GCC markets closes on mixed note in September OPEC agrees to first oil output cut in eight years Market capitalization drops 3.

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1 Global Research GCC Market Performance Markets - GCC September 2016 Performance September 2016 GCC markets closes on mixed note in September OPEC agrees to first oil output cut in eight years Market capitalization drops 3.8% GCC markets close in red for September, except BSE and ADX GCC markets ended on a mixed note in September, led by volatility due to the outcome of the US Federal Reserve s meeting, unstable oil prices, unexpected OPEC oil output cut, Deutsche Bank jitters, and uncertainty due to the upcoming US presidential elections. The BSE (0.7%) was the top gainer for the month, followed by ADX (0.1%). TASI (- 7.5%) was the top loser, followed by QE (-5%), DFM (-0.9%), KSE (- 0.4%) and MSM (-0.2%). Combined market capitalization drops 3.8% The combined market capitalization of GCC bourses declined 3.8% to USD801bn in September from USD832bn in August. The Saudi bourse contributed the most (USD353bn or 44%) to overall market capitalization, followed by the Qatari index (USD130bn or 16.3%), and the Abu Dhabi and Dubai markets (USD203bn or 25.3%). The Kuwaiti, Omani, and Bahraini exchanges contributed USD115bn or 14.4%. Trading was soft due to Eid al-adha holidays Trading activity fell in September, with volume traded declining 14.6% to 8.8bn shares and value traded falling 33.9% to USD15.1bn. Market Performance in September Aug Sep Sep Sep Sep Sep Sep Sep-16 Saudi Qatar Kuwait (Price) KWSE (Weighted) Abu Dhabi Dubai Oman Bahrain MSCI EM Index MSCI World Index Global Investment House Indices () (YTD) Bahrain All Share 0.7% -5.4% ADX Index 0.1% 3.9% MSM30 Index -0.2% 5.9% KSE Price Index -0.4% -3.9% DFM Index -0.9% 10.3% QE Index -5.0% 0.1% Tadawul All Share Index -7.5% -18.6% 1

2 GCC Aggregate Market Capitalization Country Market Cap September 2016 Market Cap August 2016 () % of total September 2016 Kuwait % 10.0% Saudi Arabia % 44.0% Abu Dhabi % 15.0% Dubai % 10.3% Qatar % 16.3% Oman % 2.1% Bahrain % 2.2% Total GCC % 100.0% GCC Aggregate Trading Activity Country September 2016 August 2016 traded Volumes (mn) As a % of total value traded traded Volumes (mn) As a % of total value traded Bahrain % % Kuwait % , % Oman % % Qatar % % Saudi Arabia , % , % UAE , % , % GCC Total , % , % OPEC agrees to first oil output cut in eight years OPEC surprised the market by agreeing on the framework for a deal to limit crude oil output as a supply surplus persists following a two-year price plunge. OPEC decided to slash oil production to 32.5 to 33mn barrels per day from 33.24mn currently. The quota for each member would be determined at the formal OPEC meeting later in November. OPEC officials stated a committee would be formed to determine how much each country would have to cut. The members would then report to the group at the next meeting scheduled on November 30 in Vienna. The oil alliance is set to lower output for the first time in eight years. The agreement was reached on September 28 at a meeting in Algiers. A global oil supply glut has caused oil prices to crash over the past two years. Additionally, OPEC nations, led by Saudi Arabia, had refused to lower production until the meet. This surprise development could gradually help stabilize the global energy markets after nearly two years of widespread disorder. OPEC is yet to implement the cuts as this still needs to be worked out in a subsequent meeting in November. However, OPEC s decision to support the cut is noteworthy. Implementation would result in the first output cut since the financial crisis in Analysts remain skeptical regarding whether the organization would implement the agreement to limit production during its November meeting. US Fed rate: Fed holds rates, hints at hike by year-end A divided Federal Reserve maintained key policy interest rates, awaiting further evidence of progress toward its goals, while expecting an increase by the year-end. The Fed is scheduled to have two more meetings this year, on November 1 and December 13. However, it is widely believed Fed Chair Janet Yellen is unlikely to raise rates just days before the presidential election. December remains a distinct possibility for the next rate hike, provided economic data supports it. 2

3 1 Yr Forward PE Global Research GCC The next major event is the US presidential election scheduled on November 8, 2016, wherein a (presumed) Clinton win is currently expected much less risk to the market than a Trump victory. Markets are forecast to be more volatile in the buildup, especially as opinion polls waver. GCC Market Valuation 1-year forward PE USA Japan India Qatar 14.0 China Hong Kong 12.0 Abu Dhabi 10.0 KSA Dubai Kuwait Bahrain Russia Oman % -10% 0% 10% 20% 30% 40% 1 yr forward EPS growth Global markets end mixed in September Global markets recorded mixed performances in September. The outcome of the Fed meeting, volatility in oil prices, unexpected oil output cut by OPEC, uncertainty surrounding Deutsche Bank, and volatility due to the upcoming US presidential elections contributed to the cautious market sentiment. US indices ended mixed as uncertainty in interest rates continued to weigh on Wall Street, which spiked volatility in US markets. Moreover, a sequence of weak economic data led to further contraction in indices, and these recorded mixed performances in September. The ISM manufacturing index came in at 49.4 for August, the weakest since January. Weak US retail sales data was also a reason which led to the Fed s decision to hold interest rates. Moreover, investors were wary of allegations that Wells Fargo had violated the service members Civil Relief Act, which raised concern regarding systematic risk in the broader financial sector. European markets ended mixed as investors were cautious about the financial health of Deutsche Bank. Deutsche Bank was fined USD14bn by the US Department of Justice for selling mortgage-backed securities, which contributed to the 2008 financial crisis. Deutsche Bank was under pressure on speculation regarding whether the German government would work on a rescue plan for the bank in case it was forced to pay the US fine. Asian markets benefitted from a rebound in the commodity markets partially offset by weak global cues. Another factor contributing to gains could be no jitters from the domestic markets in an environment where the developed markets have been thronged by a number of issues. 3

4 31-Aug 6-Sep 18-Sep 22-Sep 28-Sep in mn Global Research GCC Bahrain BSE gains 0.7% in September After a tepid performance in August, the BSE gained 0.7% in September. The index traded in a narrow range of 1,112 1,152 during the month. The market commenced on a lower note declining 1.9% in the first 6 trading sessions but subsequently gathered momentum to end the month on a positive note. On an YTD basis, the market is down 5.4%. CPI inflation stood at 2.6%YoY in August, down from 3.5%YoY for July. Bahrain awarded a total of eight tenders worth BHD2.56mn (USD6.74mn) in August, besides inviting bids for 15 tenders worth BHD6.77mn (USD17.8mn) for projects related to roads, sanitary work, and construction. Work has also started on a BHD185mn (USD483mn) Bahrain sewerage network project to link 52 residential units in Muqaba to the network. The scope of work includes the extension of 680-meter-long main connections, along with 727-meter-long sub-connections, besides the construction of 105 inspection chambers. The project was awarded to Abdul Karim Al Jahrami Contracting. BSE Index and Volume Performance and Sectoral Performance 1, ,150 1,145 1, BSE Investment 0.7% 4.4% 1,135 1, Services 1.9% 1,125 1, Hotel & Tourism 0.0% 1, Commercial Banks -0.4% 1,110 1, Insurance -0.7% Industrial -6.6% Volume (RHS) Index (LHS) -10% -5% 0% 5% Sectoral performance In September, two sectors closed in the green, three ended in red, and Hotel & Tourism remained flat. Investment (4.4%) was the key gainer, followed by Services (1.9%). Industrial was the biggest loser (-6.6%) followed by Insurance (-0.7%) and Commercial Banks (-0.4%). Investment recorded growth due to gains in Gulf Finance House (19.2%), Albaraka Banking Group (15.7%) and Investcorp Bank (1.3%). Services sector gains were contributed by Bahrain Telecom (5.6%) while 6 stocks were flat for the month. Losses in Insurance were led by Arab Insurance Group (-3.6%) and Al-Ahlia Insurance Co (-0.8%). Industrial fell due to losses in Aluminium Bahrain which fell 6.9%. Trading falls in September Trading on the BSE declined in September. Volume traded fell 26.6% to 55mn shares, while value traded dipped 25.7% to USD0.03bn. 4

5 BSE Trading Statistics Top 5 Top Gainers Gulf Finance House % Albaraka Banking Group % Bahrain Telecom Co % Al-Salam Bank % Investcorp Bank % NA NA Top 5 Losers Bahrain Islamic Bank % Aluminium Bahrain Bsc % Nass Corp Bsc % BMMI Bsc % Ithmaar Bank Bsc % NA Top 5 Volume Volume (mn) Ithmaar Bank Bsc % NA Al-Salam Bank % Ahli United Bank B.S.C % Nass Corp Bsc % BBK Bsc % Top 5 Ahli United Bank B.S.C % BBK Bsc % Al-Salam Bank % Ithmaar Bank Bsc % NA Seef Properties % Source: Bloomberg, Gulfbase & Global Research, *Price data in USD 5

6 Market capitalization The market capitalization of BSE-listed companies rose 0.7% to USD17.9bn in September. The market capitalization of the top 10 listed companies rose 1.4%. Largest 10 Listed Companies by Market Capitalization (in BHDbn) Sep-16 Aug-16 Sep-15 % YoY% Ahli United Bank B.S.C % -2.5% National Bank Of Bahrain % 1.8% Bahrain Telecom Co % -8.0% Aluminium Bahrain Bsc % -36.2% Arab Banking Corp % -39.9% BBK Bsc % -20.1% Gulf Finance House % 99.8% Investcorp Bank % 26.5% Albaraka Banking Group % -24.0% Al-Salam Bank % -17.3% Total Market Capitalization (Top 10 stocks) % -10.7% Source: Bloomberg and Global Research 6

7 31-Aug 6-Sep 19-Sep 25-Sep 29-Sep in mn Global Research GCC Kuwait KSE retreats 0.4% in September The KSE declined 0.4% in September (down 0.6% in the previous month). The index traded in a narrow range of 5,366 5,437 points during the month. The KSE recorded some volatility during the month, led by the OPEC meet, unstable oil prices, and global cues. In June, credit growth came in at 8.1%YoY, its largest monthly gain in six months. Growth was driven by a strong increase in lending for the purchase of securities and business loans, particularly credit to the oil & gas and industry sectors. Moody's outlook for Kuwait's banking system remains stable, reflecting the rating agency's expectation of continued government spending and growing loss-absorbing buffers, which would allow banks to tackle non-performing loan formation. Inflation in consumer prices declined to 2.9%YoY in August from 3.06%YoY in July. KSE Index and Volume Performance and Sectoral Performance 5,440 5,430 5,420 5,410 5,400 5,390 5,380 5,370 5,360 5, KSE Banks Health Care Financial Services Industrial Technology Basic Material Consumer Services Telecommunication Real Estate -0.4% -0.2% -0.5% -1.0% -1.0% -1.1% 0.8% 0.6% 0.5% 0.4% Oil & Gas -1.3% Volume (RHS) Index (LHS) Insurance -2.3% Consumer Goods -3.2% -10% -7% -4% -1% 2% 5% Sectoral performance In September, four sectors closed higher, while eight ended in the red. Banking stocks (0.8%) were the top gainers, followed by Healthcare (0.6%), Financial Services (0.5%) and Industrial (0.4%). Consumer Goods (-3.2%) was the biggest loser, followed by Insurance (-2.3%), Oil & Gas (-1.3%), Real Estate (- 1.1%), Telecommunication (-1%), Consumer Services (-1%), Basic Material (-0.5%), and Technology (-0.2%). The rise in Banks can be attributed to gains in National Bank of Kuwait (1.7%), Kuwait Finance House (2.2%), Commercial Bank of Kuwait (28%) while Al Ahli United Bank (-3%) declined. Among Consumer Goods, Kuwait Food Co (3.3%) was the only gainer whereas Mezzan (-4.8%), Danah Al Safat Foodstuff (-18.3%), Palms Agro Production Co. (-4%) and Kuwait Slaughter House (-6.3%) were the major losers. Trading falls in September Trading decreased in September, with value traded falling 36.4% to USD0.3bn and volume traded declining 36.9% to 0.9bn shares. 7

8 KSE Index Trading Statistics Top 5 Top 5 Gainers Kuwait Remal Real Estate Co % NA Gulf Franchising Holding Co % NA Commercial Bank of Kuwait % Al Massaleh Real Estate Co % NA Al Mudon International Real Estate Top 5 Losers % NA Credit Rating and Collection % NA Danah Al Safat Foodstuff % Al-Safat Energy Holding % NA Mubarrad Transport Co % NA NA First Takaful Insurance Co % Top 5 Volume Volume (mn) Al Mal Investment Co KSCC % NA Al Mudon International Real Estate % NA Al-Salam Group Holding Co % NA NA Abyaar Real Estate Development Co KSCC Coast Investment and Development Co KSCC Top % NA % NA Mobile Telecommunications Co % Kuwait Finance House KSC % Kuwait Food Co SAK % National Bank of Kuwait SAK % Agility Public Warehousing KSCC %

9 Market capitalization The market capitalization of KSE-listed companies rose 1.6% to USD80.5bn in September, constituting 10% of the total GCC market capitalization. Furthermore, the market capitalization of the top 10 listed companies increased 1.4%. Top 10 Listed Companies by Market Capitalization (in KWDbn) Sep-16 Aug-16 Sep-15 % YoY% National Bank of Kuwait SAK % -18.5% Kuwait Finance House KSC % -9.3% Mobile Telecommunications Co % -15.2% Al Ahli United Bank % -1.2% Kuwait Food Co SAK % 10.5% Boubyan Bank KSC % -0.2% Kuwait Projects Holding KSCC % -6.8% Mabanee Co SAKC % -3.5% Gulf Bank KSC % -14.8% Ahli United Bank KSC % -20.6% Total Market Capitalization (Top 10 stocks) % -10.6% 9

10 1-Sep 7-Sep 20-Sep 26-Sep in mn Global Research GCC Oman MSM 30 declines 0.2% in September The MSM 30 index continued its decline in September. It fell 0.2% in September after declining 1.9% in August. The index rose in the beginning of September, remained flat thereafter and fell in the month end amid dull trading and profit booking. According to statistics produced on bulletins issued by the National Centre for Statistics and Information, during the Eighth Five-Year Plan, the GDP at the current prices rose by 4% against the estimated growth rate of 6%. The growth rate was negatively impacted by the recent drop in oil prices. Oman recorded a 1.34%YoY (CPI-based) inflation rate for August, mainly driven by a 7.3% rise in prices in the transport set, and a 0.8% rise in the housing, water, electricity, gas and other fuels set. MSM30 Index & Volume and Sectoral Performance 5, ,780 5, MSM % 5,740 5, Banking & Investment 0.7% 5, ,680 2 Industrial -0.6% 5,660 0 Services & Insurance -0.9% Volume (RHS) Index (LHS) -1% 0% 1% Source: Bloomberg, Gulfbase, & Global Research Sectoral performance In September, both Industrial and Service & Insurance sectors ended in the red, whereas Banking & Investment ended in green. Services & Insurance lost the most (-0.9%), followed by Industrial (-0.6%). Banking & Investment ended in green (0.7%). Banking & Investment rose on gains in Bank Muscat (6.3%), followed by Ahli Bank (6.6%), HSBC Bank Oman (3.1%), whereas Bank Dhofar SAOG (-1.7%) and National Bank of Oman SAOG (-4.8%) fell during the month. Major contributors to the Services & Insurance sector s negative performance for the month include Oman Telecommunications Co (-3.4%), Oman Qatari Telecommunications (-4.4%) and Phoenix Power Co. (- 2.1%). Industrial stocks performed mixed, with Raysut Cement Co. (3.7%), Al Maha Ceramics Co. (3%), Salalah Mills Co (1.7%), Oman Cables Industry (-4.5%), Oman Cement Co (-4.3%) and Al Anwar Ceramic Tiles Co (-5.2%). Trading decreases in September In September, trading on the MSM30 fell, with overall volume traded decreasing 46% to 123mn shares and traded value falling 8.5% to USD0.12bn. 10

11 MSM30 Trading Statistics Top 5 Top 5 Gainers Sweets of Oman SAOG % Port Services Corporation % Dhofar International Development and Investment Holding Co % United Finance Co SAOG % Al Omaniya Financial Services % Top 5 Losers Taageer Finance Co SAOG % Renaissance Services SAOG % NA Al Anwar Ceramic Tiles Co SAOG % National Finance Co SAOG % National Bank of Oman SAOG % Top 5 Volume Volume (mn) Phoenix Power Co % Bank Nizwa % NA Bank Muscat SAOG % Bank Sohar SAOG % Oman Fisheries Co SAOG % NA Top 5 Phoenix Power Co % Bank Muscat SAOG % Port Services Corporation SAOG % Oman Telecommunications Co % Raysut Cement Co SAOG % Source: Bloomberg, Gulfbase, & Global Research 11

12 Market Capitalization In September, the market capitalization of MSM30-listed companies declined 0.2% to USD16.9bn. The market capitalization of the top 10 listed companies rose 0.1%. 10 Largest Listed Companies by Market Capitalization (in OMRbn) Sep-16 Aug-16 Sep-15 % YoY% Oman Telecommunications Co % -4.0% Bank Muscat SAOG % -19.4% Oman Qatari Telecommunications Co % -7.9% Bank Dhofar SAOG % 7.2% National Bank of Oman SAOG % -10.3% Oman International Development and Investment Co SAOG % 24.7% Raysut Cement Co SAOG % 31.3% Ahli Bank SAOG % -3.0% Bank Sohar SAOG % 18.2% Sembcorp Salalah Power & Wat % -6.9% Total Market Capitalization (Top 10 stocks) % -3.8% 12

13 1-Sep 7-Sep 20-Sep 26-Sep in mn Qatar QE declines 5% in September The Qatar Exchange (QE) declined 5% in September after a 3.6% gain in August. The QE index fell in the first half of September after the FTSE published a list of stocks that were to be included in its secondary emerging market index. Even though Qatar s upgrade to emerging market status is seen as optimistic for the market, investors bought up stocks in expectation of the list s publication, leaving many shares at or above analysts estimates of fair value. The index declined during the month on continued profit-taking subsequent the rally produced by its upgrade to the FTSE Russell index. The index climbed in the second half of the month as passive funds flowed into shares that were included in FTSE's secondary emerging market index. The country s annual CPI inflation rose 2.9%YoY in August from 2.8%YoY in July. The aggregate value of Qatar s exports to the top five nations touched QAR9.9bn in July. Qatar: Index, Volume, and Sectoral Performance 11, , QE -5.0% 10,600 10,400 10,200 10,000 9, Insurance Industrial Transportation Consumer Goods Banks & FS Telecom -3.4% -3.5% -4.1% -4.7% -6.9% 1.4% Volume (RHS) Index (LHS) Real Estate -8.8% -10% -5% 0% 5% Sectoral performance In September, all sectors except Insurance ended in the red. Insurance was the only sector that ended on a positive note (1.4%). Real Estate (-8.8%), Telecom (-6.9%), Banks & FS (-4.7%), Consumer Goods (- 4.1%), Transportation (-3.5%) and Industrial (-3.4%) ended in the red. The rise in Insurance stocks was due to an increase in Qatar Insurance Co. (2.2%) and Doha Insurance Co. (1.7%). The Real Estate sector declined majorly due to a fall in Ezdan Holding Group (-10.6%) and Barwa Real Estate Co. (-7.3%). Decline in Telecoms was due to drop in Vodafone Qatar (-8.4%), and Qatar Telecom (- 6.5%). Banks & FS losses can be attributed to Qatar National Bank (-4.3%), Masraf Al Rayan (- 6.6%), Qatar Islamic Bank (-5.2%) and Commercial Bank of Qatar (-8.1%). Consumer Goods declined due to fall in Qatar Fuel (-3.1%), Al Meera Consumer Goods Co. (-6.4%), Zad Holding Co. (- 9.4%) and Salam International Investment (-6.8%). Transportation losses were led by Qatar Gas Transport Co. (-5.6%) and Gulf Warehousing Co. (-2.8%). Decline in Industrials was led by Industries Qatar (-3.6%), Mesaieed Petrochemical Holding Co. (-7.8%), and Aamal Co. (-3.8%). Trading decreases in September In September, trading on the QE fell, with overall volume traded decreasing 14% to 109mn shares and traded value falling 8.3% to USD1.4bn. 4

14 QE Index Trading Statistics Top 5 Top 5 Gainers Dlala Brokerage and Investment Holding Co QSC % NA Qatar Insurance Co SAQ % Doha Insurance Co QSC % Al Khaleej Takaful Group QSC % Qatar General Insurance and Reinsurance Co SAQ % Top 5 Losers Ezdan Holding Group % Qatari German for Medical Devices QSC Qatar Islamic Insurance Co QSC % NA % Zad Holding Co SAQ % NA NA NA NA NA NA Vodafone Qatar QSC % NA Top 5 Volume Volume (mn) Vodafone Qatar QSC % NA Masraf Al Rayan QSC % NA NA NA NA NA Ezdan Holding Group % Qatar Gas Transport Co Ltd % Qatar National Bank SAQ % Top 5 Qatar National Bank SAQ % Industries Qatar QSC % Masraf Al Rayan QSC % Qatar Telecom QSC % Qatar Islamic Bank SAQ %

15 Market capitalization Combined market capitalization of QE-listed companies decreased 4.8% to USD130.2bn in September from USD136.9bn in August. Market capitalization of the top 10 listed companies decreased 5%. Top 10 Listed Companies by Market Capitalization (QARbn) Sep-16 Aug-16 Sep-15 % YoY% Qatar National Bank SAQ % -0.2% Industries Qatar QSC % -12.2% Ezdan Holding Group % -10.2% Qatar Telecom QSC % 24.7% Masraf Al Rayan QSC % -17.4% Qatar Islamic Bank SAQ % -8.1% Qatar Electricity and Water Co QSC % 2.0% Mesaieed Petrochemical Holding Co QSC % -18.7% Qatar Insurance Co SAQ % 24.7% Qatar Fuel QSC % 5.5% Total Market Capitalization (Top 10 stocks) % -3.7% 15

16 1-Sep 7-Sep 20-Sep 27-Sep In mn Global Research GCC Saudi Arabia TASI declines 7.5% in September The Tadawul All-Share Index (TASI) continued to decline in September. The index shed 7.5% in September after a 3.5% decline in August. The Saudi index fell over anxieties about lack of liquidity in the market. Less participation was seen in the market comparatively, and this was the first year without any grand re-opening of the markets after the Eid Al-Adha holidays. The major slump in the index came after the government announced its austerity measures. The austerity measures included a 20% cut in ministers salaries and reduction in financial bonuses and perks for public sector workers. The Emirates NBD Purchasing Managers Index (PMI) for Saudi Arabia increased to 56.6 in August from 56.0 in July. CPI YoY was 3.3% in August compared to 3.8% in July. TASI: Index, Volume, and Sectoral Performance 6,400 6,200 6,000 5,800 5,600 5,400 5,200 5,000 Volume (RHS) Index (LHS) TASI Petrochemical Agri & Food Banks & FS Cement Telecom & IT Real Estate Dev. Multi-Inv. Insurance Energy & Utilities Retail Industrial Inv. Transport Building & Const. Hotel & Tourism Media and Publishing -7.5% -2.8% -4.2% -6.0% -6.3% -7.7% -10.9% -11.2% -11.6% -12.3% -12.9% -13.6% -13.7% -16.1% -19.6% -22.0% -30% -20% -10% 0% Source: TASI, Gulfbase, & Global Research Sectoral performance In September, all fifteen sectors ended in the negative territory. Media and Publishing (-22%) declined the most, followed by Hotel & Tourism (-19.6%), Building & Construction (-16.1%), Transport (-13.7%), Industrial Investment (-13.6%), Retail (-12.9%), Energy & Utilities (-12.3%), Insurance (-11.6%), Multi-Inv. (-11.2%), Real Estate Dev. (-10.9%), Telecom & IT (-7.7%), Cement (-6.3%), Banks & FS (-6%), Agri & Food (-4.2%) and Petrochemical (-2.8%). Media and Publishing was pulled down by decline in Saudi Research and Marketing Group (-30%) and Saudi Printing and Packaging Co (-25.8%). Hotel & Tourism declined due to fall in Al Tayyar Travel Group (- 21%), Dur Hospitality Co. (-14%) and Abdulmohsen Alhokair group (-23.5%). Losses in Building & Const. were mainly due to decline in Zamil Industrial Investment Co. (-12.3%), Saudi Ceramic Co. (- 17.7%) and Al Yamamah Steel (-18.3%). Transport declined due to a fall in National Shipping Co of Saudi Arabia (-14.1%) and Saudi Public Transport Co. (-19.1%). Trading decreases in September In September, trading on the Tadawul bourse fell, with overall volume traded decreasing 34.7% to 2.3bn shares and traded value losing 38.6% to USD11.1bn. 16

17 TASI Index Trading Statistics Top 5 Top 5 Gainers Saudi United Cooperative Insurance Co Makkah Construction and Development Co % % Saudi British Bank % Advanced Petrochemical Co % Middle East Healthcare Co % Top 5 Losers Saudi Research and Marketing Group Allianz Saudi Fransi Cooperative Insurance Co % NA % Al-Ahlia Insurance Co % NA Amana Cooperative Insurance Co % Saudi Industrial Export Co % NA Top 5 Volume Volume (mn) Alinma Bank % Dar Al Arkan Real Estate Dev Co % Saudi Kayan Petrochemical Co % NA Saudi Basic Industries Corp % Bank Aljazira % Top 5 Alinma Bank % , Saudi Basic Industries Corp % , Dar Al Arkan Real Estate Dev Co Al Rajhi Banking and Invest Corp % % Al Tayyar Travel Group % Source: Bloomberg, Gulfbase, and Global Research 17

18 Market capitalization Market capitalization of companies listed on the TASI contracted 6.7% to USD352.5bn in September from USD378bn in August. Market capitalization of the top 10 listed companies dropped 6% in September. Top 10 Listed Companies by Market Capitalization (SARbn) Sep-16 Aug-16 Sep-15 % YoY% Saudi Basic Industries Corp % 2.6% Saudi Telecom Co % -9.2% Al Rajhi Banking and Invest Corp % -6.2% Saudi Electricity Co % 2.8% National Commercial Bank % -38.9% Jabal Omar Development Co % -20.8% Almarai Co % -15.9% Kingdom Holding Co % -43.1% Saudi Arabian Mining Co % 3.5% Samba Financial Group % -24.2% Total Market Capitalization (Top 10 stocks) % -12.5% 18

19 1-Sep 7-Sep 19-Sep 25-Sep 29-Sep in mn Global Research GCC UAE Abu Dhabi ADX gains 0.1% in September The Abu Dhabi Securities Exchange (ADX) registered gains of 0.1% for September after a 2.3% decline in August. Shares on the UAE stayed lower, on the reducing prospect of a rise in US interest rate during the month, even as oil prices increased and emerging market equities advanced to a high for the year. The Emirates NBD PMI for the UAE declined to 54.7 in August from 55.3 in July. According to Global Competitiveness Report 2016 published by the World Economic Forum in Switzerland, the UAE stood first regionally and 16th globally, maintaining its lead among the top 20 competitive economies in the world. ADX: Index, Volume, and Sectoral Performance 4, ADX 0.1% 4,520 4,500 4,480 4,460 4,440 4, Consumer Telecom Banks Insurance Investment & FS Real Estate Energy -0.1% -1.2% -2.6% -3.8% 1.3% 0.7% 6.2% 4,400 0 Industrial -4.8% Services-7.9% Volume (RHS) Source: Bloomberg, Gulfbase, & Global Research Index (LHS) -10% -5% 0% 5% 10% Sectoral performance Of the nine sectors, only three ended in the green in September. Services (-7.9%) was the top loser, followed by Industrial (-4.8%), Energy (-3.8%), Real Estate (-2.6%), Investment & FS (-1.2%) and Insurance (-0.1%). Consumer was the top gainer (6.2%) followed by Telecom (1.3%) and Banks (0.7%). Consumer Staples was lifted by Agthia Group PJSC (5.9%) and International Fish Farming Holding Co PJSC (20.8%). Gain in Telecom is mainly due to a rise in Emirates Telecommunication Corp Ltd (1.3%). Increase in banks can be attributed to First Gulf Bank PJSC (0.9%), National Bank of Abu Dhabi PJSC (0.7%) and Abu Dhabi Commercial Bank PJSC (0.5%). Services sector recorded a steep fall due to a huge decline in Abu Dhabi National Hotels Co. (-13.9%). In the Industrial space, losers were Ras Al Khaimah Ceramics PSC (-7.1%) and Gulf Pharmaceutical Industries PSC (-3.6%). Dana Gas Co PJS (-5.3%) led decliners in the Energy sector, whereas Abu Dhabi National Energy Co PJSC (3.9%) ended in the green. Losses in Real Estate can be ascribed to Aldar Properties PJSC (-3.3%) and RAK Properties PJSC (-1.6%). Decline in Investment & FS is due to fall in Waha Capital PJSC (-1%). Insurance showed a mixed performance with Abu Dhabi National Insurance Co. (4.8%), Al Buhaira National Insurance Co PSC (-1.3%) and Abu Dhabi National Takaful Co. (-7.2%). Trading declined in September In September, trading on the Abu Dhabi bourse fell, with overall volume traded decreasing 10.1% to 1.2bn shares and traded value losing 22.4% to USD0.66bn. 19

20 ADX Trading Statistics Top 5 Top 5 Gainers International Fish Farming Holding % NA National Bank of Umm Al Qaiwain % Abu Dhabi National for Building Materials Bildco Co PJSC % NA Gulf Medical Projects Co PSC % National Bank of Fujairah PSC % Top 5 Losers Abu Dhabi National Hotels Co % AL Khaleej Investment Co % Emirates Driving Co PJSC % Abu Dhabi Shipbuilding Co % Abu Dhabi National Takaful Co % Top 5 Volume Volume (mn) Eshraq properties Co % Aldar Properties PJSC % Dana Gas Co PJS % RAK Properties PJSC % Ras Al Khaimah Ceramics PSC % Top 5 First Gulf Bank PJSC % Aldar Properties PJSC % Eshraq properties Co % Emirates Telecommunication Corp % Abu Dhabi Commercial Bank PJSC % Source: Bloomberg, Gulfbase, & Global Research 20

21 Market capitalization In September 2016, combined market capitalization of companies listed on the ADX increased 0.4% to USD120.3bn. Market capitalization of the top 10 listed companies rose 0.5%. Top 10 Listed Companies by Market Capitalization (AED bn) Sep-16 Aug-16 Sep-15 % YoY% Emirates Telecommunication Corp Ltd % 40.8% First Gulf Bank PJSC % -15.4% National Bank of Abu Dhabi PJSC % -3.6% Abu Dhabi Commercial Bank PJSC % -15.7% Qatar Telecom % 17.9% Aldar Properties PJSC % 11.3% Abu Dhabi Islamic Bank PJSC % -17.4% Union National Bank PJSC % -35.0% National Bank of Ras Al Khaimah PSC % -22.0% National Bank of Umm Al Qaiwain PSC % 28.4% Total Market Capitalization (Top 10 stocks) % 8.0% 21

22 1-Sep 7-Sep 19-Sep 25-Sep 29-Sep in mn Global Research GCC UAE Dubai DFM declines 0.9% for September The Dubai Financial Market (DFM) lost 0.9% (up 10.2%YTD) in September after gaining 0.6% in August. Concerns over weakening oil prices and a potential rise in US interest rates weighed on the Dubai market. A lot of domestic investors were away and the volumes were relatively low. According to a report issued by the Dubai Statistics Centre (DSC), Dubai s monthly inflation rate for August was up 0.4% compared to July whereas the annual inflation rate was 2.5%YoY in August. According to internal auditing at the city s official convention bureau, Dubai Business Events secured 15% more events in the first eight months of this year than the whole of The events secured this year will be held over the course of the next four years and could add as much as AED344mn to the economy. According to latest study conducted by the Dubai Chamber of Commerce and Industry (DCCI), Dubai's non-oil trade value in 2015 with Latin America reached AED17bn. DFM: Index, Volume, and Sectoral Performance 3,560 3,540 3,520 3,500 3,480 3,460 3,440 3,420 3,400 3, DFM Services Transportation Insurance Banks Real Estate & Const. Investment & FS Telecom Consumer Staples Industrial -10.0% -0.9% -0.4% -0.7% -1.5% -2.3% -3.7% 0.3% 0.1% 6.3% Volume (RHS) Index (LHS) -15% -10% -5% 0% 5% 10% Sectoral performance In September, of the nine sectors, three ended in the green, six in the red. Industrial (-10%) was the top decliner, followed by Consumer Staples (-3.7%), Telecom (-2.3%), Investment & Financial Services (- 1.5%), Real Estate & Const. (-0.7%) and Banks (-0.4%). Services (6.3%) was the biggest gainer, followed by Transportation (0.3%) and Insurance (0.1%). Industrial losses were led by a fall in Agility Public Warehousing KSCC (-10%) and National Cement Co (- 10%). Among Consumer Staples, MARKA (-6%) lost the most. In the Telecoms space, Hits Telecom Holding Co. (-6.1%) was the top loser, followed by Emirates Integrated Telecommunications Co PJSC (- 2.3%). Losses in Investment & FS can be attributed to Dubai Financial Market PJSC (-2.2%) and Dubai Investment PJSC (-3.3%). Fall in Emaar Malls (-1.5%) and DAMAC Properties Dubai Co PJSC (- 4.2%) restricted gains in the Real Estate & const. sector. Services was lifted by National Central Cooling Co PJSC (17.2%), followed by Amanat Holdings PJSC (1.2%). Transportation showed a mixed performance due to Air Arabia PJSC (0.7%) and Aramex PJSC (- 1.5%). Trading volume rises; trade value falls in September In September, trading on the Dubai bourse was mixed, with overall volume rising 13.5% to 4.2bn shares and traded value losing 15.9% to USD1.48bn. 22

23 DFM Trading Statistics Top 5 Top 5 Gainers Shuaa Capital PSC % NA National Central Cooling Co PJSC % Mashreqbank PSC % Takaful House % NA Commercial Bank of Dubai PSC % Top 5 Losers National Cement Co PSC % Al Salam Bank Sudan % NA NA NA NA NA NA MARKA % NA Gulf General Investment Co PSC % NA International Financial Advisors KSCC % Top 5 Volume Volume (mn) Arabtec Holding PJSC % NA Drake and Scull International % NA Amanat Holdings PJSC % Shuaa Capital PSC % NA Union Properties PJSC % Top 5 Arabtec Holding PJSC % NA Emaar Properties PJSC % Drake and Scull International % NA DXB Entertainments % NA Amanat Holdings PJSC % Source: Bloomberg, Gulfbase, & Global Research 23

24 Market capitalization Combined market capitalization of companies listed on the DFM fell 1.2% to USD82.5bn in September. Market capitalization of the top 10 listed companies decreased 1.3%. Top 10 Listed Companies by Market Capitalization (AED bn) Sep-16 Aug-16 Sep-15 % YoY% Emaar Properties PJSC % 9.9% Emirates NBD Bank PJSC % -6.4% Emaar Malls % -12.0% Emirates Integrated Telecommunications Co PJSC % 27.5% Dubai Islamic Bank PJSC % 1.1% Commercial Bank of Dubai PSC % -14.3% DAMAC Properties Dubai Co PJSC % -24.3% Mashreqbank PSC % -36.4% Agility Public Warehousing KSCC % -24.2% Dubai Financial Market PJSC % -22.0% Total Market Capitalization (Top 10 stocks) % -6.5% 24

25 Appendix 1: MENA and Global market performance in September 2016 Indices Up/Down () (YTD) (x) (x) Div Yield (%) KSE Weighted Index % -7.8% KSE Price Index 5, % -3.9% Tadawul All Share Index 5, % -18.6% DFM Index 3, % 10.3% ADX Index 4, % 3.9% Bahrain All Share 1, % -5.4% QE Index 10, % 0.1% MSM30 Index 5, % 5.9% Levant & North Africa Markets Up/Down () (YTD) (x) (x) Div Yield (%) Egypt - EGX30 7, % 12.5% Egypt-- EGX % -7.1% Jordan-- Amman Fr Flt Index 2, % -0.7% Palestine - AlQuds Index % -2.7% 9.1 NA 1.9 Lebanon - BLOM Stk Index* 1, % -1.2% Morocco - CASA All Share index* 10, % 12.5% Tunisia - Tunisia Main Index* 5, % 5.9% International Indices Up/Down () (YTD) (x) (x) Div Yield (%) DJ Average 18, % 5.1% NASDAQ Composite 5, % 6.1% S&P500 Comp. 2, % 6.1% FTSE UK 6, % 10.5% Extra DAX 10, % -2.2% CAC 40 - France 4, % -4.1% International Indices Up/Down () (YTD) (x) (x) Div Yield (%) Bovespa Index 58, % 34.6% RTS Index % 30.9% Bombay SE SENSEX -India 27, % 6.7% SSE Composite Index - Shanghai 3, % -15.1% NIKKEI 225 INDEX- Japan 16, % -13.6% Hang Seng - Hong Kong 23, % 6.3% Source: Bloomberg and Global Research 25

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