Daily Market Report Saudi Arabia Stock Exchange 18 July 2016

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1 27-Jun 28-Jun Thousands 10:00 10:15 10:30 10:5 11:00 11:15 11:30 11:5 12:00 12:15 12:30 12:5 13:00 13:15 13:30 13:5 1:00 1:15 1:30 1:5 18 July 201 TASI Index, % Turnover (SAR mn) 3,59.5-2% TASI Intra Day Movement Global commentary Research Department Tel: ,700,90,80,70,0,50,0 Intraday TASI Activity Trend (Last 10 Days) - 2 Turnover (LHS, SAR bn) Previous Close TASI Index (RHS) 9,000 8,500 8,000 7,500 7,000,500,000 5,500 5,000 Regional Indices Close 1D% WTD% YTD% KSA (TASI), Qatar (DSM) 10, Kuw ait (KSE) 5, Abu Dhabi (ADSM),597.7 Dubai (DFM) 3, Oman (MSM30) 5, Bahrain (BSE) 1, MSCI GCC Major Commodities / Currencies Close 1D % WTD % YTD % Gold Spot $/Oz 1, Silver Spot $/Oz Crude Oil (Brent) OPEC Basket Euro USD Index JPY Major Global Indices Close 1D % WTD % YTD % DJ Industrial 18, S&P 500 2, Nikkei 225 1, Hang seng 21, FTSE 100, CAC 0, MSCI World 1, MSCI EM It is going to be a light week in terms of economic data in the US. The housing market index stats will be released on Monday, while the building permits data will be published on Tuesday. The initial jobless claims and the Philadelphia Fed manufacturing survey data are scheduled on Thursday, while the US oil rig count numbers will be released on Friday. In Europe, the UK s CPI numbers and the financial stability report will be released on Tuesday. The ZEW economic sentiment survey data for Germany and the Eurozone are also expected on the same day. The ECB s interest rate decision is expected on Thursday. Further, the UK s retail sales figures will also be released on Thursday. Meanwhile, the Markit PMI (preliminary) numbers for Germany, Eurozone and the UK will be published on Friday. GCC markets ended on a mixed note on Sunday. Dubai gained %, led by Arabtec, while Abu Dhabi, too, advanced %, driven by First Gulf Bank and Dana Gas. Further, Oman added 0.2%. On the other hand, Bahrain declined 0.7%, while Qatar dropped 0.1%, pulled down by Qatar National Bank. However, Kuwait ended on a flat note. Asian markets are trading on a mixed note this morning. The Hang Seng Index is trading up 0.2%, while the Shanghai Composite Index is trading in the red at 0.1%. Meanwhile, the KOSPI is trading on a flat note. The Nikkei 225 is closed on account of a public holiday. Saudi commentary Tadawul All Share Index (TASI) rose 19.1 points or 0.29% to close at, Eleven of the fifteen sector indices closed higher. The advance decline ratio was 131/3. Trading turnover was around SAR 3. bn. NCB s earnings rise 3.2% in Q2: National Commercial Bank (NCB) posted on Sunday a net profit of SAR 2. billion ($50.13 million) for the second quarter of the fiscal year 201; 3.17% up from SAR 2.3 billion ($30.13 billion) in Q2-15. (Mubasher) Bahri, APICORP plan $1.5 bln fund to buy oil tankers: The National Shipping Company of Saudi Arabia (Bahri) will today sign an agreement with Arab Petroleum Investment Corp. (APICORP) to start a $1.5 billion investment fund to buy oil tankers. (Argaam) This agreement is positive for Bahri as it could better monetize its exclusive arrangement with Aramco (to ship VLCC sized crude cargoes) by maximizing fleet where it has a stake. Further, the 15 ships to be acquired will also help Bahri modernize its fleet and increase operating efficiency, by replacing some old ships in the next few years. We believe the innovative funding structure allows fleet expansion with no major change to capital structure, as majority cost of vessels will be off-balance sheet for Bahri. Interest Rates 1M 3M 12M 3M Chg 1Y LIBOR (USD) SAIBOR EIBOR Data Sources: Bloomberg Updated as of 18/Jul/201 7:35 AM Please see penultimate page for additional important disclosures. Al Rajhi Capital (Al Rajhi) is a foreign broker-dealer unregistered in the USA. Al Rajhi research is prepared by research analysts who are not registered in the USA. Al Rajhi research is distributed in the USA pursuant to Rule 15a- of the Securities Exchange Act of 193 solely by Rosenblatt Securities, an SEC registered and FINRA-member broker-dealer. 1

2 Dallah says Riyadh hospital 32% complete: Dallah Healthcare Holding Co. has revealed that construction on its new hospital in Riyadh s Namar district is now 32 percent complete, with initial operations at the facility expected to launch in Q (Argaam) The total cost of the hospital accounted for 70% of the IPO proceeds that amounted to SAR513.1mn. Till now, the company spent 7.2% of the proceeds on Namar hospital where SAR133.8mn was spent on land and the rest SAR211mn went towards related engineering works, consultations, land survey, excavation digging and designs Sharq Eastern Petrochemical to undertake maintenance shutdown in August: Sharq Eastern Petrochemical Co., a 50:50 JV between SABIC and a consortium of Japanese companies will conduct a maintenance shutdown at its 50,000 mt/year No. 2 monoethylene glycol (MEG) plant for two weeks. The other thee production lines with a total capacity of 1,50,000 mt/year, continue to operate near full capacity. (Argaam) The maintenance shutdown will not have a significant impact on SABIC s Q3 201 performance as it constitutes only a small part of the company s total capacity. Further, SABIC is only a 50% owner of the plant. Latest Research Saudi Arabian Economy The Kingdom s Q1 201 GDP grew at the slowest pace in three years as low oil prices led to slowdown in government spending and lower subsidies likely affecting consumer spending. However, even as Saudi Arabia PMI fell m-o-m in June, it stood at a robust 5., indicating growth in the non-oil sector. Foreign reserve assets rose on a monthly basis for the first in 1 months, which could possibly be due to new foreign loans raised by the government. POS transactions grew for the first time in four months in May 201. Bank credit to the private sector rose year-on-year in May 201, albeit at a slower pace compared to the previous month, while the deposits declined at a faster pace thereby pushing the loan-to-deposit ratio to 89.9%, its highest level since November Saudi Arabia s crude oil exports fell to its lowest levels in six months in April 201 despite high production level, as more oil was used to cater to domestic demand and lower demand from overseas refineries owing to seasonal maintenance. The Kingdom s non-oil exports and imports declined at a faster pace in April 201, on a yearly basis, as compared to the previous month. On the equity front, TASI edged up 0.8% on a monthly basis in June 201, brushing aside the aftershocks from Brexit. Trading volume on the exchange was muted in June 201 owing to Ramadan. Click here to download attached English Report Qassim Cement Q2 : Slightly above estimates Qassim Cement s Q2 201 bottom-line at SAR115.2mn (-31.% y-o-y,-1.9% q-o-q) was higher than our estimate of SAR 10mn(consensus SAR119mn). Earnings decline was due to slowdown in the construction activities, Ramadan season, and lower fuel subsidy. Gross and operating profits declined 28% and 29.2% y-o-y (vs. our -30% and 31% estimates respectively), as a result of lower sales volume and increased fuel prices. An escalation in cost of goods sold put further downward pressure on the company s bottom-line. The construction sector has not shown any signs of recovery this quarter, which has weighed on the company s operating performance. We will analyze the financials once the detailed results are published. For now, we reiterate our Neutral rating with an unchanged target price of SAR per share. Click here to download attached English Report Disclosures Please refer to the important disclosures at the back of this report. 2

3 Cement Industries Building Retail Energy Transport Multi invt Hotels Media TASI Large Cap (>10% Index weight) Sectors Performance TASI Top Gainers / Losers TASI Petrochem Banks Telecom Company Last Price Chg % Vol (mn) Value Trd (SAR mn) United Wire Fact United Co-Operat Saudi Indus Expo Al Sagr Coop Ins Gulf General Coop Company Last Price Chg % Vol (mn) Value Trd (SAR mn) Arabia Qassim Cement NCB Arabian Cement Amana Coop Ins TASI Mid Cap (5-10% index weight) Sectors Performance TASI Top Index Movers / Losers (Heavy weight stocks) Real Estate Agri - Company Last Price Chg % Index Imp Value Trd (SAR mn) Savola Alinma Bk Almarai Safco Yansab Company Last Price Chg % Index Imp Value Trd (SAR mn) NCB Jabal Omar Arabia Qassim Cement Saudi Cem TASI Small Cap (<5% index weight) Sectors Performance TASI Volume Leaders Company Last Price Chg % Vol (mn) Value Trd (SAR mn) Alinma Bk Dar Al Arkan Saudi Kayan Sabic Allied Coop Ins United Co-Operat Arabian Pipes Co Med & Gulf Ins Saudi Re For Coo Amana Coop Ins TASI Stocks Closer to 52 Week High TASI - Stocks Closer to 52 Week Low Company Last Price 52Wk High % Diff Value Trd (SAR mn) Sanad Coop Ins % 00 Weqaya For Takaf % 00 Sadafco % 3 Bupa Arabia % Saudi Elec %.53 Company Last Price 52Wk Low % Diff Value Trd (SAR mn) Sanad Coop Ins % 00 Weqaya For Takaf % 00 Saudi Inv Bk % Safco % Riyad Bank % Disclosures Please refer to the important disclosures at the back of this report. 3

4 -Jul 5-Jul DSM Bank Telecom Consumer Transport Real Estate -Jul ADSM Real Estate Energy Telecome Banks Fin. Industrial Consumer -Jul DFM Bank Reality Investment Transport Telcom Performance of Regional markets Country Last Index Change (%) MCap Volume Turnover P/E (x) P/E (x) P/E (x) P/B (x) Div Yld Close 1D 1M YTD US$ bn mn shr US$ mn 12M 201E 2017E Current 12M (%) Saudi Arabia, Qatar 10, , Dubai 3, , Abu Dhabi, , Kuw ait 5, , Oman 5, , Bahrain 1, NA NA 0..7 Dubai Activity Trend (Last 10 Days) Dubai Sector Performances Dubai Top Gainers / Losers Turnover (LHS, AED bn) DFMGI Index (RHS) 3,550 3,500 3,50 3,00 3,350 3,300 3,250 3,200 3, Marka 1.22 Com Bk Dubai Amlak Finance Arabtec Takaful Emarat Ins Gulf Navigation Tabreed Ajman Bank DIB Dubai Parks Abu Dhabi Activity Trend (Last 10 Days) Abu Dhabi Sector Performances Abu Dhabi Top Gainers / Losers Turnover (LHS, AED bn) ADSMI Index (RHS) 5,000,500, Intl Fish Farming Gulf Medical Pro Abu Dhabi Nat Co FGB Dana Gas ADIsB AD Nat (TAQA) Gulf Cement Co Rak Properties Waha Capital Qatar Activity Trend (Last 10 Days) Qatar Sector Performances Qatar Top Gainers / Losers Turnover (LHS, QAR bn) DSM Index (RHS) 10,800 10,00 10,000 9, Mazaya Qatar Ind Qatar Gulf Intl Servcs Qatar Intl Is Bk Barw a Real Est QIsB Aamal Co QNB Mas Al Rayan Doha Bank Disclosures Please refer to the important disclosures at the back of this report.

5 -Jul 5-Jul BSE Banks Hotel & Tourism Industries -Jul -Jul KSE Technology Investment Industrial Real estate Bank Fin. Parallel Telecom Consumer Basic material Oil&Gas Healthcare Thousands Kuwait Activity Trend (Last 10 Days) Kuwait Sector Performances Kuwait Top Gainers / Losers Turnover (LHS, KWD mn) KWSEIDX Index (RHS) 5,395 5,390 5,385 5,380 5,375 5,370 5,35 5,30 5,355 5, Hilal Cement Co United Real Estate Osoul Investment Intl Resorts Co Intl Financial Kuw ait Cable Vision ACICO Industries Credit Rating & Coll Kuw ait Fin & Invest Egypt Kuw ait Hol Oman Activity Trend (Last 10 Days) Oman Sector Performances Oman Top Gainers / Losers 8 0 Turnover (LHS, OMR mn) MSM30 Index (RHS) 5,950 5,900 5,850 5,800 5,750 5, Al Anw ar Holding Global Fin Inves Al Suw adi Pow er Bank Sohar Ahli Bank MSM 30 Bank Industry.0.0 Gulf Intl Chem Bank Nizw a Galfar Engineering Ooredoo Raysut Cement Bahrain Activity Trend (Last 10 Days) Bahrain Sector Performances Bahrain Top Gainers / Losers Turnover (LHS, BHD mn) BHSEASI Index (RHS) 1,180 1,170 1,10 1,150 1,10 1,130 1,120 1,110 1,100 1, Al-Salam Bank Arab Banking Corp Bahrain Telecom Aluminium Bahrain Seef Properties Nass Corp Disclosures Please refer to the important disclosures at the back of this report. 5

6 IMPORTANT DISCLOSURES FOR U.S. PERSONS This research report was prepared by Al Rajhi Capital (Al Rajhi), a company authorized to engage in securities activities in Saudi Arabia. Al Rajhi is not a registered broker-dealer in the United States and, therefore, is not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. This research report is provided for distribution to major U.S. institutional investors in reliance on the exemption from registration provided by Rule 15a- of the U.S. Securities Exchange Act of 193, as amended (the Exchange Act ). Any U.S. recipient of this research report wishing to effect any transaction to buy or sell securities or related financial instruments based on the information provided in this research report should do so only through Rosenblatt Securities Inc, 20 Broad Street 2th Floor, New York NY 10005, a registered broker dealer in the United States. 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