  California Edison and San Diego Gas and Electric,
  to generate 20 percent of their electricity from
  renewable sources by 2010, instead of 2017 as
  previously required by state law.

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Utilities

• Market Cap 937.3B (922.0B)
• P/E 38.47 (38.52)
• ROE 16.14 (16.05)
• Dividend Yield 4.20 (4.25)
• Long Term Debt to Equity 2.31 (2.31)
• Price to Book Value 2.74 (2.70)
• Net Profit Margin 8.92 (9.49)
• Price to Free Cash Flow -80.27 (-79.77)

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Health Care

• Drug company stocks have risen nearly 10 YTD,
  nearly tripling the SP.
• Health insurance premiums rose an average of 7.7
  in 2006. This is the slowest rate of increase
  since 2000, though still twice as fast as
  inflation and workers wages.
• Walgreens posted a 25 increase in quarterly
  profit, helped by strong prescription drug sales.
• On Tuesday, A federal jury ruled in favor of
  Merck in a Vioxx lawsuit.

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Health Care

• Market Cap 2569.2B (2570.2B)
• P/E 37.97 (33.62)
• ROE 14.69 (14.5)
• Dividend Yield 1.62 (1.63)
• Long Term Debt to Equity 0.50 (0.51)
• Price to Book Value 4.13 (13.53)
• Net Profit Margin 11.54 (11.32)
• Price to Free Cash Flow 85.89 (79.28)

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Health Care
DJ US Health Care Index 1 Month

• Close 326.68
• 52 wk high 329.20
• 52 wk low 294.63
• Down .31 for the last week

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Information Technology

• CDC Corp (CHINA) announced it continues to
  explore the possibility of the separation of 2 of
  its business units into stand-alone companies in
  its efforts to unlock shareholder value.
• TheDeal.com reported although Napster (NAPS
  -2.24) never turned a profit, the digital music
  company should find no shortage of possible
  buyers and could fetch more than 300 mln from a
  range of Internet, entertainment or wireless
  telecommunications cos. Potential acquirers
  include Amazon.com (AMZN 1.99), which lacks a
  digital music service Yahoo! (YHOO -.7), a
  leading provider of online music and
  IAC/InteractiveCorp (IACI 1.47), which owns a
  number of consumer-related Internet companies.
• Needham noted that Broadcom (BRCM) announced that
  CFO Bill Ruehle will retire, effectively
  immediately.
• Veeco Instruments (VECO 3.14) noted they are
  seeing big strength in Asia.

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Information Technology

• Market Cap 5478.6B (5445.0B)
• P/E 29.26 (27.7)
• ROE 14.84 (14.8)
• Dividend Yield 2.05 (1.92)
• Long Term Debt to Equity 0.62 (0.62)
• Price to Book Value 6.43 (5.01)
• Net Profit Margin 10.64 (10.59)
• Price to Free Cash Flow 86.12 (66.63)

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Materials

• A recent summit of silver companies was marked by
  forecasts of increasingly robust silver
  production.
• Shares of gold producer Newmont Mining Corp. sunk
  to a 52-week low Wednesday after the company cut
  its production estimates. A Merrill Lynch analyst
  also downgraded the stock.
• Novamerican Steel Inc., a Canadian processor of
  carbon steel, stainless steel and aluminum
  products, said Wednesday its third-quarter profit
  more than doubled, thanks in part to higher sales
  and improved gross margins.

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Materials

• Market Cap 4224B
• P/E 12.99
• ROE 25.36
• Dividend Yield 2.46
• Long Term Debt to Equity 0.44
• Price to Book Value 3.54
• Net Profit Margin 11.67
• Price to Free Cash Flow 26.27

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Energy

• Oil prices fell below 60/barrel on Monday Sept.
  25, although they bounced back to over 61 on
  Tuesday.  The price of natural gas fell to its
  lowest point in three years.
• OPEC is keeping a watchful eye on oil prices and
  many analysts are predicting OPEC to cut
  production if they fall below approximately 55.
• The Bush administration has increased standards
  on fine particle air pollution.  Some analysts
  think the new standards could be among the most
  expensive regulations ever enacted by the federal
  government, costing upwards of 20 billion a
  year. 
• Chesapeake Energy Corporation (NYSECHK) today
  announced that it has elected to shut-in a
  portion of its unhedged near-term natural gas
  production in light of currently low wellhead
  natural gas prices.

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Energy
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Telecommunications Services

• Verizon Communications Inc. decided to provide a
  public audio Webcast of a meeting with select
  analysts to discuss a vast network upgrade that
  may cost the telephone company 20 billion
• Verizon Wireless Launches Wireless Broadband
  Network in Saint Augustine, Florid
• Shares of BellSouth Corp. hit their highest point
  in a year Monday following last week's reports
  that the Federal Communications Commission will
  recommend the approval of the telecom company's
  67 billion takeover by ATT Inc
• ATT Wins 5-Year, 5.2 Million Networking
  Contract From Texas-Based Sterling Bank

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Telecommunications Services

• Market Cap 401.8B
• P/E 18.30
• ROE 12.70
• Dividend Yield 3.47
• Long Term Debt to Equity 0.82
• Price to Book Value 8.79
• Net Profit Margin 9.2
• Price to Free Cash Flow 79.90

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Telecommunications Services
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As of 9/22/2006