• Most currencies have tracked equity markets tightly in this rebound. Based on simple level correlations between FX and local stocks (Charts 11-16), INR, THB and KRW are trading fair to equities, IDR has overshot and now looks rich versus the JCI, as does PHP, slightly. TWD still looks cheap versus local stocks. • Regressions of FX against key financial variables suggest iDfl and KAW now look rich to undel lying asset market drivers (Chart 17) Indeed, both may soon encounter official bids, with IDR trading near the bottom of the 13300-13700 range identified by BI as fair value. PHP, SGD, TWD and CNY are within 1% of fitted fair value based on our regression. INR, MYR and THB could be considered cheap on this metric. We have been constructive on INR, had turned neutral on the THB, but have believed there are idiosyncratic reasons why MYR should remain cheap (political risk premium, reserve rebuilding, limited policy space). offsb.prci-onshDre Itttpl r,l ieiclapreadslchart 1 and 21 3m NDF-Onshorj Forward Implied Yield Spread I Offshore too negative Offshore too positive -4% - 2010 2.0% 1.0% 2011 2012 2013 2014 2015 • Offshore-Onshore Spread (%) • 1Y Percentile (9'0) (RHS) too so 80 0.0% • 70 -1.0% • 60 -2.0% • • 50 -3O% 40 30 -4.0% 20 -5.0% 10 -6.0% • • • ♦ 0 CNY THB INR TWD KRW IDR PHP MYR Source: Bloomberg Finance LP CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0118697 CONFIDENTIAL SDNY_GM_00264881 EFTA01458680