EFTA Document EFTA01450997

II December 2013 GEM Equity Strategy Outlook 2014 Table Of Contents Summary 3 Negative year in prospect but relative underperformance should slow 3 Valuations & Margins 13 Why emerging equities are not as cheap as they appear to be in aggregate... 13 Taper versus governance BRICs at most risk of 'classic' EM crisis based on dysfunctional relationship between state and companies 18 18 21 21 Still bearish on China Positive sentiment overdone given risks of debt trap in corporate sector and local government Country conclusions 25 ASIA EX-JAPAN 25 China - corporate sector risks are rising 25 Korea - not as good as overseas investors believe 27 Taiwan - defensive merits no longer unappreciated 28 India - range bound until post-election outlook clearer 29 Indonesia - first stress test since 1997; equities expensive 31 Malaysia - low-beta but fundamentally without merit 33 Thailand - tempting only to a tactical contrarian 34 Philippines - superior fundamentals more than priced in 35 LATIN AMERICA 37 Brazil - cheap but fundamentals continue to deteriorate 37 Mexico - expensive but still better than the alternatives 39 Chile - continued breakdown of the neo-liberal model 41 CEEMEA 42 South Africa - cheap currency but expensive equities 42 Russia - cheap but fundamentals remain very negative 43 Turkey - risk reward has improved at current levels 45 Poland - still defensive in GEM context 47 Page 2 Deutsche Bank AG/London CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0 107078 CONFIDENTIAL SDNY_GM_00253262 EFTA01450997