Oil & Petrochemicals Monthly

Transcription

1 Executive summary ϢϢ Petchem price movement: Petchem prices continued their uptrend in August amid an increase in feedstock prices. Of the 25 Petchem products and feedstock covered in the report, the prices of 11 rose M/M, 8 products prices declined, and prices of 6 remained unchanged. Urea prices rose the highest by 11.3% M/M to USD 295 per ton, followed by prices of Acetic Acid-AA, which increased 5.5% M/M to USD 675 per ton. Vinyl Acetate Monomer-VAM witnessed the highest decline in prices by 4.5% M/M to USD 1,265 per ton, while EVA prices fell 1.6% M/M to USD 1,495 per ton. ϢϢ Oil price performance: Oil prices recovered in August from decline in the previous month. Brent and WTI prices increased 4.2% M/M to USD 77.4 per barrel and 1.6% M/M to USD 69.8 per barrel, respectively, in August. Prices had dropped initially due to an increase in OPEC production and one of the most bearish reports published by EIA recently. However, fresh supplies from Russia and Saudi Arabia calmed concerns of a tightening market. Moreover, supply disruptions globally also contributed to the tightening of the market. ϢϢ Outlook of International Energy Agencies: According to the oil market report by IEA, the global demand is expected to average 1.4mbpd. The report further states that OPEC s oil output rose to a nine-month high of mbpd in August. Global supplies increased as higher OPEC output was able to offset declining non OPEC output. According to OPEC, oil consumption is set to average 98.8 mbpd and.2 mbpd in 2018 and 2019, respectively. OPEC s oil production rose 278 kbpd to mbpd in August. Non-OPEC supplies are forecasted to average an estimated 59.6 mbpd and 61.7 mbpd in 2018 and 2019, respectively. Demand for OPEC crude is estimated to average 32.9 mbpd in mbpd in According to EIA - Short-Term Energy Outlook report, Brent is expected to average USD 73 per barrel in 2018, WTI is estimated to average USD 6 per barrel lower than the average for Brent in 2018 and Global consumption of petroleum and other liquid fuels is likely to grow by 1.6 mbpd in OPEC s unplanned oil supply disruptions averaged 1.6 mbpd in August. Analyst Jassim Al-Jubran j.aljabran@aljaziracapital.com.sa 1

2 Petrochemical prices continue to rise, while Aramco raised feedstock prices. Propane and butane prices advance: Propane prices rose to USD 580 per ton, and butane prices, to USD 595 per ton, in August. The PP-propane spread contracted further to USD 650 per ton in August from USD 694 per ton in July; the PP-butane spread shrank to USD 635 per ton from USD 679 per ton during this period. Naphtha prices fall: Naphtha prices declined 1.5% M/M to USD 660 per ton in August, compared with July figures. PP prices increase, while PE prices drop: PP prices rose 1.2% M/M to USD 1,240 per ton in August. Propylene prices increased 3.3% to 1,095 per ton. HDPE, LDPE, and LLDPE prices were down 1.5%, 1.3%, and 0.9%, respectively. Polystyrene prices improve: Polystyrene prices rose 2.0% to USD 1,510 per ton in August, led by a 2.2% rise in styrene prices to USD 1,395 per ton. During the month, PVC prices remained flat at USD 960 per ton. MEG (Asia) and ethylene prices continue uptrend: MEG (Asia) prices rose 1.6% M/M to USD 940 per ton in August. Ethylene prices increased 2.2% M/M to USD 1,370 per ton. Methanol-China prices remained flat at USD per ton. Titanium dioxide prices decline: The weighted average price of titanium dioxide fell 1.1% M/M to USD 3,414 per ton in August from USD 3,452 per ton in July. Urea surges, DAP decreases, ammonia remains unchanged: Ammonia prices remained unchanged at USD per ton, while urea prices surged 11.3% to USD 295 per ton in August. DAP prices fell 1.2% to USD 415 per ton. Prices rebound in August; September appears dim Prices recover in spite of bearish EIA report and rising OPEC production: Prices fell initially in August on the expectation that an increase in OPEC production and the growing global trade war would result in demand surplus, however, markets took a breather as fresh supply from Russia and KSA calmed concerns of a tightening market. In mid-august, oil prices plunged as EIA published one of its most bearish reports in years; however, prices made a comeback with looming Iran sanctions. Uptrend continued over the last week as global supply disruptions tightened the market. As of the first week of September, oil prices are set for their largest weekly loss since July due to concerns of emerging market infection and some bearish data from the EIA. Oil prices rebound in August, rising 4.2% M/M: Brent prices advanced 4.2% M/M and WTI prices 1.6% M/M in August to end at USD 77.4 and USD 69.8 per barrel, respectively. The Brent-WTI spread expanded to nearly USD 7.6 per barrel in August from USD 5.6 per barrel in July. Brent is trading at around USD 77.4 in September. Natural gas prices at Henry Hub rebound by 3.3% M/M to USD 2.9 per MMBtu. EIA raises US crude production estimates for 2018, reduces estimates for 2019: In its latest short-term energy outlook, the EIA expects oil output in the US to average 10.7 mbpd in 2018, while it forecasts output to decrease to 11.5 mbpd for OPEC oil production rises 278 kbpd in August: According to the Monthly Oil Market Report (M/MR), OPEC s oil production rose to mbpd in August. OECD commercial inventories fell 43 mn barrels from the latest five-year average, with a forward cover of 59.1 days. Table 1: Petchem Prices August 2018 Name Price (USD pet ton) M/M % YTD % Naphtha % 7.3% Saudi Propane % -1.7% Butane-Saudi % 4.4% Ethylene 1, % 3.0% Propylene-Asia 1, % 15.9% HDPE 1, % 0.8% LDPE 1, % -5.0% LLDPE -0.9% -4.8% PP-Asia 1, % 6.9% Styrene-Asia 1, % 8.6% Polystyrene-Asia 1, % 4.1% Tio2* 3, % 4.7% PVC-Asia % 9.7% MEG (Asia) % -1.1% Methanol-China 0.0% -2.4% DAP-Gulf % 2.5% Urea-Gulf % 22.9% Ammonia-Gulf 0.0% -9.1% MTBE-Asia % 10.7% EDC % 81.1% Butyl-A 1, % 2.4% BPA 1, % 23.6% Acetic Acid-AA % 8.0% EVA 1, % 0.7% Vinyl Acetate Monomer-VAM 1, % 6.8% Source: Argaam, Reuters Eikon, AlJazira Capital Research *The weighted average price of Tio2 Table 2: Economic Calendar Date Country Event Sep 04,11,18,25 US Weekly Petroleum Status Report Sep 06,13,20,27 US Initial Jobless Claims 15-Sep to 25-Sep KSA CPI YoY 18-Sep KSA July Crude Oil Output Exports: JODI 20-Sep to 05-Oct KSA Non-Oil Exports YoY 27-Sep KSA M1, M2, M3 Money Supply YoY 27-Sep KSA SAMA Net Foreign Assets SAR 3-Oct KSA Emirates NBD Saudi Arabia PMI 5-Oct US Trade Balance 07-Oct to 19-Oct KSA Unemployment Rate 10-Oct EIA Short-term Energy Outlook 11-Oct OPEC Monthly Oil Market Report 11-Oct US Monthly Budget Statement 12-Oct IEA Oil Market Report 26-Oct US GDP Annualized QoQ Source: Bloomberg, IEA, EIA, OPEC 2

3 Key comments from international energy agencies IEA Oil Market Report (Published on September 13) The global demand growth in 2018 would average 1.4 mbpd (unchanged from the previous month s estimate). OPEC s oil output rose to a nine-month high of mbpd in August as a rebound in Libya, near record Iraqi output and higher volumes from Nigeria and KSA outweighed a substantial reduction in Iran and a further fall in Venezuela. Global oil supplies grew in August to.0mbpd, higher by 1.1 mbpd a year ago as rising output from OPEC offset seasonal declines from non-opec. OECD s commercial inventories rose by 7.9 million barrels to 2,824 million barrels in July. OPEC Monthly Oil Market Report (Published on September 12) Oil consumption is expected to grow 1.62 mbpd to an average of 98.8 mbpd in 2018 (unchanged from the previous month s estimate). It is likely to further increase 1.41 mbpd and reach.2 mbpd in OPEC s oil production rose 278 kbpd to mbpd in August, according to secondary sources. Non-OPEC supplies averaged an estimated 59.6 mbpd in 2018 (unchanged from the previous month s estimate). Non-OPEC oil supply is projected to reach an average of 61.7 mbpd (down 0.1 mbpd from the previous month s estimate) in OECD commercial oil stocks rose 8.1 mn barrels M/M to 2,830 mn barrels in July. OECD commercial inventories fell 43 mn barrels from the latest five-year average, with a forward cover of 59.1 days (down 2.3 days from the latest five-year average). Demand for OPEC crude is forecast to decline 0.5 mbpd to an average of 32.9 mbpd in In 2019, demand is estimated to stand at 32.1 mbpd (down 0.9 mbpd from that in 2018). EIA Short-Term Energy Outlook (Published on September 11) Brent averaged USD 73 per barrel in August (down USD 2 per barrel from the previous month s estimate), and is expected to average USD 73 per barrel in 2018 (up USD 1 per barrel from the previous month s estimate) and USD 74 per barrel in 2019 (up USD 3 per barrel from the previous month s estimate). WTI is estimated to average USD 6 per barrel (unchanged from the previous month s estimate) lower than the average for Brent in 2018 and US crude production averaged 10.9 mbpd in August 2018, moving up kbpd from the June average, according to EIA estimates. Furthermore, production is expected to average 10.7 mbpd in 2018 (up from 9.4 mbpd in 2017) and 11.5 mbpd in 2019 (down 0.2 mbpd from the previous month s estimate). As of August 31, natural gas inventories in the US stood at 2,567 bn cubic feet (up 2.5% M/M). Global consumption of petroleum and other liquid fuels is forecast to expand 1.6 mbpd in 2018 (down 0.1 mbpd from the previous month s estimate) and 1.5 mbpd in 2019 (down 0.1 mbpd from the previous month s estimate). Non-OPEC production is projected to grow 2.3 mbpd in 2018 and 2.0 mbpd in On average, OPEC members produced 34.8 mbpd of crude in They are estimated to produce 34.0 mbpd in 2018 and 33.5 mbpd in OPEC s unplanned oil supply disruptions averaged 1.6 mbpd in August (down 0.2 mbpd from July). OECD inventories are expected to increase to 2.8bn barrels by end-2018 (unchanged from the previous month s estimates) and 3 further increase to 2.9bn barrels in 2019 (unchanged from the previous month s estimates).

4 Figure 1: US oil production US oil production averaged mbpd in August Production edged lower by 0.2% M/M in August from mbpd in July; it rose 13.4% Y/Y from 9.49 mbpd in August mbpd Jul-14 Oct-14 Jan-15 Apr-15 Oct-15 Jan-16 Apr-17 Jul-17 Oct-17 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Source: US EIA, AlJazira Capital Research Figure 2: US weekly Rig count In the week ended September 07, the rotary rig count in the US remained unchanged at 1,048. The average number of rigs also remained unchanged in August, vis-à-vis a 0.1% M/M increase posted in July. The rig count was up 11.0% Y/Y. Of the total number of rigs, 860 (down by 2 W/W) were used to drill for oil and 186 (up by 2 W/W) for natural gas. In the US, oil exploration rose 13.8% Y/Y, while gas exploration was down 0.5%. Nov-14 Feb-15 Jun-15 Sep-15 Jan-16 Aug-16 Nov-16 Mar-17 Jun-17 Source: Baker Hughes, AlJazira Capital Research Table 3: World Oil Demand and Supply (mbpd) E E 2019E World Crude Oil & Liq. Fuels Supply Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 OPEC Supp Non-OPEC Suppl Total World Supply World Crude Oil & Liq. Fuels Cons. OECD Consumption Non-OECD Consumption Total World Cons OECD Inventory (mn bbls) 3,029 3,013 2,960 2,843 2,806 2,810 2,816 2,789 2,967 2,843 2,789 2,861 OPEC Surplus Crude Oil Prod. Cap OPEC s surplus production capacity fell to 1.84 mbpd in 2Q18 from 1.91 mbpd in 1Q18. 4 Source: EIA STEO August 2018, AlJazira Capital Research The gap between crude consumption and supply expanded to 0.39 mbpd by 2Q18 (higher consumption than supply) from 0.39 mbpd in 1Q18. OECD s crude inventories increased to 2,810 mn barrels in 2Q18.

5 Table 4: OPEC monthly oil production Prod. ( 000bpd) Cap. May June July Aug % M/M Chg. Equatorial Guinea % Gabon % Ecuador % Qatar % Algeria 1,080 1,020 1,050 1,060 1, % Libya % Angola 1,580 1,530 1,430 1, 1, % Venezuela 1, 1,440 1,380 1,310 1, % Nigeria 1, 1,560 1,620 1,720 1, % Kuwait 3,000 2,710 2,760 2,770 2, % U.A.E. 3,150 2,870 2,890 2,960 3, % Iran 3,850 3,810 3,780 3,740 3, -6.4% Iraq 4, 4,480 4, 4,560 4, % R. of Congo % Saudi Arabia 11, 9,970 10,420 10,370 10, % Total OPEC 35,085 31, 32, 32,320 32, % Figure 4: US Weekly Oil Inventories Source: Bloomberg Figure 3: OPEC August Oil Production Figure 5: OECD Monthly Oil Inventories 3,200 Saudi Arabia Iraq Iran U.A.E. Kuwait Nigeria Angola Venezuela Algeria Libya Qatar Ecuador Republic of Congo Gabon Equatorial Guinea -2,000 4,000 7,000 10,000 ('000 bpd) Source: Bloomberg 3, mbpd mbpd 3,000 2, 2, 2, 2, 2, Nov-14 Feb-15 Jun-15 Sep-15 Jan-16 Aug-16 Nov-16 Mar-17 Jun-17 Jul-14 Oct-14 Jan-15 Apr-15 Oct-15 Jan-16 Apr-17 Jul-17 Oct-17 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 US weekly oil inventories fell 0.6% W/W to mbpd for the week ended August 24; moreover, inventories decreased 0.7% M/M from mbpd on July 27. Source: US EIA, AlJazira Capital Research OECD oil inventories are projected at 2,811 mn barrels at the end of While it is expected to increase to 2,909 mn barrels at the end of Source: US EIA, AlJazira Capital Research Figure 6: World Oil Production and Forecast 105 Figure 7: US Weekly Natural Gas Storage 5,000 4,000 3,000 mn bbls 95 2, Jun-14 Nov-14 Apr-15 Sep-15 Dec-16 Oct-17 Mar-18 Jan-19 Jun-19 Nov-19 May-14 Apr-15 Aug-15 Dec-15 Aug-16 Dec-16 Apr-17 Aug-17 World oil production forecasts for 2018 decreased to.58; the forecast for 2019 has decreased to mbpd Source: US EIA, AlJazira Capital Research US Weekly Natural Gas storage increased 2.5% W/W in the week ended August 31, while it surged 11.3% M/M Source: US EIA, AlJazira Capital Research 5

6 Oil and gas price trends Figure 8: Brent Crude (USD per Barrel) Figure 9: WTI Crude (USD per Barrel) Jul-14 Nov-14 Feb-15 Jun Sep-15 Dec-15 Nov-16 Feb-17 Jun Jul-14 Nov-14 Feb-15 Jun-15 Sep-15 Dec-15 Nov-16 Feb-17 Jun-17 Figure 10: OPEC Reference Basket Figure 11: Henry Hub Natural Gas (USD per mmbtu) Mar-14 Jun-14 Sep-14 Jun-15 Oct-15 Jan-16 Aug-17 Nov-17 Feb-18 May-18 6

7 Petchem price trends Figure 12: Naphtha (USD per Ton) Figure 13: Propane (USD per Ton) , , , 1, 1, 1,720 1, 1, 1, 1,200 Figure 14: Butane (USD per Ton) Figure 15: HDPE (USD per Ton) 1, 1, 1,620 1, 1, 1, 1,200 1,045 Figure 16: LDPE (USD per Ton) Figure 17: MEG-Asia (USD per Ton) ,

8 Figure 18: Polypropylene (USD per Ton) Figure 19: Polystyrene (USD per Ton) 1, 1, 1,560 1, 1, 1,815 1, 1, 1, 1,200 1, 1, 1, 1, 1, ,040 Figure 20: Methanol-China (USD per Ton) Figure 21: Urea (USD per Ton) Figure 22: Ammonia (USD per Ton) Figure 23: TiO2 US 3, 3, 3,595 3, 3, 2, 2, 2, 2,645 8

9 Petchem Spreads Naphtha prices averaged USD 648 per ton in August, down from USD 656 per ton in July. Polypropylene prices fell to USD 1,230 per ton in August from USD 1,249 per ton in July. The HDPE-naphtha spread contracted to USD 654 per ton in August from USD 676 per ton in July. The PP-naphtha spread contracted to USD 583 per ton from USD 593 per ton. The PP-propane spread contracted to USD 650 per ton and the PP-butane spread fell to USD 635 per ton in August. The Polystyrene-Benzene spread contracted to USD 621 per ton in August from USD 658 per ton in July. The PVC-EDC spread expanded to USD 629 per ton in August from USD 626 per ton in July. Figure 24: HDPE-Naphtha Figure 25: PP-Naphtha Figure 26: PP-Propane Figure 27: PVC-EDC Figure 28: Polystyrene-Benzene

10 Table 5: Petchem Price Performance Name Price * (USD per ton) M/M % Chg. QoQ % Chg. Y/Y % Chg. YTD % Chg. Naphtha % -3.6% 38.9% 7.3% Saudi Propane % 16.0% 38.1% -1.7% Butane-Saudi % 17.8% 29.3% 4.4% Ethylene 1, % 7.0% 12.8% 3.0% Propylene-Asia 1, % 0.9% 25.9% 15.9% HDPE 1, % -5.8% 13.2% 0.8% LDPE 1, % -6.2% -4.2% -5.0% LLDPE -0.9% -7.6% -2.7% -4.8% PP-Asia 1, % -1.2% 12.7% 6.9% Styrene-Asia 1, % 0.7% 12.5% 8.6% Polystyrene-Asia 1, % -3.2% 14.8% 4.1% Tio2* 3, % -0.6% 8.7% 4.7% PVC-Asia % 5.5% 2.7% 9.7% MEG (Asia) % 3.3% 4.4% -1.1% Methanol-China 0.0% -2.4% 29.0% -2.4% DAP-Gulf % -1.2% 20.3% 2.5% Urea-Gulf % 25.5% 34.1% 22.9% Ammonia-Gulf 0.0% 11.1% 39.5% -9.1% MTBE-Asia % -10.4% 10.7% 10.7% EDC % 6.3% 45.7% 81.1% Butyl-A 1, % 0.0% -7.3% 2.4% BPA 1, % 4.6% 56.4% 23.6% Acetic Acid-AA % -11.8% 51.7% 8.0% EVA 1, % 1.7% 12.4% 0.7% Vinyl Acetate Monomer-VAM 1, % -3.8% 29.1% 6.8% Table 6: Petrochemical Products by Saudi Petrochemical Companies *Weighted average Note: : *Prices as of August 26, 2018 **the weighted average price of Tio2 Company SABIC Finished Products Polyethylene, polypropylene, poly styrene, ethylene glycol (MEG), methyl tert-butyl ether (MTBE), benzene, urea, ammonia, PVC, and PTA SAFCO YANSAB Tasnee Saudi Kayan Petro Rabigh Petrochem Sahara Petrochemicals Saudi Group Sipchem Advanced Alujain CHEMANOL NAMA MAADEN Urea, ammonia Polyethylene, polypropylene, MEG, MTBE, and benzene Polyethylene, polypropylene, and propylene (TiO2) Polyethylene, polypropylene, MEG, polycarbonate, and bisphenol A Polyethylene, polypropylene, propylene oxide, and refined petroleum products Polyethylene, polypropylene, and polystyrene Polyethylene, polypropylene Styrene, benzene, cyclohexene, and propylene Methanol, butanol, acetic acid, and vinyl acetate monomer Polypropylene Polypropylene Formaldehyde improvers concrete Epoxy resin, hydrochloric acid, liquid caustic soda, and soda granule Ammonia and DAP Source: Argaam Plus 10

11 RESEARCH DIVISION Head of Research Talha Nazar Analyst Waleed Al-jubayr Analyst Sultan Al Kadi, CAIA Analyst Muhanad Al-Odan Analyst Jassim Al-Jubran BROKERAGE AND INVESTMENT CENTERS DIVISION General Manager Brokerage Services & sales Alaa Al-Yousef AGM-Head of Sales And Investment Centers Central Region Sultan Ibrahim AL-Mutawa AGM-Head of international and institutional brokerage Luay Jawad Al-Motawa AGM-Head of Qassim & Eastern Province Abdullah Al-Rahit AGM- Head of Western and Southern Region Investment Centers Mansour Hamad Al-shuaibi RESEARCH DIVISION AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory, and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and International markets, as well as offering a full suite of securities business. RATING TERMINOLOGY 1. Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target. Stocks rated Overweight will typically provide an upside potential of over 10% from the current price levels over next twelve months. 2. Underweight: This rating implies that the stock is currently trading at a premium to its 12 months price target. Stocks rated Underweight would typically decline by over 10% from the current price levels over next twelve months. 3. Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks rated Neutral is expected to stagnate within +/- 10% range from the current price levels over next twelve months. 4. Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further analysis of a material change in the fundamentals of the company. Disclaimer The purpose of producing this report is to present a general view on the company/economic sector/economic subject under research, and not to recommend a buy/sell/hold for any security or any other assets. Based on that, this report does not take into consideration the specific financial position of every investor and/or his/her risk appetite in relation to investing in the security or any other assets, and hence, may not be suitable for all clients depending on their financial position and their ability and willingness to undertake risks. It is advised that every potential investor seek professional advice from several sources concerning investment decision and should study the impact of such decisions on his/her financial/legal/tax position and other concerns before getting into such investments or liquidate them partially or fully. The market of stocks, bonds, macroeconomic or microeconomic variables are of a volatile nature and could witness sudden changes without any prior warning, therefore, the investor in securities or other assets might face some unexpected risks and fluctuations. All the information, views and expectations and fair values or target prices contained in this report have been compiled or arrived at by Aljazira Capital from sources believed to be reliable, but Aljazira Capital has not independently verified the contents obtained from these sources and such information may be condensed or incomplete. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. Aljazira Capital shall not be liable for any loss as that may arise from the use of this report or its contents or otherwise arising in connection therewith. The past performance of any investment is not an indicator of future performance. Any financial projections, fair value estimates or price targets and statements regarding future prospects contained in this document may not be realized. The value of the security or any other assets or the return from them might increase or decrease. Any change in currency rates may have a positive or negative impact on the value/return on the stock or securities mentioned in the report. The investor might get an amount less than the amount invested in some cases. Some stocks or securities maybe, by nature, of low volume/trades or may become like that unexpectedly in special circumstances and this might increase the risk on the investor. Some fees might be levied on some investments in securities. This report has been written by professional employees in Aljazira Capital, and they undertake that neither them, nor their wives or children hold positions directly in any listed shares or securities contained in this report during the time of publication of this report, however, The authors and/or their wives/children of this document may own securities in funds open to the public that invest in the securities mentioned in this document as part of a diversified portfolio over which they have no discretion. This report has been produced independently and separately by the Research Division at Aljazira Capital and no party (in-house or outside) who might have interest whether direct or indirect have seen the contents of this report before its publishing, except for those whom corporate positions allow them to do so, and/or third-party persons/institutions who signed a non-disclosure agreement with Aljazira Capital. Funds managed by Aljazira Capital and its subsidiaries for third parties may own the securities that are the subject of this document. Aljazira Capital or its subsidiaries may own securities in one or more of the aforementioned companies, and/or indirectly through funds managed by third parties. The Investment Banking division of Aljazira Capital maybe in the process of soliciting or executing fee earning mandates for companies that is either the subject of this document or is mentioned in this document. One or more of Aljazira Capital board members or executive managers could be also a board member or member of the executive management at the company or companies mentioned in this report, or their associated companies. No part of this report may be reproduced whether inside or outside the Kingdom of Saudi Arabia without the written permission of Aljazira Capital. Persons who receive this report should make themselves aware, of and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations. Asset Management Brokerage Corporate Finance Custody Advisory Head Office: King Fahad Road, P.O. Box: 20438, Riyadh 11455, Saudi Arabia Tel: Fax: Aljazira Capital is a Saudi Investment Company licensed by the Capital Market Authority (CMA), license No