MENA Market Intelligence Week ending 22 nd of November

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1 Kuwait Financial Centre Markaz R E S E A R C H Research Highlights: Provide readers with weekly updates on analysts recommendations from different investment houses, collate views on the state of MENA economy, sector developments and fixed income news. Markaz Research is available on: Bloomberg - Type MRKZ Thomson Research, Reuters Knowledge Nooz Zawya Investor ISI Emerging markets Capital IQ FactSet Research Connect TheMarkets.com M.R. Raghu CFA, FRM Head of Research rmandagolathur@markaz.com Humoud Salah N AL Sabah Financial Analyst halsabah@markaz.com MENA Market Intelligence Week ending 22 nd of November Market Performance: With the exception of Turkey and Kuwait [+0.3% and +1.95% respectively] MENA markets ended the week on a negative note. Egypt was the biggest decliner [-3.87%] following fresh political setbacks. Equity Research: Equity research reports had split recommendation outlook, out of 7 research notes covered, 50% were Buy while 50% were Neutral. Fixed Income Development: GCC debt security issuance in circulation reached USD 233 Bn, which is equivalent to 17% of GDP this is relatively low when compared with developed markets. In developed markets, Government bonds alone exceeded 100% of GDP. Table 1: Market Performance M. Cap (USD Bn) Last WTD MTD YTD 2011 MENA Markets Close % % % % Saudi (TASI) 361 6, Turkey ISE National , Kuwait SE WT.INDEX Qatar(QE Index) 97 8, Abu Dhabi (ADI) 79 2, Morocco (CAI) 53 9, Dubai (DFMGI) 48 1, Egypt (Hermes) Jordan (Amman) 23 4, Bahrain (BAX) 16 1, Oman(Muscat SM) 15 5, Lebanon (BSE) 12 1, Note: 1 Weekend Details Saudi Arabia Thursday & Friday; Turkey, Morocco & Lebanon Saturday & Sunday; MENA Ex-Saudi Arabia, Turkey, Morocco & Lebanon Friday & Saturday; US, European & Emerging Markets Saturday & Sunday Kuwait Financial Centre S.A.K. Markaz P.O. Box 23444, Safat 13095, Kuwait Tel: Fax: markaz.com

2 What Analysts are Recommending Company Currency Recommendation Date of recommendation R E S E A R C H Market price on recom day Aramex AED Overweight 20-Nov Target House Al-Jazira Capital Maridive USD Accumulate 19-Nov Audi Sardar GB Auto EGP Buy 22-Nov NAEEM Sixth of October development 7 Investment EGP Hold 18-Nov PHAROS Vodafone Qatar QAR Market Perform 18-Nov QNB Capital Qatar international Islamic Bank QAR Market Perform 19-Nov QNB Capital Raysut Cement OMR Neutral 21-Nov Oman Bank Equity Recommendation - Key points Company House Recommendation Rationale Sixth Of October Development and Investment Pharos Hold SODIC have a strong franchise and solid business model; however, it lacks positive triggers. Based on the previous Pharos issued a Hold recommendation with a price target of EGP Vodafone Qatar Aramex (U.A.E) Commercial International Bank (Qatar) Maridive Qatar National Bank ALJAZIRA Capital Qatar National Bank Audi Sardar Market Perform Overweight Market perform Accumulate Subscriber base increased 6.6% during the 3 rd quarter, this came at the expense of ARPU s which declined by 5.1% during the quarter. Based on the above, QNB reiterates its Market perform recommendation with a price target of QAR8.68, indicating a 7.8% upside potential. Despite lower than expected 3Q12 results, Al-Jazira remains bullish on Aramex. Recommendation is maintained at Overweight with a new target price of AED2.51, implying a 32% upside potential over current price. 3Q12 profitability was lower than expected; nevertheless, QNB forecast that CIB will benefit from Qatar s continuous economic growth. QNB initiated its report on CIB with a Market perform recommendation and a price target of QAR 57.25, indicating a 9.7% upside potential. 3Q12 revenues stood at USD 62.3mn, 7% above expectation; while, Cost of Goods Sold dropped by 46% YoY to USD 36.9 mn. The ability to renew contracts were one of the top reasons that lead to an Accumulate recommendation with a price target of USD1.04

3 R E S E A R C H Raysut Cement (Oman) Oman Arab Bank Neutral Valuations indicate that Raysut is fairly valued; thus, Oman Arab Bank issued a Neutral recommendation with a price target of OMR GB Auto NAEEM Buy Supply remains the main issue affecting GB Auto, However, its being addressed by Hyundai Motor Corporation. Recovery in the commercial vehicle segment lead NAEEM to reiterates its Buy recommendation with a price target of EGP 38.7, implying a 33% upside potential.

4 R E S E A R C H Fixed Income News Sources which include Bloomberg, Zawya, and daily newspapers were utilized in the creation of the fixed income section which is mainly from Markaz GCC daily report Title Market View Dana Gas Debt Deal Said to Include $100 Million Cash Payout NBB, SIO Hold Talks With Investment Dar on Bahrain Islamic Stake GCC Utilization of Bond Markets is Growing Record Gulf Sukuk Mask Dearth of Private Sales: Islamic Finance U.A.E Bahrain GCC GCC Dana Gas PJSC plans to pay bondholders about $100 million in cash as part of the $920 million debt restructuring accord. The cash would be paid to holders of the Shariah-compliant notes, or Sukuk, once a lockup agreement between Dana Gas and its creditors is signed, likely later this month. National Bank of Bahrain and the Social Insurance Organization are in talks with Investment Dar, the Kuwait-based majority owner of Aston Martin Lagonda Ltd., for a potential acquisition of shares in Bahrain Islamic Bank. The talks are at a preliminary stage and a potential acquisition is subject to completion of the due diligence process and regulatory approvals. It didn t specify the amount of shares. Investment Dar holds a percent stake in the Bahraini bank. Investment Dar last year restructured the terms on about $5 billion of loans after defaulting in There is US$233bn in debt securities issued in the GCC in circulation, equivalent to 17% of the region's GDP. This is a relatively low level compared with advanced economies where government bonds alone often amount to over 100% of GDP. According to analysis by QNB Group, this debt includes US$17bn in central bank T-bills (short-term debt instruments that are generally used to manage domestic liquidity) and US$216bn in longer-term bonds & Sukuks. Gulf governments, spending their oil wealth on $1 trillion worth of projects from airports to soccer stadiums, which will fuel a second year of record Islamic bond sales in 2013 as private companies remain reliant on bank loans. Sukuk issuance by governments and state-linked companies in the sixnation Gulf Cooperation Council made up more than 80 percent of the $20 billion of notes sold this year. That s about 10 percentage points more than in Malaysia, home to the biggest global Sukuk market.

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