Emerging Market Debt

February 2012

For Professional Use OnlyNot for public distribution

Viktor Szabo, CFA, Portfolio ManagerAberdeen Asset Management

Presentation toCitywire Conference

1

Table of contents

• Introduction to Aberdeen Asset Management

• Why Aberdeen for EMD?

• Investment team, philosophy and process

• EMD solutions

• Performance

• Allocation

• Appendices

2

Total assets under management $270.3bn

Total emerging market assets $88.9bn**

About Aberdeen Asset Management

• Aberdeen is an LSE listed* asset management company

- Sole focus on our clients' portfolios and their interests

• Global reach and local understanding

- 30 offices and over 500 investment professionals worldwide

- Investors based in all the key regions in which we invest, providing strong local knowledge

• Core investment expertise in emerging markets across both fixed income and equities

• Transparent investment processes

- As fundamental investors, our investment decisions are based on our own research

* Since 1991** Specialist mandatesSource: Aberdeen Asset Management, 31 Dec 11

Property11.4%

Fixed Income 22.7%

Equities46.6%

Money Markets5.1%

AlternativeInvestmentStrategies

14.2%

Emerging Markets Debt

$6.9bn

Emerging Market Equities$43.5bn

Asian Debt$6.7bn

Asian Equities$31.8bn

3

EMD assets under management $6.9bn*

Why Aberdeen for Emerging Market Debt?

• A strong global emerging markets footprint

• A dedicated, stable, experienced team of specialists

• A focus on the entire EMD universe

• We avoid complex opaque structured products

• We apply a forward looking, diversified approach to risk

• Our size ensures investment flexibility

* Including EMD assets carved out from other mandatesBreakdown of local currency versus US$ denominated debt (by benchmark)Source: Aberdeen Asset Management PLC, as at 31 Dec 11

Local currency debt$1.9bn

US$ denominated debt$5.0bn

Investment team, philosophyand process

5

Emerging Market resources

London

Brett Diment*Edwin Gutierrez

Kevin DalyEsther ChanMax WolmanViktor Szabo

Siddharth DahiyaFlora Sexton

Anthony SimondAndrew Stanners

Ewa Gray

Hugh Young* Flavia Cheong

Chong Yoon-ChouKristy Fong

Andrew GillanMark Gordon-James

Pruksa IamthongthongGan Ai MeeJames ThomAdrian LimLouis Lu

Christopher WongThomas Reeves

David Smith

Singapore

Anthony Michael*Kenneth Akintewe

Scott BennettAdam McCabeChew May TanWah Yong TanEe Leen Yeuh

Marisa LohMark Khoo

Ambrose Tan

Adithep Vanabrisksha*Orsen Karnburisudthi

Ratanawan Saengkitikomol

Pongtharin Sapayanon*Supakorn Tulyathan

Brett Diment: Head of Global Emerging Debt

Hong Kong

Nicholas Yeo*Frank TianKathy Xu

Nicholas Chui

Devan Kaloo*Joanne Irvine*

Andy BrownMubashira BukhariSusan McDonaldFiona ManningStephen ParrGabriel Sacks

Osamu YamagataCatriona Edmond

Peter TaylorWilliam Scholes

Devan Kaloo: Head of Global Emerging Equities

Leverage off Aberdeen’s highly rated global emerging equity platform

* Head of desk. Total number of investment professionals in Emerging is 70 (27 Fixed Income, 43 Equity). Includes affiliated persons under and inter-company agreementSource: Aberdeen Asset Management, Jan 12

Gerald Ambrose*Bharat JoshiJalil Rasheed

Mohd Najman Md IsaAndrew SanJolynn Kek

Evan Cheah

Suhaila SubohEdmund GohJeremy Teng

Emerging markets offices Fixed Income resourcesEquity resources

Bangkok

Sao Paulo

Nick RobinsonBrunella Isper

Eduardo Figueiredo

London

Singapore

BangkokKuala Lumpur

Hong Kong

Sao Paulo

Kuala Lumpur

Budapest

Budapest

Jozsef Szabo

6

EMD: the investment team

• Stable and experienced team

- With 12 people, we are one of the best resourced EMD teams

- Average of 9 years’ experience in EMD

• Local presence brings local knowledge

• Extensive primary coverage of sovereign and corporate issuers

- We research over 50 countries and more than 100 corporate issuers

- Expertise across each sub segment of the asset class

• Continuous collaboration with Asian debt and EM equity teams

Brett Diment Edwin Gutierrez Kevin Daly

Esther Chan Max Wolman

Siddharth Dahiya Andrew Stanners

Viktor Szabo

Jozsef Szabo

Ewa GrayAnthony Simond Flora Sexton

7

EMD: our investment philosophy

We believe:

• A thorough forward looking fundamental approach supplemented by market technical analysis is key to understanding and pricing all relevant risk factors

• Extensive resources are needed to deliver comprehensive primary coverage across the distinct sub segments of the EMD asset class

• In constructing diversified portfolios capturing alpha opportunities across all the different segments of the asset class

• In a benchmark aware, not benchmark driven approach

8

EMD: investment process

Step 3:Scenario analysis

Step 4:Comparative analysis

Step 5:Portfolio

Step 2:Technical analysis

Step 1:Fundamental analysis

Constructing diversified portfolios within a risk-adjusted framework

Assessing relative value across the investment universe

Forward looking assessment of risk-adjusted returns

Gauging market dynamics

Proprietary sovereign and corporate research

9

EMD solutions

EMD Plus – invests in hard currency sovereigns, quasi sovereigns and corporate bonds, localcurrency debt and FX

• Pooled fund: Aberdeen Global – Select Emerging Markets Bond Fund ($1,101m)

• Benchmark: JP Morgan EMBI GD

• AUM: $2,382m

EMD Local Currency – invest primarily in local currency debt and FX

• Pooled fund: Aberdeen Global – Emerging Markets Local Currency Bond Fund ($165m)

• Benchmark: JP Morgan GBI-EM GD

• AUM: $1,915m

EMD Core – invest primarily in hard currency sovereign and quasi sovereign bonds

• No pooled fund

• Benchmark: JP Morgan EMBI GD

• AUM: $2,337m

EM Corporates – invest in hard currency corporate bonds

• Pooled fund: Aberdeen Global – Emerging Markets Corporate Bond Fund ($53m)

• Benchmark: JP Morgan CEMBI BD

• AUM: $600m

As of 31 Dec 11

10

To 31 Dec 11

EMD: performance

Annualised

1 year 3 years 5 years Since inception

Emerging Market Debt Plus Composite1 6.79 23.20 8.35 16.39

JP Morgan EMBI Global Diversified 7.35 16.08 7.87 11.35

Difference -0.55 +7.12 +0.48 +5.03

Emerging Markets Debt Core Composite2 7.89 19.44 7.95 12.87

JP Morgan EMBI Global Diversified 7.35 16.08 7.87 10.79

Difference +0.54 +3.36 +0.08 +2.09

Emerging Market Debt Local Currency Composite3 -2.20 - - 12.64

JP Morgan GBI-EM Global Diversified -1.75 - - 12.17

Difference -0.44 - - +0.47

Emerging Market Debt Corporate Composite4 - - - 1.49

JP Morgan CEMBI Broad Diversified - - - 1.93

Difference - - - -0.45

1. Inception: 1 Aug 992. Inception: 1 Jan 963. Inception: 1 May 094. Inception: 1 Feb 11Source: Aberdeen Asset Management. Total return, gross of fees, USD

11

Country Portfolio (%) Benchmark (%)(%) of total fund

Hard currency Local currency FX (% of portfolio)

Sovereign/Quasi

Corporate

Argentina 4 2 4

Brazil 8 7 1 3 4 1

Chile 1 3 1

Dominican Republic 2 1 1 1

El Salvador 3 2 2 1

Mexico 14 7 9 1 4 4

Peru 3 4 2 1

Uruguay 2 2 2 2

Venezuela 7 4 7

Other* 8

Latin America total 44 40 26 7 11 7

Croatia 2 1 2

Hungary 1 2 1

Ivory Coast 2 1 2

Kazakhstan 3 3 2 1

Lithuania 3 2 3

Namibia 1 1

Qatar 2 2

Russia 6 6 5 1

Senegal 1 1

Serbia 1 1

South Africa 7 3 3 4

Turkey 5 6 4 1

UAE 3 2 1

Ukraine 1 3 1

Other** 12

Europe/Middle East/Africa total 38 40 30 4 4

China 5 3 2 2 1 1

Indonesia 3 6 2 1

Malaysia 3 3 1 2 2

Pakistan 1 1

Philippines 2 6 2

Sri Lanka 1 1 1

Vietnam 1 1 1

Asia total 16 20 10 3 3 3

US/Cash 2 2 90

Total 100 100 68 14 18 100

* Belize, Ecuador, Jamaica, Panama

** Belarus, Bulgaria, Gabon, Georgia, Ghana, Iraq, Jordan, Lebanon, Nigeria, Poland

Source: Aberdeen Asset Management

Positions for the Aberdeen Global Select Emerging Markets Bond Fund, 31 Dec 2011

Aberdeen Global – Select Emerging Markets Bond FundCurrent portfolio positions

Appendices

13

Aberdeen Global – Select Emerging Markets Bond FundFund characteristics

Fund name

Fund domicile

Fund type

Portfolio Manager

Fund currency

Fund size

Benchmark

Inception date

Valuation

Select Emerging Markets Bond Fund

Luxembourg

SICAV

Emerging Markets Debt team

USD

$1.1 billion as at 27/01/2012

JPM EMBI GD USD

15 August 2001

DailyShare Class ISIN Currency AMC Minimum investment

A - 2 LU0132414144 USD 1.50% USD 1,500

A – 2 Hedged LU0376989207 EUR 1.50% EUR 1,500

I - 1 LU0231480053 USD 1% USD 1,000,000

I – 2 LU0231480137 USD 1% USD 1,000,000

14

Aberdeen Global – Emerging Markets Corporate Bond FundFund characteristics

Fund name

Fund domicile

Fund type

Portfolio Manager

Fund currency

Fund size

Benchmark

Inception date

Valuation

Aberdeen Global – Emerging Markets Corporate Bond Fund

Luxembourg

SICAV

Emerging Markets Debt team

USD

$64.9 millions as at 27/01/2012

JPM Corporate EMBI Broad Diversified

30 December 2010

DailyShare Class ISIN Currency AMC Minimum investment

A - 2 LU0566480116 USD 1.50% USD 1,500

I – 2 LU0566481197 USD 1% USD 1,000,000

15

Aberdeen Global – Emerging Markets Local Currency Bond FundFund characteristics

Fund name

Fund domicile

Fund type

Portfolio Manager

Fund currency

Fund size

Benchmark

Inception date

Valuation

Aberdeen Global – Emerging Markets Local Currency Bond Fund

Luxembourg

SICAV

Emerging Markets Debt team

USD

$181.7 millions as at 27/01/2012

JP Morgan GBI-EM Global Diversified Index

6 April 2010

DailyShare Class ISIN Currency AMC Minimum investment

A - 2 LU0396317926 USD 1.50% USD 1,500

I – 2 LU0396318908 USD 1% USD 1,000,000

16

Croatia

Step 1: fundamental analysis – proprietary research

• 50 countries and over 100 corporates researched, with over 500 meetings each year

• Fundamental research undertaken for each country:

- Proprietary sovereign risk models

- Focus on key macroeconomic variables, political environment, fiscal and monetary policy developments, major risks

• Bottom-up corporate research to assess underlying creditworthiness of the companies in which we invest

• Top down industry research

Argentina

Brazil

Chile

ColombiaPanama

Poland

Russia

IMF/WB

Ecuador

Peru

Vietnam

Kazakhstan

UkraineRomania

Turkey

PhilippinesThailandVenezuela

Dominican Rep

MalaysiaNigeria

Jamaica

Uruguay

Guatemala

Pakistan

Indonesia

South Africa

Egypt

Iraq

Lithuania

Mexico

El Salvador

China

Ivory Coast

Hungary

India

Serbia

Belize

Ghana

Costa Rica

Georgia

Namibia

Senegal UAEQatar

Sri Lanka

17

Foreign holdings of local Hungarian Government debt

Step 2: technical analysis

Source: GDMA, Bloomberg, Nov 11

2,000

2,500

3,000

3,500

4,000

4,500

5

6

7

8

9

10

11

12

13

Jan04

Nov04

Aug05

Apr06

Jan07

Oct07

Aug08

May09

Feb10

Nov10

Jul11

bn HUF% HGB 10Y yield (lhs) Foreign holdings (rhs)

We conduct technical analysis to assess the impact on valuations of:

• Supply risks

• Positioning risks

• Percentage of foreign versus local ownership

• Fund flows

18

Step 3: scenario analysis

• We conduct scenario analysis for 50 countries

• Updated monthly

• We forecast risk-adjusted returns for key external and domestic bonds and foreign exchange rates

• Base, best and worst case forecasts on a one and six month horizon

• Integral to our risk management process

Current Base case (6m)

Risk scenarios %

Worstcase

Bestcase

Riskadjuste

d

Draw-down

South Africa External Bond*

Price 106.4 105.4 103.5 108.0 1.5 -0.2

Spread 120 135 160 100

USDZAR FX Forecast

Spot 6.70 7.00 7.20 6.30 0.5 -4.2

South Africa Domestic Bond*

Price 88.4 91.6 85.5 93.5

Yield 8.5% 8.0% 9.0% 7.7% 3.9 -1.8

South Africa CorporateBond**

Price 107.4 105.8 103.0 108.6 1.2 -1.2

Spread 297 315 370 260

Source: Aberdeen Asset Management, Apr 11Risk adjusted: % weighted return using 50% for base case return, 20% for best case return and 30% for worst case return plus 6 months of accrued interestDrawdown: 6 months worst case return plus 6 months of accrued interest* 10 year bonds, ** 6 year bondHypothetical positions are used here and actual market conditions may have a different impact on the portfolio. A portfolio may not include these securities.For illustrative purposes only. Past performance is not an indications of future results and you may lose money by investing.Projections are offered as opinion and are not reflective of potential performance. Projections are not guaranteed and actual events or results may differ materially

19

Step 4: comparative analysis

Source: Aberdeen Asset Management, Apr 11Six month expectation of returns. Countries used for hypothetical and illustrative purposes onlyProjections are offered and are not reflective of potential performance. Projections are no guaranteed and actual events or results may differ materiallyActual market conditions may have a different impact on the portfolio. No assumptions regarding future performance should be made

-4

-3

-2

-1

0

1

2

3

4

5

6

7

8

0 -1 -2 -3 -4 -5 -6 -7

Risk (worst case return %)

Thai Baht

Argentina 10yr USD

South Africa 10yr ZAR

Expected risk-adjusted return %• We assess the relative value between:

- Individual country yield curves

- Hard currency sovereign and corporate bonds

- External versus domestic bonds

- Emerging market currencies

� In order to identify the instruments that have the most attractive risk-return profiles and evaluate their impact on the portfolio as a whole

Alrosa

20

Step 5: current portfolio positionsConstructing a diversified, risk-controlled portfolio

Country Portfolio (%) Benchmark (%)(%) of total fund

Hard currency Local currency FX (% of portfolio)

Sovereign/Quasi

Corporate

Argentina 4 2 4

Brazil 8 7 1 3 4 1

Chile 1 3 1

Dominican Republic 2 1 1 1

El Salvador 3 2 2 1

Mexico 14 7 9 1 4 4

Peru 3 4 2 1

Uruguay 2 2 2 2

Venezuela 7 4 7

Other* 8

Latin America total 44 40 26 7 11 7

Croatia 2 1 2

Hungary 1 2 1

Ivory Coast 2 1 2

Kazakhstan 3 3 2 1

Lithuania 3 2 3

Namibia 1 1

Qatar 2 2

Russia 6 6 5 1

Senegal 1 1

Serbia 1 1

South Africa 7 3 3 4

Turkey 5 6 4 1

UAE 3 2 1

Ukraine 1 3 1

Other** 12

Europe/Middle East/Africa total 38 40 30 4 4

China 5 3 2 2 1 1

Indonesia 3 6 2 1

Malaysia 3 3 1 2 2

Pakistan 1 1

Philippines 2 6 2

Sri Lanka 1 1 1

Vietnam 1 1 1

Asia total 16 20 10 3 3 3

US/Cash 2 2 90

Total 100 100 68 14 18 100

* Belize, Ecuador, Jamaica, Panama

** Belarus, Bulgaria, Gabon, Georgia, Ghana, Iraq, Jordan, Lebanon, Nigeria, Poland

Source: Aberdeen Asset Management

Positions for the Aberdeen Global Select Emerging Markets Bond Fund, 31 Dec 2011

2121

Adding value in Hungarian local rates

EMD: case study

Forecasts – Jun 09

Current 1 month 6 month Best Worst

Central bank rate

Repo rate (%) 10.00 10.00 8.00

EURHUF forecast

Spot 279 270 260 255 330

10 year bond (%) 10.40 10.00 8.30 8.00 12.80

Source: Bloomberg, Aberdeen Asset Management, Nov 11

250

260

270

280

290

300

310

320

6

7

8

9

10

11

12

13

Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11

HGB 10Y generic (lhs) EURHUF (rhs)

a

b

c

Hungary

a) Built position in local rates and currency in June 2009 following a country research trip in April 2009 and limited foreign ownership

b) Cut rates positions in April 2010 over concerns of contagion from the Greece fiscal crisis and risks related to local elections

c) Re-entered a long position in June 2010 after a sharp sell off and attractive valuations, following calls to our Hungarian office

d) Took profits in late July 2010 after monthly policy meeting showed little further upside

e) Increased rates exposure in anticipation of a new stabilisation program (finally announced in March). The decision was supported by a country research trip.

f) Cut overweight currency position in late February (EURHUF at 271), as we saw limited appreciation potential

g) Gradually reduced rates exposure over the summer as implementation risks increased, and went underweight on currency (EURHUF at 275)

h) Neutralised rates position in July 2011 on increased two-way uncertainty

i) Increased short HUF position in late October on deepening euro-area debt crisis (EURHUF at 300)

Forecasts – Dec 10

Current 1 month 6 month Best Worst

Central bank rate

Repo rate (%) 5.50 5.50 5.50

EURHUF forecast

Spot 278 280 280 270 295

10 year bond (%) 8.18 8.00 7.50 6.65 8.50

d

e

f

h

i

g

22

EMD: case study

a) Started to build exposure as our country research trip (Nov 2009) confirmed a strong fiscal commitment and low default probability

b) Increased position participating in the issuance of the new 2020 bonds

c) Took profits following the rally on weaker economic data, but kept overweight exposure

d) Reduced exposure as valuations became over-stretched

e) Added exposure on faster-than-anticipated economic recovery

f) Took profits on valuation and euro crisis concerns

g) Took further profits on valuation and euro crisis concerns

Lithuania

Forecasts – Feb 10 Current 1 month 6 month Best Worst

USD 01/2015 price 102.2 103.4 103.8 105.1 98.2

spread 388 361 352 321 486

USD 02/2020 price 100.9 101.6 102.7 106.3 92.5

spread 356 345 330 281 481

Forecasts – Oct 10 Current 1 month 6 month Best Worst

USD 01/2015 price 111.7 109.4 111 114 104

spread 276 300 285 220 430

USD 02/2020 price 117.2 114.8 116 118.5 112.5

spread 266 280 273 250 315

95

100

105

110

115

120

Oct 09

Jan 1

0

Apr

10

Jul 1

0

Oct 10

Jan 1

1

Apr

11

Jul 1

1

Oct 11

Price Lithun 2015 Lithun 2020

a

b

c

d

ef

g

Source: Bloomberg, S&P, Aberdeen Asset Management, Oct 11

200

300

400

500

600

700

800

900

1000

1100

31-M

ar-

11

30-A

pr-

11

31-M

ay-

11

30-J

un-1

1

31-J

ul-11

31-A

ug-1

1

30-S

ep-1

1

31-O

ct-

11

30-N

ov-

11

MOBTEL 06/22/2020 CHMFRU 10/25/2017

Switch from CHMFRU into MOBTEL at a OAS spread of 57bps on 21 Oct

OAS spread 121bps as of 14 Dec

• Trade was initiated on the 21 October, switching Severstal 17s into Mobtel 20s

• Rationale for the trade was to reduce the portfolio's weighting in the metals and mining sector due to concerns over slowing global demand for metals

• Fund increased exposure to the telecoms sector which is less cyclical than the commodity sector

EMD: corporate trade example

24

EMD: our distinguishing features

• A strong global emerging markets footprint

• A dedicated, stable, experienced team of specialists

• A focus on the entire EMD universe

• We avoid complex structured products

• We apply a forward looking, diversified approach to risk

• Our size ensures investment flexibility

25

Domestic debt

External debt

Sovereign risk models

• Quantitative models supplement our fundamental analysis

• External inputs:

- Economic strength (25%)

- Economic cycle (25%)

- Solvency (25%)

- Liquidity (25%)

• Domestic inputs:

- Macroeconomic trends (25%)

- Inflation dynamics (25%)

- Savings rates (25%)

- Financial system strength (25%)

Source: Aberdeen Asset Management, Nov 11

0

200

400

600

800

10 15 20 25 30 35 40

Yie

ld s

pre

ad o

ver

treasuries (

bp)

Market score

Russia

Philippines

Dom Rep

Ukraine

Turkey

Peru

Jamaica

Venezuela 1262bp

Source: Aberdeen Asset Management, Nov 11

0

5

10

15

0 5 10 15 20 25 30 35 40

Yie

ld o

n 1

0 y

ear

bonds

Market score

BrazilTurkey

Egypt

Malaysia

PolandMexico

Indonesia

South Africa

26

EMD 2012 outlook

• Softer global growth, but backdrop still constructive for EMD

• Chinese growth will continue to moderate, consensus of 8.3% for 2012

• ECB support for banks via LTRO is supportive for risk assets

• Hard currency spreads attractive given low default risk, corporates also offer good value

• EMFX and corporates poised to outperform as risk appetite increases

• Inflows into EMD have slowed, but are likely to resume with interest rates expected to remain lower for longer

• Risks: Eurozone sovereign debt crisis, China hard landing

27

Diverging credit trends between EM and DM countries

DM vs EM sovereign credit ratings

Source: Morgan Stanley, Aug 11

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

EM rating DM rating

BB-

BB

BB+

BBB-

BBB

A+

AA-

AA

AA+

AAA

2828

General Government Debt (% GDP) vs Government Balance (% GDP)

Sovereign debt iceberg …

Source: IMF, World Economic Outlook Database, Sep 11

BelgiumFrance

Germany

Greece

Ireland

Italy

Luxembourg

Netherlands

Portugal

Slovenia

Spain

Australia

Canada

Japan

Norway

Sweden

Switzerland

UK

USA

Indonesia

India

China

Korea

Malaysia PhilippinesThailand

Panama

BelarusCroatia

Egypt

Vietnam

Hungary

Iraq

Kazakhstan

Lebanon

Serbia

Poland

Qatar

RussiaSaudi Arabia

Georgia

South Africa Turkey

UAE

Ukraine

Peru

Barbados

Brazil

Chile

Guatemala

Costa Rica

ArgentinaColombia

Jamaica

El Salvador

Egypt

Lithuania

Venezuela

0

20

40

60

80

100

120

140

160

180

-12.00 -10.00 -8.00 -6.00 -4.00 -2.00 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00

Eurozone G10 Asia CEEMA LatAm

Japan's Govt. Debt is 233%

General Government Balance for 2011 (% of GDP)

Gro

ss G

enera

l Gove

rnm

ent D

ebt f

or

2011 (

% o

f G

DP

)

29

China has resources to address credit and growth risks

China’s public debt is manageable Local debt maturity timetable

Source: HSBC, Jul 11 Source: HSBC, Jul 11

By 201353%

2014 - 1517%

After 201530%

(%)

Greece Italy US India Brazil China RussiaJapan

250

200

150

100

50

0

Local debt

30

S&P breakdown of EMBIG Diversified

AA2.6% A

8.7%

B17.2%

BB22.9%

BBB47.3%

NR1.3%

S&P breakdown of GBI EM Global Diversified

AA0.2%

A48.8%

BBB40.5%

BB10.5%

Source: JP Morgan, 30 Sep 11

Ratings quality of emerging market countries underappreciated

• External debt index is 59% investment grade • Domestic debt index is 89% investment grade

31Source: JP Morgan EMBI Global Diversified, 20 Jan 12

Spread over US Treasuries

Spreads attractive given low default risk

0

100

200

300

400

500

600

700

800

900

1000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

JPM EMBI GD JPM CEMBI BD

32

EM external, domestic and corporate indices are all investment grade

EMD yields look anomalous in “lower for longer” world

EM Local currency index: JPM GBI-EM GD, EM Hard currency index: JPM EMBI GD, EM Corporate index: JPM CEMBI BDSource: JP Morgan, S&P, Bloomberg, Nov 11

0

2

4

6

8

10

12

14M

ay 0

3

Se

p 0

3

Jan

04

Ma

y 0

4

Se

p 0

4

Jan

05

Ma

y 0

5

Se

p 0

5

Jan

06

Ma

y 0

6

Se

p 0

6

Jan

07

Ma

y 0

7

Se

p 0

7

Jan

08

Ma

y 0

8

Se

p 0

8

Jan

09

Ma

y 0

9

Se

p 0

9

Jan

10

Ma

y 1

0

Se

p 1

0

Jan

11

Ma

y 1

1

Se

p 1

1

Yield (%) EM Local currency (BBB+) EM Hard currency (BBB-) EM Corporates (BBB)

US 10 yr (AA+) German 10yr (AAA)

33

Country 10 Year Bond Yield (%) Inflation yoy (%) Real yield Credit rating S&P

Brazil 11.6 6.5 5.1 A-

Hungary 8.8 4.1 4.7 BB+

Colombia 7.3 3.7 3.5 BBB+

Russia 8.2 6.1 2.1 BBB+

Mexico 5.7 3.8 1.9 A-

Indonesia 5.6 3.8 1.8 BB+

South Africa 7.7 6.1 1.6 A

Japan 1.0 -0.5 1.5 AA-

Poland 5.6 4.6 1.0 A

Peru 5.7 4.7 0.9 BBB+

Malaysia 3.4 3.0 0.4 A

Germany 1.9 2.1 -0.2 AAA

Thailand 3.2 3.5 -0.3 A-

US 1.9 3.0 -1.1 AA+

Turkey 9.3 10.5 -1.2 BBB-

UK 2.1 4.2 -2.1 AAA

Source: S&P, Bloomberg, 26 Jan 12

Real yields yet to reflect dramatic improvement in fundamentals

34

Net foreign positions of DM banks in EM

Shrinking DM financial balance sheets not a threat to EM

Source: IMF, CEIC, Haver, UBS estimates

Asia Latin America Central Eastern Europe

2003

0%

2004 2005 2006 2007 2008 2009 2010 2011

2%4%6%8%

10%12%

-2%-4%-6%-8%

-10%

% of GDP

EM financial system aggregate loan/deposit ratio

Source: IMF, CEIC, Haver, UBS estimates

Asia Latin America Central Eastern Europe

2003 2004 2005 2006 2007 2008 2009 2010 2011

105%110%115%120%

70%75%80%85%90%95%

100%

35

Industrial production growth softened…supported by the resilient retail consumption

GDP growth slowed further in Q4 11, but still surprised on the upside…

China: growth moderating, but remains on track

Source: NBS, Credit Suisse, Jan 12 Source: NBS, PBoC, Credit Suisse, Jan 12 Source: NBS, Credit Suisse, Jan 12

China real GDP (%YoY) China retail sales (%yoy, 3m mav) China industrial production (%yoy, 3m mav)

Q2 0

9

Q3 0

9

Q4 0

9

Q1 1

0

Q2 1

0

Q3 1

0

Q4 1

0

Q1 1

1

Q2 1

1

Q3 1

1

Q4 1

18

7

9

10

11

12

13

8.9

Mar

10

Jun 1

0

Sep 1

0

Dec 1

0

Mar

11

Jun 1

1

Sep 1

1

Dec 1

1

14

15

16

17

20

18

19

17.5

Mar

10

Jun 1

0

Sep 1

0

Dec 1

0

Mar

11

Jun 1

1

Sep 1

1

Dec 1

1

12

10

14

16

18

20

22

12.8

• Recent growth data supports a ‘soft landing’

• Inflation continues to moderate and provides scope for further easing

3636

Brazil: Median market forecast for IPCA inflation

Brazil: Foreign Direct Investments

Brazil: inflation pressures easing, FDI remains robust

Source: IBGE, Credit Suisse, Oct 11 Source: Central Bank of Brazil, Credit Suisse, Oct 11

29.9 31.3

40.1 41.244.8

48.2 51.0 50.053.7 55.8 58.1 60.1 61.6

6.16.9

8.39.6

11.0

12.312.7 14.2

15.216.4

17.3 16.3 13.5

0

10

20

30

40

50

60

70

80

Oct

10

Nov 1

0

Dec 1

0

Jan

11

Feb 1

1

Mar

11

Ap

r 11

May

11

Jun

11

Jul 11

Au

g 1

1

Se

p 1

1

Oct

11

Intercompany loans (net) Private equity (net)USDbn, cumulative 12mths

36.1

38.2

48.4 50.8

55.8

60.563.8 64.2

68.972.2

75.4 76.3 75.1

4.5

1.5

Dec 0

4

Dec 0

5

Dec 0

6

Dec 0

7

Dec 0

8

Dec 0

9

Dec 1

0

Dec 1

1

Dec 1

2

Dec 1

3

8.5

7.5

5.5

4.5

3.5

2.5

6.5

3.1

5.75.9

5.3

% y-o-y

4.3

5.9

4.5

6.76.3

Center of the inflation target range

Upper limit of target

7.6

95%

90%

68%50%

50%

95%

90%

68%

• Growth is declining along with inflation pressures

• Significant foreign investment in the pipeline for the years ahead (oil and gas sector, Olympics, World Cup) will remain supportive for the economy

37

Mexico gaining export competitiveness vs China

Unit labour cost in manufacturing

2001 2003 2005 2007 2009

155

145

135

125

115

105

95

Index (2001=100) Mexico China

Source: Bloomberg, Haver Analytics, OECD, Mar 11

Note: Assuming a 30 day month, we use average 2010 USD/MXN exchange rate of 12.636 and USD/RMB exchange rate of 6.7704 to make the conversionSource: Nomura Global Economics; Xinhua News; local government websites in China; Mexican Labor Ministry, Mar 11

Minimum wage in Mexico (2011)

MXN per day USD per day

Mexico City 59.82 4.73

Monterrey, Nuevo Leon 58.13 4.60

State of Michoacan 56.70 4.49

Minimum wage in China (2011)

RMB per month USD per day

Guangzhou City 1,300 6.40

Jiangsu Province 1,140 5.61

Shaanxi Province 860 4.23

• Mexico continues to gain market share of US imports

• Improving US growth will be supportive for Mexican economy

38

Public-sector liquid assets and external debt Public-sector debt amortizations

Venezuela: comfortable financing outlook

* Includes cash holdings in government agencies and PDVSASource: Central bank, Credit Suisse, Sep 11 Source: PDVSA, Ministry of Finance, Credit Suisse, Sep 11

$bn PDVSASovereignSovereign - domestic$bn Other public sector liquid FX holdings*

Gross non-gold FX reserves

Gross gold FX reserves

Public sector external bond debt

0

Q2 0

7

Q2 0

8

Q2 0

9

Q2 1

0

Q2 1

1

15

30

45

60

75

Q3 0

7

Q4 0

7

Q1 0

8

Q3 0

8

Q4 0

8

Q1 0

9

Q3 0

9

Q4 0

9

Q1 1

0

Q3 1

0

Q4 1

0

Q1 1

1

0

2011

2013

2015

2014

2012

2016

2018

2020

2019

2017

2021

2023+

2022

2

4

6

8

10

12

14

16

18

20

22

• High oil prices will remain supportive for high yielding Venezuelan bonds

• Strong willingness and capacity to service debt

39

Commodities led export growth FDI in Malaysia has improved

Malaysia: CNY proxy

Source: CEIC, Credit Suisse, Sep 11 Source: CEIC, Credit Suisse, Sep 11

Electrical and electronics export (RM bn)

Palm oil, LNG, and oil exports (RM bn)

26

21

16

11

6

2007 2008 2009 2010 2011

6

5

4

3

2

1

0

Jun 01 Dec 03 Jun 06 Dec 08 Jun 11

FDI inflows (4q rolling sum, % of GDP)

• Strong current account surplus and increased foreign investment

• Modest appreciation of the Chinese Renminbi is supportive for the Malaysian Ringgit

40

Global Emerging Market Debt team

• Over 100 years investment experience in emerging markets

• Extensive knowledge of sovereign and corporate issuers, domestic and external debt and derivatives

• Experienced and stable team

Team members Role Experience inthe industry

Years of experience in emerging markets

Brett Diment Head of Emerging Market Debt 20 16

Edwin Gutierrez Portfolio Manager 16 16

Kevin Daly Portfolio Manager 23 17

Esther Chan Portfolio Manager 9 9

Max Wolman Portfolio Manager 12 10

Viktor Szabo Portfolio Manager 11 11

Jozsef Szabo Portfolio Manager 14 14

Siddharth Dahiya Corporate Analyst 6 6

Anthony Simond Analyst 3 1

Andrew Stanners Dealer and Portfolio Analyst 11 7

Flora Sexton Dealer 3 <1

Ewa Gray Portfolio Analyst 8 3

Source: Aberdeen Asset Management, Jan 12Includes affiliated persons operating under inter-company agreement

41

Biographies

Brett Diment, Head of Emerging Market Debt

Brett Diment is the head of emerging market debt. Brett joined Aberdeen via the acquisition of Deutsche Asset Management's London and Philadelphia fixed income businesses in 2005. Brett held the same role at Deutsche Asset Management since 1999. Brett joined Deutsche Asset Management in 1991 as a graduate and started researching emerging markets since 1995. Brett graduated with a BSc from the London School of Economics.

Edwin Gutierrez, Portfolio Manager

Edwin Gutierrez is a portfolio manager on the emerging market debt team. Edwin joined Aberdeen following the acquisition of Deutsche Asset Management's London and Philadelphia fixed income businesses in 2005. Edwin held the same role at Deutsche since joining in 2000. Previously, Edwin worked as an emerging debt portfolio manager at Invesco Asset Management and as a Latin American economist at LGT Asset Management. Edwin graduated with an MSc from Georgetown University.

* Or acquired companies

Kevin Daly, Portfolio Manager

Kevin Daly is a portfolio manager on the emerging market debt team. Kevin joined Aberdeen in April 2007 having spent the previous 10 years at Standard & Poor's in London and Singapore. During that time Kevin worked as a credit market analyst covering global emerging debt, and was head of origination for Global Sovereign Ratings. Kevin was a regular participant on the Global Sovereign Ratings Committee, and was one of the initial members of the Emerging Market Council, formed in 2006 to advise senior management on business and market developments in emerging markets. Kevin graduated with a BA in English Literature from the University of California, Los Angeles.

Viktor Szabó, Portfolio Manager

Viktor Szabó is a portfolio manager on the emerging markets debt team. Viktor joined Aberdeen in July 2009 following the acquisition of certain asset management businesses from Credit Suisse Asset Management. Previously, Viktor worked for Credit Suisse Asset Management Hungary as country chief investment officer. Prior to that, Viktor worked for the National Bank of Hungary as the head of market analysis team. Viktor holds an MSc in Economics from the Corvinus University of Budapest. Viktor is a CFA charterholder.

42

Biographies

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute* Or acquired companies

Esther Chan, Portfolio Manager

Esther Chan is a portfolio manager on the emerging market debt team specialising in emerging market corporate bonds and is also a member of the Global Best Ideas team. Esther joined the Singapore office of Aberdeen Asset Management in 2005*. In Singapore, she was a member of the Asian fixed income team, first as a credit analyst in financials and corporates, then as a portfolio manager. She moved to London in 2007, joining the emerging market debt team where she specialises in managing corporate bonds. Prior to that, she worked as a analyst in corporate finance advising companies undergoing debt restructuring in Jakarta, Indonesia. Esther has a LLB (Hons) from University College London and is a CFA Charterholder.

Max Wolman, Portfolio Manager

Max Wolman is a portfolio manager on the emerging market debt team. Max joined Aberdeen* in 2001 from Liontrust Asset Management initially working as a currency dealer for Aberdeen. In 2002 Max moved to the emerging market debt team as an assistant portfolio manager to focus on developing the local currency bonds and foreign exchange investments. More recently Max has been specialising in emerging market corporate bonds having helped develop the corporate bond investment process. Max graduated with a BA (Hons) in Business Management and is a CFA Charterholder.

Jozsef Szabó, Portfolio Manager

Jozsef Szabo is a portfolio manager on the emerging markets debt team and is responsible for local investments in Budapest. Jozsef joined Aberdeen in 2011from the central bank of Hungary where in the last six years he was managing fixed income portfolios as part of the official FX reserves management operations. Previously, Jozsef worked in monetary analysis within the central bank and served as secretary to the Monetary Council. Prior to that, Jozsef worked for the Hungarian Government Debt Management Agency. Jozsef graduated with a Masters degree from the Budapest University of Economic Sciences and is a CFA charterholder.

Siddharth Dahiya, Corporate Analyst

Siddharth Dahiya is a corporate analyst on the emerging market debt team. Sid joined Aberdeen in June 2010 working as a credit risk analyst for the counterparty risk team. Previously, Sid worked for four years at ICICI Bank UK plc in London. He was part of the treasury investment team focussing on Indian bond investments. He started his career at ICICI with the corporate finance team focussing on cross-border M&A. Sid completed a post-graduate degree in business management from the Indian Institute of Management, Lucknow in 2006. Prior to that he completed a Bachelors degree (Honours) in Electronics & Electrical Engineering from Punjab Engineering College, India.

43

Biographies

Andrew Stanners, Dealer and Portfolio Analyst

Andrew Stanners is a dealer and portfolio analyst on the emerging market debt team. Andrew joined Aberdeen via the acquisition of Deutsche Asset Management's London and Philadelphia fixed income businesses in 2005. Andrew held a similar role at Deutsche Asset Management, which he joined in 2004. Previously, he spent time working as an analyst at Cheyne Capital, prior to which he was with Deutsche Asset Management. Andrew graduated with a BA joint honours in Economics and Economic History from York University.

Ewa Gray, Portfolio Analyst

Ewa Gray is a portfolio analyst on the emerging markets debt team. Prior to this, Ewa worked as head of liquidity controllers within our treasury department where she was responsible for managing a team of 6 liquidity controllers, the team are responsible for instructing FX trades and placing cash out in various money market instruments for yield curve pick up as well as managing the daily collateral merging for OTC derivatives. Ewa joined Aberdeen via the acquisition of Deutsche Asset Management's London and Philadelphia fixed income businesses in 2005. Ewa graduated with BSc (Hons) in Mathematics with Business Management from Queen Mary University in 2003.

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute* Or acquired companies

Anthony Simond, Investment Analyst

Anthony Simond is an investment analyst on the emerging market debt team. Anthony joined Aberdeen in 2008 upon graduation. Anthony graduated with BA (Honours) in Classics at the University of Bristol.

Flora Sexton, Dealer

Flora Sexton is a dealer on the emerging market debt team. Flora joined Aberdeen in July 2011 working as a credit risk analyst for the counterparty risk team. Previously Flora worked for three years at Paternoster UK Ltd, a specialist pension scheme reinsurance provider, where she worked as an investment analyst on the credit team, focusing on fixed income. Flora graduated from Trinity College Dublin with a BA (Hons) in History.

44

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• Investors should be aware that past performance is not a guide to future returns, the value of investments and the income from them can fall as well as rise and investors may get back less than the amount invested.

• The information contained in this marketing document should not be considered as an offer, or solicitation, to deal in the shares of any securities or financial instruments.

• The views expressed in this presentation should not be construed as advice on how to construct a portfolio or whether to buy, retain or sell a particular investment. The information contained in the presentation is for exclusive use by professional customers/eligible counterparties (ECPs) and not the general public. The information is being given only to those persons who have received this document directly from Aberdeen Asset Management (AAM) and must not be acted or relied upon by persons receiving a copy of this document other than directly from AAM. No part of this document may be copied or duplicated in any form or by any means or redistributed without the written consent of AAM.

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