January 2012 ALSO In this issue: G Looking Back - 2011 G Looking Forward - 2012 January 2012 The Eurozone Crisis January 2012 G January 2012 Investment Policy January 2012 G 1/1/08 1/1/09 1/1/10 1/1/11 5/4/11 1/7/11 5/10/11The Empire1/1/12 State 1/1/08 1/1/09 1/1/10 1J/1/11anuary5 2012/4/11 1/7/11 G 5/10/11 1/1/12 1/1/08 1/1/09 1/1/10 1/1/11January5/4/11 2012 1/7/11 5/10/11 1/1/12 FTSE 100 1/1/08 6457 44341/1/09 1/1/10 5403 1/1/11 5900 5/4/11 6007 1/7/11 5946 WWW.BARRATTANDCOOKE.CO.UK 5/10/11 5102 1/1/12 5572 F TSE All100 Share 1 64573287/1/08 443422091/1/09 1 54032751/1/10 1 January 59003063/1/11 5 201260073117/4/11 1 59463097/7/11 5 51022613/10/11 1 55722858/1/12 FTSE All100 Share 32876457 22094434 27515403 30635900 31176007 30975946 TELEPHONE: 26135102 28585572 01603 624236 FTSEDow Jones100 (US) 1/1/0813265 6457 8776 44341/1/09 1/1/1010428 5403 115781/1/11 5900 123945/4/11 6007 124141/7/11 5946 109405/10/11 5102 122181/1/12 5572 DowF TSE JonesAll Share (US) 13265 3287 22098776 10428 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We now have: a) Base rates of 0.5% gross b) Inflation (RPI) at 5.2% c) Banks not having the liquidity to lend money d) Top rate income tax at 50% which make the prospects for new home buyers and 60 year olds preparing for retirement very worrying, whilst the incentive for high income earners is ever depleting. Those aged 70 on index linked pensions are in clover – but for the rest, those days are over.

I genuinely believe that the 1990-2010 days of decadence ended on 9th December 2011, the day that David Cameron stood up against the other European Union Countries: ‘ENOUGH IS ENOUGH’.

The Germans can keep their automobile industry The French can keep their agricultural policy of garlic, snails and plonk The Greeks can keep their sunshine, olive oil and filthy yoghurt but they are not going to destroy our City of London.

If it is going to take years of austerity, then we are all in it together and I believe any referendum would back David Cameron with a very large majority. It is just a pity that the Liberals, with a wimp leader who dares not stand up and be counted, and the radical Vince Cable who would like to see the banks crucified, are in partnership with the present government whose hands are tied.

LOOKING FORWARD TO 2012

The Eurozone Crisis will continue, and there is nothing that worries stockmarkets more than uncertainty, but there will be a solution one day.

The boom in China is slowing down from a GDP growth rate of approximately 9.5% to a predicted rate of 8% (it is well worth looking back to my article on China in the 1st January 2007 chronicle). However, the Chinese economy is continuing to grow (8% growth is considerable), as will the economies of other BRIC countries (Brazil, Russia and India). With the world population rising to 7bn for the first time, they have to.

The world will be mesmerised by the excitement of the French, Russian and US elections (we predict that Barack Obama will be re-elected for a second term by a small majority as the US economy surprisingly recovers – it always does before an election – see Will Mellor’s article on the US below).

And at home we really can look forward to the

London Olympics and The Royal Diamond Jubilee (three cheers for the Duke of Edinburgh walking to church today) giving us all that feel good factor.

But above all, with the exception of the retail, financial and property sectors, ‘Corporate Britain’ has never had stronger balance sheets. We particularly like ‘Essential UK Companies’, and ‘Major Global Exporters’ who are doing well (see ‘investment strategy’).

There is no hiding that we have been through a rotten 2011, but we have survived and though the economy and prospects for 2012 look bleak at this stage, the pendulum will swing, and there is considerable value out there. THE EUROZONE CRISIS

Though, in theory, the euro was originally a sensible concept for trade, in practice the cultures of 17 diverse countries could never work together.

The Teutonic, rich, hard working Germans protecting their automobile industry;

The French, who hate anything British and believe in the saying ‘EU rules are there to be broken’, protecting their agricultural policy;

And the laid back Mediterranean states who were accused of a mañana culture as far back as the Spanish Armada, not protecting anything, least of all their own sovereign debts.

The economic concept of all these diverse countries working together was flawed from the start, which makes it surprising that the euro, as we know it, has survived 10 years already.

Back in 2008, greedy European banks, using mirrors to convert ‘chests of money’ into ‘mountains of credit’, did what they always do – lent it on property which ‘never goes down’. The US had its own sub-prime property crisis (discussed in previous chronicles), but in Europe one only has to visit Spain, Portugal or Ireland to witness with one’s own eyes the disaster and misery that this property binge has created. In early December I visited Northern Ireland, where this beautiful Emerald Isle is littered with minor ‘Southforks’ desecrating the countryside, where the value of property has ‘fallen by a third, and then halved’.

Many of these empty Irish properties, some of which are owned by previous residents of Dale Farm, will never be lived in, and the banks are left holding these unsaleable properties.

The more conservative ‘old school bankers’ did what all ‘old school bankers’ used to do. They borrowed at one rate and lent at higher rates to countries (sovereign debt). What could be safer than sovereign debt within Europe supported by the euro and the European Central Bank? Until, of course, sovereign countries cannot pay the interest and therefore default. Even ‘old school bankers’ had used ‘mirrors to create mountains’, and this is exactly what the Eurozone debt crisis is all about.

The textbook method in response to the Eurozone banking crisis is:

1) To reduce interest rates to encourage borrowers to borrow.

2) To install quantitative easing, which is printing money, putting more liquidity into the economy.

3) With additional liquidity and great sums of cash, this gives the chance for ‘growth’ to return and banks and economies to recover.

But in point of fact:

1) The banks have had to repair damaged balance sheets by increasing their capital (Core Tier 1 Capital Ratios).

2) This is usually achieved by issuing equity (i.e. shares). But, investors do not want to purchase more equity in banks.

3) Therefore, the banks are having to build up their own balance sheets by:

a) Retaining profits, achieved by borrowing so low (0.5%) and lending so high (5.0%). Profits can only be retained by putting restrictions on dividends and bonuses.

b) Retaining cash from quantitative easing issues rather than lending it.

c) And, to improve ‘Core Tier 1 Capital Ratios’, not lending so much cash anyway.

This means that rather than increasing liquidity within Europe, liquidity has tightened still further, hence the lack of liquidity to industry and the mortgage market etc.

Should it be the strong European countries such as Germany and France bailing out the weak of Greece, Portugal, Spain, the Republic of Ireland, and now Italy?

Or should Greece be allowed to default, and revert to the Drachma, with Europe suffering the consequences thereof, whatever they may be? The Barratt & Cooke view is that Greece will leave the euro during 2012/2013, but that is only our view (no European politician knows the answer).

Governments and banks are doing everything they can to sort this muddle out, and solve ‘the problem’.

No doubt this will be solved one day, and Europe will return to normality. However, until then there will be austerity and uncertainty, and there is nothing stockmarkets hate more than uncertainty.

We are wary of cash seeking ‘safe havens’ (which are no longer safe!), such as:

UK 10 year gilts, where gross redemption yields are now down to 1.97% (very dangerous ) whereas Italian rates are up to 7% (still dangerous!).

And gold which was considered a safe haven can be very volatile, as seen recently.

I hope you have found this article on the euro and the present economic scenario interesting and comprehensive. I promise never to go into such detail again in future chronicles.

BARRATT & COOKE INVESTMENT STRATEGY

The majority of our clients: a) Own their own properties. b) Have sufficient liquidity for usual expenses and emergencies. c) Have made provisions for school fees/pensions etc.

They therefore need a ‘suitable’ investment strategy to meet their needs, which in most cases means: a) Further liquidity for safety and for investment opportunities. b) The potential for long term capital growth and rising income.

All individual clients are different and are advised in a bespoke way by their advisors, but we have firm views running through the investment strategy.

1) Base Rates are only 0.5% gross, with deposit rates extremely low.

Deposits are fine for liquidity and safety, but not much else.

2) 10 Year UK Gilts only yield 1.97% gross to redemption. They stand at this level as foreign money finds a so called ‘safe haven’.

One day interest rates are bound to rise, and 10 year UK gilts are anything but a ‘safe haven’ for the future at current levels.

3) Quality 5 Year Corporate Bonds give redemption yields of approximately 2.5% gross.

Again, these are vulnerable to rises in interest rates and purchasing now at substantial premiums means a significant capital fall to maturity.

All these rates of deposits, conventional gilts and corporate bonds are extremely low due to the issues raised in my article on the Eurozone.

However, for a degree of safety, liquidity and protection against inflation we prefer:

4) Index linked gilts

or in ‘gross funds’:

Index linked Corporate Bonds.

RPI stands at 5.2%, though all of our internal calculations are worked out on an RPI of 3.0% (to be cautious) due to changes in VAT, commodities falling in value, the likelihood of unemployment rising to 3,000,000, and ‘years of austerity’.

And for potential growth and rising dividends:

5) Equities – Compared to other asset classes, we consider a number of leading equities good value, particularly taking into account:

a) Dividend yield, dividend cover, potential for increasing dividends compared to present deposit and gilt yields.

b) P/E ratios which are historically low.

c) Strong balance sheets (where most leading FTSE 100 stocks have never had stronger balance sheets), having prepared for this scenario over the last few years.

We continue to be wary of:

Retailers – (with the exception of supermarkets), as a number of high street operators have run into financial difficulties such as La Senza Lingerie (whatever that is);

House builders and property - due to the increasing unemployment numbers and lack of liquidity in bank lending;

Banks - with the exception of banks with global exposure such as Standard Chartered and HSBC.

However, we particularly like:

UK Necessities Utilities: , United Utilities, SSE, National Grid Supermarkets: Tesco, Sainsbury, W M Morrison

UK Listed Global Stocks Food: Unilever Household Products: Reckitt Benckiser Hotels: InterContinental Drinks: Diageo Pharmaceuticals/Health Care: GlaxoSmithKline, AstraZeneca, Smith & Nephew Telecoms: Vodafone Engineering/Power/Industrials: Weir, IMI, , Spirax-Sarco, Smiths Group, Rolls Royce

Global Resources Oil/Oil Services: Royal Dutch Shell, BG Group, Petrofac Mining: BHP Billiton, Rio Tinto, Xstrata Chemicals: Johnson Matthey Selected Foreign Stocks (See Equity Suggestions List)

It is very important to have a well spread list of investments, as a narrow spread of companies and a lack of diversification increases the overall risk of a portfolio.

While stockmarkets are so volatile it is important to be prepared to reduce equities on a rise, to add to equities on a fall. However, in principle all our suggested stocks are purchased with a view to holding in the medium term, and only altering when stocks or markets get ahead of themselves, both up or down.

The statistics below make very interesting reading, and help to explain the Barratt & Cooke investment strategy.

See equity statistics: 1/1/2010 1/1/2011 1/1/2012

FTSE 100 Dividend Yield (net) 3.3% 3.0% 3.6% FTSE 100 Dividend Cover 1.7x 2.8x 2.8x compared with:

Base Rate (gross) 0.5% 0.5% 0.5% 10 Year Gilt Redemption Yield (gross) 4.0% 3.4% 1.97% RPI 0.3% 4.7% 5.2% while P/E ratios have been steadily falling: 18.0x 12.1x 10.1x The performance of global markets over the past 12 months is as follows: 1 Year 1/1/2011 1/1/2012 % Change High/Low

Dow Jones (US) Rose 11578 12218 +5.5 12811/10655 S&P (US) No Change 1258 1258 - 1364/1099 FTSE 100 Fell 5900 5572 -5.6 6091/4944 FTSE 250 Fell 11559 10103 -12.6 12168/9426 CAC 40 (France) Fell 3805 3160 -17.0 4157/2782 DAX 30 (Germany) Fell 4054 3346 -17.5 4360/2877 Nikkei 225 (Japan) Fell 10229 8455 -17.3 10857/8160 Hang Seng (China) Fell 23035 18434 -20.0 24419/16250 Sensex (India) Fell 20509 15455 -24.6 20561/15175

5 year index linked gilt Rose 313 341 +9.0 343/312 THE EMPIRE STATE – BY WILL MELLOR

As already mentioned in this newsletter, with incumbents keen to boost the economy as a means of appealing to voters, the US economy often recovers ahead of a presidential election. Indeed, despite the doom and gloom headlines, recent economic data certainly supports this view where:

1) December 2011 weekly jobless claims data saw the number of Americans who filed requests for benefits fall sharply to the lowest level since May 2008, suggesting fewer people are losing their jobs and more are finding work;

2) The US Consumer Confidence Index, which measures how optimistic Americans are about their job and financial prospects, rose to an eight month high (where I note consumer spending makes up approximately 70% of US gross domestic product growth);

3) There have been signs of expansion within the manufacturing sector, with a jump in the Empire Manufacturing Index for December.

Meanwhile, with exports representing approximately 13% of the US economy, the US has limited exposure to the deteriorating European economy.

Though the US has its own debt concerns in the public sector, most recently losing its coveted AAA credit rating, as I mentioned in our October newsletter, US corporates continue to build up significant cash reserves and are in robust financial positions. Therefore, despite the inherent exchange rate risks for sterling based investors acquiring US listed shares, we believe the following stocks offer investors attractive opportunities with which to obtain US exposure.

ConocoPhillips (US listed) ConocoPhillips is an integrated oil & gas company with a strong focus on exploration and production which is set to be enhanced by the April 2012 demerger of its refining and marketing division. Though it has assets worldwide, Conoco has significant shale gas acreage in North America with the US accounting for over 60% of their sales. With a strong financial position and active management of their asset base, Conoco is well positioned to continue to return funds to shareholders via a progressive dividend.

InterContinental Hotels Group (UK listed) InterContinental Hotels is the world’s largest hotels group by number of rooms, owning brands including InterContinental Hotels, Crowne Plaza and Holiday Inn. The company operates a predominately franchise based business model and is highly cash generative which has allowed net debt to be reduced significantly whilst also supporting a progressive dividend policy. Though the company has ambitious growth plans in China, India and the Middle East to drive growth over the medium term, InterContinental currently generates approximately half of its annual sales in the Americas and is therefore well positioned to benefit from any economic recovery in this region.

Healthcare – Becton, Dickinson & Co and Johnson & Johnson (both US listed) Becton, which supplies products such as needles, syringes, systems for specimen and blood collection and innovative diagnostic and research tools, has increased revenues in each division annually over the last 10 years whilst the dividend has been increased for 38 consecutive years. Becton also has a strong focus on social responsibility being listed amongst the world’s most ethical companies in 2010. Though most people associate baby care products with Johnson & Johnson, their consumer brands division is relatively small and the majority of group sales are generated by their medical device & diagnostics and pharmaceutical divisions. Johnson & Johnson has an AAA-rated balance sheet (higher than that of the US government), an excellent record of sales and earnings growth whilst the dividend has been increased for 48 consecutive years.

COMPLIANCE/REGULATION/EXAMINATION

All commerce now has compliance, and I never thought I would mention a Grand National winner in this section. However, how appropriate that the 2008 Grand National Winner was named ‘Comply or Die’.

Compliance has been installed globally for the protection of the client, though it is expensive to administer, and has no profound effect on performance.

During 2011 we have updated clients’ records on:

‘KYC’ – know your client ‘suitability’ – defining risk

These have proved very worthwhile exercises and as we all know, compliance is a necessity, without which financial advisors cannot advise clients – ‘Comply or Die’.

Even I have recently had to sit a professional examination:

CISI Level 6 Certificate in Private Client Investment Advice and Management.

This was a bit tough, having passed my Stock Exchange Exam 41 years ago! However, it does show that 40 years’ experience counts for something.

It was interesting that my first question was on suitability, which proves how important it is to keep up with compliance and regulation.

Passing this exam demonstrates my commitment to Barratt & Cooke and its clients in the long term. Unlike the litany of stockbroker mergers and deals recently recorded, Barratt & Cooke has no intention of losing its independence, or changing its personal service to clients.

Over the past few months there has been a mass of stockbroking mergers, takeovers and closures:

Altium Capital - closed its securities operation Ambrian - offloaded its brokerage division to RFC Group (Australian) Arbuthnot - agreed a defensive sale to Westhouse (UK) Collins Stewart Hawkpoint - taken over by Canaccord (Canadian) Evolution - taken over by (South African) J M Finn - sold 70% of its equity to Delen (Belgian) Merchant Securities - taken over by Sanlam (South African) Religare (Indian) - who took over Hichens Harrison in 2009, ‘threw in the towel’ Unicredit (Italian) shut its equities business in London

Most of these transactions have been a sign of weakness due to a decline in stockbroking business over the past year. Clients will be pleased to know that Barratt & Cooke’s balance sheet remains robust, and we have no intention of losing our independence. In fact, just before Christmas I told a predator to:

“like the Christmas turkey, get stuffed!”

MISCELLANEOUS – BY SAM BARRATT

Online Valuations

We are in the process of installing ‘online valuations’. Should you wish for us to contact you when this is up and running, please notify your advisor.

Nominees/Probate

At times of probate it is so much easier, and quicker, to sell and deal with deceased estates that are in Nominee Names, rather than having to wait for probate and then register with each individual company.

It is sensible for all clients to review Wills at least every 3 years, and to review investment strategy at the same time.

ISAs

ISA subscriptions will be increased on 6/4/2012 from £10,680 to £11,280 and Junior ISAs are now up and running at £3,600.

Capital Gains Tax

In many cases it is sensible to establish the Capital Gains Tax exemption limit of £10,600 (Trusts £5,300) before 5th April 2012. This exemption limit of £10,600 has been frozen until 5/4/2013.

CONCLUSION

There is a paradox with politicians and politics in a complete muddle, while the majority of Corporate Britain is in relatively good health.

Though interest rates are negligible, these have been politically manipulated, but one day will return to reality, and always remember:

‘Things are never as good as you think they are, but then again they are never as bad.’

We can now look forward to:

The Diamond Jubilee (I shall be at the street party in Heydon)

The London Olympics (I shall be there to watch Tom Daley in the high dive final)

The Cheltenham Gold Cup (where Long Run will beat the nation’s hero Kauto Star)

The long life of Norwich in the Premiership (I am delighted Joey Barton was sent off) and may I wish you all a very Happy New Year.

C W L Barratt January 2012

PLEASE NOTE: This newsletter is provided solely to enable clients to make their own investment decisions. The information within this Newsletter does not constitute advice or a personal recommendation, or take into account the particular investment objectives, financial situations,PLEASE NOTE: or needs This of newsletterindividual clients.is provided It may solely therefore to enable not beclients suitable to mak for ealltheir recipients. own investment If you hav decisions.e any doubts The as information to the suitability within of this this newsletter does not service,constitute you advice should or seek a personal advice fromrecommendation, your investment or take adviser. into Theaccount past theis not particular necessarily investment a guide objectives,to future performance. financial situations, The value or ofneeds shares of andindividual clients. It themay income therefore from not them be suitablecan fall asfor well all recipients. as rise and Ifinvestors you have may any get doubts back asless to thanthe suitabilitythey originally of this invested. service, Certainyou should Investment seek advice Trusts from wil lyourpermit investment adviser. usingThe past gear ising not as necessarily an investment a guide strategy. to future Gear performance.ing is a strategy The which value involvesof shares borr andowing the income money fromto increase them canholdings fall as of well investments as rise and or ininvestingvestors main y get back less warrantsthan they or originally derivatives. invested. Such aCertain strategy Investment is likely to Trusts result will in movementspermit using in gearing the price as anof theinvestment relevant strategy.security beingGearing amplified is a strategy significantly which involvesand may borrowing money beto subjectincrease to holdings sudden ofand investments large falls inor value investing and investorsin warrants may or get derivatives. back nothing Such at a all. strategy Any tax is likelyrelief storeferred result into movementsare those currently in the price applying. of the All relevant security estimatesbeing amplified and prospectiv significantlye figures and may quoted be subjectin this newsletterto sudden areand forecastslarge falls and in valueare not and guaranteed. investors may Barratt get andback Cook nothinge is theat all. trading Any nametax reliefs of referred to are those Barrattcurrently & Cookapplying.e Limited. All estimates Registered and in prospectiv England No.e figures 5378036. quoted Barratt in this & newsletterCooke Limited are isforecasts authorised and and are regulatednot guaranteed. by the BarrFinancialatt and Services Cooke is the trading name of AuthorBarrattity, & Cookewho are Limited. based atRegistered 25 The North in England Colonnade, No. 5378036.Canary Wharf, Barratt E14 & 5HS.Cooke Limited is authorised and regulated by the Financial Services Authority, who are based at 25 The North Colonnade, Canary Wharf, E14 5HS. Equity Suggestions – 1st January 2012

Price Net* 52 Week 01/01/12 Yield High Low CHEMICALS Johnson Matthey PLC Ordinary Shares 1836p 2.6% 2130p 1484p HEALTHCARE Smith & Nephew PLC Ordinary Shares 626p 1.6% 749p 501p ENGINEERING IMI PLC Ordinary Shares 760p 3.7% 1201p 625p Weir Group Ordinary Shares 2032p 1.4% 2254p 946p BANKS HSBC Holdings PLC Ordinary Shares 491p 5.7% 740p 456p Standard Chartered PLC Ordinary Shares 1409p 3.7% 1795p 1142p BEVERAGES Diageo PLC Ordinary Shares 1407p 2.9% 1414p 1082p ELECTRICITY National Grid PLC Ordinary Shares 625p 6.0% 654p 522p SSE PLC Ordinary Shares 1291p 5.9% 1430p 1151p FOOD PRODUCERS Tate & Lyle PLC Ordinary Shares 705p 3.4% 708p 450p Unilever PLC Ordinary Shares 2163p 3.4% 2175p 1782p FOOD RETAILERS Tesco PLC Ordinary Shares 403p 3.6% 491p 280p J Sainsbury PLC Ordinary Shares 303p 5.1% 396p 258p William Morrison PLC Ordinary Shares 326p 3.5% 326p 179p HOUSEHOLD PRODUCTS Reckitt Benckiser PLC Ordinary Shares 3180p 3.8% 3617p 2628p INDUSTRIALS Smiths Group PLC Ordinary Shares 915p 4.0% 1450p 852p LIFE ASSURANCE Aviva PLC Ordinary Shares 301p 8.6% 481p 267p MINING BHP Billiton PLC Ordinary Shares 1878p 3.9% 2654p 1625p Rio Tinto PLC Ordinary Shares 3125p 2.3% 4718p 2637p Xstrata PLC Ordinary Shares 978p 2.1% 1565p 648p OIL & GAS BG Group PLC Ordinary Shares 1377p 1.0% 1595p 1105p Royal Dutch Shell PLC ‘B’ Shares 2454p 4.3% 2476p 1768p OIL SERVICES Petrofac Ltd Ordinary Shares 1441p 2.1% 1697p 1045p PHARMACEUTICAL AstraZeneca PLC Ordinary Shares 2975p 5.6% 3218p 2454p GlaxoSmithKline PLC Ordinary Shares 1472p 4.6% 1477p 1123p SUPPORT SERVICES Aggreko PLC Ordinary Shares 2017p 1.0% 2051p 1377p TELECOMMUNICATIONS Vodafone Group PLC Ordinary Shares 179p 5.1% 185p 154p TRAVEL & LEISURE InterContinental Hotels PLC Ord Shares 1157p 2.7% 1440p 939p UTILITIES United Utilities PLC Ordinary Shares 606p 5.1% 645p 529p GAS SUPPLIERS Centrica PLC Ordinary Shares 289p 5.1% 352p 248p

SMALLER COMPANIES/SPECIAL SITUATIONS

BIOTECHNOLOGY Ordinary Shares 1043p 1.2% 1117p 815p BREWERY Greene King PLC Ordinary Shares 411p 4.8% 519p 402p OIL & GAS EnQuest PLC Ordinary Shares 92p - 160p 84p ENGINEERING Spirax-Sarco PLC Ordinary Shares 1873p 2.4% 2090p 1593p Halma PLC Ordinary Shares 330p 2.8% 432p 306p OIL SERVICES Kentz Corporation PLC Ordinary Shares 422p 1.8% 512p 335p FOOD PRODUCER Domino’s Pizza PLC Ordinary Shares 403p 2.8% 591p 372p

OVERSEAS STOCKS** Price Gross*# 52 Week 01/01/11 Yield High Low CHEMICALS BASF SE 4501p 4.1% 5865p 3524p Syngenta AG Shares 18924p 2.5% 22316p 14527p FOOD PRODUCERS Nestlé SA Registered Shares 3716p 3.4% 3799p 2993p HEALTHCARE PRODUCTS Johnson & Johnson Common Stock 4220p 3.4% 4379p 3700p OIL ConocoPhillips Common Stock 4689p 3.6% 5263p 3774p MEDICAL EQUIPMENT Becton Dickinson & Company Shares 4808p 2.2% 5775p 4478p PHARMACEUTICAL Roche Holdings AG Genusscheine NPV 10955p 4.1% 11058p 7920p TECHNOLOGY Microsoft Common Stock 1670p 2.6% 1896p 1522p BEVERAGES Coca-Cola PLC Ordinary Shares 4502p 2.7% 4618p 3944p

* These yields are estimated and not guaranteed. ** Nominee clients only. # Dividend income may be subject to local Government withholding tax (currently 35% in Switzerland, 15% in the USA and 26.375% in Germany).

Source: Bloomberg These are core stocks for a portfolio, but we will be using selective limits where appropriate. INVESTMENT TRUST & UNIT TRUST/OEIC SUGGESTIONS Price Net* 52 Week Disc** 01/01/12 Yield High Low to NAV REASONABLE YIELD Perpetual Inc & Growth Inv Trust 253p 3.9% 279p 227p 1.2% Edinburgh Investment Trust 474p 4.4% 495p 405p (2.2%) City of London Investment Trust 285p 4.7% 308p 245p (3.1%) WORLDWIDE GROWTH 386p 3.3% 430p 347p 11.3% Scottish Mortgage Investment Trust 590p 2.1% 783p 524p 9.5% 313p 1.0% 380p 298p 11.8% 33455p 4.4% 34330p 30116p (1.2%) JP Morgan American Inv Trust 859p 1.3% 920p 715p (1.9%) SMALL COMPANIES Schroder UK Mid Cap Fund 225p 2.8% 283p 211p 19.1% Invesco Perp UK Smaller Co’s Tst 181p 2.4% 216p 169p 18.6% EMERGING MARKETS Templeton Emerging Mkts Inv Trust 550p 0.8% 690p 491p 6.0% JP Morgan Emerging Mkts Inv Trust 518p 0.7% 639p 472p 7.9% Henderson TR Pacific Inv Trust 152p 1.9% 211p 136p 9.8% Blackrock Latin America Inv Trust 539p 3.2% 868p 485p 7.0% Advance Frontier Markets Fund 39.5p - 52p 39p 13.2% JP Morgan Indian Investment Trust 320p - 492p 247p 9.5% MINING FUND BlackRock World Mining Inv Trust 632p 1.0% 830p 459p 14.8% TECHNOLOGY Polar Capital Technology Trust 326p - 395p 246p 6.2% INFRASTRUCTURE FUND HICL Infrastructure Fund# 117p 5.2% 122p 108p (4.9%) Infrastructure Fund# 120p 4.4% 124p 113p (3.8%) ENVIRONMENTAL Impax Environmt’l PLC Ord Shares 95.7p 0.8% 131p 88.0p 18.6% PRIVATE EQUITY FUND 626p - 789p 519p 49.9% PHARMACEUTICAL Polar Capital Global Healthcare Trust 110p 2.8% 114p 97p 1.4% * These yields are estimated and not guaranteed ** Taken from the FT 1st January 2012/() = premium # Yields paid gross

FIXED INTEREST STOCKS

Base Rates UK US Europe 0.5% 0.25% 1.5%

Index Linked Government Stocks Equivalent Gross Gross Redemption Interest Yield* Dividend Redemption Price Yield Tax Rate Dates Date Nil 40% 1.25% Treasury Index Linked 2017** 141.7 1.1% 1.6% 1.9% May/Nov 22 Nov 2017 2.5% Treasury Index Linked 2020 364.1 2.0% 2.1% 1.2% Apr/ Oct 16 A pr 2020 1.875% Treasury Index Linked 2022** 147.7 1.5% 2.4% 1.7% May/Nov 22 Nov 2022

Index Linked Bond

National Grid 1.25% Index Linked 2021 103.1 1.2% 4.0% 2.4% Apr/Oct 06 Oct 2021

* Assuming that future RPI inflation averages 3% to redemption ** Price adjusted for inflation (please note the published price may be significantly different as it does not include accrued inflation)

Other Fixed Interest

We do not suggest purchasing:

Conventional Gilts Conventional Euro Sterling Bonds at current prices.

Source: Bloomberg

PLEASE NOTE: This suggestion list is provided solely to enable clients to make their own investment decisions. The information within this suggestion list does not constitutePLEASE NOTE: advice Thisor a suggestionpersonal recommendation, list is provided solely or take to intoenable account clients the to particularmake their investment own investment objectives, decisions. financial The situations, information or nwithineeds ofthis individual suggestion clients. list does It may not thereforeconstitute not advice be suitable or a personal for all recipients. recommendation, If you have or take any intodoubts account as to the suitabiparticularlity ofinvestment this service, objectives, you should financial seek advice situations, from youror needs investment of individual adviser. clients. The past It ismay not therefore necessarily not a beguide suitable to future for all performance. recipients. IfThe you value have of any shares doubts and as the to income the suitability from them of this can service, fall as wellyou asshould rise andseek investors advice from may your get backinvestment less than adviser. they originallyThe past invested.is not necessarily Certain Investment a guide to futureTrusts performance.will permit using The gearing value ofas shares an investment and the strategy.income from Gearing them is cana strategy fall as wellwhich as involvesrise and borr investorsowing moneymay get to back increase less holdingsthan they of originally investments invested. or investing Certain in Investment warrants or Trusts derivatives. will permit Such using a strategy gearing is aslik elyan investmentto result in strategy.movements Gearing in the is price a strategy of the whichrelevant involves security borrowing being amplified money significantlyto increase holdingsand may ofbe investmentssubject to sudden or investing and large in warrantsfalls in value or derivatives.and investors Such may a getstrategy back nothingis likely at to all. result Any in tax movements reliefs referred in the to price are those of the currently relevant applying. security Allbeing estimates amplified and significantly prospective and figures may quotedbe subject in this to suddennewsletter and arelarge forecasts falls in valueand are and not investors guaranteed. may getBarratt back andnothing Cooke at all.is the Any trading tax reliefs name referred of Barratt to are& Cooke those Limited.currently Registered applying. inAll England estimates No. and 5378036. prospectiv Barratte figures & Cooke quoted Limited in this is authorisednewsletter and are regulatedforecasts byand the are F inancialnot guar Servicesanteed. Authority,Barratt and who Cooke are basedis the tradingat 25 The name North of Colonnade,Barratt & Cooke Canar yLimited.Wharf, E14Registered 5HS. in England No. 5378036. Barratt & Cooke Limited is authorised and regulated by the Financial Services Authority, who are based at 25 The North Colonnade, Canary Wharf, E14 5HS.