IS Morning Report Monday, June 18, 2018

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1 # Global & Regional Benchmarks # UAE Trading Summary Indices Close 1Day Change 1Mnth 3Mnth YTD 1Y Change Change Change Change (AEDm) BUY SELL NET ADX 4, % 6.5% 3.9% 7.2% 3.9% ADX DFM 3, % 5.1% -4.0% -9.8% -11.7% Local 24% 21% 3% TASI 8, % 4.5% 6.3% 14.4% 21.2% Foreign 76% 79% -3% KWSEI 1, % 2.9% -4.0% -1.8% -1.5% EGX 16, % -5.6% -4.5% 8.0% 19.9% Institutional 79% 82% -4% Retail 21% 18% 4% Dow Jones 25, % 1.5% 0.6% 1.5% 17.3% DFM S&P 500 2, % 2.5% 1.0% 4.0% 14.2% Nasdaq 7, % 5.3% 3.5% 12.2% 25.9% FTSE 100 7, % -1.2% 6.9% -0.7% 1.8% DAX 13, % 0.1% 6.5% 0.7% 1.9% CAC40 5, % -0.7% 4.9% 3.6% 4.6% Nikkei225 22, % -1.3% 4.4% -0.6% 13.5% HIS 30, % -2.4% -3.8% 1.3% 18.3% Local 52% 29% 23% Foreign 48% 71% -23% Institutional 58% 79% -22% Retail 42% 21% 22% Total Local 41% 26% 15% Foreign 59% 74% -15% # Upcoming Corporate Actions & Events Date Company Event 19-June Tabreed Board Meeting 21-June Dana Gas AGM 7-Aug KHCB Board Meeting # Key Stories UAE central bank hikes repo rate by 25 basis points UAE to give Ethiopia $3 billion in aid and investments Abu Dhabi economy to pick up gradually S&P

2 DP World Australia is said to plan 'unlisted IPO' auction: AFR Gulf Navigation Board Approves Issuance of upto 100 Mln Dirhams Sukuk. Sukuk will have zero percent profit interest Dubai hotels top MENA for occupancy, room rates during Q1 Dubai inflation creeps up to 2.0 pct in May on fuel prices Etisalat's $2bln buyback to take place in 2 years: S&P DP World 'will not settle' over Djibouti port dispute Abraaj sells entire stake in Orascom Construction UAE businessman transferred debt to fund suing Abraaj Emirates plans to launch A380 on route to Japan's Osaka Etihad Airways blames rising fuel prices, costly investments as it stays in the red Saudi Arabia plans leaders' summit this year for OPEC, allies Egypt s Suez Canal reports record high $5.585b annual revenue Egypt hikes fuel prices in IMF-backed austerity drive Iran Says Three OPEC Members to Veto Saudi-Proposed Supply Boost # Key Global Trends // Market Clues Asian shares fell on Monday after U.S. President Donald Trump cranked up trade tensions by going ahead with tariffs on Chinese imports, prompting Beijing to immediately respond in kind. Fears of a global trade war added to pressure on oil prices, which extended Friday's big fall, while the dollar retreated from near 3-week highs against the safe haven yen U.S. oil prices slumped on Monday after China threatened duties on American crude imports in an escalating trade dispute with Washington. U.S. West Texas Intermediate crude futures were at $63.84 a barrel, down $1.22, or 1.9 percent, from their last settlement. Oil prices fell further on Monday, pulled down by an expectation that producer club OPEC and its allies will increase supplies. Brent crude futures, the international benchmark for oil prices, were at $73.05 per barrel at 0036 GMT, down 39 cents, or 0.5 percent, from their last close. Oil is under pressure in the lead up to Friday s much anticipated OPEC meeting. Brent crude in London and New York futures are extending declines before the gathering where Saudi Arabia and Russia are expected to propose the group and its allies ease production curbs. Not everyone is on board. Iran signaled Venezuela and Iraq will join the nation in blocking a proposal to boost output.

3 # UAE Stories The United Arab Emirates central bank said on Thursday that it was raising its repo rate by 25 basis points to 2.25 percent and increasing interest rates on certificates of deposits by the same margin. The move came after the U.S. Federal Reserve decided to raise its target range for the federal funds interest rate by a quarter of a percentage point, to between 1.75 percent and 2 percent. The United Arab Emirates pledged a total of $3 billion in aid and investments to Ethiopia on Friday, an Ethiopian official said, a major show of support for the new prime minister, Abiy Ahmed. Global ratings agency S&P on Sunday affirmed Abu Dhabi's "AA" long-term and expects growth will gradually pick up and that the its fiscal position will remain strong over the next two years.following 0.5 per cent contraction in real terms in 2017 due to the Opec's oil production cuts, S&P forecast gradual rising real GDP growth of the emirate on the back of recovering oil prices and production, and a revival in investment."we project that Abu Dhabi's economic growth will rise gradually to three per cent by 2021 from 1.3 per cent in 2018, supported by increased oil production, planned spending on investment projects, and recovering domestic credit growth bolstered by higher oil prices and improving demand in the region," said Zahabia Gupta, primary credit analyst at S&P. DP World Australia is said to plan 'unlisted IPO' auction: AFR. The deal is expected to trigger pre-emptive rights held by DP World Australia's 25 per cent shareholder, Dubai-based DP World. Sources said DP World was a reluctant seller when it offloaded the 75 per cent stake in 2010 and was likely to seek to move back up the share register. DP World sold the stake to Citi Infrastructure Investors, which was spun off to Corsair in The deal would allow Corsair to cash out its existing investors that own the 75 per cent DP World Australia stake, including Australia's Future Fund and Canada's PSP Investments. Corsair and its co-investors are liquidating the fund that owns DP World Australia. Gulf Navigation Board Approves Issuance of upto 100 Mln Dirhams Sukuk. Sukuk will have zero percent profit interest Dubai hotels achieved the highest occupancy, average room rate (ADR) and revenue per available room (RevPAR) across the MENA region during the first quarter of 2018.According to the latest EY Middle East Hotel Benchmark

4 Survey Report, the city s occupancy reached 86.9 percent with an ADR of $293, which led to an overall RevPAR of $255 in Q1. Dubai inflation creeps up to 2.0 pct in May on fuel prices. The UAE's largest telecom operator etisalat's $2 billion (Dh7.34 billion) share buyback will take place over the next two years, international ratings agency S&P Global said. The telecom major had announced its intention to buy up to 5 per cent of its paid-up capital, or million shares, in March DP World said on Saturday it remains committed to taking legal action to regain control of the port at Doraleh after accusing the Djiboutian government of illegally seizing it in February. The port operator issued a statement after media reports that said it may consider an out of court settlement with respect to the dispute. A DP World spokesperson said that the concession agreement remains in place, and the action taken by the Djiboutian government is subject to legal process in the International court of Arbitration in London. Embattled private equity firm Abraaj has sold its entire 5.4 percent stake in Orascom Construction Ltd OC.DI for about $52 million. The move came after the company crossed a 5 percent filing threshold on June 6, Abraaj said in statement in Dubai. A family involved with Abraaj handed over debt exposure to the private equity firm to a little-known fund that has now filed a petition against Abraaj, deepening its financial woes, sources said. An adviser to the Jafar family said the family was not party to the legal proceedings started by Auctus Fund in the Cayman Islands against Abraaj, although Hamid Jafar had provided Abraaj with a private loan which has since been transferred to Auctus. Emirates, the world s largest international airline, will introduce regular scheduled commercial Airbus A380 services to Osaka in Japan on October 28, subject to government approval.the deployment of the double-decker aircraft represents a capacity increase of 38 percent, the carrier said. Etihad Airways reported on Thursday a second consecutive annual loss, blaming rising fuel prices, the cost of its ambitious turnaround plan and lost business due to the collapse of Air Berlin and problems at Alitalia. United Arab Emirates-based Etihad has been overhauling its business since it made a near $2 billion loss in 2016, by replacing its top executive, dropping unprofitable routes and retiring costly aircraft among other measures. # GCC/ MENA Saudi Arabia plans to host a leaders' oil summit later this year for OPEC and non-opec countries participating in a supply cut pact, two sources familiar with the matter said on Friday. Riyadh and Moscow took the first step in institutionalising the long-term framework for co-operation between OPEC and non-opec nations this week, the sources said. Egypt s revenue from the Suez Canal for the financial year rose 11.5 per cent to a record high $5.585 billion (Dh20.5 billion), the canal authority said in a statement on its website on Sunday. Egypt has raised gasoline prices by up to 50 percent, the oil ministry said on Saturday, under an IMF reform plan calling for austerity measures that have made life tougher for ordinary Egyptians. Oil Minister Tarek El Molla said the price rises would help Egypt save up to 50 billion Egyptian pounds ($2.8 billion) in allocations for state subsidies in the state budget. Iran says Venezuela and Iraq will join it in blocking a proposal to increase oil production that s backed by Saudi Arabia and Russia when OPEC and its allies meet in Vienna this week. Three OPEC founders are going to stop it, Iran s representative to the bloc Hossein Kazempour Ardebili said in comments to Bloomberg on Sunday. If the

5 Kingdom of Saudi Arabia and Russia want to increase production, this requires unanimity. If the two want to act alone, that s a breach of the cooperation agreement. (Source: ADX, DFM, Bloomberg, Reuters, Gulf News, The National, Arabian Business) Institutional Sales and Trading Team Harshjit Oza harshjit@integratedsecurities.ae Direct Line: Disclaimer This report was prepared by Integrated Securities ( IS ) in and for the United Arab Emirates ( U.A.E. ). IS is a securities brokerage company regulated by the Emirates Securities and Commodities Authority (and neither an investment nor a financial advisory firm). The information contained in this report is given in summary and does not purport to be complete. All securities and financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transactions, currency risk. Content of this report is provided solely for informational purposes and private circulation and should not be construed as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or any other financial product or instrument, or adopting any hedging or investment strategy and does not take into account your particular investment objectives, financial situation, tax implications or any other needs. Before acting on any information you should consider and confirm the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek professional financial advice. While based on information believed to be reliable, we do not guarantee and make no express or implied representation as to the accuracy of this report or complete description of the securities markets or developments referred to in this report. The information, contained in this report are as of the date indicated and are subject to change at any time without prior notice. This report may provide the addresses of, or contain hyperlinks to, websites. IS has not reviewed any such site and takes no responsibility for the content of the same. Such address or hyperlink is provided solely for your convenience and information and the content of any such website does not in any way form part of this document. Accessing such website or following such link through this report or IS s website shall be at your own risk. The stated price of any securities mentioned in this report is as of the date indicated and is not a representation made by IS that any transaction can be effected at this price. This report is for UAE distribution and only under such circumstances as may be permitted by applicable law. The information contained in this report is not intended nor can it be construed as intended to be directed to any US persons (being any US Citizens, US Green Card Holders, or Resident Aliens subject to US income taxes for IRS purposes) unless stated otherwise. Neither IS nor its officers, directors or shareholders or other persons shall be liable for any direct, indirect, incidental or other damages including loss of profits arising in any way from the information contained in this report. This report is a mere update intended solely for the use by the intended recipients and the content of it may not be reproduced, redistributed or copied in whole or in part for any purpose without IS s prior express consent.