Integrated Securities Morning Report 07 March 2019

Integrated Securities Morning Report 07 March 2019 # Market Stats # UAE Trading Summary 1M 3M Indices Close Change Change Change Change AEDm Buy Sale Net ADX 4,977-2.2% -2.6% 2.1% 10.1% ADX 139 139 - DFM 2,626-0.4% 3.3% 1.8% -17.5% Local 43% 54% -11% TASI 8,534-0.3% -0.9% 8.7% 14.5% Foreign 57% 46% 11% BHSEASI 1,411-0.2% -0.5% 6.9% 3.3% Institution 70% 71% -1% EGX 14,643-0.6% -0.7% 18.2% -10.6% Retail 30% 29% 1% Dow Jones 25,673-0.5% 2.0% 5.3% 3.5% DFM 127 127 - S&P 500 2,771-0.7% 2.4% 5.3% 1.6% Local 40% 51% -10% Nasdaq 7,506-0.9% 3.0% 7.7% 1.5% Foreign 60% 49% 10% FTSE 100 7,196 0.2% 1.4% 6.2% 0.5% Institution 55% 41% 14% DAX 11,588-0.3% 5.1% 7.4% -5.4% Retail 45% 59% -14% CAC40 5,289-0.2% 6.1% 9.9% 1.9% Total 266 266 - Nikkei225 21,405-0.9% 3.2% -1.3% 0.7% Local 42% 53% -11% HIS 28,904-0.5% 3.3% 10.9% -4.3% Foreign 58% 47% 11% 1Y # Upcoming Corporate Actions & Events Date Company Event 07-Mar Ajman Bank BOD Meeting 07-Mar Salama BOD Meeting 07-Mar Shuaa Capital BOD Meeting 11-Mar Rak Ceramics General Assembly 13-Mar ADIB General Assembly 17-Mar RAK Properties General Assembly 17-Mar Air Arabia General Assembly 17-Mar DFM General Assembly 19-Mar ADNIC General Assembly 20-Mar Etisalat General Assembly 20-Mar Aldar General Assembly 21-Mar ADCB AGM/Merger 21-Mar UNB AGM/Merger 21-Mar GFH AGM/EGM

# KEY STORIES Dana Gas and Crescent Petroleum sign 20-year agreement with Kurdistan and will invest over USD 700m in Kurdistan gas project Dubai Islamic Bank shareholders approve to authorise board to issue any senior sukuk or other similar instruments for amount not exceeding USD 5bln Dubai islamic bank - shareholders approve to authorise board to issue any senior sukuk or other similar instruments for amount not exceeding $5 bln Nakheel generates Dh4.38b net profits for 2018 vs Dh5.67 billion a year ago Nasdaq Dubai lists USD 750m bond of Emirates Development Bank Sheikh Mohammed allocates USD 1.6bn for Northern Emirates power projects National Bank of Bahrain confirms strategy to ramp up operations in UAE and Saudi, and capitalise on trading relationship between markets UK-based Choudhrie family set to target the Saudi, UAE hotel sectors Arada to open Saudi Arabia, Abu Dhabi offices in 2019 Saudi Arabia said to mull raising tax on local banks Saudi s Al Jouf Agricultural Development posted FY net profit after zakat and tax 35.8mln riyals vs 25.6mln riyals year ago. Board proposes FY cash dividend of 1 riyals per share APICORP signs 1.5bln riyals Islamic loan provided by Saudi banks Saudi home ownership growing 6-7pct annually Saudi's Sipchem completes scheduled maintenance of International Diol Company plant Saudi's Al Khodari board invites shareholders to discuss capital restructuring Saudi Al Kathiri Holding board proposes capital increase to 45.2mln riyals from 37.7mln riyals through issuing 1 bonus share for every 5 shares Saudi Abdullah al Othaim Markets posted FY net profit after zakat and tax 302.6mln riyals vs 449.5mln riyals year ago. Board proposes FY cash dividend of 3 riyals per share IMF expects Bahrain economy to grow 1.8% in 2019 Kuwait Assembly approves mandatory health insurance for all visitors Qatar sells triple-tranche jumbo bond to raise USD 12billion Foreign holdings in Egyptian treasuries at USD 15.8bln -finance minister Egypt s Arabia Cotton Ginning posted H1 consolidated net loss EGP 27.9mln versus profit of EGP 75mln year ago Egypt s Palm Hills Developments concludes securitization of EGP 760mln receivables portfolio

Egyptian International Pharmaceuticals Industries posted FY net profit after tax EGP 651.8mln vs EGP 651.5mln year ago Egypt s Universal Company for Packaging Materials and Paper posted FY net profit EGP 30.7mln vs EGP 55.5mln year ago Egypt s Arab Dairy Products posted FY consolidated net profit EGP 41.3mln vs loss of EGP 29.3mln year ago Egypt s United Company for Housing and Development posted FY consolidated net profit EGP 104.9mln vs EGP 95mln year ago # Key Global Trends/ Market Clues Asian shares rose marginally in early trade on Thursday, with caution prevailing as investors awaited some kind of resolution to Sino-U.S. trade negotiations, while the euro remained under pressure ahead of the European Central Bank meeting. Japan s Nikkei average fell 0.6 percent, while Australian shares added 0.2 percent. MSCI s broadest index of Asia-Pacific shares outside Japan rose 0.1 percent in early trade. It was not far from its five-month high marked last week and was up 10.4 percent year-to-date. Oil edged up on Thursday amid ongoing OPEC-led supply cuts and U.S. sanctions against exporters Venezuela and Iran, although prices were prevented from rising further by record U.S. crude output and rising commercial fuel inventories. Brent crude futures were at $66.36 per barrel, up 37 cents, or 0.6 percent. OECD sees global economic growth of 3.3pct for 2019, down 0.2 percentage points from previous November forecast. OECD sees global economic growth of 3.4pct in 2020, down 0.1 percentage points from earlier forecast. Turkey's central bank left its benchmark interest rate unchanged on Wednesday as expected and said it will tighten monetary policy further if needed, soothing investor worries that it could loosen policy after inflation fell from a 15-year peak. # UAE Stories Dana Gas and Crescent Petroleum to increase gas production from Khor Mor field by 63pct in two years. Pearl Petroleum, a Crescent Petroleum and Dana Gas Consortium, signed a 20-year agreement with Kurdistan to enable additional production and sales. The consortium said gas sales agreement with Kurdistan will enable the production and sales of an additional 250 mmscf/day. The company disclosed USD 700mln expansion plan to reach 650 mmscf/day by 2021 and 900 mmsscf/day by 2022. Dubai Islamic Bank shareholders approve to authorise board to issue any senior sukuk or other similar instruments for amount not exceeding USD 5bln. Shareholders approve to authorize board to issue tier 2 sukuk for aggregate face amount not exceeding USD 1billion and additional tier I sukuk for an aggregate face amount not exceeding USD 1billion. Nakheel recorded net profit of Dh4.38 billion in 2018, a period in which it has focused heavily on existing projects, both nearing completion and those with a longer timeframe. A year ago, the net profit was Dh5.67 billion. Nasdaq Dubai welcomed the listing of a $750 million (Dh2.75 billion) conventional bond by Emirates Development Bank (EDB). It is the first product to be listed on the exchange by the bank, which is whollyowned by the UAE government.

Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, on Wednesday announced the allocation of AED5.8 billion (USD1.58 billion) for water and electricity projects in the northern emirates. National Bank of Bahrain confirms strategy to ramp up operations in UAE and Saudi, and capitalise on trading relationship between markets. C & C Alpha Group, a London-based private equity firm owned by one of the wealthiest families in India, is looking to expand into the hospitality sectors in the United Arab Emirates and Saudi Arabia. Real estate developer Arada, known for its USD 6.5bn mega project Aljada will expand its operations to Abu Dhabi and Saudi Arabia in the first half of this year. # GCC/ MENA Saudi Arabia is considering plans to increase an Islamic tax paid by local banks to as much as 20 percent, or double the current rate, according to people with knowledge of the matter, as the world s biggest oil exporter seeks to bolster alternative sources of revenue. The tax authority is in talks with lenders about raising the religious levy, known as Zakat, potentially bringing it in line with the 20 percent rate paid by foreign banks in the kingdom, the people said. Saudi Al Jouf Agricultural Development posted FY net profit after zakat and tax 35.8mln riyals vs 25.6mln riyals year ago. FY sales 358.9mln riyals vs 305.6mln riyals year ago. Board proposes FY cash dividend of 1 riyals per share. Development bank Arab Petroleum Investments Corp (APICORP) said on Wednesday it had signed a 1.5 billion riyals sharia-compliant syndicated financing facility. Owned by the Organization of Arab Petroleum Exporting Countries, APICORP's mandate is to promote the development of the Middle East energy industry. A group of Saudi banks comprising Banque Saudi Fransi, Riyad Bank, Saudi British Bank and Samba Financial Group provided the five-year Islamic loan. HSBC Saudi Arabia worked as the lead arranger for the deal. Saudi Housing Minister says home ownership percentage grows between 6-7pct annually. Saudi housing minister says hopes to raise home ownership to 15,000 saudi households per month by 2020 from a little over 10,000 per month now. Saudi Housing Minister says private sector now finances 100pct of housing market needs up from 35pct previously and expects investment in housing sector to reach 60bln riyals in 2019. Saudi's Sipchem completes scheduled periodic turnaround maintenance activities for the International Diol Company, an affiliate of Sipchem. Startup activities for diol plant commenced on Tuesday, March 05, 2019. Financial impact of this scheduled turnaround will be reflected in the company s financial results of the first quarter of 2019. Saudi's Al Khodari board invites shareholders meeting to discuss capital restructuring through number of steps including capital increase, reduction to extent that accumulated losses fall below half of paid up capital. Board invites shareholders meeting to discuss applying for opening of financial restructuring procedure as a bankruptcy procedure and to discuss dissolution of company. Saudi Al Kathiri Holding board proposes capital increase to 45.2mln riyals from 37.7mln riyals through issuing 1 bonus share for every 5 shares. Saudi Abdullah al Othaim Markets posted FY net profit after zakat and tax 302.6mln riyals vs 449.5mln riyals year ago. FY sales 7.52bln riyals vs 7.23bln riyals year ago. Board proposes FY cash dividend of 3 riyals per share. Bahrain s economy is expected to grow around 1.8 per cent in 2019, the same pace as last year, the International Monetary Fund said late on Tuesday. Bahrain was promised five years of aid worth $10 billion

(Dh36.73 billion) in October from its allies Saudi Arabia, the United Arab Emirates and Kuwait, to relieve pressure on the kingdom in currency and debt markets. The National Assembly of Kuwait overwhelmingly approved in two rounds of voting a draft law requiring foreigners visiting Kuwait to obtain a health insurance policy for the duration of the visit. Qatar sold USD 12billion in bonds on Wednesday, and drew around $50 billion in demand - the largest order book globally since its bond sale last year and the latest indication of how the country has overcome a boycott imposed by some of its Arab neighbours. Foreign investors held $15.8 billion of Egyptian treasury bills and bonds at the end of February, the finance minister said on Wednesday, up from $13.1 billion in January. Foreign holdings of Egyptian treasuries stood at $23.1 billion at the end of March 2018 and $17.5 billion at the close of the last fiscal year which ended in June. They had fallen to $14 billion by the end of September after a turbulent summer for emerging markets. Egypt s Arabia Cotton Ginning posted H1 consolidated net loss EGP 27.9mln versus profit of EGP 75mln year ago. H1 consolidated sales EGP 808.5mln versus EGP 895.3mln year ago. Palm Hills Developments and Sarwa Capital conclude securitization of EGP 760mln receivables portfolio and closes latest issue of securitization bond for company backed by receivables portfolio related to 670 delivered units. Palm Hills receivables portfolio s net value stood at EGP 609mln after discount rate of 16.04% on gross receivables portfolio of EGP 760mln. Sarwa Promotion & Underwriting acted as financial advisor, lead manager and arranger of the transaction. Egyptian International Pharmaceuticals Industries posted FY net profit after tax EGP 651.8mln vs EGP 651.5mln year ago. FY revenue EGP 2.75bln vs EGP 2.48bln year ago. Egypt s Universal Company for Packaging Materials and Paper posted FY net profit EGP 30.7mln vs EGP 55.5mln year ago. Egypt s Arab Dairy Products posted FY consolidated net profit EGP 41.3mln vs loss of EGP 29.3mln year ago. FY consolidated sales EGP 1.19bln vs EGP 1.15bln year ago. Egypt s United Company for Housing and Development posted FY consolidated net profit EGP 104.9mln vs EGP 95mln year ago. FY consolidated sales EGP 165.1mln vs EGP 141.9mln year ago. (Source: ADX, DFM, Bloomberg, Reuters, Gulf News, The National, Arabian Business)

# UAE FOCUS LIST - COMPANY DATA MCAP PRICE HIGH - LOW VALUATION DIV HISTORICAL RETURN Company (AEDm) (AED) 52WH 52WL TTM P/E TTM P/B YLD (%)^ 1M% 3M% 6M% 12M% ADCB 48,967 9.42 9.79 6.50 10.45 1.70 4.9% 0.2% 16.3% 23.1% 33.4% ADIB 16,526 4.55 4.58 3.46 7.19 1.27 6.0% 5.6% 17.9% 15.3% 19.6% ADNIC 1,388 3.70 4.00 3.40 8.79 0.66 8.1% 2.8% -3.9% 2.5% -1.3% Agthia 2,316 3.86 5.00 3.42 10.98 1.20 3.9% -0.8% -1.0% -19.6% -7.0% Air Arabia 4,359 0.93 1.33 0.90 NA 0.97 10.7% -6.6% -6.6% -6.4% -27.6% Ajman Bank 1,898 0.90 1.10 0.82 9.35 0.78 0.0% 6.2% 1.6% -4.3% -15.5% Al Waha Capital 2,820 1.45 2.19 1.36 18.99 0.74 5.2% -10.5% -17.1% -20.3% -31.6% Aldar Properties 13,995 1.78 2.30 1.43 7.53 0.58 7.9% 14.8% 12.7% -6.3% -17.6% Amanat Holdings 2,400 0.96 1.46 0.96 55.63 0.94 1.6% -12.7% -12.7% -19.3% -34.2% Amlak Finance 531 0.35 0.91 0.32 NA 0.38 0.0% -4.1% 2.0% -45.2% -60.9% Arabtec 3,255 2.17 2.47 1.58 13.52 1.96 2.3% 0.9% 13.0% 14.2% -9.6% Aramex 6,310 4.31 4.59 3.72 12.82 2.62 3.8% 0.2% 3.1% 1.4% -2.9% Bank of Sharjah 2,060 0.98 1.19 0.95 5.87 0.51 0.0% 1.1% -6.6% -9.2% -14.7% DAMAC Properties 8,591 1.42 3.16 1.10 7.48 0.61 10.6% 12.7% -17.9% -31.7% -52.8% Dana Gas 6,014 0.86 1.21 0.73 NA 0.57 1.5% -3.1% -7.3% -25.0% 13.4% Dar AL Takaful 89 0.59 0.93 0.41 12.86 0.71 0.0% 17.5% 30.2% -13.5% -16.0% Deyaar Development 2,040 0.35 0.53 0.32 14.53 0.46 0.0% -3.3% -6.9% -14.7% -32.1% Dubai Financial Market 6,448 0.81 1.12 0.70 51.26 0.83 0.0% -0.6% 3.3% -14.4% -24.7% Dubai Investment 5,443 1.28 2.21 1.04 8.37 0.45 9.4% 2.4% 4.1% -35.4% -41.8% Dubai Islamic Bank 34,464 5.23 5.41 4.66 7.23 1.43 6.7% 2.8% 1.0% 2.1% 5.7% DXB Entertainments 1,944 0.24 0.57 0.23 NA 0.34 0.0% -4.7% -10.0% -31.2% -55.9% Emaar Dev 15,240 3.81 5.34 3.26 3.92 2.01 0.0% 11.1% -19.6% -27.1% -22.5% Emaar Malls 22,124 1.70 2.24 1.43 10.28 1.33 5.9% 14.1% 0.0% -13.3% -19.8% Emaar Properties 35,011 4.89 6.20 3.85 5.96 0.75 2.9% 22.6% 15.1% -2.2% -20.4% Emirates Integrated Tele 23,223 5.08 5.24 4.73 13.14 2.71 4.3% 0.0% 2.4% -1.6% 1.4% Emirates NBD 52,243 9.40 11.00 8.25 5.52 0.96 4.3% -8.7% 4.4% 2.2% 5.0% Eshraq Properties 1,018 0.44 0.77 0.41 348.73 0.68 NA -4.8% -14.1% -23.7% -38.3% Etisalat 146,801 16.88 17.95 15.70 16.46 3.27 4.7% -0.7% -0.1% 1.4% -5.7% First Abu Dhabi Bank 154,963 14.22 15.60 10.80 13.37 1.70 4.9% -6.9% 0.7% 0.4% 31.7% GFH 3,534 0.96 1.52 0.73 8.24 0.85 9.1% -10.3% -14.3% -31.4% -31.4% Gulf Navigation Holding 724 0.79 1.17 0.72 NA 0.86 0.0% -3.9% -22.0% -11.3% -27.0% Gulf Pharmaceutical 1,854 1.60 2.38 1.44 NA 1.03 6.1% -15.3% -23.8% -20.8% -31.0% Marka 138 0.28 0.58 0.26 NA NA NA 0.0% 0.0% 0.0% -51.8% Mashreqbank 14,202 80.00 80.00 68.05 6.89 0.71 5.0% 14.0% 8.1% 17.6% 0.0% National Bank of Fujairah 7,893 4.80 4.80 2.50 13.59 1.71 1.6% 0.0% 22.8% 62.2% 72.0% National Central Cooling Co 4,589 1.69 1.88 1.45 10.57 0.98 5.6% -2.3% 7.0% 3.7% -3.4% RAK Bank 7,208 4.30 4.85 4.00 8.03 1.01 7.0% 7.5% 2.6% 3.6% -9.5% RAK Properties 930 0.47 0.84 0.43 6.18 0.24 0.0% 0.0% -8.8% -23.9% -43.3% Ras Al Khaimah 1,830 2.03 2.86 1.75 10.25 0.73 9.9% 12.8% 5.7% -11.0% -29.0% SALAMA 561 0.46 0.76 0.38 326.53 0.74 0.0% -5.3% -5.5% -14.2% 0.4% Sharjah Islamic Bank 3,287 1.12 1.28 1.08 6.28 0.61 0.0% -6.7% -1.8% -8.2% -10.4% SHUAA Capital 735 0.69 1.15 0.63 27.08 0.82 0.0% -13.6% -29.6% -32.4% -37.3% Takaful Emarat Insurance 242 1.61 2.70 1.35 17.27 1.46 5.1% 0.0% -3.6% -8.0% -17.4% TAQA 5,702 0.94 1.45 0.67 14.41 1.28 0.0% 2.2% -6.9% -16.8% 22.1% Union National Bank 15,078 5.48 5.60 3.36 13.65 0.90 3.6% 5.4% 17.8% 15.4% 37.7% Union Properties 1,600 0.37 0.91 0.35 12.61 0.57 0.0% -4.8% -19.6% -48.0% -58.6% United Arab Bank 2,475 1.20 1.60 1.01 32.06 0.98 0.0% 0.0% -4.0% 0.0% -25.0% (Source: Bloomberg) ^ current dividend yield based on last year dividend declaration

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