MENA Market Intelligence Week ending 8 th of November

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1 Kuwait Financial Centre Markaz R E S E A R C H MENA Market Intelligence Week ending 8 th of November 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 Market Performance: MENA markets were mainly positive during the week. Saudi Arabia, Kuwait and Bahrain were the biggest gainers each were up 1.7% WTD. Dubai and Qatar were the biggest losers by declining 0.6% and 0.4% respectively. Equity Research: A few equity research reports were published this week, as analysts would incorporate 3Q12 numbers into their models and update it accordingly. Fixed Income Development: QNB Group announced the successful completion of a bond issuance under its Euro Medium Term Note (EMTN) Program in the international capital markets. Under this program, a $1bn tranche was issued on November 7, 2012 that matures in February 2018 with a coupon rate of percent. This rate is the lowest in the history for bonds issued by financial institutions in the region. Table 1: Market Performance M. Cap Indicators (USD Last WTD MTD YTD 2011 Bn) MENA Markets Close % % % Saudi (TASI) 373 6, % Turkey ISE National , % Kuwait SE WT.INDEX % Qatar(QE Index) 99 8, % Abu Dhabi (ADI) 80 2, % Morocco (CAI) 53 9, % Dubai (DFMGI) 48 1, % Egypt (Hermes) % Jordan (Amman) 24 4, % Bahrain (BAX) 16 1, % Oman(Muscat SM) 15 5, % Lebanon (BSE) 12 1, % Kuwait Financial Centre S.A.K. Markaz 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 P.O. Box 23444, Safat 13095, Kuwait Tel: Fax: markaz.com

2 R E S E A R C H What Analysts are Recommending Company Currency Recommendation Gulf warehousing company Date of recommendation Market price on recom day Target QAR Accumulate 04-Nov House QNB Financial Services GB Auto EGP Buy 07-Nov NAEEM National Societe Generale EGP Reduce 09-Nov Audi Sardar Equity Recommendation - Key points Company House Recommendation Rationale Gulf Warehousing Company (Qatar) GB Auto (Egypt) National Societe General Bank (Egypt) QNB Financial Services NAEEM Audi Sardar Accumulate Buy Reduce Better than expected 3Q12 results, coupled with a positive long term growth story, lead QNB Financial Services to issue an Accumulate recommendation with a price target of QAR 45.12, implying a 13% upside potential. 3Q12 YoY results: revenues were down 14% to EGP 2,046 mn, EBITDA declined by 16% to EGP 191, while net income lost 27% to EGP 65mn. NAEEM maintains its Buy recommendation with a price target of EGP 36, pending further analysis and revised forecast. Audi Sardar issued a Reduce recommendation with a price target of EGP The main rationale behind this decision was: higher tax rate, weak loan growth due to continued weakness in corporate lending and 3Q12 net income was bellow expectation.

3 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 Reaches Inprinciple Agreement on Sukuk Refinancing Banque Fransi Seeks Holder Approval for 2.5 Billion Riyal Sukuk UAE KSA Dana Gas PJSC, the Middle East's first and largest regional private sector natural gas company, announced that it has reached an in-principle agreement on the restructuring terms of the US$1 billion Sukuk-al-Mudarabah due 31 October 2012 with the Ad Hoc Committee of Sukukholders. The Ad Hoc Committee holds a majority of the outstanding Sukuk. The Agreement envisages that $80mn of the Sukuk currently held by the Company will be cancelled and that Sukuk holders will receive a partial paydown from the Company's balance sheet cash. The remaining Sukuk will be reinstated as two pari passu instruments comprising a New Ordinary Sukuk and a New Convertible Sukuk which will have revised economic terms. Shareholders meeting is on Nov 12 in Riyadh, Banque Saudi Fransi said in a statement on Saudi bourse website. Riyadh-based bank, partly owned by Credit Agricole SA, said Oct 13 it got approval from Saudi central bank to issue the Sukuk. QNB announces completion of its $1bn bond Dubai recovering but faces $48 bln debt challenge Qatar UAE QNB Group announced the successful completion of a bond issuance under its Euro Medium Term Note (EMTN) Program in the international capital markets. Under this program, a $1bn tranche was issued on November 7, 2012 that matures in February 2018 with a coupon rate of percent. This rate is the lowest in the history for bonds issued by financial institutions in the region. Dubai faces nearly $50 billion of debt maturities between 2014 and 2016 but, unlike the crisis in 2009, is better equipped to handle redemptions due to an economic rebound, Standard Chartered said in a research report on Wednesday. In the note, the U.K.-based lender said Dubai, propelled into the global limelight three years ago after asking for a $25 billion debt restructuring for one of its flagship investment vehicles, has made little progress on raising cash from asset sales and the emirate's overall debt burden remains a challenge.

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