August 17, 2013

Asia Pacific TRADE IDEA

Bridging macro to micro: GS top-down stock ideas Portfolio Strategy Research

Less favorable risk/reward after the recent bounce; focus on alpha Refreshed stock ideas for August

Despite this generally benign global macro backdrop, we think the risk/reward for Asian markets is generally less favorable after the 8.3% rebound since the trough in June. We continue to see moderate downside earnings risks for the region and the aggregate index valuations would look less attractive on an average basis (14.9X 12m forward P/E) than the headline numbers may suggest (11.7X). Overall, we expect a range-bound trading environment in the near term and suggest investors focus on alpha opportunities over beta trades. Adhering to our stock selection algorithm against the current macro backdrop, complemented by our regional thematic preferences (e.g. US/EU exporters, strong vs. weak balance sheets, GARP plays, specific China alpha opportunities, and rising rate beneficiaries), we have made the following changes to our portfolio:

 

Additions: James Hardie, Orient Overseas, Oil India, Idea Cellular and Hyundai Glovis. Removals: ICICI Bank, Larsen & Toubro, SK Telecom, Tenaga Nasional and AirAsia.

The aggregate portfolio contains 25 stocks, which on average trades at 14.2X 2013E P/E, 2.2X P/B, with 13% EPS growth and US$64mn average daily turnover. The new constituents will be reflected on Bloomberg on August 19.

Performance

RELATED RESEARCH Asia Pacific: Portfolio Strategy Research: Bridging macro to micro: GS top-down stock selection, June 11, 2012 Global Leading Indicator (GLI): July Final GLI: Another month between Slowdown and Expansion, August 2, 2013

GSSZTDSP HAS GAINED 25.1% SINCE ITS INCEPTION ON JUNE 11, 2012 145 GSSZTDSP

MXAPJ

140 135 125.1

130 125 120 115 110

112.2

105 100 95

Jun-12 Jun-12 Jul-12 Jul-12 Aug-12 Aug-12 Sep-12 Oct-12 Oct-12 Nov-12 Nov-12 Dec-12 Dec-12 Jan-13 Jan-13 Feb-13 Feb-13 Mar-13 Mar-13 Apr-13 Apr-13 May-13 May-13 Jun-13 Jun-13 Jul-13 Aug-13 Aug-13

We update our top-down stock ideas for August 2013 post the release of the Global Leading Indicator (GLI) final reading for July 2013, which places the global industrial cycle between the ‘Expansion’ and the ‘Slowdown’ phase, suggesting sluggish but positive growth.

GSSZTDSP HAS OUTPERFORMED MXAPJ WITH SIMILAR VOLATILITY 10

Rel Price Perf (RHS)

Rel Vol

111.5

115

8

113

6

111

4 2

109 0.56

107

0

105

-2

103

-4

101

-6

99

-8

97

Jun-12 Jun-12 Jul-12 Jul-12 Aug-12 Aug-12 Sep-12 Oct-12 Oct-12 Nov-12 Nov-12 Dec-12 Dec-12 Jan-13 Jan-13 Feb-13 Feb-13 Mar-13 Mar-13 Apr-13 Apr-13 May-13 May-13 Jun-13 Jun-13 Jul-13 Aug-13 Aug-13

-10 95 As of the market close on August 16, our recommended stock list (GSSZTDSP) has gained 25.1% (equal-weighted) since its inception on June 11, 2012, compared to a 12.2% rise of MXAPJ (both in USD), resulting Source: Bloomberg, MSCI, Goldman Sachs Global Investment Research. in a spread of 12.9 percentage points. The portfolio has dropped 3.3%, versus 3.9% for MXAPJ ytd. The portfolio has outperformed MXAPJ 167 days out of 309 since its inception, with a past 60-day volatility of 17.7% vs. 17.2% of MXAPJ. Kinger Lau, CFA Goldman Sachs does and seeks to do business with +852-2978-1224 [email protected] Goldman Sachs (Asia) L.L.C. companies covered in its research reports. As a result, Timothy Moe, CFA +852-2978-1328 [email protected] Goldman Sachs (Asia) L.L.C. investors should be aware that the firm may have a conflict of Caesar Maasry interest that could affect the objectivity of this report. Investors +852-2978-7213 [email protected] Goldman Sachs (Asia) L.L.C. should consider this report as only a single factor in making Richard Tang, CFA their investment decision. For Reg AC certification and other +852-2978-0722 [email protected] Goldman Sachs (Asia) L.L.C. important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html. Analysts employed by nonUS affiliates are not registered/qualified as research analysts with FINRA in the U.S. This report is intended for distribution to GS institutional clients only.

The Goldman Sachs Group, Inc.

Goldman Sachs Global Economics, Commodities and Strategy Research

August 17, 2013

Asia Pacific

Top-down stock ideas for August 2013 Performance review for July Exhibit 1: GSSZTDSP has gained 25.1% since its inception on June 11, 2012 Indexed returns since June 11, 2012 (US$)

145 GSSZTDSP

MXAPJ

140 135 130

125.1

125 120 115 110 105

112.2

100

Jun-12 Jun-12 Jul-12 Jul-12 Aug-12 Aug-12 Sep-12 Oct-12 Oct-12 Nov-12 Nov-12 Dec-12 Dec-12 Jan-13 Jan-13 Feb-13 Feb-13 Mar-13 Mar-13 Apr-13 Apr-13 May-13 May-13 Jun-13 Jun-13 Jul-13 Aug-13 Aug-13

95

Note: The ability to trade these baskets will depend upon market conditions, including liquidity and borrow constraints at the time of trade. Source: Bloomberg, MSCI, Goldman Sachs Global Investment Research.

Exhibit 2: GSSZTDSP has outperformed MXAPJ

Exhibit 3: GSSZTDSP has moderately higher realized volatility compared with MXAPJ

Relative price returns since June 11, 2012 (US$)

Price returns volatility since June 11, 2012 (US$) 116

111.5

GSSZTDSP

MXAPJ

60D Volatility 25

Differential

114 112

20

110

15

108 10

106 104

5

102 0

100

Source: Bloomberg, MSCI, Goldman Sachs Global Investment Research.

Goldman Sachs Global Economics, Commodities and Strategy Research

Jul-13

Aug-13

Jun-13

Jun-13

May-13

Apr-13

May-13

Mar-13

Feb-13

Mar-13

Feb-13

Jan-13

Dec-12

Dec-12

Nov-12

Oct-12

Nov-12

Sep-12

-5

Sep-12

Jun-12 Jun-12 Jul-12 Jul-12 Aug-12 Aug-12 Sep-12 Oct-12 Oct-12 Nov-12 Nov-12 Dec-12 Dec-12 Jan-13 Jan-13 Feb-13 Feb-13 Mar-13 Mar-13 Apr-13 Apr-13 May-13 May-13 Jun-13 Jun-13 Jul-13 Aug-13 Aug-13

98

Aug-12

GSSZTDSP vs MXAPJ

Source: Bloomberg, MSCI, Goldman Sachs Global Investment Research.

2

August 17, 2013

Asia Pacific

Exhibit 4: Tencent and Hyundai Motor were the outperformers, whereas Larsen & Toubro and Icici Bank were the laggards Monthly price performance since July 16, 2013 (US$, open price) Larsen & Toubro -27% Icici Bank Delta Electronics PTT PCL Bank Rakyat Indonesia Lotte Shopping AirAsia Bhd China Life Insurance Insurance Australia Sk Telecom Krung Thai Bank Samsung Electronics Hon Hai Precision Industry Ammb Holdings Ocbc Bank HSBC Tenaga Nasional Boc Hong Kong Tata Motors Alliance Global Group AIA China Construction Bank Lenovo Group Hyundai Motor Tencent Holdings

-21% -5% -5% -4% -4% -4% -4% -3% -3% -2% -2% 0%

Price Chg

0% 1% 1% 1% 2% 5% 5% 6% 8% 9% 12% 14%

-30% -25% -20% -15% -10%

-5%

0%

5%

10%

15%

20%

Source: Bloomberg, Goldman Sachs Global Investment Research.

Exhibit 5: Our suggested stock ideas’ performance vs. the regional and their respective local benchmarks Monthly price performance since July 16, 2013 (US$, open price) Larsen & Toubro Icici Bank Lotte Shopping Sk Telecom Samsung Electronics Insurance Australia HSBC Boc Hong Kong PTT PCL AirAsia Bhd Krung Thai Bank Delta Electronics China Construction Bank AIA Lenovo Group Bank Rakyat Indonesia China Life Insurance Ocbc Bank Ammb Holdings Tenaga Nasional Hon Hai Precision Industry Tencent Holdings Hyundai Motor Alliance Global Group Tata Motors

Rel. Perf to MAXPJ Rel. Perf to Country Index

-30%

-20%

-10%

0%

10%

20%

Source: Bloomberg, MSCI, Goldman Sachs Global Investment Research.

Goldman Sachs Global Economics, Commodities and Strategy Research

3

August 17, 2013

Asia Pacific

Less favorable risk/reward after the recent bounce; Focus on alpha The latest GLI reading (final) for July suggests the global economy has remained on the border between ‘Expansion’ and ‘Slowdown’ for the past 3 months, after staying firmly in ‘Slowdown’ from January to April. This means global growth momentum has remained positive although the acceleration of growth is rather muted. Historically, ‘Expansion’ and ‘Slowdown’ has been generally supportive of risky assets performance, with MXAPJ registering 3.2% and 0.2% average monthly returns in that phase of the cycle over the past 25 years respectively, compared with the average monthly returns of -2.1% for the other phases. Despite this benign macro backdrop and our economists’ expectation of a more noticeable global growth recovery in the latter part of this year, we think the risk/reward for the

region has become more balanced and we expect the market to stay in a trading range in the near term, given: 

Performance: Regional markets have rebounded over 8.3% since the troughs in June and the MXAPJ index is hovering at our end-September 440 target level. Risk/reward looks less favorable now than it did at the start of the quarter.



Macro. Although policy tightening concerns have moderated in China and recent export and IP data are encouraging, the changes in the macro environment broadly revolve around: (a) lower consensus growth expectations in Asia; (b) continuing pressure on Asia Pacific currencies, with variation in policy responses (tightening in India and Indonesia, loosening in Australia); and (c) a moderate improvement in the growth outlook for the US and Euro area.



Earnings. I/B/E/S consensus earnings forecasts continue to come down, but still stand somewhat above our top-down forecasts (consensus 11% vs. our 8% estimate for 2013 regional EPS growth). We expect further downward revisions.



Valuations: Valuations have rebounded from recent troughs. They are still moderate in aggregate terms (11.7X 12m forward P/E) but would look less attractive on an average basis (14.9X) due to the average-down effect by low-PE stocks, including China SOEs and Samsung Electronics.



Investor positioning. Flows have recently tilted towards North Asia and India is finally seeing some net foreign selling. Equity market positioning has reduced (with the exception of India), but foreign positioning is still quite heavy in local currency debt markets (notably in several ASEAN markets).

For details, see Asia Pacific: Ideas for the summer lull, August 12. Our top-down stock selection strategy against this macro backdrop, complemented by our regional thematic overlays including US/EU exporters, strong vs. weak balance sheets, GARP plays, specific China alpha opportunities, and rising rate beneficiaries, are as follows (see details on pages 9 and 10):

a.

Moderately go long market beta;

b.

Add select global growth proxies;

c.

Own stocks that tend to perform well when inflationary pressure reemerges.

Stocks that possess these macro characteristics and have shown favorable micro readings in terms of valuation, earnings revisions, and technical indicators, are shown in Exhibit 12. For details about our stock-picking framework and our stock selection methodology, see Asia Pacific: Portfolio Strategy Research: Bridging macro to micro: GS top-down stock selection , June 11, 2012.

Goldman Sachs Global Economics, Commodities and Strategy Research

4

August 17, 2013

Asia Pacific

Exhibit 6: GS GLI suggests the global economy has moved into the expansion phase GLI momentum and momentum changes

0.10

Recovery

Expansion

Sep 2012 Aug 2012

Oct 2012

GLI acceleration

0.05

Jul 2012

Nov 2012

0.00

Jun 2012

Jun 2013

Jan 2013

Apr 2013

Mar 2013

-0.05

Dec 2012

May 2013

Jul 2013

Feb 2013

-0.10

Contraction

Slowdown

-0.15 -0.1

-0.1

0.0

0.1

0.1 0.2 GLI growth

0.2

0.3

0.3

0.4

Source: Goldman Sachs Global Investment Research.

Exhibit 7: Changes to our portfolio Additions Bloomberg JHX AT OINL IS 086280 KP IDEA IS 316 HK

Name James Hardie Industries Oil India Hyundai Glovis Idea Cellular Orient Overseas (Itnl)

In Date Out Date 19-Aug-13 19-Aug-13 19-Aug-13 19-Aug-13 19-Aug-13

Name Icici Bank Larsen & Toubro Sk Telecom Tenaga Nasional AirAsia Bhd

In Date 5-Mar-13 4-Apr-13 5-Mar-13 4-Apr-13 12-Jun-13

Abs Return

Relative to MXAPJ

Relative to Local Market

Deletions Bloomberg ICICIBC IS LT IS 017670 KP TNB MK AIRA MK

Abs Relative to Relative to Out Date Return MXAPJ Local Market 16-Aug-13 -24% -18% -10% 16-Aug-13 -22% -17% -11% 16-Aug-13 18% 24% 26% 16-Aug-13 12% 17% 12% 16-Aug-13 -10% -12% -6%

Note: Returns are calculated based on the open price on “In Date” and closing price on “Out Date”. Source: MSCI, Bloomberg, Goldman Sachs Global Investment Research.

Goldman Sachs Global Economics, Commodities and Strategy Research

5

August 17, 2013

Asia Pacific

Exhibit 8: Weight distribution of our recommended portfolio by markets Indonesia 4%

Singapore 4%

Exhibit 9: Weight distribution of our recommended portfolio by sectors

Korea 16%

Semi. 4%

Philippines 4%

Computer H/W 4%

Materials 4% Banks 24%

Software & services 4%

Malaysia 4% Australia 8%

Hong Kong 16%

Thailand 8%

Retailing 4% Industrials 4% Insur. & Other Fin. 16%

Oil & Gas 8%

Taiwan 12%

India 12%

China 12%

Transportation 8%

Computer H/W 12%

Autos 8%

Source: FactSet, MSCI, Goldman Sachs Global Investment Research

Source: FactSet, MSCI, Goldman Sachs Global Investment Research

Exhibit 10: Weight differentials versus MXAPJ, by markets

Exhibit 11: Weight differentials versus MXAPJ, by sectors

Hong Kong India

5%

Thailand

5%

Philippines

3%

TDSP vs MXAPJ (Wgt differentials)

Korea

1%

Indonesia

1%

Taiwan

1%

Malaysia

0%

Singapore

-1%

China Australia

Insur. & Other Fin. Computer H/W Transportation Autos Materials Oil & Gas Software & services Banks Retailing Media Steel Telecoms Industrials Chemicals Utilities Div. mining Semi. Property -7% Cons. stap. -9%

7%

-6% -17%

-20%

-15%

-10%

-5%

0%

5%

10%

Source: FactSet, MSCI, Goldman Sachs Global Investment Research

Goldman Sachs Global Economics, Commodities and Strategy Research

-10%

9% 9% 6% 5% 2% 2% 1% 1% 0% 0% -1% -1% -2% -2%

TDSP vs MXAPJ (Wgt differentials)

-3% -4% -4%

-5%

0%

5%

10%

Source: FactSet, MSCI, Goldman Sachs Global Investment Research

6

August 17, 2013

Goldman Sachs Global Economics, Commodities and Strategy Research

Exhibit 12: We highlight these names with their favorable macro exposure and compelling micro profile relative to their regional peers Stock ideas for August 2013, priced as of August 16, 2013

Ticker

Name

Market

IAG AT JHX AT 939 HK 700 HK 992 HK 5 HK 1299 HK 2388 HK 316 HK TTMT IS IDEA IS OINL IS BBRI IJ 005930 KP 005380 KP 023530 KP 086280 KP AMM MK AGI PM OCBC SP 2317 TT 2308 TT 2823 TT PTT TB KTB TB

Insurance Australia Grp. Australia James Hardie Industries PLCAustralia China Construction Bk H China Tencent Holdings Lim(Cn) China Lenovo Group Ltd. China HSBC Hong Kong AIA Hong Kong Boc Hong Kong Holdings Hong Kong Orient Overseas (Itnl) Hong Kong Tata Motors India Idea Cellular Ltd. India Oil India Limited India Bank Rakyat Indonesia Indonesia Samsung Electronics Co. LtdKorea Hyundai Motor Co. Ltd. Korea Lotte Shopping Co Korea Hyundai Glovis Co. Ltd. Korea Ammb Holdings Malaysia Alliance Global Group Philippines Ocbc Bank Singapore Hon Hai Precision Industry CTaiwan Delta Electronics Inc. Taiwan China Life Insurance Co. Ltd.Taiwan Ptt Thailand Krung Thai Bank Thailand Average MXAPJ

Mkt. cap (US$mn) 11,046 3,993 55,246 48,389 6,232 205,705 55,756 11,930 1,350 3,939 1,876 964 8,902 128,381 32,116 3,478 2,276 4,033 1,323 21,547 26,361 8,243 1,875 9,014 2,078 26,242

6m ADVT (US$mn) 29.8 13.8 193.6 168.2 46.6 146.8 109.2 37.3 5.0 47.5 12.6 5.2 26.6 334.4 105.8 15.4 14.1 13.8 10.2 31.7 97.2 23.5 12.5 45.7 44.6 64

Price 5.8 9.9 6.0 366.6 7.9 86.2 36.3 25.0 45.4 314.0 171.9 465.3 7800.0 1295000.0 236500.0 355000.0 194500.0 8.0 27.7 10.6 79.1 138.0 29.7 324.0 19.0

GS Rating N B B B* N B B* B B B* B B* B B B* B CS N N N B B B B B

In Date 5-Mar-13 19-Aug-13 5-Mar-13 4-Apr-13 16-Jul-13 12-Jun-13 12-Jun-13 5-Mar-13 19-Aug-13 6-Dec-12 19-Aug-13 19-Aug-13 4-Apr-13 6-May-13 16-Jul-13 5-Feb-13 19-Aug-13 5-Nov-12 6-Dec-12 6-May-13 16-Jul-13 12-Jun-13 12-Jun-13 6-May-13 5-Nov-12

Returns since in date -9.5% -4.2% 51.1% 9.2% 3.2% 9.3% -3.8% -1.8% -15.1% -15.9% 11.2% -12.0% 17.1% 59.8% -5.7% 0.4% -4.4% -1.7% -5.6% 1.7%

Market risks

√ √ √ √ √ √

Factor loading Local Policy/ Inflation growth liquidity √ √ √ √ √ √ √ √ √ √ √ √ √ √

√ √ √

√ √ √ √ √ √ √ √

√ √ √ √

√ √

√

√ √

√ √ √ √ √ √

√

Oil

√

Global 13E P/E growth 12.3 25.1 5.7 √ 33.1 14.7 √ 11.4 √ 17.6 12.4 √ 17.0 8.6 34.5 8.0 10.3 6.3 √ 7.2 √ 11.0 √ 14.1 13.5 20.9 √ 14.0 9.6 √ 17.8 12.9 8.3 √ 8.4 14.2 12.4

13E P/B 2.5 1.1 9.5 3.4 1.2 1.9 1.7 0.8 2.2 3.7 1.4 2.6 1.5 1.3 0.7 3.1 1.9 3.1 1.5 1.3 3.6 1.1 1.4 1.3 2.2 1.5

13E D/Y 5.0% 4.4% 6.1% 0.3% 2.5% 4.6% 1.2% 5.2% 1.4% 0.9% 0.2% 4.8% 2.6% 0.6% 0.8% 0.4% 0.8% 2.9% 1.4% 3.2% 2.0% 4.1% 1.0% 4.1% 4.8% 2.6% 3.2%

Fundamentals 13E EPS EPS EPSg rev. sent. 20% 3% 69% 29% 2% -45% 10% 0% 8% 32% 2% 30% 18% 2% 6% 32% -2% -5% 41% 6% 10% 2% -1% -31% -23% -7% -4% 5% 2% 25% 78% 15% 69% 4% 2% 0% 3% 3% 0% 34% -2% -67% 2% 3% 33% -13% -2% -26% 4% -1% -22% 8% 1% 14% -2% 1% 0% -4% 1% -13% 7% 0% 18% 3% 0% -43% 15% 1% 15% 8% 0% -13% 12% -1% -61% 13% 1% -1% 8% -2% -5%

Technical 14d %b RSI 55 59% 60 85% 63 89% 64 71% 74 108% 52 39% 58 61% 56 69% 48 52% 63 103% 62 100% 43 37% 39 -24% 54 70% 65 97% 53 85% 57 66% 50 29% 61 81% 50 37% 58 78% 47 38% 45 20% 44 27% 48 54% 55 61% 55 65%

Note (1): These stocks are rated Buy (B) or Neutral (N) by Goldman Sachs Research except Hyundai Glovis which is Coverage suspended (CS). Note (2): *denotes the stock is on our regional Conviction List. ‘Tick’ indicates stock that ranks top-30 percentile within each factor relative to its market peers and they perform well in our specified macro environment. Revisions and sentiment are based on forward 12-month consensus EPS. Note (3): All the fundamentals and valuations in the above table are from I/B/E/S consensus. Source: FactSet, I/B/E/S, MSCI, Goldman Sachs Global Investment Research.

Asia Pacific

7

Additions Bloomberg

Name

Deletions Country

In date

Out date

Bloomberg

Name

Country

December JHX AT

James Hardie Industries PLC

Australia

06-Dec-12

04-Jan-13

December LEI AT

Leighton Holdings

3323 HK

China National Building Material

China

06-Dec-12

03-Apr-13

16 HK

Sun Hung Kai Properties

TTMT IS

Tata Motors

India

06-Dec-12

-

TCS IS

Tata Consultancy Services

In date

Out date

Australia

04-Oct-12

06-Dec-12

Hong Kong

07-Sep-12

06-Dec-12

India

04-Oct-12

06-Dec-12

006800 KP

Daewoo Securities

Korea

06-Dec-12

05-Mar-13

086280 KP

Hyundai Glovis

Korea

04-Oct-12

06-Dec-12

AGI PM

Alliance Global Group Inc.

Philippines

06-Dec-12

-

024110 KP

Industrial Bank of Korea

Korea

04-Oct-12

06-Dec-12

DBS SP

DBS Group Holdings

Singapore

06-Dec-12

04-Jan-13

SM PM

SM Investments

Philippines

11-Jun-12

06-Dec-12

2448 TT January STO AT

EPISTAR Corp.

Taiwan

06-Dec-12

04-Feb-13

Delta Electronics

Taiwan

11-Jun-12

06-Dec-12

Santos

Australia

03-Jan-13

03-Apr-13

2308 TT January JHX AT

James Hardie Industries PLC

Australia

06-Dec-12

04-Jan-13

1928 HK

Sands China

Hong Kong

03-Jan-13

-

LT IS

Larsen & Toubro

India

07-Sep-12

04-Jan-13

HNDL IS

Hindalco Industries

India

03-Jan-13

05-Mar-13

012330 KP

Hyundai Mobis

Korea

04-Oct-12

04-Jan-13

CAPL SP February RIO AT

CapitaLand

Singapore

03-Jan-13

04-Feb-13

DBS Group Holdings

Singapore

06-Dec-12

04-Jan-13

Rio Tinto

Australia

05-Feb-13

05-Mar-13

DBS SP February 700 HK

Tencent Holdings Lim(Cn)

China

11-Jun-12

04-Feb-13

1833 HK

Intime Department Store

China

05-Feb-13

03-Apr-13

010950 KP

S-Oil Corp.

Korea

05-Nov-12

04-Feb-13

023530 KP

Lotte Shopping Co

Korea

05-Feb-13

-

CAPL SP

CapitaLand

Singapore

03-Jan-13

04-Feb-13

WIL SP

Wilmar International

Singapore

05-Feb-13

-

2887 TT

Taishin Financial Holdings

Taiwan

05-Nov-12

04-Feb-13

2474 TT March IAG AT

Catcher Tech Co

Taiwan

05-Feb-13

11-Jun-13

EPISTAR Corp.

Taiwan

06-Dec-12

04-Feb-13

Insurance Australia Grp.

Australia

05-Mar-13

-

2448 TT March RIO AT

Rio Tinto

Australia

05-Feb-13

05-Mar-13

939 HK

China Construction Bk H

China

05-Mar-13

-

4 HK

Wharf Holdings

Hong Kong

05-Jul-12

05-Mar-13

316 HK

Orient Overseas (International)

Hong Kong

04-Oct-12

05-Mar-13

HNDL IS

Hindalco Industries

India

03-Jan-13

05-Mar-13 05-Mar-13

2388 HK

Boc Hong Kong Holdings

Hong Kong

05-Mar-13

-

83 HK

Sino Land

Hong Kong

05-Mar-13

03-Apr-13

ICICIBC IS

Icici Bank

India

05-Mar-13

16-Aug-13

006800 KP

Daewoo Securities

Korea

06-Dec-12

001450 KP

Hyundai Marine & Fire Inurance

Korea

05-Mar-13

03-Apr-13

BDO PM

BDO Unibank

Philippines

07-Sep-12

03-Apr-13

017670 KP April MTS AT

Sk Telecom Co

Korea

05-Mar-13

16-Aug-13

Yuanta Financial Holding

Taiwan

03-Aug-12

05-Mar-13

Metcash

Australia

04-Apr-13

11-Jul-13

2885 TT April STO AT

Santos

Australia

03-Jan-13

03-Apr-13

700 HK

Tencent Holdings Lim(Cn)

China

04-Apr-13

-

3323 HK

China National Building Material

China

06-Dec-12

03-Apr-13

1 HK

Cheung Kong Holdings

Hong Kong

04-Apr-13

11-Jun-13

1833 HK

Intime Department Store

China

05-Feb-13

03-Apr-13

LT IS

Larsen & Toubro

India

04-Apr-13

16-Aug-13

83 HK

Sino Land

Hong Kong

05-Mar-13

03-Apr-13

BBRI IJ

Bank Rakyat Indonesia

Indonesia

04-Apr-13

-

STLT IS

Sterlite Industries (India)

India

05-Nov-12

03-Apr-13

TNB MK

Tenaga Nasional

Malaysia

04-Apr-13

16-Aug-13

001450 KP

Hyundai Marine & Fire Inurance

Korea

05-Mar-13

03-Apr-13

JCNC SP

Jardine Cycle & Carriage

Singapore

04-Apr-13

-

3008 TT

LARGAN Precision

Taiwan

04-Oct-12

03-Apr-13

2891 TT May BDO PM PTT TB OCBC SP 005930 KP LLC AT

Chinatrust Finl Hldgs

Taiwan

04-Apr-13

11-Jun-13

Bdo Unibank PTT PCL Ocbc Bank Samsung Electronics Co. Ltd. Lend Lease Group

Philippines Thailand Singapore Korea Australia

06-May-13 06-May-13 06-May-13 06-May-13 06-May-13

11-Jul-13 11-Jun-13

Agile Property Hldgs Sands China Indofood Sukses Makmur Wilmar International Jardine Cycle & Carriage Noble Group

Hong Kong Hong Kong Indonesia Singapore Singapore Singapore

05-Nov-12 03-Jan-13 05-Nov-12 05-Feb-13 04-Apr-13 07-Sep-12

03-May-13 03-May-13 03-May-13 03-May-13 03-May-13 03-May-13

HSBC AIA AirAsia Bhd Delta Electronics Inc. China Life Insurance

Hong Kong Hong Kong Malaysia Taiwan Taiwan

12-Jun-13 12-Jun-13 12-Jun-13 12-Jun-13 12-Jun-13

16-Aug-13 -

Lend Lease Group Ping An Insurance H Cheung Kong Holdings Chinatrust Finl Hldgs Catcher Tech Co

Australia China Hong Kong Taiwan Taiwan

06-May-13 07-Sep-12 04-Apr-13 04-Apr-13 05-Feb-13

11-Jun-13 11-Jun-13 11-Jun-13 11-Jun-13 11-Jun-13

Lenovo Group Hyundai Motor

China Korea

16-Jul-13 16-Jul-13

-

Metcash Bdo Unibank

Australia Philippines

04-Apr-13 06-May-13

15-Jul-13 15-Jul-13

June 5 HK 1299 HK AIRA MK 2308 TT 2823 TT July 992 HK 086280 KP

May 3383 HK 1928 HK INDF IJ WIL SP JCNC SP NOBL SP June LLC AT 2318 HK 1 HK 2891 TT 2474 TT July MTS AT BDO PM

Source: FactSet, I/B/E/S, MSCI, Goldman Sachs Global Investment Research.

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Note (1): We only show the changes over the past 8 months; please contact the team for changes before that.

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Goldman Sachs Global Economics, Commodities and Strategy Research

Exhibit 13: History of additions and deletions of GSSZTDSP in the past 8 months

The key building blocks and approach of our stock-selection framework

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GS top-down stock picking framework

Source: FactSet, I/B/E/S, Goldman Sachs Global Investment Research.

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GLI mom growth and acceleration define the four phases of the business cycle and our stock selection decision process

The logic flow/mechanism of our top-down selection framework

Source: Goldman Sachs Global Investment Research.

Source: Goldman Sachs Global Investment Research.

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Goldman Sachs Global Economics, Commodities and Strategy Research

GS top-down stock picking process

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Equity basket disclosures The Securities Division of the firm may have been consulted as to the various components of the baskets of securities discussed in this report prior to their launch; however, none of this research, the conclusions expressed herein, nor the timing of this report was shared with the Securities Division. Note: The ability to trade these baskets will depend upon market conditions, including liquidity and borrow constraints at the time of trade.

MSCI disclosures All MSCI data used in this report is the exclusive property of MSCI, Inc. (MSCI). Without prior written permission of MSCI, this information and any other MSCI intellectual property may not be reproduced or redisseminated in any form and may not be used create any financial instruments or products or any indices. This information is provided on an “as is” basis, and the user of this information assumes the entire risk of any use made of this information. Neither MSCI, any of its affiliates nor any third party involved in, or related to, computing or compiling the data makes any express or implied warranties or representations with respect to this information (or the results to be obtained by the use thereof), and MSCI, its affiliates and any such third party hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of this information. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in, or related to, computing or compiling the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. MSCI and the MSCI indexes are service marks of MSCI and its affiliates. The Global Industry Classification Standard (GICS) were developed by and is the exclusive property of MSCI and Standard & Poor’s. GICS is a service mark of MSCI and S&P and has been licensed for use by The Goldman Sachs Group, Inc.

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Disclosure Appendix

Reg AC We, Kinger Lau, CFA and Timothy Moe, CFA, hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Disclosures Option Specific Disclosures Price target methodology: Please refer to the analyst’s previously published research for methodology and risks associated with equity price targets. Pricing Disclosure: Option prices and volatility levels in this note are indicative only, and are based on our estimates of recent mid-market levels(unless otherwise noted). All prices and levels exclude transaction costs unless otherwise stated. General Options Risks – The risks below and any other options risks mentioned in this research report pertain both to specific derivative trade recommendations mentioned and to discussion of general opportunities and advantages of derivative strategies. Unless otherwise noted, options strategies mentioned in this report may be a combination of the strategies below and therefore carry with them the risks of those strategies. Buying Options - Investors who buy call (put) options risk loss of the entire premium paid if the underlying security finishes below (above) the strike price at expiration. Investors who buy call or put spreads also risk a maximum loss of the premium paid. The maximum gain on a long call or put spread is the difference between the strike prices, less the premium paid. Selling Options - Investors who sell calls on securities they do not own risk unlimited loss of the security price less the strike price. Investors who sell covered calls (sell calls while owning the underlying security) risk having to deliver the underlying security or pay the difference between the security price and the strike price, depending on whether the option is settled by physical delivery or cash-settled. Investors who sell puts risk loss of the strike price less the premium received for selling the put. Investors who sell put or call spreads risk a maximum loss of the difference between the strikes less the premium received, while their maximum gain is the premium received. For options settled by physical delivery, the above risks assume the options buyer or seller, buys or sells the resulting securities at the settlement price on expiry.

Distribution of ratings/investment banking relationships Goldman Sachs Investment Research global coverage universe Rating Distribution

Buy

Hold

Investment Banking Relationships

Sell

Buy

Hold

Sell

Global 31% 54% 15% 49% 41% 38% As of July 1, 2013, Goldman Sachs Global Investment Research had investment ratings on 3,535 equity securities. Goldman Sachs assigns stocks as Buys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell for the purposes of the above disclosure required by NASD/NYSE rules. See 'Ratings, Coverage groups and views and related definitions' below.

Disclosures required by United States laws and regulations See company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manager or co-manager in a pending transaction; 1% or other ownership; compensation for certain services; types of client relationships; managed/comanaged public offerings in prior periods; directorships; for equity securities, market making and/or specialist role. Goldman Sachs usually makes a market in fixed income securities of issuers discussed in this report and usually deals as a principal in these securities. The following are additional required disclosures: Ownership and material conflicts of interest: Goldman Sachs policy prohibits its analysts, professionals reporting to analysts and members of their households from owning securities of any company in the analyst's area of coverage. Analyst compensation: Analysts are paid in part based on the profitability of Goldman Sachs, which includes investment banking revenues. Analyst as officer or director: Goldman Sachs policy prohibits its analysts, persons reporting to analysts or members of their households from serving as an officer, director, advisory board member or employee of any company in the analyst's area of coverage. Non-U.S. Analysts: Non-U.S. analysts may not be associated persons of Goldman, Sachs & Co. and therefore may not be subject to NASD Rule 2711/NYSE Rules 472 restrictions on communications with subject company, public appearances and trading securities held by the analysts.

Additional disclosures required under the laws and regulations of jurisdictions other than the United States The following disclosures are those required by the jurisdiction indicated, except to the extent already made above pursuant to United States laws and regulations. Australia: Goldman Sachs Australia Pty Ltd and its affiliates are not authorised deposit-taking institutions (as that term is defined in the Banking Act 1959 (Cth)) in Australia and do not provide banking services, nor carry on a banking business, in Australia. This research, and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act, unless otherwise agreed by Goldman Sachs. Brazil: Disclosure information in relation to CVM Instruction 483 is available at http://www.gs.com/worldwide/brazil/area/gir/index.html. Where applicable, the Brazil-registered analyst primarily responsible for the content of this research report, as defined in Article 16 of CVM Instruction 483, is the first author named at the beginning of this report, unless indicated otherwise at the end of the text. Canada: Goldman, Sachs & Co. has approved of, and agreed to take responsibility for, this research in Canada if and to the extent it relates to equity securities of Canadian issuers. Analysts may conduct site visits but are prohibited from accepting payment or reimbursement by the company of travel expenses for such visits. Hong Kong: Further information on the securities of covered companies referred to in this research may be obtained on request from Goldman Sachs Global Economics, Commodities and Strategy Research

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Goldman Sachs (Asia) L.L.C. India: Further information on the subject company or companies referred to in this research may be obtained from Goldman Sachs (India) Securities Private Limited; Japan: See below. Korea: Further information on the subject company or companies referred to in this research may be obtained from Goldman Sachs (Asia) L.L.C., Seoul Branch. New Zealand: Goldman Sachs New Zealand Limited and its affiliates are neither "registered banks" nor "deposit takers" (as defined in the Reserve Bank of New Zealand Act 1989) in New Zealand. This research, and any access to it, is intended for "wholesale clients" (as defined in the Financial Advisers Act 2008) unless otherwise agreed by Goldman Sachs. Russia: Research reports distributed in the Russian Federation are not advertising as defined in the Russian legislation, but are information and analysis not having product promotion as their main purpose and do not provide appraisal within the meaning of the Russian legislation on appraisal activity. Singapore: Further information on the covered companies referred to in this research may be obtained from Goldman Sachs (Singapore) Pte. (Company Number: 198602165W). Taiwan: This material is for reference only and must not be reprinted without permission. Investors should carefully consider their own investment risk. Investment results are the responsibility of the individual investor. United Kingdom: Persons who would be categorized as retail clients in the United Kingdom, as such term is defined in the rules of the Financial Conduct Authority, should read this research in conjunction with prior Goldman Sachs research on the covered companies referred to herein and should refer to the risk warnings that have been sent to them by Goldman Sachs International. A copy of these risks warnings, and a glossary of certain financial terms used in this report, are available from Goldman Sachs International on request. European Union: Disclosure information in relation to Article 4 (1) (d) and Article 6 (2) of the European Commission Directive 2003/126/EC is available at http://www.gs.com/disclosures/europeanpolicy.html which states the European Policy for Managing Conflicts of Interest in Connection with Investment Research. Japan: Goldman Sachs Japan Co., Ltd. is a Financial Instrument Dealer registered with the Kanto Financial Bureau under registration number Kinsho 69, and a member of Japan Securities Dealers Association, Financial Futures Association of Japan and Type II Financial Instruments Firms Association. Sales and purchase of equities are subject to commission pre-determined with clients plus consumption tax. See company-specific disclosures as to any applicable disclosures required by Japanese stock exchanges, the Japanese Securities Dealers Association or the Japanese Securities Finance Company.

Ratings, coverage groups and views and related definitions Buy (B), Neutral (N), Sell (S) -Analysts recommend stocks as Buys or Sells for inclusion on various regional Investment Lists. Being assigned a Buy or Sell on an Investment List is determined by a stock's return potential relative to its coverage group as described below. Any stock not assigned as a Buy or a Sell on an Investment List is deemed Neutral. Each regional Investment Review Committee manages various regional Investment Lists to a global guideline of 25%-35% of stocks as Buy and 10%-15% of stocks as Sell; however, the distribution of Buys and Sells in any particular coverage group may vary as determined by the regional Investment Review Committee. Regional Conviction Buy and Sell lists represent investment recommendations focused on either the size of the potential return or the likelihood of the realization of the return. Return potential represents the price differential between the current share price and the price target expected during the time horizon associated with the price target. Price targets are required for all covered stocks. The return potential, price target and associated time horizon are stated in each report adding or reiterating an Investment List membership. Coverage groups and views: A list of all stocks in each coverage group is available by primary analyst, stock and coverage group at http://www.gs.com/research/hedge.html. The analyst assigns one of the following coverage views which represents the analyst's investment outlook on the coverage group relative to the group's historical fundamentals and/or valuation. Attractive (A). The investment outlook over the following 12 months is favorable relative to the coverage group's historical fundamentals and/or valuation. Neutral (N). The investment outlook over the following 12 months is neutral relative to the coverage group's historical fundamentals and/or valuation. Cautious (C). The investment outlook over the following 12 months is unfavorable relative to the coverage group's historical fundamentals and/or valuation. Not Rated (NR). The investment rating and target price have been removed pursuant to Goldman Sachs policy when Goldman Sachs is acting in an advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances. Rating Suspended (RS). Goldman

Sachs Research has suspended the investment rating and price target for this stock, because there is not a sufficient fundamental basis for determining, or there are legal, regulatory or policy constraints around publishing, an investment rating or target. The previous investment rating and price target, if any, are no longer in effect for this stock and should not be relied upon. Coverage Suspended (CS). Goldman Sachs has suspended coverage of this company. Not Covered (NC). Goldman Sachs does not cover this company. Not Available or Not Applicable (NA). The information is not available for display or is not applicable. Not Meaningful (NM). The information is not meaningful and is therefore excluded.

Global product; distributing entities The Global Investment Research Division of Goldman Sachs produces and distributes research products for clients of Goldman Sachs on a global basis. Analysts based in Goldman Sachs offices around the world produce equity research on industries and companies, and research on macroeconomics, currencies, commodities and portfolio strategy. This research is disseminated in Australia by Goldman Sachs Australia Pty Ltd (ABN 21 006 797 897); in Brazil by Goldman Sachs do Brasil Corretora de Títulos e Valores Mobiliários S.A.; in Canada by Goldman, Sachs & Co. regarding Canadian equities and by Goldman, Sachs & Co. (all other research); in Hong Kong by Goldman Sachs (Asia) L.L.C.; in India by Goldman Sachs (India) Securities Private Ltd.; in Japan by Goldman Sachs Japan Co., Ltd.; in the Republic of Korea by Goldman Sachs (Asia) L.L.C., Seoul Branch; in New Zealand by Goldman Sachs New Zealand Limited; in Russia by OOO Goldman Sachs; in Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W); and in the United States of America by Goldman, Sachs & Co. Goldman Sachs International has approved this research in connection with its distribution in the United Kingdom and European Union. European Union: Goldman Sachs International authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority

and the Prudential Regulation Authority, has approved this research in connection with its distribution in the European Union and United Kingdom; Goldman Sachs AG and Goldman Sachs International Zweigniederlassung Frankfurt, regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht, may also distribute research in Germany.

General disclosures This research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. We seek to update our research as appropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the large majority of reports are published at irregular intervals as appropriate in the analyst's judgment. Goldman Sachs conducts a global full-service, integrated investment banking, investment management, and brokerage business. We have investment banking and other business relationships with a substantial percentage of the companies covered by our Global Investment Research Division. Goldman, Sachs & Co., the United States broker dealer, is a member of SIPC (http://www.sipc.org).

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Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desks that reflect opinions that are contrary to the opinions expressed in this research. Our asset management area, our proprietary trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research. The analysts named in this report may have from time to time discussed with our clients, including Goldman Sachs salespersons and traders, or may discuss in this report, trading strategies that reference catalysts or events that may have a near-term impact on the market price of the equity securities discussed in this report, which impact may be directionally counter to the analysts' published price target expectations for such stocks. Any such trading strategies are distinct from and do not affect the analysts' fundamental equity rating for such stocks, which rating reflects a stock's return potential relative to its coverage group as described herein. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research. This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Investors should review current options disclosure documents which are available from Goldman Sachs sales representatives or at http://www.theocc.com/about/publications/character-risks.jsp. Transaction costs may be significant in option strategies calling for multiple purchase and sales of options such as spreads. Supporting documentation will be supplied upon request. In producing research reports, members of the Global Investment Research Division of Goldman Sachs Australia may attend site visits and other meetings hosted by the issuers the subject of its research reports. In some instances the costs of such site visits or meetings may be met in part or in whole by the issuers concerned if Goldman Sachs Australia considers it is appropriate and reasonable in the specific circumstances relating to the site visit or meeting. All research reports are disseminated and available to all clients simultaneously through electronic publication to our internal client websites. Not all research content is redistributed to our clients or available to third-party aggregators, nor is Goldman Sachs responsible for the redistribution of our research by third party aggregators. For all research available on a particular stock, please contact your sales representative or go to http://360.gs.com. Disclosure information is also available at http://www.gs.com/research/hedge.html or from Research Compliance, 200 West Street, New York, NY 10282. © 2013 Goldman Sachs. No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of The Goldman Sachs Group, Inc.

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