Saudi Stock Market. Weekly Update TRADING STATISTICS TASI CLOSE & MARKET TURNOVER

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1 Saudi Stock Market Weekly Update Week Ending June 16, 2016 TASI declines 0.97% Even if only partially implemented, the (National Transformation) plan will benefit Saudi Arabia's credit profile by supporting the country's fiscal and economic strength - Moody s Investors Service Markets react to Britain s referendum on EU Tadawul All Share Index (TASI) decreased 1% during the week and closed at 6,543 points. Global markets were also negative this week on concerns of Britain s referendum and US interest rate increase. Crude oil price also struggled in a global risk-off trade with Gold seeing some positive momentum and nudging the USD 1,300/oz level. During the week, Saudi Arabia announced that 2.5% annual tax will be levied on the value of unused land designated for residential or commercial use. The tax will be applied in stages, first to owners of plots exceeding 10,000 square meters in area, and eventually to owners of land plots over 5,000 square meters. TASI CLOSE & MARKET TURNOVER 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, ,571 6,590 6,627 6,567 6,543 3,311 3,556 3,911 4,696 3, Jun Jun Jun Jun Jun-16 Total Turnover TASI Close (RHS) 6,640 6,620 6,600 6,580 6,560 6,540 6,520 6,500 All the regional indices closed lower due to global weakness. Dubai (-1.9%), Abu Dhabi (-1.3%) and Oman (-1.3%) lost the most. Globally, markets are waiting for the outcome of Britain's referendum on whether to remain in or leave the European Union. June 23 (voting day) could be one of the most important days for British citizens. However, as we write, the support for LEAVE vote seems to be rapidly gaining momentum. A Financial Times compilation of opinion polls shows 48% in favour of LEAVE against 43% to REMAIN even as several institutions have warned citizens over the economic repercussions of leaving the EU. TRADING STATISTICS Gainers Losers No change Total No. of Companies Saudi market breadth was negative with 39 gainers as against 126 losing stocks

2 DJIA S&P 500 SSE MSCI World MSCI EM FTSE 100 DAX Nikkei Bahrain Kuwait Qatar Saudi Oman Abu Dhabi Dubai GLOBAL INDICES WEEKLY RETURNS -1.4%, 17, %, 2, %, 2, %, 1, %, 5, %, 9,792-1%, 6, %, 5, %, 4, %, 3, %, 1, %, %, 5, %, 9, %, 15,434 Note: Weekly returns are calculated considering Friday to Thursday week. Numbers indicate weekly returns and index closing values. SAUDI SECTOR INDICES 13 out of 15 indices closed the week in Red Amongst sectors, 13 out of the 15 indices closed the week on the negative side. Agriculture & Food Industries and Hotel & Tourism indices lost the most, shedding 3.2% each. Energy & Utilities (+18.4%) and Telecom & IT (+0.7%) closed on the positive side. Banks and Petrochemicals lost 1.1% and 2.1% respectively. Banks constituted 19.2% of the total traded value and 20.1% of the total volume to become the top trading sector. This was followed by Petrochemicals which contributed 16.7% to the value and 10.2% to the total volume. Index Open Close WTD YTD Total Volume (Mn) Total Turnover No. of Trades TASI 6,607 6, % -5.3% 1,191 18, ,305 Banks & Financial Services 14,543 14, % -7.8% 239 3,582 34,625 Petrochemical Industries 4,516 4, % 3.4% 121 3,124 36,956 Cement 4,399 4, % -3.5% ,553 Retail 10,605 10, % -16.3% ,653 Energy & Utilities 6,213 7, % 28.4% 58 1,215 22,519 Agriculture & Food Industries 7,834 7, % -16.9% ,163 Telecom & IT 1,521 1, % -5.5% ,259 Insurance 1,287 1, % 3.0% 151 2,448 93,826 Multi-Investment 2,686 2, % -20.5% ,423 Industrial Investment 6,587 6, % 0.3% ,229 Building & Construction 2,052 2, % -12.2% ,782 Real Estate Development 6,217 6, % 2.7% 336 2,417 43,505 Transport 7,236 7, % -7.9% ,097 Media and Publishing 2,823 2, % -20.1% ,167 Hotel & Tourism 10,112 9, % -41.7% ,548

3 THIS WEEK S WINNERS & LOSERS Top Gainer Saudi Electricity Company (+18.7%) Saudi Electricity Company registered the largest gain, this week, by increasing 18.7% to close at SAR This was followed by National Gas & Industrialization Co. (+17.1%) and Saudi United Cooperative Insurance Co. (+11.3%). On the other side, Amana Cooperative Insurance Co. shed another 9.3% and led the losers table, followed by Emaar The Economic City (-6.3%) and Yanbu National Petrochemical Co. (-6.2%) Top Loser Amana Cooperative Insurance Co. (-9.3%) SABIC, the gulf s largest company, lost 1.3% during the week and clocked a turnover of SAR 2.2bn. SABIC has gained 6.5% during the year and closed at SAR TOP GAINERS TOP LOSERS Company Close WTD YTD Value Traded Company Close WTD YTD Value Traded Saudi Electric % 32.2% 16,539 GASCO % 4.1% 5,980 Walaa % 21.3% 3,981 AlRajhi Takaful % 7.0% 9,676 SSP % -11.6% 1,593 Amana Insurance % 13.6% 3,219 Emaar EC % 8.4% 4,969 YANSAB % 28.2% 1,486 Savola Group % -26.6% 1,480 FIPCO % 4.6% 2,652 TOP 10 MARKET CAPITALIZATION COMPANIES Company Name Market Cap Last Price (SAR) WTD Change YTD Change LTM Net Income P/E Ratio P/BV Ratio Saudi Basic Industries Corp. 244, % 6.5% 18, Saudi Telecom Co. 128, % -6.4% 9, Al Rajhi Bank 94, % 12.1% 7, Saudi Electricity Company 86, % 32.2% 2, National Commercial Bank 79, % -21.9% 9, Jabal Omar Development Co. 56, % 10.4% -220 NA 6.1 Saudi Arabian Mining Co. 43, % 12.7% Almarai Co. 43, % -7.6% 1, Samba Financial Group 41, % -11.1% 5, Kingdom Holding Co. 41, % -29.8% TASI 1,514,660 6, % -5.3% 99,

4 SAUDI ARABIA CORPORATE & ECONOMIC NEWS Saudi Arabia s Cabinet approved rules for foreign companies to invest in wholesale and retail trade sector with 100% ownership. Companies that plan to apply for 100% ownership must have SAR 30mn in called-up capital and business operations in at least three international markets. Fawaz Abdulaziz Alhokair Co. s board has approved the sale of its entire stake in Spanish clothing retailer Blanco for SAR 350mn to an investment fund. Rabigh Refining and Petrochemical Co. (Petro Rabigh) is expected to start its 160,000 tonne per year ethylene vinyl acetate/low density polyethylene (EVA/LDPE) swing plant towards the end of this year. Sahara Petrochemicals has awarded a three-year contract to US-based Jacobs Engineering Group to provide general engineering services at its facilities in Jubail Industrial City. Saudi Aramco and Malaysia s Petronas have reportedly approached banks seeking proposals to finance about USD 7bn for a planned refinery and a petrochemical complex in Malaysia. Saudi Aramco and GE are partnering to install Saudi Arabia s first Wind Turbine at the Turaif Bulk Plant, located in the north-west of the Kingdom. Saudi International Petrochemical Co. (Sipchem) has completed the early redemption of its Mudaraba sukuk worth SAR 1.8 billion in full. Al Reef Sugar Refinery Co. has signed a SAR 840mn long term credit agreement with Saudi Industrial Development Fund for eight years starting from Bawan Co. said its 85.5% owned subsidiary United Transformers Electric Co. is setting up a new joint venture in Algeria, which will start commercial operations in Q Dow Chemical Co said it became the first foreign company to receive a trading license from Saudi Arabia as the Kingdom plans to diversify its economy and free its dependence on oil exports. Saudi Electricity Co. is seeking bids from international developers to build two solar-power plants in Al-Jouf and Rafha in the north of the country. General Authority of Civil Aviation intends to hand over a national carrier license to the Saudi Gulf Aviation Company, adding that it plans to begin its domestic flights from King Fahd International Airport in Dammam.

5 OTHER GULF NEWS GLOBAL ECONOMIC NEWS Companies in the UAE that earn more than AED The US Federal Reserve decided to keep interest 3.75mn annually will reportedly be required to regis- rates at between 0.25% and 0.5% in the face of an ter under the first phase of a new value-added tax uncertain jobs market. (VAT) system. Bank of Japan held rates at minus 0.1% and said it Moody s confirmed the UAE's Aa2 rating and will continue to conduct money market operations changed the outlook from Stable to Negative re- at an annual pace of JPY 80 trillion. flecting the lack of clarity around the formulation and implementation of government policies Microsoft is buying the professional networking website LinkedIn for just over USD 26bn in cash. National Bank of Abu Dhabi and First Gulf Bank are reportedly discussing a potential merger to establish the Middle East s largest lender. The UK's inflation rate, as measured by the Consumer Prices Index, was unchanged in May at 0.3%. Emirates National Oil Co. has secured a USD 230mn unsecured loan from the Industrial and Commercial Bank of China Ltd to fund new projects and support expansion plans. Chinese car-hailing app Didi Chuxing Technology Co said it raised USD 7.3bn in its latest round of funding, including USD 4.5bn from new and existing investors. Abu Dhabi National Energy Co. (TAQA) has finalized the issuance of a total of USD 1bn in five and tenyear bonds, the company said. Walt Disney Co. opened the gates to its first resort in mainland China, after years of planning and costs of more than USD 5.5bn. Emirates Telecommunications (Etisalat) has signed an agreement to sell its 92.3% stake in Sudanese fixed line operator Canar to Bank of Khartoum for Cosmetics maker Revlon Inc has agreed to buy Elizabeth Arden Inc in an USD 870mn deal to strengthen its skincare and fragrance business. AED 349.6mn. Qatar National Bank has raised QAR 10bn (USD 2.75bn) from capital-boosting perpetual notes.

6 C H A R T S O F T H E W E E K ANNUAL AVERAGE INFRASTRUCTURE SPENDING AS % OF GDP ( ) Source: McKinsey, Bloomberg TREND IN 10 YEAR GOVERNMENT BOND YIELDS Source: Bank of America Merrill Lynch, Bloomberg

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