Inside This Issue. Inde x Le ve l a s o f 31- Ma r We ek Hig h. % be lo w

Transcription

1 April 7, 2013 Rebased Performance of Regional Indices Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 S&P Pan Arab Large/Mid Composite S&P GCC Large/Mid Composite MSCI Jordan+Egypt+Morocco MENA Market Caps Saudi Arabia 41% UAE 16% Qatar 14% 11% Egypt 5% Morocco 5% Jordan 3% Bahrain 2% Oman 2% Lebanon 1% Tunisia 1% Palestine 0% (%) Share of MENA Market Cap Market Cap. (USD billion) Summary of Performance of MENA Indices Inside This Issue In Focus 1: GCC 1Q2013 Market Performance In this section, we review the performance of the Gulf Cooperation Council (GCC) markets in 1Q2013. The analysis considers the indices performance, liquidity, and expected real gross domestic product (GDP) growth rates; in addition, we look at valuations using different key metrics such as the market cap-to-gdp ratio, the price-to-earnings (P/E) ratio, and the dividend yield for the GCC, the G-7, and emerging markets. The Abu Dhabi stock market achieved a 15.0% return, outperforming the rest of the GCC markets in 1Q2013. However, based on peer valuation, Qatar seems to be the most attractive among GCC peers trading at a P/E TTM of 10.7x, a discount of 15.7% relative to its GCC peers. In Focus 2: GCC Dividends By: Sarah Dashti In this section, we take a look at the trends for dividends prevailing in the GCC stock markets. Our analysis, at a broad level, suggests that while there is no clear pattern for dividend payouts, dividend yields have increased over the past three years. Bahrain currently offers the highest dividend yield in the region. From a sectors perspective, building materials, financial services, and telecommunication stocks have consistently paid dividend yields in excess of 5% in the past three years. Interestingly, most GCC markets offer better dividend yields compared to their peers in the emerging markets, broader Europe, and the Asia/Pacific regions. By: Ashish Jain INDEX Inde x Le ve l a s o f 31- Ma r We ek Hig h 52-Week Lo w % be lo w 52-Week Hig h % o ve r 52-Week Lo w % Cha ng e 1-Mo nth Pe rio d YTD Ma rk e t Ca p (USD billio ns) REGIONAL S&P Pan Arab Large/Mid Composite % 8.6% 1.2% 4.7% 969 S&P GCC Large/Mid Composite % 7.6% 0.5% 4.6% 800 MSCI Jordan+Egypt+Morocco 1,011 1, % 7.1% -6.1% -9.6% 129 GCC MSCI Bahrain % 11.3% 4.6% 7.8% 16 MSCI % 9.9% -1.7% 0.3% 100 MSCI Oman 999 1, % 19.3% 2.3% 7.0% 21 MSCI Qatar 1,096 1,100 1, % 8.6% 2.7% 7.8% 129 S&P Saudi Arabia Large/Mid Composite % 10.2% 2.5% 5.4% 385 MSCI UAE % 46.5% 0.8% 24.8% 147 OTHER MENA MSCI Egypt 1,204 1,558 1, % 11.0% -8.0% -12.3% 51 MSCI Jordan % 9.9% -1.4% 2.2% 28 MSCI Morocco % 4.4% -0.9% -3.0% 50 MSCI Lebanon % 6.0% -1.7% -1.2% 10 MSCI Tunisia 1,196 1,341 1, % 0.9% -0.8% -1.9% 9 Palestine SE % 13.6% 0.0% -0.8% 3 nbkcapital.com

2 IN FOCUS 1 GCC 1Q2013 MARKET PERFORMANCE In this section, we review the performance of the Gulf Cooperation Council (GCC) markets in 1Q2013. The analysis considers the indices performance, liquidity, and expected real gross domestic product (GDP) growth rates; in addition, we look at valuations using different key metrics such as the market cap-to-gdp ratio, the price-to-earnings (P/E) ratio, and the dividend yield for the GCC, the G-7, and emerging markets. GCC Markets Yield Positive Returns in 1Q2013 Figure 1-1 illustrates the performance of the GCC markets in 1Q2013. The chart plots the 1Q2013 performance of the individual country indices on the y-axis and the period s liquidity ratio (PLR) on the x-axis. The PLR denotes the average daily traded value in 1Q2013 divided by the average value traded in FY2012. All GCC markets yielded positive returns in 1Q2013. Abu Dhabi was the best performer among the GCC markets with a 15% return, closely followed by Dubai with a 12.7% return; both markets continue to outperform their peers. The other markets displayed a positive performance, but not of the same magnitude; Saudi Arabia, Oman,, Qatar, and Bahrain posted returns of 4.8%, 4.0%, 3.8%, 2.6%, and 2.4%, respectively. In terms of liquidity, Dubai topped the GCC markets with a 1.8x PLR ratio, while Saudi Arabia had the lowest PLR ratio, 1.0x. Figure 1-1 GCC Markets Performance and Liquidity in 1Q2013 Figure 1-2 1Q2013 Index Performance Snapshot 20% All GCC markets yielded positive returns in 1Q2013 with Abu Dhabi outperforming and Bahrain underperforming. Dubai showed the highest improvement in liquidity 1Q2013 Return (%) 15% 10% 5% 0% -5% Saudi Qatar Abu Dhabi Dubai Oman Bahrain 18% 15% 12% 9% 6% 3% 0% 15.0% Abu Dhabi (ADSM Index) 12.7% Dubai (DFM Index) 4.8% Saudi (Tadawul All Share) 4.0% 3.8% 2.6% 2.4% Oman (MSM (Weighted Qatar (Qatar SE) Bahrain (BSE Index) Index) Index) -10% Period's Liquidity Ratio (PLR x) Source: Reuters The improvement in the Abu Dhabi market was mainly driven by four players: First Gulf Bank (FGB) with a 20% stock price increase in 1Q2013, Abu Dhabi Commercial Bank (ADCB) with a 38% increase, and National Bank of Abu Dhabi (NBAD) with an 18% increase. These players command the highest weights in the ADSM index, 30%, 7%, and 8%, respectively. Bahrain was the worst performer among the GCC markets in 1Q2013. This weak performance occurred on the back of a 24% decline in the stock price of the Arab Banking Corporation (ABC, represents 21% of the index). Performance of the GCC Markets versus Global Peers Sarah Dashti T E. sarah.dashti@nbkcapital.com We compared the performance of the MSCI GCC Countries Index (MSCI GCC Index) in 1Q2013 to the MSCI Emerging Markets Index (MSCI EM Index), the MSCI BRIC Index (Australia, Brazil, Russia, India, Hong Kong, and China), and the MSCI World Index. The MSCI GCC Index achieved a 6% increase in 1Q2013, outperforming the MSCI BRIC and the MSCI Emerging Markets indices, which declined 3% and 4%, respectively, during the same period. However, the increase in the MSCI GCC Index fell slightly behind the 8% increase in the MSCI World Index in 1Q2013. nbkcapital.com 2

3 Figure 1-3 Performance of the MSCI Indices in 1Q The MSCI GCC Index outperformed the MSCI BRIC and the MSCI EM indices, but underperformed the MSCI World Index Jan-13 Jan-13 Jan-13 Feb-13 Mar-13 Mar-13 MSCI GCC Countries Index MSCI Emerging Market index MSCI BRIC MSCI World Index Sources: Bloomberg and NBK Capital Valuations We examined various key metrics to determine where the GCC stands from a valuation standpoint compared to the developed markets (G-7) and the emerging markets (EM). We focused on the market cap-to-gdp ratio, the P/E ratio, and the dividend yield. Figure 1-4 summarizes our findings. Figure 1-4 Valuation Multiples for the GCC, the G-7, and the EM Country Index Mkt. Cap. GDP USD Billion* GDP Growth** Foreword Price Market Cap-to- P/E TTM P/B TTM Div. Yield Earning-to- (USD Mn) 2012E 2013E 2013F GDP 2012 Growth GCC KSA Tadawul All Share % 57% 15.1x 1.9x 3.6% 3.6x SE Weighted % 60% 20.6x 1.4x 3.1% 11.0x UAE MSCI UAE % 21% Abu Dhabi ADX General x 1.1x 5.4% - Dubai DFM General x 0.8x 4.5% - Qatar QE Index % 68% 10.7x 1.5x 5.3% 2.2x Oman MSM % 28% 11.3x 1.6x 4.5% 2.9x Bahrain BB All Shares % 59% 9.5x 0.9x 4.5% 3.4x Total 782 1,485 1, % 3.8x Simple Average 51% 12.7x 1.3x 4.4% G-7 United States DOW JONES INDUS. AVG 18,384 15,653 16, % 113% 14.2x 2.9x 2.4% 6.7x Japan NIKKEI 300 4,031 5,984 5, % 67% 21.5x 1.2x 1.8% 17.4x United Kingdom FTSE 100 3,439 2,434 2, % 136% 18.1x 1.8x 3.7% 16.2x France CAC 40 1,715 2,580 2, % 67% 14.6x 1.2x 3.7% 40.0x Germany DAX 1,584 3,367 3, % 47% 14.8x 1.5x 3.3% 17.4x Canada S&P/TSX COMPOSITE 1,949 1,770 1, % 106% 15.3x 1.8x 3.1% 7.8x Italy FTSE MIB 482 1,980 1, % 25% 35.7x 0.7x 3.5% Total 31,584 33,769 34, % 8.5x Simple Average 92% 19.2x 1.6x 3.1% Emerging Markets China CSI 300 3,061 8,250 9, % 34% 12.5x 1.8x 2.0% 1.5x India S&P BSE SENSEX 1,177 1,947 2, % 56% 15.8x 2.6x 1.6% 2.6x Brazil BRAZIL BOVESPA 1,163 2,425 2, % 46% 41.2x 1.1x 4.3% 10.4x Russia Russian RTS Select 738 1,954 2, % 35% 4.8x 0.7x 4.1% 1.3x Mexico MEXICO IPC 548 1,163 1, % 45% 18.5x 3.0x 1.3% 5.3x South Africa FTSE/JSE AFRICA TOP40 IX % 116% 18.2x 2.2x 3.2% 6.0x South Korea KOSPI 200 1,108 1,151 1, % 90% 17.6x 1.2x 1.2% 4.9x Taiwan Taiwan Taiex % 177% 22.7x 1.7x 3.4% 5.9x Indonisia Jakarta Composite , % 49% 19.1x 3.1x 1.9% 3.0x Australia S&P/ASX 200 1,417 1,542 1, % 89% 20.4x 1.9x 4.3% 6.8x Total 11,007 20,184 21, % 2.6x Simple Average 51% 19.1x 1.9x 2.7% *Nominal GDP; **Real GDP Growth. Sources: IMF, Bloomberg, and NBK Capital nbkcapital.com 3

4 Market Cap-to-GDP For the market cap-to-gdp ratio, we used the total market capitalization as of March 2013 and the nominal GDP for FY2013 as forecasted by the International Monetary Fund (IMF). In our analysis, at the end of March 2013, the simple average ratio for the GCC countries stood at 51%, compared with 92% for the G-7 and 51% for the emerging markets. The analysis indicates that, based on the market cap-to-gdp ratio, the GCC valuations are in line with those for the emerging markets, but lower than the G-7. Focusing on the GCC region, several countries are trading at low ratios, especially the United Arab Emirates (UAE) and Oman, with ratios as low as 21% and 28%, respectively. Historically, both countries have traded at similar low market cap-to-gdp ratios of around 27% and 29%, respectively. Price-to-Earnings and Dividend Yields We used the P/E multiple at the end of 1Q2013 as a comparable valuation metric. The GCC markets simple average P/E multiple stood at 12.7x, lower than the 19.2x multiple of the G-7 countries and the 19.1x multiple of the emerging markets. Taking the IMF s 2013 expected GDP growth rates into account; the GCC markets growth rate (3.3%) beats the G-7 rate (+2%) but falls behind the emerging markets rate (7.5%). As a result, the GCC FPEG (Forward Price/Earnings-to- Growth Ratio) stands at 3.8x, while the G-7 FPEG (excluding countries with negative growth) is 8.5x, making the GCC markets more appealing. Specifically, Qatar seems to be the most attractive among its GCC peers as it has the highest expected GDP growth for 2013 (4.9%), a relatively low P/E multiple of 10.7x, a high dividend yield (5.3%), and the lowest FPEG (2.2x). The dividend yield of the GCC markets (simple average of 4.4%) exceeds the G-7 dividend yield (3.1%) and the emerging markets dividend yield (2.7%). Abu Dhabi stands out with an outstanding 5.4% dividend yield. Conclusion The GCC remains an attractive investment opportunity. All GCC markets maintained positive returns in 1Q2013, with Abu Dhabi witnessing the highest return in the GCC as well as increased liquidity. Moreover, the MSCI GCC Index outperformed the MSCI EM and the MSCI BRIC indices but fell slightly behind the MSCI World Index. The GCC markets (especially Qatar) display appealing valuations, as they are in line with the emerging markets in terms of market cap-to-gdp. Furthermore, the GCC market maintains a lower FPEG, a lower P/E multiple, and higher forecasted GDP growth compared with the G-7. Finally, the GCC markets stand out in terms of dividend yields, exhibiting a higher measure than the G-7 and the EM. nbkcapital.com 4

5 IN FOCUS 2 GCC DIVIDENDS In this section, we take a look at the trends for dividends prevailing in the GCC stock markets. Our analysis, at a broad level, suggests that while there is no clear pattern for dividend payouts, dividend yields have increased over the past three years. Bahrain currently offers the highest dividend yield in the region. From a sectors perspective, building materials, financial services, and telecommunication stocks have consistently paid dividend yields in excess of 5% in the past three years. Interestingly, most GCC markets offer better dividend yields compared to their peers in the emerging markets, broader Europe, and the Asia/Pacific regions. A deeper look From a universe of dividend-paying stocks (at least one dividend payment over the past three years), we find that, generally, the GCC markets offered dividend yields of above 4% in the recent past with payout ratios of above 50% on average*. We calculated dividend yields based on average prices during the financial year. Trends by country With mixed trends in dividend payouts among the GCC countries over the past three years, dividend yields have increased for all GCC markets except Qatar and Saudi Arabia. The stocks in the UAE witnessed the steepest jump in dividend yields as well as payouts. We believe the improving earnings performance after the rounds of sharp write-offs in the backdrop of the economic crisis may have resulted in better payouts and, thus, higher dividend yields for the UAE. Banking and telecommunication, and to an extent real estate, stocks recorded most of the improvement in the dividend profile within the UAE market. However, a decline in stock prices may have contributed to increasing dividend yields for Bahrain,, and Oman between 2010 and As for Qatar, we feel normalization of payout ratios, mainly for the banking sector (from 80% in 2010 to 68% in 2012, on average), along with an average 7.5% rise in the Qatar Exchange Index has resulted in declining dividend yields over the last three years. Figure 2-1 Performance of GCC Stock Market Indices (Based on Average Index Levels during the Year) 15.5% 9.2% -0.2% 0.6% 0.0% -3.7% -6.5% -6.9%-6.4% -10.9% -10.2% -15.5% KSA UAE* Qatar Price Index Oman Bahrain Ashish Jain *For MSCI UAE Index. Source: Bloomberg T E. ashish.jain@nbkcapital.com * For most comparisons, we preferred to use ratios based on simple averages as we feel the simple average represents a better view on individual companies instead of a weighted average in which the average may be distorted by the characteristics of a few large cap companies. Nevertheless, for illustration purposes only, we also show the weighted averages. nbkcapital.com 5

6 Figure 2-2 Dividend Payouts and Dividend Yields (Based on Simple Average) 80% 65% 50% Payout Dividend Yield (%) % 20% GCC UAE KSA Qatar Oman Bahrain UAE Bahrain Oman GCC Qatar KSA Sources: Bloomberg and NBK Capital The following charts show that dividend payouts for the large cap companies are on the rise, suggesting that these companies growth may be maturing. This is mostly driven by chemical, petrochemical, and telecommunication stocks, the majority of which fall in the large cap companies category. Figure 2-3 Dividend Payouts and Dividend Yields (Based on Market Cap Weighted Average) 80% Payout 6.3 Dividend Yield (%) 65% 50% % 20% KSA GCC Qatar Bahrain UAE Oman Bahrain Qatar KSA Oman GCC UAE Sources: Bloomberg and NBK Capital Trends by sector In terms of sectors, building materials, financial services, and telecommunication stocks have consistently offered dividend yields in excess of 5% over the last three years. As for payouts, real estate stocks have been low in distributing a share of their net profits, while holding companies, building material, and telecommunication stocks have generally maintained relatively high payouts over the past three years. nbkcapital.com 6

7 Figure 2-4 Payout Ratio 100% 80% 60% 40% 20% Holding Cos. Bldg. Mat. Telcos Chemicals Pet. Chem. Construction Consumer Healthcare Fin. Services Industrial Tran. & Logi. Insurance Real Estate Banking Sources: Bloomberg and NBK Capital Figure 2-5 Dividend Yields (%) Telcos Fin. Services Pet. Chem. Chemicals Bldg. Mat. Holding Cos. Banking Tran. & Logi. Real Estate Healthcare Insurance Industrial Consumer Construction Sources: Bloomberg and NBK Capital nbkcapital.com 7

8 Outlook and comparison with other regions The prospects for dividends in the GCC for 2013 remain strong with around a 5% dividend yield on average, based on consensus forecasts. Bahrain and Qatar appear to be the highest dividendpaying markets in the region in However, a 2013 dividend forecast is available for only a few companies in Bahrain compared to other markets. Therefore, the forecast dividend yield, based on a limited number of stocks, may not represent a complete view on the Bahrain stock market. Moreover, compared to other regions, the forecast yields for the GCC stocks are substantially higher. Therefore, from a pure dividend perspective, we continue to like the attractiveness of the regional markets. Figure 2-6 GCC Markets (Forecast Yields and Payout)* Figure 2-7 Forecast Dividend Yield Comparison (2013) 8.0% Dividend Yield (2013) 6.0% 4.0% UAE GCC Avg. Oman KSA Qatar Bahrain 6.8% 5.9% 5.0% 4.9% 4.9% 4.8% 3.8% 3.7% 3.1% 2.7% 2.6% 2.0% 40% 50% 60% 70% 80% Payout Ratio (2013) Bahrain Qatar GCC KSA Oman UAE MSCI Europe MSCI EM MSCI World MSCI APAC *Based on the companies for which dividend forecasts are available; therefore, a comparison between 2012 actual and 2013 forecast is not particularly meaningful. Sources: Bloomberg and NBK Capital nbkcapital.com 8

9 Companies under coverage (Prices as of MARCH 31, 2013) Sector Country Currency Closing Price Date of Last Report 12-Month Fair Value Recommendation Banking Abu Dhabi Commercial Bank UAE AED Jan Hold Abu Dhabi Islamic Bank UAE AED Feb Hold Arab National Bank Saudi Arabia SAR Apr Hold BankMuscat Oman OMR Feb Hold Banque Saudi Fransi Saudi Arabia SAR Apr Hold Commercial International Bank Egypt EGP Mar Hold Credit Agricole Egypt Egypt EGP Feb Hold Doha Bank Qatar QAR Feb Hold First Gulf Bank UAE AED Jan Hold National Bank of Abu Dhabi UAE AED Jan Hold National Bank of Oman Oman OMR Jan Hold National Societe Generale Bank Egypt EGP Feb Sell Qatar Islamic Bank Qatar QAR Jan Hold Qatar National Bank Qatar QAR Jan Buy Riyad Bank Saudi Arabia SAR Apr Buy Samba Financial Group Saudi Arabia SAR Apr Buy Saudi Hollandi Bank Saudi Arabia SAR Apr Buy The Commercial Bank of Qatar Qatar QAR Mar Hold The Saudi British Bank Saudi Arabia SAR Apr Hold Union National Bank UAE AED Feb Hold PE PB Sector Country Currency Building Materials Lecico Egypt EGP Mar Hold Oman Cement Co. Oman OMR Mar Buy Qatar National Cement Co. Qatar QAR Mar Hold Raysut Cement Co. Oman OMR Mar Hold Yamama Cement Saudi Arabia SAR Mar Hold Contractors Arabtec UAE AED Mar-13 Suspended Suspended DEPA UAE USD Mar Hold nmf nmf Drake and Scull UAE AED Feb Hold Consumer Goods and Retail Abdullah Al Othaim Markets Saudi Arabia SAR Feb Buy Agthia UAE AED Jan Hold Alhokair** Saudi Arabia SAR Jan Hold Almarai Saudi Arabia SAR Apr Buy GB Auto Egypt EGP Feb Hold Juhayna Egypt EGP Mar Hold Oriental Weavers Egypt EGP Feb Buy Savola Saudi Arabia SAR Apr Hold Petrochemicals and Oil Closing Price Date of Last Report National Petrochemical Company Saudi Arabia SAR Apr Hold na na Saudi Arabian Fertilizer Co. Saudi Arabia SAR Jan Hold Saudi Basic Industries Corp. Saudi Arabia SAR Jan Hold Saudi Industrial Investment Group Saudi Arabia SAR Apr Buy Saudi Kayan Petrochemicals Saudi Arabia SAR Jan Buy na Yanbu National Petrochemicals Saudi Arabia SAR Jan Hold Real Estate Emaar UAE AED Mar Hold Mabanee KWD Mar Hold Palm Hills Developments Egypt EGP Mar-13 na na na na na na na na Salhia Real Estate Co. KWD Mar Hold Sodic* Egypt EGP Feb Hold Sorouh UAE AED Jan Buy Talaat Mustafa Group* Egypt EGP Mar Buy Telecommunications Batelco Bahrain BHD Mar Hold du UAE AED Feb Hold Etisalat UAE AED Jan Buy Jordan Telecom Jordan JOD 5.37 Suspended Suspended Suspended 13.5 na na 6.8 na na Mobily Saudi Arabia SAR Feb Hold Nawras Oman OMR 0.52 Suspended Suspended Suspended 10.5 na na 4.1 na na Omantel Oman OMR Mar Buy Qatar Telecom Qatar QAR Suspended Suspended Suspended 12.7 na na 4.0 na na Saudi Telecom Saudi Arabia SAR Feb Hold Telecom Egypt Egypt EGP Mar Hold Vodafone Qatar* ** Qatar QAR Jan Hold nmf nmf nmf Transportation & Logistics Air Arabia UAE AED Feb Sell Aramex UAE AED Mar Buy DP World UAE USD Apr Hold Jazeera Airways KWD Mar Hold Others El Sewedy Electric Egypt EGP Apr Hold Maridive Group Egypt USD Mar Hold Qatar Electricity and Water Co. Qatar QAR Feb Buy *2012 multiples based on NBK Capital forecast. ** Fiscal Year Ends March 12-Month Fair Value Recommendation PE EV/EBITDA nbkcapital.com 9

10 RISK AND RECOMMENDATION GUIDE RECOMMENDATION UPSIDE (DOWNSIDE) POTENTIAL BUY MORE THAN 20% HOLD BETWEEN -15% AND 20% SELL LESS THAN -15% RISK LEVEL LOW RISK HIGH RISK Disclaimer The information, opinions, tools, and materials contained in this report (the Content ) are not addressed to, or intended for publication, distribution to, or use by, any individual or legal entity who is a citizen or resident of or domiciled in any jurisdiction where such distribution, publication, availability, or use would constitute a breach of the laws or regulations of such jurisdiction or that would require Watani Investment Company KSCC ( NBK Capital ) or its parent company, its subsidiaries or its affiliates (together NBK Group ) to obtain licenses, approvals, or permissions from the regulatory bodies or authorities of such jurisdiction. The Content, unless expressly mentioned otherwise, is under copyright to NBK Capital. Neither the Content nor any copy of it may be in any way reproduced, amended, transmitted to, copied, or distributed to any other party without the prior express written consent of NBK Capital. All trademarks, service marks, and logos used in this report are trademarks or service marks or registered trademarks or registered service marks of NBK Capital. The Content is provided to you for information purposes only and is not to be used, construed, or considered as an offer or the solicitation of an offer to sell or to buy or to subscribe for any investment (including but not limited to securities or other financial instruments). No representation or warranty, express or implied, is given by NBK Capital or any of its respective directors, partners, officers, affiliates, employees, advisors, or representatives that the investment referred to in this report is suitable for you or for any particular investor. Receiving this report shall not mean or be interpreted that NBK Capital will treat you as its customer. If you are in doubt about such investment, we recommend that you consult an independent investment advisor since the investment contained or referred to in this report may not be suitable for you and NBK Capital makes no representation or warranty in this respect. The Content shall not be considered investment, legal, accounting, or tax advice or a representation that any investment or strategy is suitable or appropriate for your individual circumstances or otherwise constitutes a personal recommendation to you. NBK Capital does not offer advice on the tax consequences of investments, and you are advised to contact an independent tax adviser. The information and opinions contained in this report have been obtained or derived from sources that NBK Capital believes are reliable without being independently verified as to their accuracy or completeness. NBK Capital believes the information and opinions expressed in this report are accurate and complete; however, NBK Capital gives no representations or warranty, express or implied, as to the accuracy or completeness of the Content. Additional information may be available upon request. NBK Capital accepts no liability for any direct, indirect, or consequential loss arising from the use of the Content. This report is not to be relied upon as a substitution for the exercise of independent judgment. In addition, NBK Capital may have issued, and may in the future issue, other reports that are inconsistent with and reach different conclusions from the information presented in this report. Those reports reflect the different assumptions, views, and analytical methods of the analysts who prepared the reports, and NBK Capital is under no obligation to ensure that such other reports are brought to your attention. NBK Capital may be involved in many businesses that relate to companies mentioned in this report and may engage with them. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Information, opinions, and estimates contained in this report reflect a judgment at the report s original date of publication by NBK Capital and are subject to change without notice. The value of any investment or income may fall as well as rise, and you may not get back the full amount invested. Where an investment is denominated in a currency other than the local currency of the recipient of the research report, changes in the exchange rates may have an adverse effect on the value, price, or income of that investment. In the case of investments for which there is no recognized market, it may be difficult for investors to sell their investments or to obtain reliable information about their value or the extent of the risk to which they are exposed. NBK Capital has not reviewed the addresses of, the hyperlinks to, or the websites referred to in the report and takes no responsibility for the content contained therein. Such address or hyperlink (including addresses or hyperlinks to NBK Capital s own website material) is provided solely for your convenience and information, and the content of the linked site does not in any way form part of this document. Accessing such websites or following such links through this report or NBK Capital s website shall be at your own risk. NBK Group may have a financial interest in one or any of the securities that are the subject of this report. Funds managed by NBK Group may own the securities that are the subject of this report. NBK Group may own units in one or more of the aforementioned funds. NBK Group may be in the process of soliciting or executing fee-earning mandate or doing business for companies that are either the subject of this report or are mentioned in this report. As a result, you should be aware that NBK Group may have material conflict of interest that could affect the objectivity of this report. Copyright Notice This is a publication of NBK Capital. No part of this publication may be reproduced or duplicated without the prior consent of NBK Capital. nbkcapital.com 10

11 NBK CAPITAL Head Office 38th Floor, Arraya II Al Shuhada Street, Block 6, Sharq P.O.Box 4950, Safat T F MENA Research 35th Floor, Arraya II Al Shuhada Street, Block 6, Sharq P.O.Box 4950, Safat 13050, T F E. Brokerage 37th Floor, Arraya II Al Shuhada Street, Block 6, Sharq P.O.Box 4950, Safat 13050, T F E. United Arab Emirates NBK Capital Limited Precinct Building 3, Office 404 Dubai International Financial Center P.O.Box Dubai, UAE T F Turkey NBK Capital Arastima ve Musavirlik AS, Sun Plaza, 30th Floor, Dereboyu Sk. No.24 Maslak 34398, Istanbul, Turkey T F Egypt NBK Capital Securities Egypt SAE 20 Aisha EL Taymouria St. Garden City Cairo, Egypt T F National Bank of Abdullah Al-Ahmed Street P.O. Box 95, Safat City, T F Telex: NATBANK Jordan Head Office Al Hajj Mohd Abdul Rahim Street Hijazi Plaza, Building # 70 P.O.Box , Amman , Jordan T F United States of America New York Branch 299 Park Avenue, 17th Floor New York, NY 10171, USA T F China Shanghai Representative Office Suite 1003, 10th Floor, Azia Center, 1233 Lujiazui Ring Rd. Shanghai , China T F INTERNATIONAL NETWORK Bahrain Bahrain Branch GB Corp Tower, Block 346 Road 4626, Building 1411.P.O. Box 5290, Manama, Kingdom of Bahrain T F Saudi Arabia Jeddah Branch Al-Andalus Street, Red Sea Plaza P.O. Box Jeddah 21444, Saudi Arabia T F United Arab Emirates Dubai Branch Sheikh Rashed Road, Port Saeed Area, ACICO Business Park P.O. Box 88867, Dubai United Arab Emirates T F Lebanon National Bank of (Lebanon) SAL Sanayeh Head Office BAC Building, Justinian Street P.O. Box , Riyad El Solh Beirut, Lebanon T F Iraq Credit Bank of Iraq Street 9, Building 187 Sadoon Street, District 102 P.O.Box 3420, Baghdad, Iraq T / / F Egypt Al Watany Bank of Egypt 13 Al Themar Street Gameat Al Dowal AlArabia Fouad Mohie El Din Square Mohandessin, Giza, Egypt T /17 F United Kingdom National Bank of (Intl.) Plc Head Office 13 George Street, London W1U 3QJ, UK T F NBK Investment Management Limited 13 George Street London W1U 3QJ, UK T F France National Bank of (Intl.) Plc Paris Branch 90 Avenue des Champs-Elysees Paris, France T F Singapore Singapore Branch 9 Raffles Place #51-01/02 Republic Plaza, Singapore T F ASSOCIATES Qatar International Bank of Qatar (QSC) Suhaim bin Hamad Street P.O.Box 2001 Doha, Qatar T F Turkey Turkish Bank Head Office Valikonagl Avenue No. 1 P.O.Box Nisantasi, Istanbul, Turkey T F nbkcapital.com 11

12 KUWAIT DUBAI ISTANBUL CAIRO