GCC Markets. GCC Markets Performance October Global Research GCC Market Performance Markets - GCC November 2015

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1 Global Research GCC Market Performance Markets - GCC November 2015 Performance October 2015 GCC markets traded mixed during October on mixed corporate results Trading improved, except in the UAE and Bahrain Market capitalization declined 1.4% in October GCC markets close mixed in October GCC markets ended mixed in October due to mixed sentiments over corporate earnings across markets. Markets remained volatile during the month. Trading remained thin during the holidays for Hijari New Year. The MSM30 was the major gainer (2.4%), followed by the QE (1.2%) and the KSE (0.9%). The ADX was the biggest loser (-4.0%), followed by the TASI (-3.8%), the DFM (-2.5%) and the BSE (-2.0%). Combined market capitalization drops 1.4% The combined market capitalization of GCC bourses declined 1.4% to USD930.5bn in October from USD944.1bn in September. The Saudi bourse, which recorded a 2.3% fall in market capitalization, accounted for the largest share (USD433.5bn or 46.6%). Qatar accounted for USD168.1bn (18.1%), while Abu Dhabi and Dubai constituted USD200.4bn (21.5%) of the total. Kuwait, Oman, and Bahrain together contributed USD128.5bn to the total. GCC trading increase in October Trading across GCC markets improved in October. The volume of shares traded rose 1.1%; however, trading volumes across markets remained low due to the Hijari New Year holidays. traded increased 13.7% due to a rise in trading value across countries, except the UAE and Bahrain. Moreover, trading was volatile due to mixed corporate earnings. Market Performance in October Oct-15 5-Oct-15 9-Oct Oct Oct Oct Oct Oct-15 Saudi Qatar Kuwait (Price) KWSE (Weighted) Abu Dhabi Dubai Oman Bahrain MSCI EM Index MSCI World Index Global Investment House Indices () (YTD) KSE Price Index 0.9% -11.6% Tadawul All Share Index -3.8% -14.5% DFM Index -2.5% -7.2% ADX Index -4.0% -4.6% Bahrain All Share -2.0% -12.4% QE Index 1.2% -5.5% MSM30 Index 2.4% -6.5% Source: Zawya, Bloomberg, Reuters & Global Research

2 GCC Aggregate Market Capitalization Country Market Cap October 2015 Market Cap September 2015 () % of total October 2015 Kuwait % 9.1% Saudi Arabia % 46.6% Abu Dhabi % 12.1% Dubai % 9.4% Qatar % 18.1% Oman % 2.5% Bahrain % 2.1% Total GCC % 100.0% Source: Respective stock exchanges, Zawya and Global Research GCC Aggregate Trading Activity Country October 2015 September 2015 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 , % , % Source: Respective stock exchanges, Reuters, Zawya & Global Research GCC markets volatile in October; long-term fundamentals remain stable GCC markets ended mixed in October due to varied corporate earnings results for 9M15 across bourses. Globally, investor sentiments improved due rebound in oil price, monetary easing in China, more expected stimulus from European Central Bank (ECB) and Fed s statement of expected rate hike in December; these affected GCC markets as well. However, trading volume was thin due to the Hijari New Year holidays. Despite the volatility in oil prices, we believe the outlook for GCC economies will remain intact in the long term, supported by stable growth in infrastructure expenditure and diversification into non-oil sectors. Although all GCC countries have been recording a deficit/lower surplus during the past nine months, local governments are committed to essential developmental activities to diversify their economies away from the oil to the non-oil sector, which would boost revenue. Furthermore, some of the countries are already planning to overcome their deficits by increasing taxes and issuing bonds, which would cut down the shortfall. Net-net, oil-dependency of GCC economies would reduce gradually over the next few years. In terms of valuation, the one-year forward PE ratio of GCC markets stands at x, broadly lower than that of emerging market peers. Major GCC markets, such as the UAE and Qatar, are a part of the MSCI Emerging Markets Index. Furthermore, the KSA is likely to be included in the index in FTSE upgraded Qatar to Secondary Emerging Market from Frontier Market in September Given these developments, the growth outlook for the stock market appears positive. 2

3 1 year forward EPS growth GCC Market Valuation EPS Growth versus Price to Earnings 20% 15% Dubai Japan 10% Qatar 5% Kuwait India China 0% 5.0x 7.0x 9.0x 11.0x 13.0x 15.0x 17.0x 19.0x Abu Dhabi US -5% -10% Oman Hong Kong Saudi Arabia -15% Egypt UK -20% 1 year forward PE Source: Bloomberg & Global Research Fed s statement of expected rate hike in December, easing concerns over China boost investor sentiment In October, global equity markets rallied, following negative investor sentiment in the past two months. The rally was due to a rebound in oil prices and easing concerns over China. An expected stimulus from the ECB and a possible rate hike by the US Federal Reserve in December boosted investor sentiments. Meanwhile, mixed corporate earnings kept trades volatile. US markets closed the month in the green owing to the US Federal Reserve s statement of raising the interest rate in December. Mixed corporate earnings and positive economic data improved investor sentiment. In the US, consumer spending marginally rose in September. Employment cost increased in 3Q15, while the Chicago PMI rebounded in October. Improving oil prices helped to lift up investor sentiments. Moreover, easing concerns over China improved trading activity. European markets closed in the green at the end of the month on hints of additional quantitative easing measures from the ECB. Furthermore, the US Federal Reserve s statement of raising the interest rate in December supported the market movements. Mixed corporate earnings were reported during the month. Asian markets closed higher in October due to positive global cues and easing concerns over China. Investor sentiment in the region improved as the economic outlook for China stabilized and the country s central bank cut borrowing rates to support the economy. 3

4 1-Oct 6-Oct 11-Oct 14-Oct 20-Oct 27-Oct in mn Bahrain BSE falls 2.0% in October BSE declined 2.0% in October after falling 1.8% in September and 2.4% in August. The market activities remained mixed over the earning results; however, concerns over volatility in oil prices continued to weigh on the market. Positive global cues partially offset the negative investor sentiments. The market witnessed a steep fall during the first half of the month and attempted to recover during the next half. On YTD basis, the market lost 12.4%. According to the government release, Bahrain s total financial reserves for the financial year ended 2014 stood at USD mn compared with USD mn in BSE Index and Volume Performance and Sectoral Performance 1,280 1,275 1,270 1,265 1,260 1,255 1,250 1,245 1,240 1,235 1, BSE Hotel & Tourism Services Insurance Commercial Banks Investment -2.0% -1.4% -1.6% -3.4% 0.0% 2.1% Industrial -5.0% Volume (RHS) Index (LHS) -8% -3% 2% 7% Source: Zawya, Gulfbase & Global Research Sectoral performance In October, four sectors ended in the red, while one closed higher and one ended flat. Industrial (-5.0%) topped the losers, followed by Investment (-3.4%), Commercial Banks (-1.6%), and Insurance (-1.4%). Services closed flat; Hotel & Tourism (2.1%) was the sole gainer during the month. The Industrial sector declined due to weakness in Aluminium Bahrain Co. (-5.2%). The Investment sector contracted due to a fall in Khaleeji Commercial Bank (-3.3%), Albaraka Banking Group (-3.9%), and Arab Banking Corporation (-11.5%). Heavyweight sector Commercial Banks ended the month in the red, primarily led by Al Ahli United Bank (- 1.4%), followed by BBK (-1.4%) and Bahrain Islamic Bank (-25.2%). Hotel & tourism grew, driven by a 3.1% rise in Gulf Hotels Group. Trading declines in October Trading on the BSE declined in October. Volume traded decreased to 28.0mn shares from 86.3mn shares last month, while trading value reduced to USD0.01bn from USD0.06bn. 4

5 BSE Trading Statistics Top 5 Top Gainers Investcorp Bank BSC* % GFH Financial Group BSC* % BMMI BSC % Ithmaar Bank BSC* % NA Gulf Hotel Group BSC % Top 5 Losers Bahrain Islamic Bank BSC % Arab Banking Corporation* % Aluminium Bahrain BSC % Al Salam Bank Bahrain BSC % Bahrain Cinema Co BSC % Top 5 Volume Volume (mn) Ithmaar Bank BSC* % NA Khaleeji Commercial Bank BSC % Seef Properties BSC % Ahli United Bank BSC* % Aluminium Bahrain BSC % Top 5 Ahli United Bank BSC* % Ithmaar Bank BSC* % NA Seef Properties BSC % Aluminium Bahrain BSC % Khaleeji Commercial Bank BSC % Source: Reuters & Global Research, *Price data in USD 5

6 Market capitalization The total market capitalization of companies listed on the BSE decreased 1.6% to USD19.8bn in October from USD20.1bn in September. Market capitalization of the top 10 listed companies fell 1.7%. Largest 10 Listed Companies by Market Capitalization (in BHDbn) Oct-15 Sep-15 Oct-14 % YoY% Ahli United Bank BSC % -9.7% National Bank of Bahrain BSC % -5.8% Aluminium Bahrain BSC % -13.7% Arab Banking Corporation BSC % -27.5% Bahrain Telecommunications Co BSC % -5.8% BBK BSC % -3.7% Al Baraka Banking Group BSC % -23.2% Investcorp Bank BSC % 27.6% Ithmaar Bank BSC % -13.9% GFH Financial Group BSC % -58.6% Total Market Capitalization (Top 10 stocks) % -13.8% Source: Reuters and Global Research 6

7 1-Oct 6-Oct 11-Oct 18-Oct 21-Oct 26-Oct 29-Oct in mn Kuwait KSE grows 0.9% in October The Kuwait Stock Exchange (KSE) rose 0.9% in October after declining 1.6% in September. The index was volatile during the month due to mixed performance by blue chips. The market managed to end up in the green supported by 3Q15 earnings surprises from Real estate and Consumer Goods sectors. On YTD basis, the index lost 11.6%. Kuwait Authority for Partnership Projects (KAPP) has restarted work on the long delayed USD7bn metro project. KAPP has updated feasibility studies and are expecting to start the procurement in 1Q16. Other major development was in Oil and Gas sector. Kuwait s National Petroleum signed an USD16bn contract to build the regions biggest refinery, which is expected to have a capacity of 615,000 bpd. KNPC expects the refinery to start working in November KSE Index and Volume Performance and Sectoral Performance 5,820 5,800 5,780 5,760 5,740 5,720 5,700 5,680 5,660 5, KSE Real Estate Consumer Goods Industrial Telecom Health Care Banks Basic Material Financial Services Technology -1.9% 0.9% 4.7% 3.3% 1.3% 0.9% 0.9% 0.7% 0.7% 0.1% Oil & Gas -2.7% Volume (RHS) Index (LHS) Consumer Services Insurance -3.2% -5.4% -10% -5% 0% 5% 10% Source: Kuwait Stock Exchange & Global Research Sectoral performance In October, four sectors ended in the red, while eight ended in the green. Real Estate (4.7%) led gainers, followed by Consumer Goods (3.3%), Industrial (1.3%), Telecom (0.9%), Healthcare (0.9%), Banks (0.7%), Basic Material (0.7% ), and Financial Services (0.1%). Conversely, Insurance (- 5.4%) declined the most, followed by Consumer Services (-3.2%), Oil and Gas (-2.7%), and Technology (-1.9%). Gains in Real Estate were primarily led by a strong performance from Tamdeen Real Estate (6.8% ), followed by United Real Estate (6.5%), and The Commercial Real Estate Co. (4.9%). The rise in Consumer Goods (3.3%) was led by Danah Al Safat Foodstuff (8.8%), followed by Livestock Transport & Trading Co. (9.5%). Insurance declined, dragged by Gulf Insurance Group (-4.8%), followed by Al Ahleia Insurance Co. (-4.9% ). Consumer Services fell due to a drop in IFA Hotels & Resorts Co. (-15.3%), followed by Sultan Center Food Products Co. (-12.6% ). Trading activity improved in October October 2015 witnessed upbeat trading activity, with the value of shares improving a marginal 0.5% to USD0.69bn from USD0.68bn in September and volume rising 7.6% to 2.6bn shares. 7

8 KSE Index Trading Statistics Top 5 Top 5 Gainers Mushrif Trading and Contracting Co % Real Estate Trade Centers Co % Gulf Petroleum Investment Co % NA Nafais Holding Co % Jeeran Holding Co % Top 5 Losers United Foodstuff Industries Group Co % First Takaful Insurance Co % NA Burgan for Well Drilling Trad and Maint % Independent Petroleum Group % IFA Hotels and Resorts Co % NA Top 5 Volume Volume (mn) Al Dar National Real Estate Co % Investors Holding Group Co % Hits Telecom Holding Co % NA National Ranges Co % NA Gulf Petroleum Investment Co % NA Top 5 National Bank of Kuwait SAK % Kuwait Finance House KSCP % Mobile Telecommunications Co % Agility Public Warehousing Co % Al Dar National Real Estate Co % Source: Gulfbase, Reuters & Global Research 8

9 Market capitalization In October 2015, the market capitalization of KSE-listed companies fell 0.5% to USD85.0bn. The market capitalization of the top 10 listed companies decreased 0.8%. Top 10 Listed Companies by Market Capitalization (in KWDbn) Oct-15 Sep-15 Oct-14 % YoY% National Bank of Kuwait SAK % -11.2% Kuwait Finance House KSCP % -21.0% Mobile Telecommunications Co KSC % -40.4% Ahli United Bank BSC % -5.4% Kuwait Food Co KSCP % -26.6% Boubyan Bank KSCP % -10.4% Burgan Bank SAKP % -15.2% Kuwait Projects Holding KSCP % -18.5% Gulf Bank KSCP % -18.2% Commercial Bank of Kuwait KSC % -22.4% Total Market Capitalization (Top 10 stocks) % -19.5% Source: Reuters, Zawya & Global Research 9

10 1-Oct 6-Oct 11-Oct 14-Oct 20-Oct 25-Oct 28-Oct in mn Oman MSM30 increases 2.4% in October The MSM30 index rose 2.4% in October after falling 1.4% in September and sliding 10.5% in August. Market sentiment was positive over the earnings season and helped the market to push back to gains. Trade remained choppy during the month; market movements in the second half were flattish. On YTD basis, the index fell 6.5%. In October, Oman sold its first sovereign Islamic bond, with a minimum subscription of OMR500,000 (USD1.3mn). The OMR denominated issue would have tenure of five years and mature in Shariah-compliant banks in the country would benefit from this move owing to new investment opportunities. MSM30 Index & Volume and Sectoral Performance 6,000 5,950 5,900 5,850 5,800 5,750 5,700 5,650 5,600 5,550 5, MSM 30 Banking & Investment Services & Insurance Industrial 0.4% 1.6% 2.4% 5.9% Volume (RHS) Source: Zawya, Gulfbase, and Global Research Index (LHS) 0% 5% 10% Sectoral performance In October 2015, all three sectors ended in the green. During the month, Banking & Investment (5.9%) gained the most, followed by Services & Insurance (1.6%) and Industrial (0.4%). The heavyweight Banking & Investment sector rose primarily due to gains in HSBC Bank Oman (2.5%), followed by Bank Muscat (1.1%), Bank Nizwa (27.4%), Sohar Bank (10.6%), and Sharqiya Investment Holding Co. (4.7%). Bank Muscat reported a 7.5%YoY growth in its 3Q15 earnings, which boosted the sentiment. However, rest of the banks reported a poor bottom-line in 3Q15. The Services & Insurance sector grew, led by gains in Sembcorp Salalah (3.0%), followed by Renaissance Services Co. (10.7%), Oman Qatari Telecommunications Co. (1.6%), and Sohar Power (11.8%). The Industrial sector was almost flat during the quarter; Al Anwar Holding Co. (9.4%) was the key gainer, adding to the gains of the overall sector, partially offset by losses in United Finance Co. (-6.6%) and Global Financial Inv. Co. (-3.7%). Trading activity rises in October Trading on the MSM30 index increased in October, with the volume traded gaining 59.3% to 378.2mn shares from 237.4mn shares in September. The total turnover rose 24.0% to USD0.21bn. 10

11 MSM30 Trading Statistics Top 5 Top 5 Gainers Bank Nizwa SAOG % NA Port Services Corp SAOG % NA Oman Textile Holding Co % NA Al Izz Islamic Bank SAOG % NA NA Oman Fisheries Co SAOG % NA Top 5 Losers United Power Co SAOG % NA Oman Flour Mills Co SAOG % Oman Oil Marketing Co SAOG % United Finance Co SAOG % Galfar Eng & Contracting % NA Top 5 Volume Volume (mn) HSBC Bank Oman SAOG % , Bank Nizwa SAOG % NA Al Anwar Holdings SAOG % Renaissance Services SAOG % Bank Muscat SAOG % Top 5 HSBC Bank Oman SAOG % Bank Muscat SAOG % Al Anwar Holdings SAOG % Sembcorp Salalah % Oman International Dev. & Inv % Source: Reuters & Global Research 11

12 Market Capitalization Market capitalization of the companies listed on the MSM30 index grew 1.7% to USD23.7mn in October from USD23.3mn in September. Market capitalization of the top 10 listed companies increased 1.3%. 10 Largest Listed Companies by Market Capitalization (in OMRbn) Oct-15 Sep-15 Oct-14 % YoY% Bank Muscat SAOG % -20.1% Oman Telecommunications Co SAOG % -2.1% National Bank of Oman SAOG % -9.3% Bank Dhofar SAOG % -21.6% Ahli Bank SAOG % 4.4% Sembcorp Salalah Power and Water Co SAOG % 15.5% Bank Sohar SAOG % 2.6% HSBC Bank Oman SAOG % -26.7% Raysut Cement Co SAOG % -46.1% Phoenix Power Co SAOG % NA Total Market Capitalization (Top 10 stocks) % -9.3% Source: Reuters and Global Research 12

13 1-Oct 7-Oct 13-Oct 19-Oct 25-Oct 29-Oct in mn Global Research - GCC Qatar QSE rises 1.2% in October The Qatar Stock Exchange (QSE) advanced 1.2% in October after falling 0.9% in September. After three straight months of decline, the index registered gains due to bullish sentiment of foreign investors and domestic institutions. The index also experienced lower selling pressure from retail investors due to optimism about the earnings season. Trading volumes were largely consistent over the month. US companies expressed significant confidence in the profitability of their Qatari operations in the coming years and expected to do more business, as per the inaugural edition of a report titled US Business Outlook in Qatar, coauthored by US Chamber of Commerce, the American Chamber of Commerce in Qatar (AmCham Qatar) and Ernst & Young (EY). The bourse added a product offering to its participants by successfully launching the rights trading of Gulf Warehousing (GWCS) on 18 October. Qatar: Index, Volume, and Sectoral Performance 12, ,600 11,200 10, QE Transportation Real Estate Telecom 1.2% 2.5% 4.6% 5.8% 10,400 10, Consumer Goods Industrial Insurance -0.3% 1.7% 1.0% Volume (RHS) Source: Zawya, Gulfbase, & Global Research Index (LHS) Banks & FS -1.1% -2% 0% 2% 4% 6% 8% Sectoral performance In October, just two sectors ended in the red, while six recorded gains. Banks & Financial Services (-1.1%) was the top loser, followed by Insurance (-0.3%). Among the gainers, Transportation (5.8% ) rose the most, followed by Real Estate (4.6%), Telecommunication (2.5%), Consumer Goods (1.7%) and Industrial (1.0%). The fall in the Banks & Financial Services sector was mainly due to a decline in Islamic Holdings Co. (-8.3%), followed by Al Ahli Bank (-6.0%), partly offset by gains in Dlara Brokerage & Investment Holding Co. (5.6%) and Qatar Islamic Bank (3.4%). The drop in the Insurance sector was mainly due to a fall in sector heavyweight Qatar Insurance (-0.1%). Gains in the Transportation sector (5.8%) were mainly due to the double-digit rise in sector heavyweight Qatar Gas Transport Co. (10.7%), followed by Qatar Navigation Co. (1.3%). The Real Estate sector did not have any losers and the rise was mainly due to gains in Ezdan Holding Group (4.3%), Barwa Real Estate (5.2%), and followed by United Development (5.0%). The Telecommunication sector rose mainly due to an increase in Vodafone Qatar (6.4%), followed by a rise in OOREDOO (1.0%). The gain in the Consumer Goods sector was mainly led by Qatar Fuel (6.9% ), followed by Salam International Investment Co. (3.8%), partly offset by a decline in Al Meera Consumer Goods Co. (-6.2%). 13

14 Trading rises in October Trading on the QSE increased in October. The value traded grew 5.5% to USD1.6bn. The volume traded increased 32.3% to 167.5mn in October from 126.5mn in September. QSE Index Trading Statistics Top 5 Top 5 Gainers Qatari German for Medical Devices QSC % NA Qatar Gas Transport Co Ltd % Aamal Co QSC % Qatari Investors Group QSC % Qatar Fuel QSC % Top 5 Losers Islamic Holding Group QSC % Al Khaleej Takaful Group QSC % Al Meera Consumer Goods Co QSC % Ahli Bank QSC % Commercial Bank QSC % Top 5 Volume Volume (mn) Vodafone Qatar QSC % NA Mazaya Qatar Real Estate Development QSC % Qatar Gas Transport Co Ltd % Ezdan Holding Group QSC % Barwa Real Estate Co QSC % Top 5 Gulf International Services QSC % Vodafone Qatar QSC % NA Qatar National Bank SAQ % NA Mazaya Qatar Real Estate Development QSC % Industries Qatar QSC % Source: Gulfbase, Reuters, & Global Research 14

15 Market capitalization The total market capitalization of companies listed on the QSE rose to USD168.1bn in October vis-à-vis USD167.1bn in September. The market capitalization of the top 10 listed companies was flat from September to October. Top 10 Listed Companies by Market Capitalization (QARbn) Oct-15 Sep-15 Oct-14 % YoY% Qatar National Bank SAQ % -14.8% Industries Qatar QSC % -34.7% Ezdan Holding Group QSC % -1.0% Masraf Al Rayan QSC % NA Qatar Islamic Bank SAQ % 5.5% Mesaieed Petrochemical Holding Co QSC % -33.9% Ooredoo QSC % -37.0% Qatar Electricity and Water Co QSC % 16.7% Barwa Real Estate Co QSC % 4.5% Commercial Bank QSC % -20.8% Total Market Capitalization (Top 10 stocks) % -18.4% Source: Reuters, Zawya, & Global Research 15

16 1-Oct 5-Oct 7-Oct 11-Oct 13-Oct 15-Oct 19-Oct 21-Oct 25-Oct 27-Oct 29-Oct in mn Saudi Arabia TASI falls 3.8% in October In October, Saudi Arabia s TASI declined 3.8% following a 1.6% fall in September. After a slightly sluggish start to the month, the market gained momentum on an announcement by the US Energy Information Administration (EIA) that global oil demand is expected to increase the most in Moreover, it indicated that the global crude oil supply glut may be easing, added to the positive sentiment in the market. However, toward the end, the market was weighed down by anticipation of the Government of Saudi Arabia reducing subsidies and spending levels as well as increasing taxes to cover the budget deficit amid a low oil price environment. In October, BlackRock, the world's largest asset management company, was granted regulatory approval to trade local stocks in Saudi Arabia. According to the Capital Market Authority (CMA), Saudi Arabia will relax its rules for direct investment by foreigners in its stock market, as this would help the Kingdom get included in the global indices. TASI: Index, Volume, and Sectoral Performance 8,000 7,800 7,600 7,400 7,200 7,000 6,800 Volume (RHS) Index (LHS) TASI Media & Publishing Transport Telecom & IT Energy & Utilities Petrochemical Industrial Inv. Multi-Inv. Building & Const. Insurance Retail Banks & FS Agriculture & Food Real Estate Dev. Cement Hotel & Tourism -3.8% -1.8% -2.5% -3.8% -4.6% -4.8% -5.1% -6.6% -7.3% -8.0% -10.1% 6.7% 2.4% 2.0% 0.2% 20.5% -20% -10% 0% 10% 20% 30% Source: TASI, Gulfbase, & Global Research Sectoral performance In October, 10 sectors ended in the red, while five ended higher. Hotel & Tourism (-10.1%) declined the most, followed by Cement (-8.0%), Real Estate Development (-7.3%), Agriculture & Food (-6.6%), Banks & Financial Services (-5.1%), Retail (-4.8%), Insurance (-4.6%), Building & Construction (-3.8%), Multi-Investment (-2.5%) and Industrial Investment (-1.8%). The gains were broadly driven by Media & Publishing (20.5%), Transportation (6.7%), Telecom & IT (2.4%), Energy Utilities (2.0%) and Petrochemical (0.2%). The Banking sector s performance was dragged down by a decline in Alinma Bank (-11.0%), Al Rajhi Bank (- 6.2%), Bank Al Jazira (-12.6%), Banque Saudi Fransi (-5.2%), and SABB (-4.3%), and Saudi Hollandi (-14.3%). The fall in the Real Estate sector was due to a drop in Dar Al Arkan Real Estate Development Co. (-7.3%), Emaar the Economic City (-11.4%), Jabal Omar Development Co. (-7.3%) and Knowledge Economic City (-13.4%). The gain in the Telecom sector was majorly ascribed to an increase in Saudi Telecom Co. (4.6%), whereas Etihad Etisalat Co. ended flat. 16

17 Trading increases in October Trading on the TASI increased in October. The volume of shares traded rose 18.6% to 4.2bn in October from 3.6bn in September. The value of shares traded increased to USD25.2bn in October from USD21.2bn in September. TASI Index Trading Statistics Top 5 Top 5 Gainers Saudi Research and Marketing Group SJSC Al Sagr Cooperative Insurance Co SJSC Saudi Printing and Packaging Co SJSC % % % Jazan Development Co SJSC % Arabian Shield Cooperative Insurance Co SJSC % Top 5 Losers Al Ahlia for Cooperative Insurance Co SJSC Al Tayyar Travel Group Holding Co SJSC % NA % Tabuk Cement Co SJSC % Saudi Hollandi Bank SJSC % Saudi Airlines Catering Co SJSC Top 5 Volume % Volume (mn) Alinma Bank SJSC % , Dar Al Arkan Real Estate Development Co SJSC Saudi Kayan Petrochemical Co SJSC Emaar The Economic City SJSC Saudi Basic Industries Corp SJSC % % NA % % Top 5 Alinma Bank SJSC % , Saudi Basic Industries Corp SJSC Dar Al Arkan Real Estate Development Co SJSC % , % Saudi Arabian Mining Co SJSC % Al Rajhi Banking and % Investment Corp SJSC Source: Gulfbase, Reuters, & Global Research 17

18 Market capitalization In October, the market capitalization of companies listed on the TASI declined 2.3% to USD433.5bn from USD443.6bn in September. The market capitalization of the top 10 listed companies, however, rose 0.2%. Top 10 Listed Companies by Market Capitalization (SARbn) Oct-15 Sep-15 Oct-14 % YoY% Saudi Basic Industries Corp SJSC % -25.7% Saudi Telecom Co SJSC % -14.1% National Commercial Bank SJSC % NA Al Rajhi Banking and Investment Corp SJSC % -21.4% Saudi Electricity Co SJSC % 0.3% Kingdom Holding Co % -23.0% Jabal Omar Development Co SJSC % 15.0% Almarai Co SJSC % -1.9% Samba Financial Group SJSC % -16.8% Saudi British Bank SJSC % -30.4% Total Market Capitalization (Top 10 stocks) % -6.4% Source: Reuters, Zawya, & Global Research 18

19 1-Oct 7-Oct 13-Oct 20-Oct 26-Oct in mn UAE Abu Dhabi ADX declines 4.0% in October Abu Dhabi s ADX shed 4.0% in October after rising 0.2% in September. During the start of the month, the market posted some gains on expectations that the US Federal Reserve would delay the impending interest rate hike. Following this, some recovery in crude oil prices underpinned the stock market, mainly driven by gains in petrochemical and energy stocks. However, later, the market broadly trended sideways for some time ahead of the third quarter corporate earnings. However, toward the end, another spell of weakness in crude oil prices weighed on the market. Moreover, weakness in some of the global equity markets kept the overall investor sentiment subdued. In October, Abu Dhabi Securities Exchange indicated that it is in discussion with two financial institutions to act as market makers. Currently, National Bank of Abu Dhabi is the only market maker the exchange has. Moreover, the bourse is also in discussion with several companies regarding potential public listings on its secondary market. ADX: Index, Volume, and Sectoral Performance 4,650 4,600 4,550 4,500 4,450 4,400 4,350 4,300 4,250 4,200 Volume (RHS) Index (LHS) ADX Telecom Services Health Care Construction Industrial Insurance Investment & FS Consumer Real Estate Banks Energy -8.2% -12.7% -4.0% -2.2% -3.8% -5.2% -0.9% -1.4% 0.2% 0.0% 0.0% 7.8% -20% -10% 0% 10% Source: Zawya, Gulfbase, & Global Research Sectoral performance In October, seven sectors ended in the red, two remained flat, and two closed higher. Energy (-12.7%) declined the most, followed by Banks (-8.2%), Real Estate (-5.2%), Consumer (-3.8%), Investment & Financial Services (-2.2%), Insurance (-1.4%) and Industrial (-0.9%). Among the gainers, Telecommunication (7.8%) advanced the most, followed by Services (0.2%). Healthcare and Construction sectors remained flat. Decline in the Real Estate sector was led by weakness in Aldar Properties (-5.0%), Eshraq Real Estate (- 7.5%), and RAK Properties (-4.9%). The fall in the Banks sector was ascribed to Abu Dhabi Commercial Bank (-2.0%), First Gulf Bank (- 11.5%), Invest Bank (-11.8%), Union National Bank (-8.9%) and National Bank of Abu Dhabi (- 8.6%). The fall in these stocks was partly offset by a gain in Bank of Sharjah (4.6%) and National Bank of Umm Al Qaiwain (4.7%). The Investment & Financial Services sector ended lower due to a decline in Waha Capital (-2.3%). The Telecommunication sector was boosted by gains in Emirates Telecommunication Corp. (7.8%), whereas Sudan Telecommunication (-3.3%) declined. Trading declines in October Trading on the ADX decreased in October. The volume of shares traded declined 44.1% to 1.2bn in October from 2.1bn in September. The value traded fell 18.9% to USD1.0bn. 19

20 ADX Trading Statistics Top 5 Top 5 Gainers Green Crescent Insurance Co PJSC National Corp for Tourism and Hotels Emirates Telecommunications Group Co PJSC % NA % % Union Insurance Co PSC % Abu Dhabi Ship Building PJSC % NA Top 5 Losers National Bank of Fujairah PJSC % Al Khazna Insurance Co PSC % NA National Marine Dredging PSC % Dana Gas PJSC % Abu Dhabi Aviation % Top 5 Volume Volume (mn) Dana Gas PJSC % Aldar Properties PJSC % Eshraq Properties Co PJSC % NA Emirates Telecommunications Group Co PJSC % RAK Properties PJSC % Top 5 Emirates Telecommunications Group Co PJSC % First Gulf Bank PJSC % Aldar Properties PJSC % Abu Dhabi Commercial Bank PJSC % Dana Gas PJSC % Source: Reuters, Gulfbase, & Global Research 20

21 Market capitalization In October, the market capitalization of companies listed on the ADX declined 2.4% to USD112.9bn. The market capitalization of the top 10 listed companies declined 1.7%. Top 10 Listed Companies by Market Capitalization (AEDbn) Oct-15 Sep-15 Oct-14 % YoY% Emirates Telecommunications Group Co PJSC % -0.9% First Gulf Bank PJSC % -21.5% National Bank of Abu Dhabi PJSC % -29.1% Abu Dhabi Commercial Bank PJSC % -5.1% Aldar Properties PJSC % -28.8% Union National Bank PJSC % -18.6% Abu Dhabi Islamic Bank PJSC % -32.3% National Bank of Ras Al Khaimah PSC % -22.7% United Arab Bank PJSC % -5.4% National Bank of Umm Al Qaiwain PSC % 1.8% Total Market Capitalization (Top 10 stocks) % -4.1% Source: Reuters & Global Research 21

22 1-Oct 6-Oct 11-Oct 14-Oct 20-Oct 25-Oct 28-Oct in mn UAE Dubai DFM falls 2.5% in October Dubai Financial Market (DFM) declined 2.5% in October after falling 1.9% in September. Broadly, the weakness recorded in the third quarter continued for the month. The market posted some gains initially due to expectations of a delay in interest rate hike by the US Federal Reserve and some recovery in crude oil prices. However, in the second half of the month, the market broadly trended downward, mainly due to weakness in global equity markets and softer crude oil prices. In October, International Finance Corporation (IFC), a member of the World Bank Group, listed a USD100mn sukuk on Nasdaq Dubai. This raised the nominal value of sukuk listed on Dubai to USD36.8bn. DFM: Index, Volume, and Sectoral Performance 3,750 3,700 3,650 3,600 3,550 3,500 3,450 3,400 3,350 3, DFM Insurance Services Consumer Staples Telecom Industrial Transportation Banks Real Estate & Const -2.5% -1.7% -1.8% -2.3% -2.6% 4.1% 3.8% 1.9% 0.0% Volume (RHS) Index (LHS) Investment & FS -7.0% -10% -5% 0% 5% Source: Zawya, Gulfbase, & Global Research Sectoral performance In October, Investment & Financial Services (-7.0%) declined the most, followed by Real Estate & Construction (-2.6%), Banks (-2.3%), Transportation (-1.8%) and Industrial (-1.7%). The Telecommunication sector remained flat. Among the gainers, Insurance (4.1%) rose the most, followed by Services (3.8%) and Consumer Staples (1.9%). The decline in the Investment & Financial Services sector was ascribed to weakness in Dubai Financial Market Co. (-14.9%), Dubai Investment (-4.6%), Al-Madina For Finance & Investment Co. (-1.7%) and Shuaa Capital (-10.9%). This was partly offset by an increase in Ekttitab Holding Co. (4.4%) and Gulf General Investment Co. (0.6%). The decline in the heavyweight Real Estate & Construction sector was mainly ascribed to a fall in Arabtec (- 11.4%), Union Properties (-8.8%), Damac Properties (-2.3%), Deyaar Development (-9.3%) and Emaar Properties (-0.2%). This was partly offset by gains in Emaar Malls Group (1.3%). The Banking sector, another index heavyweight, was weighed down by weak performance of Amlak Finance (- 14.7%), Dubai Islamic Bank (-3.4%), Gulf Finance House (-5.1%), Al Salam Bank (-4.7%) and Mashreq Bank (-6.3%). This decline was partly offset by gains in Ajman Bank (3.4%) and Emirates NBD (3.2%). Trading remains mixed in October Trading on the DFM remained mixed in October, with the volume traded increasing 2.5% to 3.9bn and the value of shares traded decreasing 13.9% to USD1.5bn. 22

23 DFM Trading Statistics Top 5 Top 5 Gainers Gulf Navigation Holding PJSC % Takaful Emarat Insurance PJSC % Amanat Holdings PJSC % NA NA Dubai Islamic Insurance and Reinsurance Co PSC % Dubai Parks and Resorts PJSC % NA NA Top 5 Losers Dubai Financial Market PJSC % Amlak Finance PJSC % NA Marka PJSC % NA NA Arabtec Holding PJSC % NA Shuaa Capital PSC % Top 5 Volume Volume (mn) Gulf Navigation Holding PJSC % Arabtec Holding PJSC % NA Amanat Holdings PJSC % NA NA Dubai Parks and Resorts PJSC % NA NA Drake and Scull International PJSC % Top 5 Emaar Properties PJSC % Arabtec Holding PJSC % NA Dubai Islamic Bank PJSC % Damac Properties Dubai Co PSC % Amlak Finance PJSC % NA Source: Reuters, Gulfbase, & Global Research 23

24 Market capitalization In October, the market capitalization of companies listed on the DFM fell 1.6% to USD87.5bn. The market capitalization of the top 10 listed companies decreased 1.2%. Top 10 Listed Companies by Market Capitalization (AEDbn) Oct-15 Sep-15 Oct-14 % YoY% Emirates NBD Bank PJSC % -7.2% Emaar Properties PJSC % -35.5% Emaar Malls Group PJSC % -2.5% Dubai Islamic Bank PJSC % -14.4% Emirates Integrated Telecommunications Co PJSC % -5.2% Mashreqbank PSC % -15.3% Damac Properties Dubai Co PSC % NA Commercial Bank of Dubai PSC % 23.1% Dubai Financial Market PJSC % -48.0% Dubai Investments PJSC % -22.0% Total Market Capitalization (Top 10 stocks) % -10.6% Source: Reuters & Global Research 24

25 Appendix 1: MENA and Global market performance in October 2015 Indices Up/Down () (YTD) (x) (x) Div Yield (%) KSE Weighted Index % -11.5% KSE Price Index 5, % -11.6% Tadawul All Share Index 7, % -14.5% DFM Index 3, % -7.2% ADX Index 4, % -4.6% Bahrain All Share 1, % -12.4% QE Index 11, % -5.5% MSM30 Index 5, % -6.5% Levant & North Africa Markets Up/Down () (YTD) (x) (x) Div Yield (%) Egypt - EGX30 7, % -15.9% Egypt-- EGX % -29.6% Jordan-- Amman Fr Flt Index 2, % -6.1% Palestine - AlQuds Index % -2.0% NA NA NA Lebanon - BLOM Stk Index 1, % -3.3% Morocco - CASA All Share index 9, % -5.6% Tunisia - Tunisia Main Index 5, % 0.5% International Indices Up/Down () (YTD) (x) (x) Div Yield (%) DJ Average 17, % -0.9% NASDAQ Composite 5, % 6.7% S&P500 Comp. 2, % 1.0% FTSE UK 6, % -3.1% Extra DAX 10, % 10.7% CAC 40 - France 4, % 14.6% International Indices Up/Down () (YTD) (x) (x) Div Yield (%) Bovespa Index 45, % -8.3% RTS Index % 6.9% Bombay BSE Sensex -India 26, % -3.1% SSE Composite Index - Shanghai 3, % 4.6% Nikkei 225 Index- Japan 19, % 9.4% Hang Seng - Hong Kong 22, % -4.1% Source: Bloomberg and Global Research 25

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