-Fitch Ratings TASI SLIPS. Week Ending July 30, 2015

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1 Week Ending July 3, 215 We think that governments in the region understand the benefits of subsidy reform, including both fiscal cost savings, and more efficient resource allocation and energy consumption. -Fitch Ratings TASI SLIPS Tadawul All Share Index (TASI) saw heavy cuts during the early part of the week and touched a low of 9,57 points. The index was flat during the later part with TASI eventually decreasing 2.9% for the week to close at 9,98 points. Downtrend in Oil played spoilsport as Petrochemical stock witnessed large cuts. All regional indices were also lower. Saudi Market was the highest losing indices (-2.9%) followed by Dubai (-1.4%) and Abu Dhabi (-1.3%). TASI declines 2.9% US adopts new method to compute GDP Globally, oil prices return to its state of flux with the Brent hovering around USD 52 per barrel. Reports suggest that the US continues to drill with the rig count increasing and production continuing apace. There are some unofficial reports that Saudi Arabia is likely to cut production as domestic demand peaks in the summer. But clearly when market share is the strategy, would Saudi Arabia take a step in that direction? Or will they reduce to prove that they still control the oil market? In the US, advance estimate of second quarter GDP shows 2.3% growth. The US has adopted a new methodology to compute its GDP which shows that economy actually grew.6% in the first quarter instead of contracting by.2%, as reported earlier. Separately, the Federal Reserve announced that it will raise interest rates when it becomes reasonably confident of inflation in its objective; Fed decided to keep the rates near zero for now. TASI CLOSE & MARKET TURNOVER TRADING STATISTICS 6, 5, 4, 3, 2, 1, 9,32 9,8 9,91 9,17 9,98 4,933 5,52 3,398 3,693 4,16 26-Jul Jul Jul Jul-15 3-Jul-15 9,35 9,3 9,25 9,2 9,15 9,1 9,5 9, 8, Gainers Losers No change Total No. of Companies Total Turnover (SAR Mn) TASI Close (RHS) Saudi market breadth was negative with 16 gainers as against 149 losing stocks

2 S&P 5 FTSE 1 DJIA MSCI World Nikkei DAX MSCI EM SSE Bahrain Oman Kuwait Qatar Abu Dhabi Dubai Saudi GLOBAL INDICES WEEKLY RETURNS.3%, 2,19.2%, 6,669.1%, 17, %, 1,76 -.8%, 2, %, 11, %, %, 1, %, 6, %, 6, %, 11, %, 4, %, 4, %, 9,98-1.1%, 3,76 Note: Weekly returns are calculated considering Friday to Thursday week. Numbers indicate weekly returns and index closing values. SAUDI SECTOR INDICES All the 15 indices closed the week in Red All the sector indices closed the week in Red reflecting the trend in broader market. The highest loss was reported by Agriculture & Food Inds. (-5.4%) followed by Retail (-4.7%) and Transport (-4.4%). Index heavyweight Petrochemicals and Banks fell 3.3% and 2.4% respectively. Petrochemicals became the top traded sector and constituted 27.6% of the total value and 21.% to the total volume. Banks & Financial services contributed 14.7% to total value and 17.% to the total volume. Index Open Close WTD YTD Total Volume (Mn) Total Turnover (SAR Mn) No. of Trades TASI 9,373 9,98-2.9% 9.2% ,236 47,119 Banks & Financial Services 2,749 2, % 1.6% 116 3,113 43,218 Petrochemical Industries 6,47 6, % 5.8% 144 5,856 7,579 Cement 6,797 6, % -3.5% ,175 Retail 17,548 16, % 7.8% ,199 Energy & Utilities 6,663 6, % 17.6% ,642 Agriculture & Food Industries 12,348 11, %.% 34 1,583 25,753 Telecom & IT 1,845 1,79-3.% -7.8% 84 1,254 16,389 Insurance 1,669 1, % 29.8% 16 3,19 96,22 Multi-Investment 4,368 4, % 16.6% ,47 Industrial Investment 8,624 8,36-3.7% 26.% 25 1,24 26,22 Building & Construction 3,584 3, % 5.2% ,91 Real Estate Development 7,628 7,57-1.6% 26.9% 62 1,3 21,71 Transport 1,83 9, % 33.1% 23 1,322 29,99 Media and Publishing 2,246 2,27-1.7%.3% ,214 Hotel & Tourism 23,653 22, % 14.8% ,771

3 THIS WEEK S WINNERS & LOSERS Top Gainer The Company for Cooperative Insurance (+1.1%) The Company for Co-operative Insurance (Tawuniya) increased by 1.1% during the week and became the highest gainer. Tawuniya closed at SAR 19.9 and has gained 118.4% till date. This was followed by Rabigh Refining and Petrochemical Co (+3.%) and Arabian Pipes Company (+2.4%). The losers table was led by Saudi International Petrochemical Co (-11.5%) followed by Emaar The Economic City (-11.%) and Saudi United Cooperative Insurance Company (-9.7%). Top Loser Saudi International Petrochemical Co (-11.5%) SABIC, the gulf s largest company, lost 1.57% for the week and clocked a turnover of SAR 3.87bn. SABIC has gained 15.9% YTD to close at SAR TOP GAINERS Company Close WTD YTD Value Traded (SAR Mn) Tawuniya % 118.4% 159 Petro Rabigh % 32.% 347 APC % 12.4% 35 Sagr Insurance % 16.9% 84 ZAIN KSA % 2.4% 845 TOP LOSERS Company Close WTD YTD Value Traded (SAR Mn) Sipchem % 7.8% 98 Emaar EC % 12.7% 254 Walaa % -9.8% 137 MEPCO % 24.8% 156 Malath Insuranc % 12.5% 711 THE LIQUIDITY PLAY (VOLUME VALUE TREND) The market activity increased during the week and traded 685mn shares (266mn and 563mn shares in the preceding two weeks). The turnover also increased during the week to SAR 21.2bn vis-a-vis SAR 8.1bn and SAR 18.bn in the preceding two weeks. TASI WEEKLY TURNOVER TREND (SAR MN) TASI WEEKLY VOLUME TREND (MN) 8, 7, 6, 5, 4, 3, 2, 1, /Jul 29/Jul 28/Jul 27/Jul 26/Jul 23/Jul 22/Jul 15/Jul 14/Jul 13/Jul 12/Jul 9/Jul 8/Jul 7/Jul 6/Jul 5/Jul 3/Jul 29/Jul 28/Jul 27/Jul 26/Jul 23/Jul 22/Jul 15/Jul 14/Jul 13/Jul 12/Jul 9/Jul 8/Jul 7/Jul 6/Jul 5/Jul Week Week 1 Week 2 Week 3 Week Week 1 Week 2 Week 3

4 SAUDI CORPORATE & ECONOMIC NEWS The Ministry of Water and Electricity has signed 45 water and sanitation contracts in various regions of the Kingdom amounting to more than SAR 73mn. The National Shipping Co. of Saudi Arabia has completed the issuance of Saudi Riyal-denominated sukuk with a nominal value of SAR 3.9bn Alinma Bank and Alinma Tokio Marine signed an insurance contract with annual premium of SAR 752mn to cover the bank s money risks. The National Water Co. launched an experimental operation of the first phase of SAR 7mn project relating to Abaar Saad well development which supplies Riyadh with water. Saudi Aramco said it plans to undertake solar and wind projects in 1 remote districts across the Kingdom expected to generate 3 megawatts of power. Separately, foreign engineering firms have reportedly submitted bids to build a gas plant in eastern Saudi Arabia (Fadhili) for Saudi Aramco at an estimated cost of USD 5bn to USD 6bn. Qassim Agricultural Co. has purchased 5% of the land owned by Wabel Al-Arabia for Investment in Buraidah at a total value of SAR 182.5mn to jointly build a mall and residential tower. Saudi Arabia s Acwa Power has purchased Turkey s Ventis Enerji for TRY 25.3mn. Abdullah A. M. Al-Khodari Sons Co. (Al-Khodari) will file a request with Capital Market Authority, to raise its capital before August 31, the Company said. Saudi Aramco has awarded a six-year agreement to Dynamic Industries Saudi Arabia for engineering, material procurement, fabrication, transportation and installation of its offshore oil and gas facilities. King Abdulaziz City for Science and Technology (KACST), Saudi Electricity Co. (SEC) and Energy Technology Co. signed a memorandum of understanding to develop the first independent solar power plant in the Kingdom. King Fahd International Airport has signed a contract, with XP Jet America, to establish and run a private aviation terminal. Etihad Etisalat Co. (Mobily) restated its financial results for 213, 214 and Q1-215 following an investigation of accounting errors by Saudi Arabia s Capital Market Authority (CMA). Mobily restated its Q1-215 net loss to SAR 45mn from the SAR 199mn loss previously reported for the period. The company also said it widened its FY 214 net loss to SAR 1.58bn from a SAR 913mn loss originally recorded. Jabal Omar has received construction contracts worth SAR 1.56bn. The Arab Contractors, Cairo has completed the bridge intersection of Prince Majed and Bani Malek streets in Jeddah city with cost of SAR 92mn. Egypt and Saudi Arabia have signed a pact in Cairo aimed at boosting military and economic ties.

5 OTHER GULF NEWS The Abu Dhabi Securities Exchange is considering introducing futures and options contracts for specific Abu Dhabi stocks as well as market index futures in co-ordination with the Dubai Mercantile Exchange. Emaar Properties has awarded construction contract for The Hills Project worth AED 844mn to Al Ghandi and Consolidated Contractors. Union Properties, Dubai confirmed plans that it is working on developing several projects at total cost of AED 2bn. Dubai's Emirates National Oil Co plans to expand in the region after the United Arab Emirates deregulated fuel prices, lifting financial pressure on the company. Dubai-based courier Aramex is looking to make acquisitions in the second half of the year, the Company said, after growth in online shopping boosted its second-quarter net profit. Oman s Renaissance Services said it started repurchasing one-third of the total Mandatory Convertible Bonds at a price of OMR.17. Kuwait s central tenders committee announced the awarding of a tender worth KWD 3.5bn by Kuwait National Petroleum Co. for building Al-Zour refinery to three consortiums of global firms. Munshaat Real Estate Projects has signed a settlement agreement with National Investments Company after losing a judicial dispute over an amount of KWD 6.7mn. Drake & Scull Engineering, Kuwait was awarded a development contract worth AED 218mn for a major education institution in Kuwait. Canary Wharf Group, a wholly owned joint venture between Brookfield Property Partners and the Qatar Investment Authority, has received planning approval to build a residential tower at its New Phase site (formerly known as Wood Wharf). Egypt raised electricity prices for mid-to-high household usage by an average of 19% for the 215/216 fiscal year, the electricity ministry said. GLOBAL ECONOMIC NEWS China recorded a service trade deficit of USD 91.6bn for the first six months of 215, the State Administration of Foreign Exchange reported. The U.K. GDP grew at an annualized rate of 2.8% in the second quarter of 215, said Office for National Statistics. Microsoft Corp. has reportedly agreed to invest about USD 1mn in Uber Technologies Inc. at a valuation of approximately USD 5bn. Électricité de France SA has agreed to buy 51% of Areva SA in a transaction that values the whole unit at EUR 2.7bn. Teva Pharmaceutical Industries has agreed to buy Allergan PLC s generics unit for USD 4.5bn in cash and stock. Melrose Industries PLC has agreed to sell its German-based energy and water business, Elster Group GmbH, to Honeywell International Inc. for GBP 3.3bn in cash.

6 C H A R T S O F T H E W E E K US QUARTERLY GDP: PRE AND POST REVISION Note: Revision denotes the calculated values due to change in computation methodology Source: BEA, Zero Hedge TREND IN COMMODITY PRICES Source: Gerard Minack, Downunder Daily

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