Saudi Arabia: Real Estate Overview

Transcription

1 Kuwait Financial Centre S.A.K Markaz R E S E A R C H Research Highlights: Examining the trends and developments concerning the real estate sector in the Kingdom of Saudi Arabia Saudi Arabia: Real Estate Overview Executive Summary Saudi Arabian real estate market is poised for further growth driven by structural factors that are enduring in nature. Being the largest country in the GCC region enjoying high population growth and advantageous demographic structure (over 70% of the population is under age 30), the residential segment is expected to experience under supply situation for some time to come. Weak mortgage law has restricted the growth of this segment so far forcing individuals to fund housing purchase mostly through own means. Introduction of new mortgage law will see banks and financial institutions playing an increased role towards housing finance. Housing market will also see entry of new companies geared towards providing finance. An estimated 150,000 new housing units are expected to be in demand annually with 70% of that coming from Riyadh, Jeddah and Mecca alone. Only about 70% of that demand is being currently met. Increased life expectancy, reducing unemployment, decreasing family sizes, increasing personal disposable income, new avenues for funding with affordable interest rates can all come together as strong triggers for a structural growth in the residential segment. The unexpected increase in oil price and its re-rating to a higher level than what was budgeted is triggering an economic and liquidity boom leading to increased spending levels by government. Expenditure allocation for 2007 at over SAR 100 billion is the highest ever in the history of the Kingdom. This augurs well for commercial segments. The launch of economic cities with a targeted investment of more than SAR 280 billion will provide the stimulus for growth for this segment. Other segments like retail and hospitality are also experiencing strong demand triggers like changing consumer behavior and KSA as a destination for religious tourism. ME Real Estate Team Kuwait Financial Centre S.A.K. Markaz P.O. Box 23444, Safat 13095, Tel Kuwait Tel: Fax: We believe that some of these positive drivers are already imbedded in the real estate Prices. Property prices are believed to have increased at the rate of 10% to 15% p.a. while land prices have increased by 17% to 20% p.a. during the last 3 years. Similarly rental rates have also increased by an estimated 20%-25% p.a in major cities. However, these price increases did not seep through the economy in the form of increased inflation as is the case with Qatar and UAE. While we believe that prices are increasing, when benchmarked with other cities in the region (like Dubai and Doha), KSA still offers potential for further growth backed by improving regulations. (Appendix 11) In the short to medium time horizon, only an unexpected economic contraction and/or geopolitical development may derail the positive outlook for the real estate market in KSA. Other potential risks to the sector would be a further stock market correction as we believe Saudi investors are equally exposed to these two major asset classes.

2 1. Discussion on components of the real estate market Exhibit 1: Segments of real estate market Saudi real estate market structure The size of the housing market in Saudi Arabia is estimated at SAR 67 SAR 78 Bn. Commercial 30% Office Villas Retail Housing 70% Apartments Hospitality/Leisure Duplex Industrial Traditional Houses I. Housing segment Mecca dominates the residential segment due to religious tourism. a) Structure The size of the housing market in Saudi Arabia is estimated at SAR 67 SAR 78 Bn, which is around 70% of the total real estate market. Occupancy in apartments represented the majority of the real estate market at 32.70% in Mecca dominates the segment primarily due to its religious tourism potential. It is interesting to note that traditional houses dominate the structure in Mecca along with apartments. Riyadh has more or less a balanced structure between apartments and villas. (Exhibit 2) Saudi British Bank (SAAB) estimates around 45% of the total population of Saudi Arabia occupying rented accommodation. Exhibit 2: Segments of residential markets & occupancy trends Housing occupancy by type 8.10% 20.20% 32.70% 9.10% Source: SAMBA 29.80% Apartments Traditional houses Duplex Villas Others 2

3 Housing occupancy by cities 75% of the residential financing in Saudi Arabia is by way of private financing Riyadh Mecca Eastern Prov. Jazan Asir Al-Qaseem Madinah Al-Baha Northern Bord Tabuk (000 units) Najran Al-Jowf Apartments Villas Duplex Traditional house Source: SAMBA b) Financing I. State of the Real estate Financing market in Saudi Arabia The majority of financing for the housing segment is by the private sector (75%) till 2004 (Exhibit 3). The government sponsored financing under the Real Estate Development Fund (REDF), which has a zero interest rate policy, accounted for a minority share. The low penetration of financing for housing can be mainly attributed to the unavailability of a mortgage law. This resulted in the absence of collateral for the banks to fund housing projects. However, reports indicate that the government is working on a draft mortgage law and is expected to be launched in the current year. Exhibit 3: Trends in Financing Number of houses in "000" 's sponsored by various agencies between REDF, the government funded, loan scheme forms a small part of the financing market in Saudi Arabia Private sector REDF Rush Public Housing Progaramme (Government Scheme) Other governmental agencies Source: Ministry of Economy and Planning II. State of Government financing The zero interest rate policy led to an upsurge in the number of applicants and resulted in high amount of wait list applicants. As at the end of 2004 (Seventh plan), the number of wait list applicants is estimated at 400,000 by the Ministry of Economy and Planning. This resulted in an increase in fund size by SAR 9 Bn in 2004 however, still low as a percentage of total credit offered to the sector. (Exhibit 4) 3

4 Exhibit 4: REDF Loan disbursement trend Bank financing is expected to gain ground once the new mortgage law is released. 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, % 3, % 0.30% 0.35% 0.36% 0.33% 2,516 2,261 2,232 2, % 1,881 1, % 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% Loan disbursement by REDF (SAR mn) (LHS) Share of GDP (RHS) Source: SAMA III. Bank Credit Bank financing to the real estate housing segment has been hampered by the unavailability of a mortgage law. This has resulted in low percentage of total credit issued to the building and construction segment at around 7% during the last 3-4 years. Banks and private finance companies tend to shy away from this segment as most of the financing is without securitization. However, taking into consideration the expected release of a mortgage law during the current year, many companies waiting on the sidelines to enter this lucrative segment. In April 2007, Dar Al Arkan, Kingdom Installment, Arab National Bank and International Finance Corporation (IFC) entered into a joint venture with capital of SR2 billion (US$533.2 million) to launch a mortgage financing company in Saudi Arabia. Apart from financing companies, corporate houses such as Saudi Aramco and SABIC also provide housing finance through its subsidiaries at discounted rates to its employees. Exhibit 5: Bank credit to building & construction segment Bank credit to building & construction sector SR millions 40,000 30,000 20,000 10, ,774 37,845 9% 9% 9% 7% 31,726 16,746 20,982 21,955 23,057 7% 8% 7% Q % 8.0% 6.0% 4.0% 2.0% 0.0% Bank credit to building & construction % of total bank credit Source: Ministry of economy & Planning 4

5 Demand outstrips supply in the residential segment in Saudi Arabia. c) Demand & Supply Demand outstrips supply in Saudi Arabia for housing units. The total number of houses required as per the eighth plan is 730,000 houses by end of 2009 (Table -1 ). This translates into an annual requirement of roughly 150,000 housing units. The current supply is roughly estimated at 100,000 units, thereby leaving a gap of 33%. The under supply situation as estimated by Ministry of Economy & Planning (MEP) in Riyadh alone is at 270,000 units. This under supply can be related to lack of adequate financing options. The scenario magnifies in value terms if we look at the expected shift in consumer preferences in demand. SAAB expects a decline in traditional rural houses and a shift in consumer preferences towards Duplex s (Exhibit - 6). This will mean an increase in number of houses of higher value and a need for an increase in financing options to acquire the same. Region Table 1: Demand & Supply for housing ( ) (Houses in 000 s ) Replacement New Demand Demand Un- satisfied supply as at the end of 2004 % of total supply as at end 2004 No: of Houses % of total No: of Houses % of total Total Demand No: of Houses % of total Riyadh Makkah Madina h Qassim East Region Assir Tabuk Hail Norther n Borders Jazan Najran Baha Jouf Total Source: Ministry of planning 5

6 Exhibit 6: Change in preferences - Demand Recent research estimates point out to an average annual price increase of 9% Traditional rural houses Apartments Duplex Villas Others 2004 (%) 2027 (%) Source: SABB Rental rates have also increased by 21% in Riyadh between November 2004 and November d) Prices The scenario of demand outstripping supply has resulted in prices increasing significantly. In the absence of established statistics, providing accurate price points becomes challenging. However, recent research estimates point to an average annual price increase of 9% in Saudi Arabia between 2002 and (Exhibit 7) This we believe, leaves further room for an increase in both property prices and rental rates. The rental rates, even though have increased by 21% on an average between November 2004 November 2006 in Riyadh, is still lower than most other cities in the GCC region. Rental levels for a twobedroom apartment in Riyadh at $680 is the lowest in the GCC region and is only 35% of what prevails in Doha (Qatar). Exhibit 7: Annual price increases Residential segment Annual price increase ( ) (%) Jeddah Riyadh Medinah Eastern Province Average price increase in Saudi Arabia Mecca 6

7 All the demand drivers for the residential segment are indicating towards a positive environment ahead. Doha Dubai Muscat Manama Kuwait Riyadh Average rent increase,% rise (Nov-2004-Nov2006) 21% 29% 27% 24% 66% 83% 0% 20% 40% 60% 80% 100% Doha Dubai Kuwait Manama Muscat Riyadh Rent for Two-bedroom Apartment in 2006 (US$ permonth) ,930 1, Source: Gulf talent.com, SAMBA e) Drivers of residential market Demand Driver Signal Justification Population Positive Annual population growth of 2.4% during the last 14 years expected to sustain till (Appendix - 5 ) Demographics Positive Proportion of young population of age below 15 years at 38.2% Personal disposable incomes Low cost government financing Positive Positive Per capita GDP nearly doubled to USD 15,210 in 2007 from a modest USD 8553 (2002). Thrust on amount of low-cost credit issued by REDF is expected to be enhanced going forward. Interest rates Neutral The interest rates in Saudi Arabia are closely track US interest rates. Current prognosis on interest rates is an expectation of either remaining flat or even decreasing. II. Commercial segment Low vacancy rates pushing the prices in the commercial segment. A. Office Demand for office space is outstripping supply in Saudi Arabia. According to Colliers International, the vacancy rates of the commercial offices in prime locations such as Riyadh and Jeddah stood at 2% and 5%, respectively at the end of second quarter of This undersupply and low vacancy rates have triggered a price increase in the office segment too. On an average, the annual price increases in the office segment have been higher than that in the residential segment (Exhibit 8). Another estimate points out to supply of new office space to come on stream only in This is expected to keep the rental rates firm. 7

8 Saudi Arabia has witnessed a 10.74% annual average increase in prices of commercial property between 2002 and Exhibit 8: Annual price increases Office segment 9.1 Eastern province Annual price increase ( ) (%) Jeddah Medinah Average price increase in Saudi Arabia Riyadh Mecca There is a significant build up of retail space. Demand Driver Signal Justification Business environment Positive High fiscal surplus backed by private sector growth provides a strong business backdrop. Budge surplus for year 2006 is estimated at SAR 266 billion of which nearly 15% is estimated to have been channeled to development projects. We expect to see a substantial increase in the future. Strong private sector growth along with accession to WTO also provides strength to this segment. Economic Cities Positive The creation of economic cities is a major effort towards positioning Saudi Arabia competitively vis-à-vis other players in the region as well as globally. The concept of economic cities is intended to trigger opportunities for many anciliary industries as well apart from real estate. B. Retail There is a build up of retail space in Saudi Arabia. This is due to the lower retail space available in Saudi Arabia as percentage to its GDP as compared to its peers in the GCC region like UAE (Exhibit 9). At present, approximately 14.7 Mn Sq.ft is under construction in Riyadh, Jeddah and Al Khobar. According to the Middle East Council of Shopping Centre, an additional 16 million square feet of retail space will be added to the existing retail space in the two main cities, Jeddah and Riyadh, over the next five years. 8

9 Exhibit 9: Retail space distribution in Gross Leasable Area (GLA) 8% 7% 2% 10% 43% 30% Source: Retail International Drivers of retail segment UAE Saudi Arabia Kuwait Qatar Bahrain Oman Demand Driver Signal Justification Regulations Positive Entry into WTO has led to a relaxation of regulations. Foreign retailers are now permitted to hold up to 51% of local companies. This has led to a number of multi nationals setting shop. Carrefour is planning to open 18 new hypermarkets. Increase in GDP/capita Positive The high oil prices have resulted in an increase in GDP per capita figures in Saudi Arabia. This has also resulted in an increase in personal disposable incomes. This is a strong driver for entry of retail chains. Change in consumer behavior Positive The aspiration levels of consumers have increased providing opportunities for retailers to meet this aspiration through provision of enhanced choices.. Occupancy rates in hotels in Saudi Arabia are averaging at around 85%. C. Hospitality & Tourism The increasing amount of tourists is expected to keep the investments into this segment on a rise. According to the Ministry of Tourism, the current capacity of hotels cannot handle the number of tourists expected to visit the Kingdom. Consequently, there has been a major push to increase the number of hotel rooms in Saudi Arabia. According to the Ministry of Commerce and Industry of Saudi Arabia, the number of hotels operating in the Kingdom stood at 1,049 toward the end of 2005, with total room capacity estimated at 104,000. Furthermore, during the 1Q07, occupancy rates for Kingdom s hotels averaged 84.4%. To accommodate the large number of tourists, the government and the private sector would have to provide 50,000 additional hotel rooms and 74,000 newly furnished apartments. 9

10 Table:2 Projected tourism trips in Mn Domestic tourism trips Inbound tourism trips Total Inbound and domestic trips Source: Ministry of Tourism D. Industrial segment The industrial segment of Saudi Arabia is a benefactor of the government due to the latter s focus is in diversifying the economy. The Saudi Arabian General Investment Authority (SAGIA) provided licenses to 3,608 projects worth SR292.7 billion until March SAGIA plans to provide licenses to new investment projects worth more than SR300 billion in The industrial sector in the Kingdom is expected to witness accelerated growth as the Saudi government has relaxed restrictions on foreign investments and private investors. The government is encouraging the establishment of small and medium scale industries. Within the industrial sector, foreign investments in infrastructural areas such as transport, logistics and telecommunications are expected to increase substantially. The transportation sector in Saudi Arabia holds great potential for development and growth. Industry sources estimate that approximately US$50 billion will be invested in several expansion programs at various airports and seaports. The Saudi Railway Organization (SRO) is planning to establish two more railway lines linking Jeddah and Jizan as well as Taif and Khamis Mushayt. SRO has already signed a SR3.3mn contract with an engineering consultancy firm to conduct a feasibility study on the two railway lines. Furthermore, the Saudi Seaports Authority is building a new passenger terminal at King Abdul Aziz Port in Dammam. The terminal will service passengers between Dammam and Dubai. The proposed berth will initially serve passenger liners between Dammam and Dubai and will later extend to other Arabian Gulf countries. III. Economic Cities The basic foundation for the creation of economic cities in Saudi Arabia is to position Saudi Arabia competitively in terms of global ranking. The country has embarked on a 10x10 program which aims to improve Saudi Arabia s ranking to be within the top 10 investment destination by the year A fundamental trigger to such an ambition is the creation of economic cities. (Appendix 9). So far, there were four economic cities launched across the Kingdom with an investment value of SAR 268 Bn. 10

11 Exhibit 10: Distribution of investments across economic cities Economic cities Investments SAR268 Bn King Abdullah Economic City (Jeddah) SAR100 Bn Knowledge Economic City. (Al- Madhinah) Investments SAR26 Bn IV. Stock market performance Prince Abdulaziz Bin Mousaed Economic City (Hail) Investments SAR30 Bn Jazan Economic City (Jizan) Investments SAR113 Bn The market cap of real estate stocks in Saudi Arabia form 13% of the total market cap of all the real estate stocks in the GCC region. (Appendix 8). This is a lower representation of the segment in the equity market as compared to Kuwait, where the share is 22%%. On the performance front, real estate stocks in Saudi have underperformed the benchmark during the last one year. The real estate stocks in the last one year proved to be more riskier than the benchmark itself. Emaar economic city generated the lowest return and Red sea housing generated the highest risk. (Exhibit 11) In spite of the decline, the real estate stocks continue to trade at a wide premium to the benchmark in terms of price to earnings ratio. The real estate stocks also are generating lower dividend yield as compared to the benchmark. Exhibit 11: Risk & Return chart for Saudi Arabia real estate stock Real Estate Stocks and Benchmark Performance (23-July-2006 to 24-June-2007) SASI Red Sea Housing The real estate stocks proved to be more riskier than the benchmark in the last one year. Annualised Return 1 Year % Saudi Real Estate Makkah Construction Emmar Economic City Annualised Risk % 1 Year 11

12 Exhibit: 11 Valuation landscape % Price change 1 year Saudi Index Red sea housing N.A Saudi Real Est Makkah Construction Emaar the Economic City N.A % Price change 1 year N.A as earnigs are negative Saudi Index Red sea housing N.A Saudi Real Est Makkah Construction Emaar the Economic City N.A 12

13 3.60 Dividend yield (%) N.A. as earnigs are negative Saudi Index Red sea housing Saudi Real Est Makkah Construction Emaar the Economic City 3.00 Price to Book ratio (x) Saudi Index Red sea housing Saudi Real Est Makkah Construction Emaar the Economic City 13

14 Appendix: 1 - Projects plan time line R E S E A R C H

15 Appendix 2: Contribution of real estate & construction to GDP Contribution Of Real Estate and Construction Sector to GDP % 14.5% 14.0% 13.5% 13.0% 12.5% 14.0% 13.3% 13.2% 13.2% 13.4% Contribution to GDP (%) Source: SAMA Appendix 3: Contribution of real estate & construction to GDP SR millions 40,000 30,000 20,000 10,000 0 Bank credit to building & construction sector Q % 8.0% 6.0% 4.0% 2.0% 0.0% Bank credit to building & construction % of total bank credit Source: SAMA

16 Appendix 4: Cost of Living Index Source: SAMA Year Economic activity Renovation, rent,fuel & water General Q Appendix 5: Interest rates on 1 year Saudi Riyal deposit Interest rate on one year Saudi Riyal deposit Q 07 Interest rate on one year Saudi Riyal deposit Source: SAMA 16

17 Appendix 6: Saudi population Kingdom population in million millions CAGR ( ): 2.4% s E Source: CDS Appendix 7: Money supply in the Saudi economy Money Supply in Saudi economy SR billions Q 07 Source: SAMA Money Supply in SR billion 17

18 Appendix 8: Comparative matrix of real estate companies Large Real Estate Companies in GCC Market Cap % (Mn Close Price Dollars) (Lc) Chg 1Y PE (x) P/B (X) Price to sales (x) Dividend yield (%) Name Country EMAAR PROPERTIES UAE EMAAR ECON CITY Saudi N.A N.A 1.53 N.A N.A ALDAR PROPERTIES UAE SOROUH REAL EST UAE N.A N.A 2.44 UNION PROP UAE TL REAL EST Kuwait MAKKAH CONSTRUCT Saudi MABANEE CO Kuwait COMMERCIAL R.E. Kuwait Small Real Estate Companies in GCC ARAB TECH CONST UAE SAUDI REAL EST Saudi RAK PROPERTIES UAE N.A TAMDEEN REAL EST Kuwait QA REAL EST CO Qatar N.A SALHIAH REAL EST Kuwait KWT REAL EST Kuwait N.A THEMAR Kuwait RED SEA HOUSING Saudi N.A GRAND REAL EST Kuwait UNITED REAL EST Kuwait INTL INVEST PROJ Kuwait N.A 2.39 N.A 0.00 INJAZZAT RE EST Kuwait ARAB REAL EST CO Kuwait AL ENMAA REA EST Kuwait AJIAL REAL EST Kuwait TIJARA& REAL EST Kuwait AAYAN REAL EST Kuwait KWT R.E.HOLDING Kuwait JEEZAN REAL EST Kuwait N.A 1.35 N.A 0.00 GRND RE TOUR DEV Kuwait UNION REAL EST Kuwait PEARL REAL EST Kuwait AL-MASSALEH R.E. Kuwait N.A ARKAN ALKWT R.E. Kuwait N.A N.A AL KHALEEJ DEV Kuwait UNITED PROJ CO Kuwait TAMEER R.E. INV Kuwait N.A AQAR REAL EST Kuwait SAM REAL EST Kuwait N.A AL MOWASAT HLDG Kuwait N.A N.A GULF HORIZON Kuwait N.A N.A N.A Source: Reuters 18

19 Appendix 9: Economic cities Economic City Table: 3 - The Economic Cities - Snapshot Size Estimated (Mn Cost (SAR Project Details Sq.Mtrs) Bn) Ownership King Abdullah Economic City (Jeddah) Knowledge Economic City. (Al- Madhinah) Prince Abdulaziz Bin Mousaed Economic City (Hail) Jazan Economic City (Jizan) Sea Port 14.0 Industrial Zone 63.0 Central Business District (mixed use zone including commercial, 3.8 hotel, retail and Financial Island) Resort District 3.5 Educational Zone and Residential Communities 51.0 Others 32.7 Total Taiba Complex for Technology and Knowledge-based Economy. Technological and Administrative Colleges. Theme Park "Seera Land". Islamic Civilization Studies Centre. Complex for Medical Studies, Biological Sciences and Health Services. Complete Business Centre. Residential Areas that include towers, villas and hotel apartments. Passengers station. Commercial complexes with state-of-the-art marketing facilities. King Abdul Aziz Mosque. Total 4.8 Supply, Transportation and Logistical Services Center Dry port, airport and land freight sector Agro-industrial zone Mining and processing industrial sectors Total Seaport Industrial zone Commercial business district Residential areas Public amenities Total Emmar properties thru five subsidiaries (44.70%), Emmar middle east (5.88%), other corporates (19.42%) and Public (30%) Savola Group (40%), Taiba Holding (20%), rest by government. 30% Institutional Funding, 70% Government Funding N.A 19

20 Appendix Macro Economy Economic parameter Units Gross domestic product, constant price Million SR 636, , , , , ,850 Gross domestic product, constant price % change 0.5% 0.1% 7.7% 5.3% 6.1% 4.3% Gross domestic product, current price Million SR 686, , , ,771 1,182,514 1,307,522 Gross domestic product, constant price % change -2.9% 3.0% 13.8% 16.7% 26.0% 10.6% Money supply Billion SR Interest rate on 1 year Riyal deposit % Population million Source: SAMA, Population Reference Bureau 2. Bank Credit by economic activity (SR Million) Economic activity Q1 Agriculture and Fishing 2,138 2,530 2,549 3,785 6,716 6,802 7,380 Manufacturing & Processing 24,659 24,324 26,604 26,519 34,460 37,566 38,605 Mining & Quarrying 1, ,252 2,275 1,802 2,289 Electricity water & other Utilities 1,220 1,094 1,837 3,273 3,226 3,598 3,756 Building and Construction 16,746 20,982 21,955 23,057 31,726 37,845 36,774 Commerce 40,167 42,194 51,886 62,808 83, , ,059 Transport & Communication 9,917 13,555 12,803 13,406 14,382 6,875 9,177 Finance 6,703 8,862 11,877 33,839 56,747 61,828 58,327 Services 9,514 9,718 8,839 12,337 15,097 16,735 16,777 Miscellaneous 64,534 74,724 82, , , , ,549 Services Source: SAMA

21 Appendix 11: Regulatory Developments The new real estate law enacted by the Royal Decree No. M/15 dated July 19, 2000 has the following salient features: It allows non-saudi residents to own real estate for their private residence with the permission of the Interior Ministry. It also allows ownership of real estate by foreign investors to conduct their business activities and own properties needed for their accommodation and that of their employees. The law entitles investors to rent out the property. Non-residents are also allowed to purchase real estate to conduct real estate business in all cities, except for the holy cities of Mecca and Medina, provided investment in the real estate business is not less than SR30 million. While non-saudis may not own land in Mecca or Medina, they can lease property in either city for a two-year renewable period.

22 Disclaimer This report has been prepared and issued by Kuwait Financial Centre S.A.K (Markaz), which is regulated by the Central Bank of Kuwait. The report is intended to be circulated for general information only and should not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction. The information and statistical data herein have been obtained from sources we believe to be reliable but in no way are warranted by us as to its accuracy or completeness. Opinions, estimates and projections in this report constitute the current judgment of the author as of the date of this report. They do not necessarily reflect the opinion of Markaz and are subject to change without notice. Markaz has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate, or if research on the subject company is withdrawn. This report does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Kuwait Financial Centre S.A.K (Markaz) does and seeks to do business, including investment banking deals, with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. 22

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24 Markaz Published Researches Sl No Title Release Date Research Highlights GCC Equity Funds: The Asset Allocation Challenge GCC Leverage Risk: How real it is? GCC for fundamentalists: A topdown framework Managing GCC Volatility: Strategies and Tactics Derivatives Market in GCC: Cutting a (very) long market short To Leap or To Lag: Choices before GCC Regulators Real Estate Report - Syria GCC Asset Allocation A Gulf Emerging Portfolio: And Why Not? Markaz Volatility Indices (MVX) To obtain a copy, contact: Kuwait Financial Centre Markaz - Client Relations & Marketing Department Tel: Ext Fax: Postal Address: P.O. Box 23444, Safat, 13095, State of Kuwait info@markaz.com