August 21, 2012

KOREA

Morning

Economy & Strategy Update Major Indices Close Chg Chg (%) Fixed Income Weekly KOSPI 1,946.31 -0.23 -0.01 Wait until economic outlook becomes clear KOSPI 200 258.03 -0.17 -0.07 KOSDAQ 490.13 2.87 0.59

Turnover ('000 shares, Wbn) Volume Value KOSPI 353,453 3,787 KOSPI 200 60,433 3,066 KOSDAQ 543,689 1,915

Market Cap (Wbn) Value KOSPI 1,121,216 KOSDAQ 106,915

KOSPI Turnover (Wbn) Buy Sell Net Foreign 839 806 33 Institutional 1,053 1,005 48 Retail 1,859 1,954 -95

KOSDAQ Turnover (Wbn) Buy Sell Net Foreign 51 45 7 Institutional 68 57 10 Retail 1,795 1,807 -12

Program Buy / Sell (Wbn) Buy Sell Net KOSPI 946 414 532 KOSDAQ 9 10 -1

Advances & Declines Advances Declines Unchanged KOSPI 427 397 81 KOSDAQ 461 463 75

KOSPI Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Electronics 1,283,000 -12,000 508 KODEX LEVERAGE 12,545 -25 204 KODEX INVERSE 7,540 10 133 254,000 5,500 118 Hyundai Motor 242,000 -3,500 104

KOSDAQ Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Medipost 113,400 7,100 78 Agabang 13,800 100 44 Barunson 4,965 565 34 KOREA COMPUTER INC 2,610 155 29 ASIA TECHNOLOGY 3,645 50 29 Note: As of August 20, 2012

This document is a summary of a report prepared by Daewoo Securities Co., Ltd. („Daewoo‰) and published on our website. Please review the compliance notices contained in the original report. Information and opinions contained herein have been compiled in good faith from sources deemed to be reliable. However, the information has not been independently verified. Daewoo makes no guarantee, representation or warranty, express or implied, as to the fairness, accuracy or completeness of the information and opinions contained in this document. Daewoo accepts no responsibility or liability whatsoever for any loss arising from the use of this document or its contents or otherwise arising in connection therewith. Information and opinions contained herein are subject to change without notice. This document is for informational purposes only. It is not and should not be construed as an offer or solicitation of an offer to purchase or sell any securities or other financial instruments. This document may not be reproduced, further distributed or published in whole or in part for any purpose.

Fixed Income August 20, 2012

Daewoo Securities Co., Ltd. Yeo-sam Yoon Fixed Income Monthly Sr. Fixed Income Strategist Wait until economic outlook becomes clear +82-2-768-4124 [email protected]

Yields are on the rise Investor sentiment is shifting rapidly to risk assets from safe havens (with the 10-year

UST yield surging to 1.8% from a low of 1.4%) as US economic indicators improve

slightly and the eurozone debt crisis stabilizes a little. If the US economy keeps getting better, the Fed will soon lose its rationale to implement QE3, although the launch of the

monetary stimuli was almost a foregone conclusion only a few weeks ago. We advise refraining from building bond positions until we obtain more clarity over global macro conditions. On that matter, we believe things will become reasonably clear by mid-

September. Since the US announced its dismal 2Q GDP growth (of 1.5%) in 2Q, the outlook for the

country brightens, especially for consumer and housing sectors. A fall in oil prices in 2Q

has also brightened 3Q growth outlook by boosting consumersÊ purchasing power.

More importantly, the rebound in housing price could signal the deleveraging in the banking sector is coming to an end. Needless to say, the upbeat outlook for the economy bodes ill for the UST market. German Chancellor Angela MerkelÊs expression of support last week for the ECBÊs efforts to contain the eurozone crisis is also fanning buying of equities. The eurozone debt crisis is unlikely to emerge as a major threat to global financial markets for the time being.

Wait until momentum returns As risk appetite revives, KTB yields should continue to rise. We believe the 3-year and 10-year KTB yields will rebound to around 3.0% and 3.3%, respectively, with the yield curve steepening. But the 3-year yield will likely face resistance at around 2.88%. Before deciding to take positions, a couple of things need to be checked: 1) the outcome of the MPCÊs September meeting, and 2) the dimming outlook for the global economy. As such, we recommend taking a defensive approach until mid-September.

This document is a summary of a report prepared by Daewoo Securities Co., Ltd. („Daewoo‰) and published on our website. Please review the compliance notices contained in the original report. Information and opinions contained herein have been compiled in good faith from sources deemed to be reliable. However, the information has not been independently verified. Daewoo makes no guarantee, representation or warranty, express or implied, as to the fairness, accuracy or completeness of the information and opinions contained in this document. Daewoo accepts no responsibility or liability whatsoever for any loss arising from the use of this document or its contents or otherwise arising in connection therewith. Information and opinions contained herein are subject to change without notice. This document is for informational purposes only. It is not and should not be construed as an offer or solicitation of an offer to purchase or sell any securities or other financial instruments. This document may not be reproduced, further distributed or published in whole or in part for any purpose.

Market Data August 21, 2012

※All data as of close August 20, 2012, unless otherwise noted.

Other Major Indices Economic Indicators Close Net Chg 1D (%) YTD (%) Close 1D ago 1M ago 1Y ago MSCI Korea* 394.53 -4.01 -1.01 10.14 USD/KRW 1,133.30 1,133.10 1,138.60 1,072.30 KOSPI 1,946.31 -0.23 -0.01 6.57 JPY100/KRW 1,425.18 1,428.52 1,446.30 1,398.77 KOSDAQ 490.13 2.87 0.59 -3.29 EUR/KRW 1,398.21 1,400.28 1,397.80 1,534.68 Dow Jones* 13,275.20 25.09 0.19 8.66 3Y Treasury 2.95 2.93 2.88 3.49 S&P 500* 1,418.16 2.65 0.19 11.05 3Y Corporate 3.54 3.52 3.47 4.22 NASDAQ* 3,076.59 14.20 0.46 16.15 DDR2 1Gb* 1.21 1.21 1.24 1.04 Philadelphia Semicon* 405.14 -3.12 -0.76 9.91 NAND 16Gb* 1.82 1.81 1.91 2.68 FTSE 100* 5,852.42 17.91 0.31 2.68 Oil (Dubai)* 110.67 111.29 100.86 104.95 Nikkei 225 9,171.16 8.66 0.09 7.14 Gold* 1,616.30 1,616.10 1,589.50 1,791.20 Hang Seng* 20,116.07 153.12 0.77 6.56 Customer deposits (Wbn)* 18,262 18,212 16,698 19,685 Taiwan (Weighted) 7,431.91 -36.01 -0.48 6.90 Equity type BC (Wbn)(Aug. 16) 99,678 99,841 99,273 101,794 Note: * as of August 17, 2012 Source: KSDA, FnGuide, DRAMeXchange, MSCI

KOSPI Top 10 Foreign Net Buy / Net Sell (Wbn) KOSPI Top 10 Institutional Net Buy / Net Sell (Wbn) Net Buy Net Sell Net Buy Net Sell Hyundai Heavy Industries 30.21 112.57 Samsung Electronics 28.97 Samsung Techwin 40.32 Samsung SDI 24.81 Orion 13.84 NHN 16.15 SEMCO 19.57 Hyundai Mobis 13.07 Glovis 11.54 DSME 11.25 Samsung Corp. 17.91 Hyundai Motor 12.44 Hyundai Eng. & Cosnt. 7.06 Hyundai Eng. & Cosnt. 8.46 Hyundai Motor 14.61 Hynix 8.70 Honam Petrochemical 5.84 KT 8.38 SK Energy 10.19 7.91 Motors 5.78 Hyundai Heavy Industries 7.91 S-Oil 9.04 KB Financial Group 6.60 Samsung F&M Insurance 4.30 Asiana Airlines 7.74 LG Chem 7.46 Samsung Techwin 6.13 Samsung Corp. 4.29 Orion 7.67 4.74 LG Electronics 6.12 Samsung Heavy Ind. 3.87 7.17 4.56 LG Uplus 5.21 KT 3.61 Samsung F&M Insurance 6.55 Halla Climate Control 4.21 Source: KSDA, FnGuide

KOSDAQ Top 10 Foreign Net Buy / Net Sell (Wbn) KOSDAQ Top 10 Institutional Net Buy / Net Sell (Wbn) Net Buy Net Sell Net Buy Net Sell Sung Kwang Bend 3.43 Daum Communications 1.20 Paradise 4.40 SM 2.67 Medy-tox 2.32 JCE 0.90 CJ O Shopping 4.09 Viatron 1.87 Silicon Works 1.40 CJ O Shopping 0.68 Wemade 1.77 Sung Kwang Bend 1.66 Gamevil 1.16 Paradise 0.68 Partrion 1.56 Medy-tox 1.50 0.89 Neowis Internet 0.65 HaanSoft 1.30 Medipost 1.45 AHNLAB 0.66 Techno Semichem 0.52 OSSTEM IMPLANT 1.16 Com2us 0.99 Intops 0.56 SFA Engineering 0.52 Macrogen 0.98 Gamevil 0.86 OSSTEM IMPLANT 0.56 Melfas 0.49 Innox 0.94 Melfas 0.80 Barunson 0.50 NANOS 0.46 Daum Communications 0.88 Emerson Pacific 0.77 Interflex 0.46 ICD 0.45 JCE 0.79 Diotek 0.67 Source: KSDA, FnGuide

KOSPI Top 10 by Market Cap (Wbn) KOSDAQ Top 10 by Market Cap (Wbn) Close (W) Chg (W) Mkt Cap Close (W) Chg (W) Mkt Cap Samsung Electronics 1,283,000 -12,000 188,985 Celltrion 28,400 -400 4,958 Hyundai Motor 242,000 -3,500 53,307 Daum Communications 107,000 0 1,444 POSCO 391,000 4,000 34,090 Semiconductor 21,750 -250 1,268 Kia Motors 76,800 -400 31,132 Paradise 13,800 750 1,255 Hyundai Mobis 317,000 3,500 30,858 CJ O Shopping 199,900 6,000 1,240 LG Chem 323,500 -4,500 21,439 AHNLAB 119,900 -800 1,201 97,200 100 19,440 GemVax 43,550 3,450 1,064 Hyundai Heavy Industries 254,000 5,500 19,304 SM 48,650 -600 994 Shinhan Financial Group 37,600 250 17,830 Interflex 69,800 2,000 976 Samsung Electronics (P) 741,000 -10,000 16,920 POSCO ICT 7,060 -60 967 Source: