The changing landscape

The changing landscape Saudi Arabia s capital markets Q2 2017

Table of contents 01 The macroeconomic perspective 03 02 Regulatory developments in the capital markets 09 03 M&A activity 17 04 Capital markets performance snapshot 22 05 Equity market trends Tadawul main market 25 06 IPO trend analysis Tadawul main market 31 07 Sukuk market 45 08 REITs market 50 09 Nomu market 55 10 Mutual funds and ETFs 63 11 Abbreviations and glossary 72

Section 01 The macroeconomic perspective

Nominal GDP (US$b) Domestic demand (US$b) Capital market performance is directly correlated with oil prices, as reflected in the Tadawul All Share Index (TASI) growth during the period 2012 1H17 Brent crude oil spot price growth, nominal gross domestic product (GDP), oil GDP and non-oil GDP growth (2012 16) Economic growth slowed in the first half of 2017, weighed down by the cumulative impact of Government spending cuts and lower oil prices. TASI growth, domestic demand and industrial growth (2012 16) Declining economic growth has adversely affected the capital market since 2014, with the TASI posting a negative growth of 17.1% in 2015. With economic measures, the TASI has seemed to stabilize in the last two periods. Brent crude oil spot price growth 2012 2013 2014 2015 2016 1H17 9.6% 1.5% 1.3% 13.8% 1.9% 14.0% 2012 2013 2014 2015 2016 1H17 TASI growth 6.0% 25.5% 2.4% 17.1% 4.3% 3.0% 800 760 720 680 640 600 7.8% 11.3% 736 9.3% 8.6% 9.4% 756 747 6.3% 7.3% 652 46.0% 1.3% 9.9% 640 20.0% 10.0% 0.0% 10.0% 20.0% 30.0% 40.0% Oil GDP and non-oil GDP growth 800 600 400 200 4.3% 552 5.2% 589 6.3% 657 4.5% 687 639 8.0% 6.0% 4.0% 2.0% 0.0% Industrial growth (percentage) 560 2012 2013 2014 2015 2016 50.0% 0 (1.0%) 2012 2013 2014 2015 2016 (2.0%) Nominal GDP Oil GDP growth Non-oil GDP growth Source: Oxford Economics, S&P Capital IQ, EY analysis Domestic demand Industrial growth Page 4

2012 2013 2014 2015 2016 1H17 SAIBOR Investment (US$b) Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 SAMA bills (52 week percentage) Falling investments and a rise in the interest rate are expected to tighten liquidity and put pressure on the capital market in the near future Investment growth (2012 16) Saudi Arabia enjoyed a steady growth in investments, with a compound annual growth rate (CAGR) of 6% from 2012 15. Persistent low oil prices and the current economic outlook led to a 17.3% fall in investments through 2016 year-on-year (y-o-y). Saudi Arabian Monetary Authority (SAMA) bills and Saudi Arabia Interbank Offered Rate (SAIBOR) In 2016, lending rates increased to 2.3% from 1.09% in 2015 owing to a rise in Federal Reserve interest rates. Rising interest rates have led to a fall in money supply (decreased by 0.2% in 2016 to US$305b), thereby adversely impacting the capital market outlook. So far, 2017 has shown a stable outlook. 2012 2013 2014 2015 2016 Investment growth 8.1% 7.7% 7.8% 2.4% 17.3% 250 15 1.80% 1.40% 1.15% 1.74% 1.39% 200 150 100 50 12 164 177 9 190 195 8 8 161 7 12 9 6 3 Inward foreign direct investment (US$b) 1.00% 0.60% 2.50% 2.00% 1.50% 1.00% 1.11% 1.09% 1.07% 1.09% 2.30% 1.75% 0.50% 0 2012 2013 2014 2015 2016 0 0.00% Investment FDI (Inward) Source: Oxford Economics, SAMA, EY analysis Page 5

Feb 14 Apr 14 Jun 14 Aug 14 Oct 14 Dec 14 Feb 15 Apr 15 Jun 15 Aug 15 Oct 15 Dec 15 Feb 16 Apr 16 Jun 16 Aug 16 Oct 16 Dec 16 Feb 17 Apr 17 Jun 17 Feb 14 Apr 14 Jun 14 Aug 14 Oct 14 Dec 14 Feb 15 Apr 15 Jun 15 Aug 15 Oct 15 Dec 15 Feb 16 Apr 16 Jun 16 Aug 16 Oct 16 Dec 16 Feb 17 Apr 17 Jun 17 The economic impact of low oil prices triggered Government measures to control the economic slowdown and stabilize the capital market Brent crude oil spot price (US$ per barrel) 120.0 108.9 80.0 40.0 47.1 Since around 86% of Government revenues are derived from oil revenues, a prolonged period of lower prices impacted Government expenditure, creating a deficit of US$98b in 2015. 0.0 TASI index value 12,000.0 The Government funded the deficit by drawing on its reserves and central bank deposits. 8,000.0 4,000.0 9,106.6 6,863.6 2014 2015 2016 1H17 Reserves, foreign exchange, US$b 719 603 526 500 0.0 Summary Of the Saudi Arabian Government s revenues, 86% is derived from oil. Therefore, low oil prices led to a decline in government expenditure and the gross fixed capital formation (GFCF), and consequently had a strong impact on the capital market. In order to combat the impact of declining GFCF, the Saudi Arabian Government resorted to using the large foreign reserves of SAR2.6t (US$603b) held by the SAMA, which provided the required financial cushion for the Government to prevent further decline in the markets, and push economic growth. Furthermore, there was plenty of room for the Government to raise debt, given its strong credit ratings and record low debt levels, which caused the markets to stabilize from January 2016 onward. In 2016, The Government also cut domestic funding for infrastructure and perks to civil servants, consequently the fiscal deficit of Saudi Arabia came down from US$98b to US$79b in 2016, with positive signs of economic recovery. Source: SAMA, EIA, news articles, Trading economics, EY analysis Page 6

Privatization of major sectors, focus on small- and medium-sized enterprises (SMEs) and encouraging foreign investment are few significant measures as part of the Government s Vision 2030 agenda to reduce Saudi Arabia s dependence on oil Listing of Tadawul likely to improve Saudi Arabia s finances SMEs to gain more leverage in line with Vision 2030 Vision 2030 has a clear focus on the private sector to develop and diversify the economy. The Government has formed a public authority for SMEs to regulate the sector, facilitate funding and create jobs. SME contribution to GDP is expected to increase by four times. Vision 2030 Saudi Aramco Tadawul announced plans to go public in 2018. It is the largest stock market in the Middle East region, with a market cap of US$306b. The Capital Market Authority (CMA) estimates listed companies to increase from 175 to 250 by 2020. Saudi Aramco proposed stake sale to provide relief against falling oil revenues Saudi Arabia announced desire to IPO Saudi Aramco. Budget (2017) to impose taxes; industrial energy and mining sectors to gain importance Saudi Arabia s US$17.5b bond sale expected to stabilize state finances Saudi Arabia issued the largest emerging market bond sale of US$17.5b in October 2016. The huge demand for Saudi debt was partly due to low global interest rates and funds frustration with a lack of highyielding assets globally. This reassures investors that the country could diversify its revenues and stabilize state finances. Source: Public sources, news articles Privatization Saudi Arabia to launch privatization drive as part of wider economic reforms The 2017 budget deficit is expected to be 33% lower than that in 2016. The deficit is expected to be reduce by debt and drawing from reserves. Other key budget features include: Introduction of a minimum expatriate fee Imposition of selective taxes on tobacco, soft drinks and energy drinks There are plans to privatize major sectors such as health care, energy, airports, education and renewable energy. Health care remains the top priority for privatization, with private sector health contribution to rise to 35% by 2020 from 25% in 2015, taking the number of licensed medical facilities from 40 to 100. Page 7

Global events that impacted the Saudi capital markets Rise in US interest rates The US Federal Reserve raised interest rates to 1% to 1.25% range in June 2017. A further increase in 2017 is predicted. The rise in US interest rates would result in capital outflow, as investors from emerging economies seek higher returns in the largest economy in the world. In order to keep the currency pegged at the fixed rate, Saudi Arabia has to sell dollars. However, Saudi Arabia s dollar income and dollar reserves has dropped significantly. Source: Public sources, news articles US and Saudi firms sign highvalue deals During Trump s visit in May 2017, US and Saudi Arabian companies signed business deals worth tens of billions of dollars. PIF and US private equity firm Blackstone agreed to create a US$40b infrastructure investment fund. Saudi Aramco signed 16 accords with 11 US companies valued at about US$50b. Saudi Arabia made post-brexit Britain its preferred partner to help reshape its economy after Theresa May s visit to Saudi Arabia in April 2017. Saudi Arabia is Britain s largest trade partner in the Middle East region, with an annual trade worth US$8.2b a year. The fall in sterling value post-brexit led to cheaper imports from the UK. Post-Brexit, trade relations and ties are expected to strengthen as Britain and GCC are working on a Free Trade Agreement that could be signed with the UK. Better trade ties post-brexit Lifting of Iran sanctions/ Qatar embargo Saudi Arabia, the UAE, Bahrain and Egypt has cut off ties with Qatar as the countries allegedly accused Qatar of funding terrorism. However, Qatar is finding ways to work around the situation by trade tie ups with other countries and increasing local production. Lifting of Iran sanctions, which would lead to an increase in oil supply, is likely to lower oil prices further. Although Saudi Arabia was refusing production cuts initially, they have recently reduced exports, which has slightly pushed up oil prices. Saudi- Russia extends production cuts The Saudi-Russia consortium has agreed to extend a deal to cut oil production through March 2018, which was supposed to expire in June 2017. The two countries have agreed to do their best to achieve the desired goal of stabilizing the market and reducing commercial oil inventories to their five-year average level. Saudi Arabia and Russia produce a combined 20 million barrels of crude oil a day about one-fifth of global consumption. Page 8

Section 02 Regulatory developments in the capital markets

Tadawul aims to improve access to capital, relax regulations, and improve governance and transparency standards Parallel market Nomu lists 9 companies Tadawul lists real estate investment trust (REIT) funds Exchange allows foreign investment Listed shares considered for tax profile CMA approves new corporate governance regulations for joint stock companies (JSCs), also announces plans for updating M&A regulations CMA makes amendments to strengthen capital market and be in line with global standards Alternative equity market launched in February 2017, with lighter listing requirements compared with the main market Minimum capital requirement of SAR10m compared with SAR100m in the main market Encourages SMEs and family businesses to go public Nine companies currently trading on the exchange Since inception the Saudi Nomu market index declined by 35% by the end of Q2 2017, highlighting volatility driven by the nature and age of the segment. An independent sector for REITs on its current equity market, where investors may trade units of the fund via the same mechanism used for equities. There are four REITs currently listed in Tadawul: Riyad REIT fund, which got listed in November 2016, was the first and Taleem REIT Fund was the latest, which got listed in May 2017 Qualified foreign investors (QFIs) allowed to own direct stake of slightly less than 10%, an increase from 5% Combined, all foreign investors limited to owning 49% of any single institution To qualify as QFI, investor to have a minimum of US$1b assets under management (AUMs) globally (instead of US$5b) Retail and wholesale businesses allowed 100% foreign ownership Zakat or tax profile of listed entities will be based on actual ownership between GCC and non-gcc persons as at the date of fiscal yearend, which will now include the weight of listed shares. Previously, the percentage of only original (founding) shareholders ownership was taken into account New regulations provide shareholders and board members with improved rights, greater clarity and more transparency as to their respective roles and responsibilities Published in mid-february this year, they formally come into effect on 22 April 2017 The draft regulations on M&A includes regulating mergers through the general assembly, offering proposals, mandatory and permissive offers and disclosure requirements, as well as demonstrating the timetables of these transactions. It also includes provisions on Reverse Takeover and Demergers. Move to T+2 settlement cycle from T+0 is expected to increase liquidity in the market Introduction of new tradable rights to improve products and services, and diversify investment channels Introduction of securities lending and covered short selling by the CMA. Short selling allows investors to make gains in a declining market The independent custody model, along with the T+2 settlement cycle, expected to provide custodians with the ability to match client instructions against the broker and only settle the ones that clients have instructed. Source: Public sources, news articles Page 10

The publication of the new corporate governance regulations is driven by the continued effort to attract additional foreign investment into Saudi Arabia and bring in standards in line with other leading global exchanges 01 02 03 Key objectives of the new corporate governance regulations include 1. Enhancing shareholder rights 2. Clarifying board, committee and executive management roles and responsibilities, including their decisionmaking mechanisms 04 3. Achieving greater openness, competitiveness, transparency and disclosure 05 4. Avoiding and disclosing conflicts of interest 5. Improving accountability and control over employees 08 07 06 6. Protecting shareholder rights 7. Overseeing corporate actions 8. Raising the professional standards of listed JSCs Source: Public sources, news articles Page 11

Move from T+0 to T+2 settlement cycle is in line with rules adopted by some of the regional regulators and global best practice T+0 settlement cycle: same day as transaction The transaction date and settlement date (the date on which a purchaser pays the seller for securities) occur on the same day. What was the need for the shift to T+2? The principal drawback was that it required purchasers to fund fully any trade they intend to carry out on the transaction date, which reduces market liquidity. QFIs faced the issue on funding commitments, especially where such trades take place on a Sunday, which is a business day in Saudi Arabia, but not in many Western jurisdictions where QFIs are likely to be based. Introduction to the change from T+0 to T+2 settlement cycle in Tadawul T+2 settlement cycle: two days after the transaction date Settlement will take place two days after the transaction date; however, this should have no impact to traders on Tadawul. Buyers can sell securities directly upon executing transactions, with no need to wait for completing the settlement of securities. Sellers gain purchasing power, which enables them to buy new securities directly upon executing transactions without having to wait for completing the settlement of securities. The new settlement cycle will apply to transactions of securities of all types listed in the market stocks, sukuk, bonds, exchange traded funds (ETFs) and tradable rights, in addition to over-the-counter (OTC) transactions. Source: Tadawul, news articles Page 12

T+2 settlement cycle is expected to increase liquidity and asset safety in the Saudi Arabian capital markets Best practice Asset safety Short selling Activate dealer role Promote QFI investment Aligning the Saudi stock market with leading global settlement practices, which will open up new listing opportunities for the Saudi market among other global market indices Increasing levels of asset safety for investors, and providing enough time to verify transactions and deal with errors, should they occur Allowing short selling on condition of borrowing equities Activating the role of the market makers in the stock market Developing an investment environment that promotes institutional-level investments and meets necessary requirements for coping with any future changes 3 1 2 Advantages (T+2 settlement) 4 5 Page 13

Recent introduction of T+2 is expected to provide custodians with the ability to match client instructions against the broker, and only settle the ones that clients have instructed Independent custody model: overview Independent custody model was introduced in 2015: Benefit: enabled foreign investors to appoint a global or local custodian bank to hold their assets in Saudi Arabia instead of relying on a local broker Challenge: trades needed to be pre-funded, as the market operated on a T+0 settlement time, which increases counterparty risk and makes correcting trading errors difficult Introduction of T+2 in 2017: This provides custodians with the ability to match client instructions against the broker, and only settle the ones that clients have instructed. Enhancements to the Independent custody model will also enable custodians to reject the settlement of unconfirmed trades executed by the executing brokers. The new Tadawul Trading Procedures require exchange members (brokers) to be custody members. Source: Tadawul, news articles Independent custody model: structure Execution broker (trading) Independent custody member Settlement member Saudi Arabian Riyal Interbank Express (SARIE) payment settlement (cash settlement) Transaction executed within Tadawul Tadawul The exchange (trading) Securities Depository Center (SDC) (cash netting, securities settlement) Transaction executed within Tadawul Page 14

CMA has developed a mechanism of trading rights to diversify and expand available investment channels What is a tradable right? 1. Allocating one subscription period 2. for all investors Introducing live subscription feature Tradable rights are tradable securities that entitle right holders to subscribe to new shares offered during a capital increase. All shareholders registered in the company s records at the end of the extraordinary general meeting (EGM) are entitled to tradable rights. The EGM is convened for voting on the decision of the capital increase (registered shareholders). Each right grants its holder the eligibility to subscribe to a new share at the offering price. Source: Tadawul, news articles All investors can subscribe in one phase instead of two separated phases. Similar to the buy/sell mechanism of shares, all investors may subscribe to rights through the trading platform. This will be in addition to any other subscription channel provided by the broker. 3. Subscribing through the trading platform Summary of new trading framework 4. Investors can subscribe immediately after the settlement of bought rights. The entire tradable rights process (starting from the EGM date until allocation) will be shortened to a maximum of 28 days instead of 34 days. Shortening periods of tradable rights Page 15

Short selling allows investors to make gains in a declining market and/or offers the option to hedge The CMA s recent announcement also relates to the introduction of securities lending and covered short selling. Both these decisions go hand in hand, since short selling is usually executed by borrowing and then selling the borrowed security with the intention of buying it back later at a lower price. Short selling Covered short selling is allowed for investors other than natural persons.* However, investors have to borrow securities and have them settled on their account before selling short. Short selling could only be conducted from specially designated accounts short-selling accounts Securities borrowing and lending (SBL) SBL activities are handled completely bilaterally, while the SDC only facilitates a free-of-payment (FOP) transfer of securities based on instruction from counterparties. SBL transactions originate outside of the exchange, and negotiations take place bilaterally. However, the SDC provides a Tadwulaty platform that allows initiation of a request for interest for borrowing and lending securities. There are two types of SBL transactions fixed-term and open-ended. Source: Tadawul, news articles * A real human being as opposed to a corporation, which is often treated by law as a fictitious person. Page 16

Section 03 M&A activity

Deal value (US$m) Low oil prices and global slowdown has impacted the M&A activity in Saudi Arabia both in terms of value and volume during 2014 16; however, 1H17 showed significant improvement in the M&A activity, especially in terms of value raised Saudi Arabia M&A activity (2012 1H17) 12,000 80 10,000 8,000 6,000 4,000 2,000 48 Bahri merger with Vela (Aramco subsidiary) 1,300 71 Mosaic and SABIC acquire 40% concession rights in Al Khabra and Umm Wu al from Ma aden 1,000 72 3,233 3,438 66 Aramco invested in Lanxess (Germany) 1,746 4,344 63 Value of disclosed deals, excluding the PIF and Uber deal, has come down in 2016 compared with the past five years PIF invested in Uber 3,500 Aramco agrees to buy RAPID project for US$7b Tronox (US) agrees to buy National Titanium Dioxide for ~US$2.2b 24 9,215 70 60 50 40 30 20 10 Number of deals (volume) 1,801 1,572 1,501 0 2012 2013 2014 2015 2016 1H17 0 Deal value (US$m) Deals greater than US$1b Number of deals Source: Mergermarket, ThomsonOne, Capital IQ, EY analysis Note: both completed and announced deals have been considered in the analysis; transactions that are less than US$5m and 5% stake have not be considered in our analysis; deals with disclosed values are only considered for analysis based on value; all disclosed deals with value more than US$1b have been included separately to show the impact of the deal in the overall trend. Page 18

Deal value (US$m) The consumer products, diversified industrial products, and real estate and hospitality sectors were the most active sectors, contributing to ~40% of the total deal volume between 2012 and 1H17 in Saudi Arabia Saudi Arabia M&A activity by top sectors* value and volume (2012 1H17) 9,000 60 8,000 7,000 48 48 Top five sectors by volume* form 55% of the total number of deals during 2012 1H17 Top 10 sectors by volume* forms 82% of the total number of deals during 2012 1H17 50 6,000 5,000 4,000 32 30 30 4,564 9,136 Includes US$7b investment of Saudi Aramco in RAPID project (Malaysia) 5,430 41 40 30 Number of deals 3,000 2,000 1,000 2,126 1,870 2,127 751 685 21 20 18 18 1,709 155 16 12 1,047 1,440 10 1,609 20 10 0 Consumer products Diversified industrial products Real estate and hospitality Provider care Professional firms and services Technology Oil and gas Construction Power and utilities Chemicals Metals and mining Other transportation Other sectors 0 Deal value (US$m) Number of deals Source: Mergermarket, ThomsonOne, Capital IQ, EY analysis * Top sectors include top 10 by value or volume during the period; rest of the sectors are classified as other sectors, which includes agriculture; aerospace and defense; asset management; automotive; banking and capital markets; insurance; media and entertainment; and telecommunications (volume indicates number of transactions). Page 19

Number of M&A deals Both M&A and IPO activity have declined during the economic slowdown in Saudi Arabia; however, M&A activity is still largely active, with investors looking to capitalize on the opportunities or consolidate business to stay relevant in the market Saudi Arabian M&A vs. IPO activity comparison of number of M&A deals vs. number of IPOs 80 8 70 60 7 71 72 6 66 63 7 6 50 40 30 48 5 4 Continual decline in M&A and IPO activity in 2015 1H17 3 5 4 3 Number of IPOs 20 24 2 10 1 0 0 0 2012 2013 2014 2015 2016 1H17 Number of M&A deals Number of IPOs Source: Mergermarket, ThomsonOne, Thomson Reuters Eikon, Capital IQ, EY analysis Page 20

Saudi Arabian companies were involved in more than 63% of the cross-border deals by volume during 2012 and 2016, of which 43% were with other Middle East and North Africa countries, followed by 30% with European countries Saudi Arabia M&A deal flow analysis (2012 1H17) Europe 18 US$0.4b US$3,319m #63 45 US$2.9b US$6,586m #26 12 US$4.1b North America 14 US$2.5b US$3,405m #92 52 US$2.1b Other MENA countries 40 US$1.3b 128 US$8.5b KSA 83 US$5.3b 133 US$18.9b 18 US$9.6b Asia US$32,649m #344 11 US$1.1b US$10,633m #29 Key Inbound: inflow of deals to Saudi Arabia from other countries Outbound: outflow of deals from Saudi Arabia to other countries Domestic: deals within Saudi Arabia US$188m #1 South America 1 US$0.2b US$43m #4 Source: ThomsonOne, Mergermarket, public Source, EY analysis Note: Chart represents volume of deals from Saudi Arabia deal flow perspective; # represents number of deals; The volume and value of deals mentioned in the charts is the consolidated value for the period from 2012 to 2016; Other MENA countries excludes Saudi Arabia * Africa excludes North Africa. The overall deal values might not sum up to the total deal value due to rounding. Africa* 4 US$0.04b US$5m #1 Australia and Oceania 1 US$0.005b Page 21

Section 04 Capital markets performance snapshot

The Nomu market has fallen by over 35% by the end of June 2017 since its launch, while the TASI, REITs, mutual funds and ETFs indices have been positive in the first half of 2017 Capital markets performance at the end of June 2017 Six months index return (percentage) One year index return (percentage) Tadawul all share index (TASI) main market 3.0% 14.2% Nomu- parallel market index 36.4% n/a REITs 7.5% n/a Mutual funds 1.4% 4.4% ETFs 4.0% 17.0% 40.0% 30.0% 20.0% 10.0% 0.0% 10.0% 0.0% 5.0% 10.0% 15.0% 20.0% Source: Tadawul, EY analysis. *Nomu index six months return based on start date 26 February 2017 to 22 June 2017; Mutual fund performance is based on average of performance of all the mutual funds for six months and one year ending 31 July 2017; ETFs performance based on an average of three ETFs listed in Tadawul; six month index return indicates change in index between last trade date of December 2016 and June 2017; one year index return indicates change in index between last trade date of June 2016 and June 2017. Page 23

Out of the 20 sector indices in the Tadawul main market, 9 showed positive returns, with food and beverages, media and utilities sector indices being the top three in 1H17 Tadawul main market sector performance at the end of June 2017 Main market sectors Market capitalization (US$b) Six-month index return (percentage) One-year index return (percentage) Materials Banks Telecommunication services Real estate management and development Food and beverages Utilities Insurance Diversified financials Health care equipment and services Retailing Energy Capital goods Consumer services Transportation 46.9 33.3 30.8 29.0 11.6 10.5 7.6 7.4 7.0 5.3 3.9 3.5 124.6 141.7 2.7% 0.1% 12.9% 17.7% 13.7% 17.0% 20.4% 6.4% 10.0% 7.4% 20.1% 0.8% 4.4% 13.6% 26.8% 43.4% 12.1% 30.2% 3.3% 11.5% 9.1% 1.2% 9.5% 14.0% 4.5% TASI: 3% 6.7% TASI: 14% 23.5% 17.8% Commercial and professional services 2.1 23.9% 5.8% Food and staples retailing 1.9 8.0% 2.8% Pharma, biotech and life sciences 1.1 13.2% 4.6% Consumer durables and apparel 0.9 14.5% 16.0% Media 0.7 20.3% 12.6% REITs 0.5 7.5% 0.0% 0 50 100 150 30% 20% 10% 0% 10% 20% 30% 40% 20% 0% 20% 40% 60% Source: SAMA, Tadawul, EY analysis *New sector classification of Tadawul (effective 8 January 2017); market capitalization as of 22 June 2017 (last trade date of 1H17); conversion rate of SAR1 to US$0.266631; six-month index return indicates change in index between last trade date of December 2016 and June 2017; one-year index return indicates change in index between last trade date of June 2016 and June 2017. Page 24

Section 05 Equity market trends Tadawul main market

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 TASI TASI had broadly mirrored oil price movement during 2012-1H17. From middle of FY14 to the last quarter, significant decline in oil prices reflected panic investor sentiment, where TASI fell by 5,645 points from its highest level of 11,061 in FY14 to its lowest of 5,416 in FY16 from where it has improved during 1H17 TASI and Brent crude oil spot price per barrel (2012 1H17) 12,000 10,000 125.8 Highest peak in crude price Highest peak in TASI 115.2 11,061.1 Slump in oil prices due to the oversupply of crude had a major impact on TASI 140 120 8,000 6,000 4,000 9,574.5 8,284.9 45.1 Lowest TASI 5,459.8 5,416.5 7,166.4 53.9 100 80 60 40 Brent crude oil price per barrel (US$) 2,000 0 26.0 Lowest crude price 20 0 TASI Brent crude spot price (US$) Deflection points Brent crude prices start falling Source: EIA, Thomson Reuters Eikon, Capital IQ, EY analysis TASI starts falling Page 26

Market capitalization (US$b) Among the top 10 sectors by market capitalization, real estate management and development, and utilities were the only two sectors that grew each year during 2012 16, while the diversified financials sector saw a drop in market capitalization each year after 2013 Market capitalization by sector* in Tadawul (2012 1H2017) Top three sectors Next top two sectors 500.0 450.0 400.0 350.0 300.0 250.0 200.0 150.0 100.0 50.0 70% 69% 67% 66% 66% 8% 9% 11% 12% 13% 373.4 26.2 10.3 15.3 14.9 14.9 40.7 82.0 140.2 5.9 1.5 21.5 467.4 39.3 36.6 9.4 11.5 5.6 2.8 10.6 19.0 9.8 25.3 17.2 16.7 27.2 20.7 21.5 27.0 50.0 46.9 101.3 173.2 483.4 137.0 142.1 421.0 34.2 10.8 18.0 23.1 27.2 43.8 115.7 117.1 9.6 5.0 16.6 448.5 31.6 11.4 25.7 23.5 33.9 45.0 114.5 6.2 7.4 12.7 470.3 27.0 11.6 29.0 30.8 33.3 46.9 124.6 136.5 141.7 7.4 7.6 10.5 Other sectors Retailing Health care equipment and services Diversified financials Insurance Utilities Food and beverages Real estate management and development Telecommunication services 1 Materials Top three sectors 0.0 2012 2013 2014 2015 2016 1H17 Sector contribution ranking based x on 1H17 market capitalization Source: Tadawul, EY analysis *New sector classification of Tadawul (effective 8 January 2017); market capitalization as of December end of each year; top 10 sectors are based on 1H17 market capitalization; conversion rate of SAR1 to US$0.266631; other sectors include energy, capital goods, transportation, consumer services, commercial and professional services, food and staples retailing, pharmaceutical, biotechnology and life sciences, consumer durables and apparel, media and REITs. 67% 14% The top 10 sectors form an average of 93% of the total market capitalization during 2012 1H17 The top five sectors on an average represented 78% of the market capitalization during the period By the end of 1H17, contribution of food and beverages sector and banking sector to total market capitalization has increased by 1.8% and 1% respectively, compared with 2016 10 9 8 7 6 5 4 3 2 Banks Top 10 sectors Next top two sectors Page 27

CAGR (percentage) of market capitalization, by sector (2012 16) The real estate management and development, utilities, and food and beverages sectors were the top three market capitalization gainers among all the sectors in Tadawul, considering the impact of new listings over the past five years Tadawul market capitalization by sector* growth vs. change in contribution (2012 16) 60.0% 50.0% 40.0% New listings of Saudi German Hospital and Al Hammadi in the health care equipment and services sector helped to lift its market capitalization by 4.8 times between 2012 and 2016 SGS listing in the transportation sector supported the market capital growth by 3.8 times during the period Health care equipment and services 7.4 Transportation 4.8 The National Commercial Bank (NCB) listing improved the market capitalization of the banking sector However, the listing of the Alandalus Property Company in 2016 did not have much impact on the market capitalization of the real estate sector 30.0% 20.0% 10.0% 0.0% 10.0% 20.0% Market capitalization of the materials sector did not increase, even though there were three new listings during the period Materials 136.5 Diversified financials 12.7 Pharma, biotech and life sciences 1.3 Telecommunication services 45.0 Insurance 11.4 Food and beverages 23.5 Real estate management and development 33.9 Source: Tadawul, EY analysis *New sector classification of Tadawul (effective 8 January 2017); conversion rate of SAR1 to US$ 0.266631; 1H17 not included, since information from 2012 to 2016 is for the full year. Capital goods 6.8 Food and staples retailing 1.8 Retailing 6.2 Consumer durables and apparel 1.0 Consumer services 4.5 Utilities 25.7 Energy 7.9 Commercial and professional services REITs 2.6 0.1 30.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2.0% 4.0% Media 0.9 Change in contribution to total market capitalization by sector between 2012 and 2016 (percentage) Banks 114.5 Key Y axis X axis The size of the bubble represents the market capitalization (in US$b) of the respective sectors at the end of December 2016. This represents the CAGR growth of market capitalization of respective sectors between 2012 and 2016 (e.g., the market capitalization of the health care equipment and services sector grew by 48% during the period). This represents each sector s change in contribution to the total market capitalization between 2016 and 2012. (e.g., contribution of the health care equipment and services sector s market capitalization to the total market capitalization was 1.6% in 2016 and 0.4% in 2012. A change of 1.2% is represented). Page 28

Yearly shares traded (in millions) The yearly shares traded in Tadawul have stabilized to an extent after a steep fall in 2013, with the banking sector gaining prominence among investors, while trading in the telecommunication sector has dropped during 2012 16 Yearly shares traded by sector* in Tadawul (2012 1H2017) 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 82,545 6,259 9,766 3,145 5,142 11,595 17,669 15,333 1,965 494 1,678 52,502 4,584 5,874 2,548 2,683 6,396 11,143 10,423 903 630 885 70,803 5,086 1,090 65,996 737 1,750 5,137 8,076 4,459 3,584 2,301 4,718 4,153 8,646 11,396 15,693 7,730 13,902 13,213 807 549 1,276 67,729 5,276 2,600 2,726 3,230 9,560 12,327 14,184 1,082 1,187 1,370 23,567 2,794.7 2,737 5,339 573 481 597 745 856 1,385 Other sectors Consumer durables and apparel Consume services Energy Telecommunication services Food and beverages Capital goods Insurance Real estate management and development 9,500 10,029 12,470 14,187 3,527 2 Materials 6,433 4,532 1 Banks 0 2012 2013 2014 2015 2016 1H17 Sector contribution ranking based x on 2016 shares traded Source: Tadawul, EY analysis *New sector classification of Tadawul (effective 8 January 2017); top ten sectors are based on 2016 shares traded; Other sectors include transportation, retailing, media, commercial and professional services, utilities, diversified financials, food and staples retailing, health care equipment and services, pharma, biotech and life sciences, and REITS. The top 10 sectors by shares traded form an average of ~92% of the total yearly shares traded during 2012 16 In 1H17, contribution of real estate management and development sector to total shares traded was at 23% compared with 18% in 2016 10 9 8 7 6 5 4 3 Page 29

CAGR (percentage) of yearly shares traded, by sector (2012 16) The banking sector witnessed the maximum increase in trading activity over the past five years, with a CAGR growth of ~11% and change in contribution of ~9% Tadawul shares traded in a year, by sector* growth vs. change in contribution (2012 16) 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 10.0% 20.0% 30.0% Yearly shares traded in the telecommunication services have dropped by almost a quarter over the past five years No new listings have been registered in the sector during the period Telecommunication services 2,600 The real estate management and development sector witnessed a heavy fall in activity, although there was a new listing in 2016 Insurance 9,560 Capital goods 3,230 Real estate mgmt and dev't 12,327 Energy 1,370 Health care equipment and svc Consumer durables and apparel Utilities 1,082 607 Diversified financials 506 Commercial and professional Svc 638 Media 640 Materials 14,184 Food and beverages 2,726 Consumer services 1,187 304 Retailing Pharma, 986 REITs 37 Food and staples retailing 503 Transportation 1,006 biotech and life science 48 40.0% 9.0% 4.0% 1.0% 6.0% 11.0% Change in contribution to total yearly shares traded between 2012 and 2016 (percentage) There was a change of more than 35% in market activity in both sectors (with just two companies each). However, shares traded by each sector form just 1% of the total shares traded in Tadawul Banks 14,187 The new listing of NCB did not contribute much to the yearly shares traded, as it formed just 1% of the total banking sector activity in 2016 Key Y axis X axis The size of the bubble represents the total yearly shares traded (in millions) of the respective sectors during 2016 This represents the CAGR growth (%) of total yearly shares traded by the respective sectors between 2012 and 2016 (e.g., the yearly shares traded by the telecommunication services declined by 28% during the period) This represents each sector s difference in contribution (in %) to the total yearly shares traded between 2016 and 2012 (e.g., the contribution of the telecommunication services sector s yearly shares traded to total shares traded was 4% in 2016 and 12% in 2012. A change of 8% is represented) Source: Tadawul, EY analysis *New sector classification of Tadawul (effective 8 January 2017); 1H17 not included since information from 2012 to 2016 is for full year. Page 30

Section 06 IPO trend analysis Tadawul main market

Capital raised (US$m) Since 2012, 25 companies have raised US$10.5b though IPOs in Tadawul main market; 2014 16 witnessed limited IPO activity in Saudi Arabia, while no companies went public in 1H17 KSA IPO activity value and volume (2012 1H17) 8,000 7,000 7 6,726 NCB raised US$6b through IPO during 2014 8 7 6,000 6 6 5,000 4,000 3,000 5 4 3 5 4 3 Volume (number of IPOs) 2,000 1,000 1,420 523 1,107 745 2 1 0 2012 2013 2014 2015 2016 1H17 0 0 Capital raised (US$m) Volume (number of IPOs) Source: Thomson Reuters Eikon, Capital IQ, EY analysis. Note: No companies completed IPO in Tadawul main market in 1H17. Page 32

Average IPO size (US$m) Average size of IPOs in Saudi Arabia during the last five years was ~US$ 188m, excluding the largest IPO (NCB), valued at US$6b Average size of IPOs (2012 16) 1,200 1,121 1,000 800 600 400 Average of all IPOs: US$421m 200 203 105 277 248 Average (excluding NCB): US$188m 0 2012 2013 2014 2015 2016 Source: Thomson Reuters Eikon, Capital IQ, EY analysis. Note: No companies completed IPO in Tadawul main market in 1H17. Page 33

Materials and health care were the other two prominent sectors in terms of capital raised in Saudi Arabia, apart from banking KSA s IPO activity by sector value (2012 16) NCB s US$6b IPO was the largest IPO in MENA. It was oversubscribed by 23 times. Banks US$5,998m NCB Capital goods US$338.3m EIC, Bawan Materials US$1,120.9m City Cement, Northern Cement, Najran Cement, Alyamamah Steel, MEPCO, UACC, Takween Retailing US$134.4m SACO Health care US$880.1m Saudi German Hosptl, Al Hammadi, Dallah Health, National Medical Care Co Consumer durables and apparel US$127.3m L azurde Transportation US$752m Saudi Ground Services Real estate management and development US$100.8m Andalus Consumer services US$584.6m Al Tayyar Travel Group, Abdul Mohsen Al Hokair Group Food and staples retailing US$72m Farm Superstores Commercial and professional services US$354.1m Saudi Air Lines Catering Insurance US$58m Jazira Takaful, Alinma Tokio, Metlife AIG ANB Source: Thomson Reuters Eikon, Capital IQ, EY analysis. Note: No companies completed IPO in Tadawul main market in 1H17; company names based on respective Tadawul trading name. Page 34

The slumping oil prices and general economic slowdown affected the number of companies going for IPOs during 2015 16 KSA IPO activity by sector volume (2012 16) Year Sector Banks Capital goods Commercial and professional services Consumer durables and apparel Consumer services Food and stapled retailing Health care equipment and services Insurance Materials Real estate management and development Retailing Transportation Total FY12 1 1 1 1 3 7 FY13 1 1 2 1 5 FY14 1 1 1 1 1 1 6 FY15 1 1 1 1 4 FY16 1 1 1 3 Total 1 2 1 1 2 1 4 3 7 1 1 1 25 Materials and health care contributed 44% to the total number of IPOs raised during 2012 16. Source: Thomson Reuters Eikon, Capital IQ, EY analysis. Note: No companies completed IPO in Tadawul main market in 1H17. Page 35

Average yearly P/E ratio/multiple The average price-to-earnings multiple of IPOs in Saudi Arabia at the time of listing was ~14.6x, excluding the National Medical Care Company, during the past five years Price-to-earnings (P/E) multiple* IPOs in Saudi Arabia at the time of listing (2012 16) 25.0 21.2 The National Medical Care Company (Care) had a P/E ratio of 35.9x, which moved the average P/E for the year from 13.9x to 21.2x. 20.0 17.7 Average P/E ratio 15.0 13.0 14.2 14.9 All IPOs: 15.7x Excluding Care: 14.6x 10.0 5.0 0.0 2012 2013 2014 2015 2016 Source: Thomson Reuters Eikon, Capital IQ, EY analysis. Note: * P/E multiple unavailable for Umm Al-Qura Cement Company, which was a greenfield project, and for all of the three insurance companies that were making losses prior to their IPOs; No companies completed IPO in Tadawul main market in 1H17. Page 36

Health care equipment and services and retailing were the top sectors, with the highest average P/E multiple at the time of listing in Saudi Arabia P/E multiple of IPOs in Saudi Arabia at the time of listing, by sector* (2012 16) P/E multiple at the time of listing Number of companies Health care equipment and services Retailing Transportation 15.7 22.3 23.8 4 1 1 Excluding the P/E of Care (46.7x), the average of health care equipment and services would have been 16.2x. The sector would have still been one of the top sectors with the highest P/E ratio at the time of listing. Consumer durables and apparel 15.5 1 Saudi Company for Hardware was the only IPO in the retailing sector. Real estate management and development Materials 15.1 14.7 1 7 In the materials sector, Takween Advanced Industries had a P/E ratio of 24.3x, and the lowest P/E was 6x for City Cement Company. Capital goods 14.5 2 Food and staples retailing 12.6 1 Commercial and professional services 12.1 1 Consumer services 11.9 2 Banking 10.2 1 Insurance n/a 3 Source: Thomson Reuters Eikon, EY analysis Note: *New sector classification of Tadawul (effective 8 January 2017); P/E multiple unavailable for Umm Al-Qura Cement Company, which was a greenfield project, and for all of the three insurance companies that were making losses prior to their IPOs; No companies completed IPO in Tadawul main market in 1H17. Page 37

Equity offerings (percentage) Majority of the companies offered 30% equity for the initial public listing in Saudi Arabia. IPO proceeds were used as exit routes by shareholders in 60% of the public issues during the five years Percentage of equity offered by KSA IPOs (2012 16) KSA IPOs use of proceeds analysis (2012 16) 2016 2015 2014 2013 2012 50% 1 1 2 All the four materials sector (cement segment) companies that completed IPOs in the period offered a 50% equity offering Expand operations 28% 30% 3 4 4 4 Among the IPOs in Saudi Arabia during the 2012 16 period, 80% offered equity of 30%, which was the minimum level set by the CMA for listing 5 25% 1 The CMA approved NCB s equity offering of 25% owned by the PIF The exception to the NCB by the CMA on the lower equity offering was after considering the number of shares offered (500m) Meeting working capital requirements/improving solvency position 12% Exit by shareholders 60% 0 1 2 3 4 5 6 Number of IPOs Source: Tadawul, IPO prospectus, Thomson Reuters Eikon, EY analysis Note: No companies completed IPO in Tadawul main market in 1H17. Page 38

Returns (in percentage) Slowdown in the Saudi Arabian economy during 2016 also impacted the IPO market, with average returns of listed companies during 2016 being negative, as well as much lower average oversubscription rates compared with the previous four years IPO oversubscription rate and average return (percentage) generated post listing in Tadawul, by year (2012 16) Average oversubscription rate: (2012 16): 10.2x 200 6.2x 8.1x 21.6x 7.7x 3.5x 180 160 140 2013 witnessed high average returns across categories. This was largely due the returns of the two insurance companies Metlife AIG ANG and Jazira Takaful. 2014 witnessed a high oversubscription rate for IPOs, with five out of six companies being oversubscribed by more than 23 times. The average returns of companies listed on Tadawul during 2016 were negative. 120 189% 100 144% 40 108% 100% 20 0 3% 2% 3% 41% 42% 23% 0% 0% 0% 28% 29% 19% 1% 4% 4% 17% 20 2012 2013 2014 2015 2016 Average day-one return (percentage) Average week-one return (percentage) Average first month return (percentage) Average first year-end return (percentage) Source: Thomson Reuters Eikon, SAMA, public sources, EY analysis Note: Averages are based on holding period returns during the respective years; week one considers return as at the end of 7 days after listing, first month considers return as at the end of 30 days after listing, first year-end return considers return at the end of 31 December for the respective year of listing; no companies completed IPO in Tadawul main market in 1H17. Page 39

Stock returns (percentage) The insurance, and food and staples retailing sectors witnessed the highest first month and yearend return among other sectors during the period. Health care equipment and services witnessed the highest positive average returns across all four categories IPO oversubscription rate and average return (in percentage) generated post listing in Tadawul, by sector* (2012 16) Average oversubscription rate 23.0 16.4 5.6 2.9 14.8 25.5 10.1 12.3 5.0 7.8 9.1 6.2 300 Average day-one return (percentage) 295% Sectors with top average stock returns attained for first month and first year end 250 Average week-one return (percentage) Average first month return (percentage) 220% Sectors with positive stock returns across all four return time line categories post-listing 200 Average first year-end return (percentage) 190% 108% 100 56% 50 38% 43% 12% 36% 12% 22% 30% 30% 23% 25% 23% 23% 11% 2% 16% 0% 0% 3% 5% 0% 0 2% 2% 5% 8% 20% 50 Banks Capital goods Commercial and professional Services 47% Consumer durables and apparel Consumer services 60% Food and staples retailing Health care equipment and Services Insurance 7% 9% 40% Materials 20% 0% 5% 6% 1% Real estate management and development 0% 34% 34% Retailing 2% 32% 38% 0% 18% Transportation Source: Thomson Reuters Eikon, SAMA, public sources, EY analysis *New sector classification of Tadawul (effective 8 January 2017); averages are based on holding period returns of IPOs classified under the respective sectors during 2012 16; week one considers return at the end of 7 days after listing; first month considers return at the end of 30 days after listing; first year-end return considers return at the end of 31 December for the respective year of listing; no companies completed IPO in Tadawul main market in 1H17. Page 40

2016 2015 2014 2013 2012 Metlife AIG ANG and Jazira Takaful witnessed the highest returns after the first month and first yearend post-listing on Tadawul. Five out of six companies that completed an IPO during 2014 had been oversubscribed by more than 23x compared with an average of 10x during the five years IPO oversubscription rate and average share price return (in percentage) of IPOs listed in Tadawul, by issuer (2012 16) IPO subscription rate Issuers Week-one share price return First-month share price return First year-end share price return 6 6 3 5 3 5 8 9 9 12 3 5 3 3 8 8 9 6 8 16 Average: 10x 24 23 25 26 23 0 5 10 15 20 25 30 Alinma Tokio M ALTAYYAR Catering City Cement Dallah Health Najran Cement Takween Bawan Care Jazira Takaful Metlife AIG ANB Northern Cement Al Hammadi Al Hokair Group EIC Farm Superstores NCB UACC MEPCO SACO SGS ALANDALUS ALYAMAMAH STEEL LAZURDE Saudi German Hosptl 14% 9% 11% 13% 11% 1% 5% 2% 8% 1% 2% 2% 21% 18% Average: 20% 23% 30% 34% 32% 60% 60% 20 10 0 10 20 30 60 70 Subscription rate Returns (percentage) Returns (percentage) Returns (percentage) Source: Tadawul, Thomson Reuters Eikon, public sources, EY analysis Note: week one considers return at the end of 7 days after listing; first month considers return at the end of 30 days after listing; first year-end return considers return at the end of 31 December for the respective year of listing; No companies completed IPO in Tadawul main market in 1H17; company names based on respective Tadawul trading name. 60% 60% 60% 60% 60% 19% 8% 15% 8% 19% 15% 7% 20% 6% 22% 6% 6% 44% 39% 21% 12% 16% 34% 38% 71% 108% 193% 281% 50 0 50 100 150 300 350 327% 353% 400 33% 14% 36% 2% 18% 27% 47% 3% 2% Average: 59% 30% Average: 57% 9% 23% 27% 1% 7% 29% 11% 5% 28% 60% 174% 190% 232% 386% Six out of seven companies listed on Tadawul during 2015 and 2016 witnessed a negative share price return. 100 0 100 200 400 500 500% Page 41

Capital raised (US$m) With just 4 out of 25 IPOs backed by private equity firms, PE back exits in the Saudi Arabian capital markets did not see much prominence during 2012 16 Private equity (PE)-backed KSA IPOs (2012 16) PE-backed KSA IPOs by sector (2012 16) 400 365 388 3 Capital raised (US$m) Volume Average P/E multiple at the time of listing 350 300 250 200 150 1 2 127 1 2 1 Number of IPOs Health care equipment and Services Consumer services 168 585 1 2 15.5x 11.9x 100 50 Consumer durables and apparel 127 1 15.2x 0 2012 2014 2016 0 Capital raised (US$m) Volume 0 300 600 Source: Tadawul, prospectus, EY analysis Note: Analysis is based on the publicly available information at the first level of shareholding at the time of listing. All offerings where a PE had 5% or more shareholdings at the time of listing were considered for the analysis. The analysis does not include insurance companies; *New sector classification of Tadawul (effective 8 January 2017); there were no private equity backed IPOs during 2013 and 2015. Page 42

Percentage Total expense for IPOs in Saudi Arabia was, on average, 3.7% of the capital raised, with underwriting expense forming around 55% of the total expense for IPOs over the last five years IPO expense and underwriting fee as a percentage of capital raised (2012 16) 5.0% 4.7% 4.5% 4.2% 4.0% 3.5% 3.6% 3.7% Total IPO expense: Average : 3.7% Median : 3.7% 3.0% 2.9% 2.6% 2.8% Underwriting fees: 2.5% 2.3% 2.1% Average : 2.3% Median : 2.8% 2.0% Average 1.5% 1.4% Median 1.0% 0.5% 0.0% 2012 2013 2014 2015 2016 Total IPO expenses as a percentage of capital Raised Underwriting fees as a percentage of capital raised Source: Tadawul, prospectus, Thomson Reuters Eikon and EY analysis Note: total IPO expense as a percentage of capital raised of NCB, Takween, Alinma Tokio Marine and METLIFE AIG ANB has been excluded from the above analysis, as they were outliers; underwriting fee analysis excludes NCB, which is an outlier. Non-meaningful data is also excluded from the analysis; no companies completed IPO in Tadawul main market in 1H17. Page 43

Majority of the underwriters charged fees of ~2.8% of capital raised from issuers in Saudi Arabia during 2012 16 IPO expense as a percentage of capital raised, by issuer (2012 16) Underwriting fee as a percentage of capital raised, by issuer (2012 16) Takween Alinma Tokio M Najran Cement Altayyar Catering City Cement Dallah Health Northern Cement Care Jazira Takaful Metlife AIG ANB Bawan Farm Superstores UACC Al Hokair Group Al Hammadi NCB EIC MEPCO SACO SGS Alandalus Saudi German Hosptl Alyamamah Steel Lazurde 2.9% 3.7% 2.5% 1.6% 3.7% 3.1% 3.8% 5.1% 4.8% 4.8% 4.4% 3.2% 3.2% 0.1% 2.7% 4.4% 3.8% 1.4% 5.0% 3.1% 5.5% 5.4% 9.0% 15.3% Higher percentage, as the capital raised was just US$16m, although the total expense reached US$2.4m 26.1% Higher percentage, as the capital raised was just US$14m, although the total expense reached US$3.6m Lower percentage, as the capital raised was the highest (US$6b) in five years, although the fees was just US$6.7m Average: 3.7% Median: 3.7% Takween Alinma Tokio M Najran Cement Altayyar Catering City Cement Dallah Health Northern Cement Care Jazira Takaful Metlife AIG ANB Bawan Farm Superstores UACC Al Hokair Group Al Hammadi NCB EIC MEPCO SACO SGS Alandalus Saudi German Hosptl Alyamamah Steel Lazurde na na na 0.1% 0.5% 0.8% 1.0% 1.0% 2.0% 2.8% 2.3% 2.8% 2.8% 2.8% 2.1% 2.2% 2.8% 2.8% 2.8% 2.8% 2.8% 2.8% 2.8% 2.8% 3.4% The highest underwriting fee has been charged for the IPOs of Middle East Healthcare Co. (~US$13m) and Al Tayyar Travel Group (~US$10m) since 2012 Average: 2.3% Median: 2.8% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 0.0% 1.0% 2.0% 3.0% 4.0% Source: Tadawul, IPO prospectus, Thomson Reuters Eikon, EY analysis Note: Analysis based on companies with meaningful data available in the sources; n/a indicates data not available or not meaningful; outliers (NCB, Takween, Alinma Tokio Marine and METLIFE AIG) are excluded to calculate average and median; no companies completed IPO in Tadawul main market in 1H17; company names are based on respective Tadawul trading name. Page 44

Section 07 Sukuk market

US$m US$m The Saudi sukuk market remained fairly subdued from 2014 16, as the complexity of sukuk issuance continued to weigh on the issuance volume. However, 1H17 showed significant improvement in sukuk issuances Total value/total number of sukus issued and trend of Sukuk issuance (2012 1H17) The value of Sukuk issued decreased by 78.7% during the period 2012 16, owing to the Saudi Arabia s greater preference for conventional bond issuance. The size and frequency of sukuk issuance reduced from 2014 onward due to complexity in the Islamic debt market, resulting from the differences in Sharia interpretation with the global standards, along with the introduction of innovatively structured sukuks. In 1H17, the total value increased on account of the issuance of banking and financial sector sukuks. 3,000 12,000 10,000 10 10,057 9 9 12 10 2,500 The major sukuk issuance by banks and other financials sector resulted in a spike in the average deal size in 1H17 8,000 6,000 4,000 2,000 0 7 6,254 5,027 4,640 4 3 3,423 1,334 2012 2013 2014 2015 2016 1H17 Total value of sukuk issued # of sukuk issued 8 6 4 2 0 Number of Sukuk issued 2,000 1,500 1,000 500 0 2012 2013 2014 2015 2016 1H17 Range Mean Median Source: Thomson Eikon, News articles, EY analysis Page 46

With the tenure extended from five to seven years, various sectors prefer the sukuk market, with the biggest number issuance by the banking and financial sector Sukuk issuance value (US$m) and volume by sector (2012 1H17) Sectors 2012 2013 2014 2015 2016 1H17 Total Aerospace Agency Banking Chemicals Electric utility Financial* Food processing Industrials Oil and gas Services Transportation Utility 4,001 # 1 1,280 # 3 707 # 2 267 # 1 Source: Thomson Eikon * The financial sector comprises financial institutions other than banks 4,057 # 1 2,134 # 3 2,400 # 2 800 # 3 667 # 1 5,33 # 1 2,400 # 3 587 # 2 1,200 # 1 173 # 1 133 # 1 2,800 # 5 1,067 # 2 267 0.3 # 1 # 1 427 # 1 107 # 1 1,040 # 1 Top three sectors by value 267 # 1 423 # 2 3,000 # 1 # - number of sukuk issuances. 8,481 #4 533 #1 9,681 #16 587 #2 1,200 #1 6,547 #8 1,493 #5 107 #1 267 #1 133 #1 1,040 #1 667 #1 Page 47

All the sectors posted an investment grade with low risk and relative ability to meet financial commitments Fitch long-term issuer default ratings (2012 16) Sukuk issuance across various sector was backed by ratings reflecting low risk and high credit quality Sectors 2012 2013 2014 2015 2016 Ratings and their risk denominations Agency* Fitch long-term issuer default rating (risk profile) Low High Low High Low High Low High Low High AAA to A High credit quality and low risk Banking Low High Low High Low High Low High Low High BBB+ to B Good credit quality; however, speculative Chemicals Low High Low High Low High Low High Low High CCC to C Substantial to high credit risk Oil and gas Low High Low High Low High Low High Low High D High default risk Utility Low High Low High Low High Low High Low High RD Restricted default Source: Thomson Eikon Note: a few sectors have been excluded from the analysis, including aerospace, financial, food processing, industrials, and service and transportation, due to data paucity. 1H17 sukuk issuances excluded due to data paucity * Agency includes Saudi Telecom Company. Page 48

Banks have been consistently contributing to sukuk issuance over the last five years, as sukuk classifies for the Tier II capital requirements under Basel III Major avenues of investing the sukuk proceeds by sectors Banking 1 Used to strengthen Tier II capital to comply with regulations US$6,253m* US$10,056m* US$5,027m* US$4,640m* US$1,334m* 2012 2013 2014 2015 2016 Aerospace 2 Used to strengthen Tier II capital to comply with regulations Food processors 3 Used to strengthen Tier II capital to comply with regulations Utility 4 Meeting working capital requirement; refinancing financial obligations and capital expenditure Source: Thomson Reuters, news articles *Yearly sukuk issuance value. Note: 1H17 not considered due to data paucity Banking to strengthen Tier II capital to comply with regulatory purposes Aerospace to construct new King AbdulAziz International Airport Financial to purchase assets and on sale commodities for business purposes Food processing for general purposes Aerospace to finance expansion of Jeddah's King Abdulaziz Airport and King Khaled International Airport Banking to strengthen Tier II capital for regulatory purpose and to expand Islamic banking Financial to fund construction of plant and lease the issuer s proportional interest Food processors general purposes Utility to meet working capital requirements, refinance existing debt and meet capital expenditure Services to meet working capital requirements, refinance existing debt, meet capital expenditure and make other investments Banking strengthen Tier II capital for regulatory purpose and to expand Islamic banking Industrial for general purposes and refinancing of the existing debt Financial for general purposes and repayment of its existing debt, and financing of investments Food processors to finance capital investment program and invest in strategies for funding diversification Banking to strengthen Tier II capital for regulatory purpose and to expand Islamic banking Financial used for refinancing of debt and general business purposes Banking used for general purposes, including repayment of financial obligations Oil and gas for strengthening the reserves Page 49

Section 08 REITs market

REITs will modernize the Saudi capital market and will further help in realizing the National Transformation Program under Saudi Vision 2030 In Saudi Arabia, a REIT is defined as a closedended investment company that owns incomeproducing real estate REITs are traded as units at Tadawul and are traded as equities in the market. They are generally managed by collectively investing and owning real estate projects, which in turn qualify to generate a periodical income in the form of cash dividends Unlike real estate investment funds (REIFs), REITs are flexible to trade due to the lack of complexity, transparency, subscription and liquidation REITs can help realize the broader goals of the National Transformation Program (NTP) and Saudi Vision 2030. The NTP mentions several initiatives which aim to increase the real estate sector s contribution to overall GDP In Saudi Arabia, due to the nature of the real estate sector, with frequent rent reviews and asset appreciation, REITs can be an effective hedge against inflation REITs bring in alternative sources of finance to the private sector, which can facilitate the participation of the private sector in raising the supply of real estate How can REITs benefit the Saudi capital market? Diversification REITs can offer diversification benefits to the investors by allowing them to spread their risks in multiple real estate segments (residential, commercial, industrial and agricultural properties) and markets (25% of REITs can be invested outside the Kingdom). Structure of the REITs Real estate management service Properties Custodian Unit holders Property manager Income generated from rent Property management fee Stronger historical returns The zero tax for remitted dividends for Saudi REITs, namely other asset classes, increases its attractiveness to the QFIs. Currently, foreign investors need to pay a withholding tax rate of 5% when repatriating dividends. Real estate ownership Working in the interest of the unit holders REIT Fund s board of directors Accessibility Accessibility to Tadawul and tax benefits for QFIs will bring in higher participation from the QFIs. Their increased participation in the capital market will modernize the economy, along the lines of Vision 2030. Real estate custody fees Fee Investment in the funds Management services Transparency The introduction of REITs in the Kingdom, coupled with effective regulatory oversight, will ensure increased levels of transparency, with an improved real estate transparency score (ranked 63 out of 109 constituents) and will bring about growth in the sector. Dividend distribution Management fee Fund manager Source: Tadawul Page 51

REITs are at a nascent stage and introduction of regulations will bring in standardization Investment opportunities REIT assets REITs can invest in residential, commercial, industrial and agricultural properties; whether they are local, regional or global. However, they cannot invest in vacant lands. Foreign asset restrictions The value of assets invested outside the Kingdom should not exceed 25% of a REIT's total asset value. Legal form Closed-ended fund Investor restrictions Number of investors Minimum 50 Public ownership Minimum 30% of total REIT units owned by public Investor ownership Open to Saudi and GCC citizens, and non-saudi residents in the Kingdom Nominal value SAR10 per unit Capital requirement Minimum SAR100m Borrowing restrictions Should not exceed 50% of total fund asset value Investment policy Minimum 75% of total asset value invested in income-producing real estate Distribution requirements 90% of the fund s net income to be distributed to unit holders as cash dividends at least once a year Reinvesting profits Minimum of 90% of profit to be distributed and only 10% of profits allowed to be reinvested Source: Tadawul Page 52

15 Feb 17 22 Feb 17 01 Mar 17 08 Mar 17 15 Mar 17 22 Mar 17 29 Mar 17 05 Apr 17 12 Apr 17 19 Apr 17 26 Apr 17 03 May 17 10 May 17 17 May 17 24 May 17 31 May 17 07 Jun 17 14 Jun 17 21 Jun 17 Price (US$) 13 Nov 16 20 Nov 16 27 Nov 16 04 Dec 16 11 Dec 16 18 Dec 16 25 Dec 16 01 Jan 17 08 Jan 17 15 Jan 17 22 Jan 17 29 Jan 17 05 Feb 17 12 Feb 17 19 Feb 17 26 Feb 17 05 Mar 17 12 Mar 17 19 Mar 17 26 Mar 17 02 Apr 17 09 Apr 17 16 Apr 17 23 Apr 17 30 Apr 17 07 May 17 14 May 17 21 May 17 28 May 17 04 Jun 17 11 Jun 17 18 Jun 17 Price (US$) Saudi REITs trade in low volumes due to the unfavorable market conditions in the real estate sector REITs issued in Saudi Arabia 1 Riyad REIT fund Objective is to invest in income-producing real estate assets in Saudi Arabia 5.0 4.0 3.0 2.0 1.0 0.0 2.93 Initial investor sentiments spiked the value traded on the second day of listing 3.18 50 40 30 20 10 0 Volume traded (millions) Dividend yield: 2.12% 7.0 25 2 AlJazira Mawten REIT fund Objective is to invest in AlKhumrah warehouses in Jeddah city Dividend yield: na 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2.93 4.89 20 15 10 5 0 Volume traded (millions) Source: Tadawul, EY analysis Page 53

30 May 17 31 May 17 01 Jun 17 02 Jun 17 03 Jun 17 04 Jun 17 05 Jun 17 06 Jun 17 07 Jun 17 08 Jun 17 09 Jun 17 10 Jun 17 11 Jun 17 12 Jun 17 13 Jun 17 14 Jun 17 15 Jun 17 16 Jun 17 17 Jun 17 18 Jun 17 19 Jun 17 20 Jun 17 21 Jun 17 22 Jun 17 Price (US$) 30 Apr 17 02 May 17 04 May 17 06 May 17 08 May 17 10 May 17 12 May 17 14 May 17 16 May 17 18 May 17 20 May 17 22 May 17 24 May 17 26 May 17 28 May 17 30 May 17 01 Jun 17 03 Jun 17 05 Jun 17 07 Jun 17 09 Jun 17 11 Jun 17 13 Jun 17 15 Jun 17 17 Jun 17 19 Jun 17 21 Jun 17 Price (US$) Jadwa REIT Al Haramain Fund and Taleem REIT Fund are newly listed REIT funds and the performance have been relatively stable since listing REITs issued in Saudi Arabia 5.0 50 3 Jadwa REIT Al Haramain Fund Objective is to invest primarily in real estate assets in the Holy cities of Makkah and Al Madinah Dividend yield: na 4.0 3.0 2.0 1.0 0.0 2.93 3.18 40 30 20 10 0 Volume traded (millions) 5.0 20 4 Taleem REIT Fund Objective is to invest in or acquiring real estate assets that are linked to the educational or training sector Dividend yield: na 4.0 3.0 2.0 1.0 0.0 2.93 3.36 10 0 Volume traded (millions) Source: Tadawul, EY analysis Page 54

Section 09 Nomu market

The parallel market is expected to deepen the capital market base and achieve Saudi Arabia s Vision 2030 The parallel market is an alternative platform for companies to go public with less stringent listing requirements, and incorporates companies with lower market capitalization (minimum SAR10m). The Nomu market opened a new avenue for SMEs to raise capital in a more costeffective manner compared with the main market (Tadawul). It will also provide an additional exit route to PE investments in SMEs. Lower floatation requirement (20% vs. 30% in the main market) will make Nomu attractive for family-owned businesses, which will help them enhance their corporatization. Introduction of Nomu market supports the Vision 2030 objectives, which envisages increasing the SME contribution to 35% of the GDP from 20% currently. It also aims at further developing the capital markets. Objective of establishing Nomu market Company type Saudi Joint Stock Company A majority of its capital owned by citizens of a Member State of the GCC and enjoys a nationality in the Gulf region Company performance Market capitalization Minimum one year of operational and financial performance No profitability track record required Additional source of funding for SMEs to access capital Increased diversification and deepening of the capital market Legal advisor Financial statements Annual audited statements Quarterly reviewed FSs Disclosure of material information Criteria for offering and listing processes Lock-in period Shareholding If market value for all shares to be listed is more than SAR40m minimum 50 public shareholders If market value for all shares to be listed is less than SAR40m minimum 35 public shareholders Investors share Minimum SAR10m Financial advisor mandatory; legal advisor optional 100% of pre-offering investor shares for one year At least 20% of shares owned by qualified institutions, with 5% as individual limit Source: Saudi Arabia - all industries all sectors (Al Rajhi Capital), Tadawul, News articles Page 56

Qualified investors Nomu- parallel market is restricted to qualified investors; Authorized Persons (APs) must determine the eligible investors Who can invest in the parallel market? 1 APs, for their own accounts Clients of APs, provided AP is appointed as an investment manager to take the decisions 2 Natural person allowed to open an investment account 3 Government of the Saudi Arabia or anybody recognized by the authority/exchange An account in the Securities Depository Center Fulfilling any of the below criteria: Government-owned companies 4 Has conducted transactions in the security market of not less than SAR40m in total and not less than 10 transaction in each quarter during the last 12 months (LTM) 5 GCC-based companies and funds Average size of the natural person s portfolio exceeds SAR10m during the LTM Investment funds 6 Holds the General Securities Qualification Certificate, which is recognized by the authority 7 QFIs Natural persons 8 Source: Saudi Arabia All Industries All Sectors (Al Rajhi Capital), Tadawul Page 57

Liberal listing and capitalization requirements make way for capital raising and provide PE exit routes to SMEs and family-owned businesses Key differences Main market Nomu parallel market Minimum market capitalization SAR100m (US$27m) SAR10m (US$3m) Percentage offered At least 30% At least 20% Public shareholders At least 200 (a) Continual obligations Standard disclosure requirements. Disclosure of quarterly financial statements within 30 calendar days from the end of the period and year-end financial statements within 90 calendar days from the end of the period (b) If expected aggregate market value for all shares to be listed exceeds SAR40m, at least 50 public shareholders required If expected aggregate market value for all shares to be listed is less than SAR40m, at least 35 public shareholders required (a) Lighter financial disclosure requirements (with regard to time permissible to disclose) (b) Disclosure of quarterly financial statements within 45 calendar days from the end of the period and year-end financial statements within 90 calendar days from the end of the period Daily fluctuation limits ± 10% ± 20% Source: Saudi Arabia All Industries All Sectors (Al Rajhi Capital), Tadawul Page 58

Al-Omran Industrial Trading Al-Samaani Factory For Metal Industries Development Works Food Raydan Abdullah Saad Mohammed Abo Moati for Bookstores Baazeem Trading Arab Sea Information System Thob Al Aseel Al Kathiri Holding US$m The highlight of the listing is that the PE firm backed only one IPO Size of the offering IPO activity by sector (US$m) 70 64.8 Retailing 109.2 60 57.6 Consumer services 61.9 50 40 30 31.6 Capital goods Software and services 5.9 9.0 20 10 0 9.0 4.7 4.3 12.8 5.9 6.8 Commercial and professional services IPO objective* 11.5 0 20 40 60 80 100 120 Exit by shareholders 7 PEbacked IPO Expand operation 1 Source: Company prospectus, EY analysis * Al Kathiri Holding: 50% of IPO proceeds will be from exit by shareholders and 50% expansion operation Page 59

Al-Omran Industrial Trading Al-Samaani Factory For Metal Industries Development Works Food Raydan Abdullah Saad Mohammed Abo Moati for Bookstores Baazeem Trading Arab Sea Information System Thob Al Aseel Al Kathiri Holding Al-Omran Industrial Trading Al-Samaani Factory For Metal Industries Development Works Food Raydan Abdullah Saad Mohammed Abo Moati for Bookstores Baazeem Trading Arab Sea Information System Thob Al Aseel Al Kathiri Holding PE multiple Market capitalization (US$) The average P/E multiple of companies in Saudi Arabia at the time of listing was ~12.5x P/E multiples at the time of listing in Nomu market Market capitalization at the time of listing in Nomu market 20.0 17.8 250.0 230.4 Average market capitalization: US$72.4m 15.0 10.0 8.8 11.3 13.2 14.8 12.4 12.4 Average PE: 12.5 11.7 9.8 200.0 150.0 126.4 100.0 76.8 5.0 50.0 53.8 28.1 26.0 35.2 54.4 20.8 0.0 0.0 Source: Saudi All Industries Sector 2017 (Al Rajhi Capital), Thomson Eikon, EY analysis Note: P/E multiple based on IPO price and 2016 annualized figures; market capitalization based on respective company listing day close price and outstanding shares; Thob Al Aseel was listed on 15 June 2017, Al Kathiri Holding was listed on 9 July 2017 and all other companies was listed on 26 February 2017. Page 60

Return (percentage) Removing the outlier*, the average weekly returns from the day of listing was at 3.2%. Additional listings will improve the position in the long run Week-end returns from the day of listing in the parallel market 70.0% 60.0% 58.4% 50.0% 40.0% 30.0% 20.0% 16.7% 16.3% 10.0% 0.0% 11.4% 1.6% 9.5% Average: 9.3% Average*: 3.2% (10.0%) (4.9%) (8.2%) (20.0%) (16.9%) (30.0%) Arab Sea Information Abdullah Saad System Mohammed Abo Moati for Bookstores Raydan Baazeem Trading Al-Omran Industrial Trading Development Works Food Al-Samaani Factory For Metal Industries Thob Al Aseel Al Kathiri Holding Co Source: Tadawul, EY analysis * Outlier Excluding Arab Sea Information System Co. Page 61

2/26/2017 3/5/2017 3/12/2017 3/19/2017 3/26/2017 4/2/2017 4/9/2017 4/16/2017 4/23/2017 4/30/2017 5/7/2017 5/14/2017 5/21/2017 5/28/2017 6/4/2017 6/11/2017 6/18/2017 Nomu index Volume traded in the parallel market has declined significantly over the period compared with the initial surge Volume traded and closing index price in the Nomu market 2,000 8.0 1,000 1,597 1,165 1,017 6.0 4.0 2.0 Volume traded (million) Key statistics (as on 22 Jun 2017) % index change: 36.3% Value traded (US$): 1.0m Volume traded: 122,904 0 0.0 Volume traded Nomu Index Source: Tadawul Note: Average trade size is defined as cumulative volume traded divided by number of trades. Page 62

Section 10 Mutual funds and ETFs

Investment funds (US$b) AUMs from 2014 onward declined by double digits, stemming from the slow economic growth, however, the Q1 2017 shows significant improvement in the numbers Total AUMs for investment funds the investment funds in Saudi Arabia are the largest assets managed in the GCC region, at US$27.9b 30.0 252 270 275 275 300 25.0 240 236 250 20.0 15.0 23.5 27.5 29.5 27.4 23.4 27.9 200 150 Number of investment funds 10.0 100 5.0 50 0.0 2012 2013 2014 2015 2016 Q1 2017 0 Investment funds* (US$b) Number of operating funds Source: SAMA *Investment funds comprise mutual funds and ETFs. Page 64

The mutual industry in Saudi Arabia is primarily dominated by equity funds, and a major proportion of these funds focus on capital preservation Types of mutual funds in Saudi Arabia, H1 2017 7.7% 4.0% 4.0% 3.7% 15.8% 1.5% 0.7% 62.6% Other funds Funds of funds Bond/debt funds Multi-assets funds Real estate funds Balanced funds Composition of equitybased mutual funds, H1 2017 1.2% 13.5% 0.6% Growth 84.8% Income and growth Income Capital preservation Key terms Stock fund or equity fund is a fund that invests in stocks; it is also called equity securities Money market fund is an open-ended mutual fund that invests in short-term debt securities, such as treasury bills and commercial paper Balanced funds are geared toward investors who are looking for a mixture of safety, income and modest capital appreciation A real estate fund is a type of mutual fund that primarily focuses on investing in securities offered by public real estate companies A multi-asset fund is a combination of asset classes (such as cash, equity or bonds) used as an investment Debt funds primarily invest in bonds and other debt instruments, and will suit investors who want to optimize current income assuming low to moderate levels of risk A fund of funds is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities A growth fund is a diversified portfolio of stocks that has capital appreciation as its primary goal, with little or no dividend payouts An income and growth fund is a mutual fund that has a dual strategy of capital appreciation and current income generation through dividends or interest payments Income funds are mutual funds that seek to generate an income stream for shareholders by investing in securities that offer dividends or interest payments A capital appreciation fund attempts to increase asset value, primarily through investments in growth stocks Money market funds Equity funds Source: Tadawul Page 65

Majority of the funds managed have been invested in domestic assets in Saudi Arabia valued at US$19b and foreign investments accounts valued at close to US$5b in Q1 2017 Top 10 mutual fund mangers in Saudi Arabia (industry overview) Q1 2017 40.0 35.0 36 30.0 25.0 25 20.0 15.0 10.0 8.1 18 13 19 14 14 12 16 10 5.0 4.2 2.9 2.8 1.5 1.3 1.1 1.0 0.6 0.4 0.0 NCB Capital Company Samba Capital & Investment Management Co Riyad Capital Company Al Rajhi Capital HSBC Saudi Arabia Limited Fund Managers Saudi Fransi Capital Arab National Investment Company Aljazira Capital Alawwal Invest Jadwa Investment AUMs (US$b) Number of funds managed Sources: Tadawul, GulfBase, Business Wire Page 66

Performance growth (%) The following charts showcase the top-performing funds based on the performance growth rate in July 2017 Top five performing funds as of 31 July 2017 40 β α σ 30 34.8 34.1 HSBC China and India Equity Freestyle Fund 1,19 0.43 13.02 25.5 26.4 20 22.3 25.2 Samba Capital China Opportunities Fd (Al Izdihar) 1.20 0.63 16.63 15.5 10 0 10 11.8 9.7 6.0 7.7 3.1 0.5 5.9 10.9 5.1 3.0 2.4 5.1 5.3 4.3 1.4 0.1 2.7 1.3 6.0 7.9 12.1 1.6 Riyad South East Asian Fund HSBC Global Emerging Markets Equity Fund Saudi Fransi Al Naqaa Asia Growth Fund 1.22 0.13 11.69 1.23 0.24 11.85 1.58 0.72 11.87 17.1 20 2012 2013 2014 2015 2016 YTD (31st July 2017) Saudi Tadawul All Shares 1 Source: Tadawul, Thomson Reuters Eikon Note: β α and σ are the Beta Alpha and Standard deviations respectively of the fund for the one-year period as of 31 July 2017. Page 67

Performance growth (%) Performance growth (%) HSBC China and India Equity Freestyle Fund reported the highest growth, with a one-year beta value of close to one, depicting price movement in line with market from 2012 to 2016 HSBC China and India Equity Freestyle Fund 40 30 20 10 0 10 20 22.3 6.0 25.5 7.7 10.9 2.4 2.7 17.1 1.3 2012 2013 2014 2015 2016 YTD (31st July HSBC China and India Equity Freestyle Fund 2017) Saudi Tadawul All Shares 4.3 34.8 1.6 Versus benchmark One year Three year Five year Alpha 0.43 0.28 0.28 Beta 1.19 0.93 1.01 Information Ratio 0.62 0.13 0.14 R-square 0.93 0.79 0.77 Sharpe Ratio 0.59 0.14 0.21 Standard Deviation 13.02 14.99 15.21 Treynor Ratio 1.86 0.64 0.89 Top holdings*ldings Tencent Holdings Ltd. 10% Alibaba Group Holding Ltd. 9% China Mobile Ltd 6% Infosys Ltd. 6% Baidu Inc. Sponsored ADR 6% Wipro Ltd. 5% Maruti Suzuki India Ltd. 4% Samba Capital China Opportunities Fd (Al Izdihar) 40 30 20 10 0 10 20 15.5 6.0 25.5 3.1 5.1 2.4 7.9 6.0 17.1 2012 2013 2014 2015 2016 YTD (31st July Samba Capital China Opportunities Fd (Al Izdihar) 2017) Saudi Tadawul All Shares 4.3 Source: Thomson Reuters Eikon Note: Performance growth Year-to-date (YTD) data is as 31 st July 2017. Since top holdings information is not available, industry-based holdings have been considered. 34.1 1.6 Versus benchmark One year Three year Five year Alpha 0.63 0.26 0.09 Beta 1.20 0.78 0.79 Information Ratio 0.28 0.11 0.08 R-square 0.58 0.71 0.69 Sharpe Ratio 0.43 0.06 0.10 Standard Deviation 16.63 23.68 20.80 Treynor Ratio 1.67 0.55 0.75 Top holdings* Information Technology 33.31% Financial 31.77% Consumer 11.64% Telecommunication Services 10.26% Energy 4.07% Real Estate 3.59% Page 68

Performance growth (%) Performance growth (%) Riyad South East Asian Fund reported a positive growth rate in 2016 compared with a negative growth in 2015 Riyad South East Asian Fund 40 30 20 10 0 10 20 18.5 6.0 25.5 5.4 2.6 2.4 7.5 17.1 2012 2013 2014 2015 2016 YTD (31st July 2017) Riyad South East Asian Fund 2.2 4.3 Saudi Tadawul All Shares 29.4 1.6 Versus benchmark One year Three year Five year Alpha 0.13 0.07 0.07 Beta 1.22 1.13 1.13 Information Ratio 0.21 0.08 0.01 R-square 0.96 0.95 0.91 Sharpe Ratio 0.48 0.07 0.11 Standard Deviation 11.69 16.45 15.02 Treynor Ratio 1.32 0.28 0.43 Top holdings*ldings Taiwan Semiconductor - Aia Group Ltd - Tencent Holdings - Samsung Electronics - Alibaba Group co - HDFC Bank Ltd - Indust. & Coml Bank China - HSBC Global Emerging Markets Equity Fund 30 20 10 0 10 20 11.8 6.0 25.5 5.9 2.4 5.1 12.1 17.1 2012 2013 2014 2015 2016 YTD (31st July HSBC Global Emerging Markets Equity Fund 2017) Saudi Tadawul All Shares Source: Thomson Reuters Eikon Note: Performance growth Year-to-date (YTD) data is as 31 st July 2017. *Information not available. 5.3 4.3 26.4 1.6 Versus benchmark One year Three year Five year Alpha 0.24 0.02 0.07 Beta 1.23 0.98 0.99 Information Ratio 0.11 0.01 0.05 R-square 0.97 0.92 0.91 Sharpe Ratio 0.45 0.01 0.05 Standard Deviation 11.85 15.50 14.49 Treynor Ratio 1.25 0.06 0.21 Top holdings Tencent Holdings Ltd. 8% Alibaba Grp HLD-ADR 6% Taiwan Semiconductor 6% China Mobile Ltd. 4% Yandex NV 3% Page 69

Performance growth (%) Performance growth (%) Saudi Fransi Al Naqaa Asia Growth Fund and Riyad Future Equity Fund have reported significant growth in 2016 and have performed above the market index in the same time period Saudi Fransi Al Naqaa Asia Growth Fund 30 20 10 0-10 -20 9.7 6.0 25.5 0.5 3.0-2.4 4.3-1.4-0.1-17.1 2012 2013 2014 2015 2016 YTD (31st July 2017) Saudi Fransi Al Naqaa Asia Growth Fund 25.2-1.6 Saudi Tadawul All Shares Versus benchmark One year Three year Five year Alpha 0.72 0.13 0.04 Standard Deviation 11.87 14.57 13.90 Beta 1.58 1.07 1.03 Information Ratio 0.01 0.09 0.01 R-square 0.95 0.87 0.74 Sharpe Ratio 0.36 0.08 0.12 Treynor Ratio 0.77 0.32 0.48 Top holdings*ldings Tencent Holdings Ltd. 6.4% Alibaba Group ADR 5.1% Taiwan Semiconductor 4.8% Baidu INC-US-ADR 2.0% CSL Ltd. 1.9% China Mobile Ltd. 1.9% Largan Precision 1.4% Infosys Ltd. 1.2% Riyad Future Equity Fund 30 20 10 0-10 -20 15.2 6.0 25.5 5.6 0.6 2.4 13.1 17.1 8.7 4.3 2012 2013 2014 2015 2016 YTD (31st July 2017) Riyad Future Equity Fund Saudi Tadawul All Shares 24.1 1.6 Versus benchmark One year Three year Five year Alpha 0.23 0.10 0.01 Beta 1.22 1.12 1.15 Information Ratio 0.09 0.07 0.02 R-square 0.93 0.93 0.91 Sharpe Ratio 0.44 0.03 0.06 Standard Deviation 12.15 17.68 16.72 Treynor Ratio 1.26 0.13 0.27 Source: Thomson Reuters Eikon Note: Performance growth Year-to-date (YTD) data is as 31 st July 2017. *Information not available Top holdings Latin America Fund - China Focus Fund - India Focus Fund - Equities South Africa - Page 70

Unit price (SAR) Unit price (SAR) Overview of Saudi Arabia s major ETFs FALOM ETFs FALCOM Saudi Equity ETF FALCOM Petrochemical ETF 35 35 30 25 20 28.6 27.7 24.8 28.1 29.8 23.0 2012 2013 2014 2015 2016 1H17 FALCOM 30 Saudi Equity 30 25 20 31.7 27.9 26.2 26.1 20.0 24.1 2012 2013 2014 2015 2016 1H17 FALCOM Petrochemical Top 10 holdings (percentage of total portfolio) Sector allocation (percentage of total portfolio) Top 10 holdings (percentage of total portfolio) Al Rajhi 19.88% SABIC 56.69% SABIC 13.92% 4% 3%2% 2%1% Banks Real Estate YANSAB 9.85% Jabal Omar 8.58% 6% Food & Beverages SAFCO 9.21% STC 5.02% 38% Telecom Advanced 7.42% Almarai 4.92% 10% Utilities TASNEE 7.22% MA wgaden 3.79% Retailing Petrochemical 4.63% Saudi Electricity 3.79% Capital Goods Sipchem 2.65% SAVOLA Group 3.72% 13% Energy Alujain 1.34% Alinma 3.57% Insurance CHEMANOL 0.70% Jarir 2.85% 21% Consumer Services NAMA 0.29% Sources: Tadawul website, FALCOM website Note: HSBC Saudi 20 Equity Index was not considered for the analysis due to data paucity. Top holdings and sector allocation data is as of June 2017 Top 10 holdings (percentage of total portfolio) 4.63% 7.22% 2.65% 1.34% 7.42% 9.21% 9.85% 0.29% SABIC 0.70% 56.69% YANSAB SAFCO Advanced TASNEE Petrochemical Sipchem Alujain CHEMANOL NAMA Page 71

Section 11 Abbreviations and glossary

Abbreviations GDP TASI SAMA SAIBOR GFCF REIT NTP Gross domestic product Tadawul All Share Index Saudi Arabian Monetary Authority Saudi Arabian Interbank Offered Rate Gross fixed capital formation Real estate investment trust National Transformation Program QFI JSC LLC CMA SBL SDC SME CAGR Qualified foreign investors Joint stock company Limited liability company Capital Market Authority Securities borrowing and lending Securities Depository Center Small- and medium-sized enterprises Compound annual growth rate REIF Real estate investment fund AP Authorized person PE Private equity IPO Initial Public Offering P/E Price-to-earnings AUM Asset under management GCC Gulf Cooperation Council ETF Exchange-traded fund Page 73

Glossary Term Natural Person Custody member Exchange member Execution broker Independent custody member Definition A real human being, as opposed to a corporation, which is often treated bylaw as a fictitious person Authorized Person (AP): a member of the SDC providing custody services for investors. AP, i.e., custody member, can, but does not have to be an exchange member at the same time. Authorized Person (AP): an member of exchange providing trading services for investors. AP, i.e., an exchange member, has to be a custody member at the same time An exchange member providing trading services in respect of transactions in deposited securities custody services that are provided by another legal entity an independent custody member A custody member providing custody services if trading services are provided by the execution broker Term Alpha Standard deviation Beta Information ratio R-square Sharpe ratio Treynor ratio Definition A measure of active fund performance; average returns discounted by market returns A measure of investment risk or volatility in subperiod returns A measure of sensitivity of fund performance to changes in benchmark performance Risk-adjusted measure of performance; defined as average return divided by standard deviation of active return The percentage of variability in fund performance explained by benchmark performance Risk-adjusted measure of performance, defined as average excess return divided by standard deviation of excess return Risk-adjusted measure of performance, defined as average excess return divided by beta SARIE National real-time gross settlement (RTGS) payment system, operated by SAMA, that facilities cash settlement for the SDC SDC The Central Securities Depository (CSD) of Saudi Arabia performs securities settlement and cash netting, safekeeping and registry functions. SDC operates end beneficial accounts Page 74

EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. The MENA practice of EY has been operating in the region since 1923. For more than 90 years, we have grown to more than 6,000 people united across 20 offices and 15 countries, sharing the same values and an unwavering commitment to quality. As an organization, we continue to develop outstanding leaders who deliver exceptional services to our clients and who contribute to our communities. We are proud of our accomplishments over the years, reaffirming our position as the largest and most established professional services organization in the region. 2017 EYGM Limited. All Rights Reserved. EYG no. 05176-172Gbl ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting tax or other professional advice. Please refer to your advisors for specific advice. ey.com/mena Abdulrahman Moulay Albizioui Partner, Transaction Advisory Services Leader, Saudi Arabia Entity: Ernst & Young & Co. (Public Accountants) Email: abdulrahman.moulay@sa.ey.com Phone: +966 50 5265042 Mohsin Iqbal Principal Transaction Advisory Services, Jeddah, Saudi Arabia Email: mohsin.iqbal@sa.ey.com Phone: +966 54 1577864 Gregory Hughes MENA IPO Leader, Transaction Advisory Services Email: gregory.hughes@ae.ey.com Phone: +971 56 5035085