1000thth August MONTH 2015 2014

Friday’s Non-farm payroll number came in slightly below expectations but the unemployment rate stayed at 5.3% while underemployment ticked lower to 10.4%. Despite the miss, the dollar gained against the Euro Friday, as the reading of 215,000 meant a September rate hike is not completely off the table. The weaker Euro should be positive for European exporters and we retain our preference for European equities. Economic data should continue to dictate market direction this week, with ZEW expectations from Germany on Tuesday, US retail sales, Industrial production in China and German CPI Wednesday, with University of Michigan Sentiment rounding out the week. We retain our preference for Financials in NEWS particular and highlight some of our preferred plays below.

Equities Commentary Insurers – Allianz, Prudential & FBD This week’s market events Given the improving macro backdrop and rate increases on the horizon in the UK and US, we continue to like the insurance sector. Core portfolio stock Allianz (Outperform) released M CORPORATE ECONOMICS strong Q2 earnings last Friday with beats on top and bottom line. The shares saw IRES REIT - IMS CH - New Yuan Loans weakness as funds continued to flow out of PIMCO although the rate continued to decrease. We continue to like the story and would note the its whole asset management T CORPORATE ECONOMICS unit which includes PIMCO and Allianz GI, counts for just 6.4% of annual revenues. Our preferred UK insurer Prudential (Outperform) reports earnings tomorrow with EPS of £0.55. Prudential - H1/15 GE - ZEW Survey Ladbrokes - H1/15 Expectations While fears remain over China we would note that Pru’s presence in Asia is well diversified Lufthansa - Traffic Stats EZ - ZEW Survey with market leading positions across the region. Closer to home, FBD reports earnings on Expectations the 25th. The Insurer has endured a difficult number of months with the CEO recently stepping down. We remain cautious ahead of results and the stock remains under review W CORPORATE ECONOMICS until we get a clearer picture of performance and its balance sheet. Shane Kelly | Alibaba - Q1 US – MBA E.ON - IMS Applications Investment Analyst Cisco - Q4

DCC – Trends remain strong ahead of possible FTSE inclusion DCC (Not Rated) offers investors a strong track record of generating FCF and has delivered an EPS growth rate of 12.3% (compounded) over the past 20yrs. It offers a well-diversified product mix spread across energy, IT & entertainment products, healthcare, environmental services and food & beverage sectors. In its July update management said that first quarter T CORPORATE ECONOMICS Nestle - H1/15 GE - CPI YoY trading had started well following strong full year earnings, announced in May. Another Applied Materials - US - Retail Sales potential positive for the stock may be its possible inclusion in the FTSE 100 at its next Q3 Ex Auto review in September. This would see a net flow of c. 1.94m shares c. 9.76 av daily volume, US - Initial Jobless Claims as funds and ETF trackers include the shares in portfolios. Shane Kelly | Investment Analyst

Ryanair – Taking partial profit on position F CORPORATE ECONOMICS We are taking partial profit on our Ryanair position within our Core Portfolio and are n/a EZ - CPI Core YoY US - PPI Final reducing our holding from 4.5% to 3.0%, after seeing significant capital gains ytd of 30.2% Demand YoY in addition to the 3.7% dividend paid on the 27th February. We are still positive on the stock US U. Of Michigan Sentiment longer term, and see management lifting its full year FY16 net income guidance above €940m - €970m from its Q1/16 trading statement at its next quarterly earnings update. Higher EPS guidance should be driven by better average yields, further fuel cost savings Upcoming Events and higher number of passengers carried. Ryanair’s existing €400m share buyback programme is due to be completed this Wednesday, and we may see some short term 19/08/15 Glanbia weakness, but its completion shouldn’t affect the short price longer term. We forecast the

Board will announce a special dividend of c. €0.40 at its AGM being held on the 24th 24/08/15 Kingspan September payable early in 2016. Stephen Hall | Investment Analyst Financials – Bank of Ireland & AIB 25/08/15 FBD – H1/15

The backdrop for the Irish financial sector remains strong, with Irish GDP expected to grow 26/08/15 Paddy Power - IMS by 5% in 2015 and the Irish unemployment rate falling to 9.7% (Dec’14 was 10.6%) leading 26/08/15 Datalex – IMS to lower rates of mortgage arrears and impairment write backs. AIB’s (underperform) H1/15 results beat market expectations on most measures last Friday, with PBT tripling to €1.2bn, 27/08/15 CRH - IMS We also saw a 34bps NIM improvement to 1.94% and a strengthening capital base with a 27/08/15 IFG – H1/15 27/08/15 ICG – H1/15 fully loaded CET 1 ratio growing by 240bps to 8.3%. Bank of Ireland (Outperform) still 27/08/15 Grafton Group – IMS remains our preferred name, with a very strong capital base of 11.8%, a higher NIM of 2.21%, only 15% of loan book impaired and declining. The bank is transitioning into a 28/08/15 Independent News & Media - dividend story and we anticipate it re-instating a dividend late in 2016. We have raised our IMS target price to 45c from 43c. Stephen Hall | Investment Analyst

Equit ies Portfolio Management Research Bonds

Regulatory Information Issuer Descriptions: (Source: Bloomberg) Allianz: Allianz SE, through subsidiaries, offers insurance and financial services. The Company offers property and casualty, life and health, credit, motor vehicle and travel insurance, and fund management services. Prudential: Prudential plc is an international company which provides a wide assortment of insurance and investment products and services. Insurance products include life, accident and health, property and casualty insurance, as well as fixed and variable annuities. Financial and investment services include personal and group pensions, equity plans, mortgages and deposit accounts FBD: FBD Holdings PLC is primarily involved in insurance underwriting. The Company has also developed complementary financial service businesses plus hotel and leisure property interests. FDB offers insurance services for the car, home, business, as well as farm in addition to investment and pension services for personal finance and finance solution for business. DCC: DCC is a sales, marketing, distribution and business support services Group. The Group operates in the following sectors, energy, IT & entertainment products, healthcare, environmental services and food & beverage. DCC's strategy is to grow a sustainable, diversified business. Ryanair: Ryanair Holdings PLC provides low fare passenger airline services to destinations in Europe Bank of Ireland: Bank of Ireland provides a range of banking, life insurance and other financial services to customers in Ireland and United Kingdom. Services include branch banking, personal and business loans, loan insurance, mortgages, foreign exchange, correspondent banking, credit cards and stockbroking. AIB: Allied Irish Banks plc (AIB) attracts deposits and offers commercial banking services. The Bank offers mortgage, automobile, business, plant and equipment purchase, and lease financing loans, investment banking, securities brokerage, asset management and treasury services, and discounts invoices. AIB operates in Ireland, the United Kingdom, and the United States Historical Record of recommendation Allianz: We have been positive on Allianz‟s outlook since 24/04/14 and no changes have been made to the recommendation since then Prudential: We have been positive on Core Portfolio stock, Prudential, since 20/03/13 and no change has been made to our recommendation since then FBD: We have a Market Perform recommendation for FBD since 02/03/15 changing our recommendation from Outperform to Market Perform on that day Ryanair: Ryanair was added to the Core Portfolio at inception in January 2013 and on the 10th August 2105 we downgraded Ryanair to Market Perform from Outperform DCC: As of today, the 19/05/15, we have a Not Rated recommendation for DCC changing from an Outperform rating Bank of Ireland: We have been positive on the outlook for Bank of Ireland since 27/07/15 changing our recommendation to Outperform from Market Perform AIB: We have a Underperform recommendation for AIB since 24/3/14 and no changes have been made to this rating in the last 12 months None of the above recommendations have been disclosed to the relevant issuer prior to dissemination of this Research. 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