TresVista November 09 Newsletter
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TresVista November 09 Newsletter



The MENA Newsletter gives you a quick but incisive look at the events taking place in the business world in the Middle East. It is classified into sections such as Macro economic news, Government ...

The MENA Newsletter gives you a quick but incisive look at the events taking place in the business world in the Middle East. It is classified into sections such as Macro economic news, Government regulations, and Liquidity events amongst others. We aim to give you a broad overview of the factors influencing the MENA markets and an understanding of the newsworthy events across countries, sectors and companies in the region.

Your feedback is appreciated as we are always looking for ways to improve our Newsletter and enhance your experience. You can write to us at



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    TresVista November 09 Newsletter TresVista November 09 Newsletter Document Transcript

    • Issue No. 2.03 MENA MONTHLY NEWS Month of November 2009 MENA MARKETS For additional Country Index Close % Change 110.0 information or requests Saudi Arabia SASEIDX Index 6,355.8 0.7% or to be added to the Kuwait KWSEIDX Index 6,933.7 (4.0%) 105.0 UAE DFMGI Index 1,940.4 (6.6%) distribution list, please Egypt HERMES Index 542.8 (12.5%) contact… 100.0 Oman MSM30 Index 6,357.2 1.4% Jordan JOSMGNFF Index 2,583.5 0.3% Morocco MOSENEW Index 10,208.5 (5.3%) 95.0 Bahrain BHSEASI Index 1,438.3 (5.2%) Qatar DSM Index 7,193.4 4.4% 90.0 1. MENA Overview Tunisia TUSISE Index 4,107.4 1.2% 2. Saudi Arabia Lebanon BLOM Index 1,543.2 (2.5%) 3. Kuwait 85.0 Abu Dhabi ADSMI Index 2,668.2 (8.6%) 4. UAE Nov-01 Nov-08 Nov-15 Nov-22 Nov-29 Saudi Arabia Kuwait U.A.E Egypt 5. Egypt 6. Other Countries GLOBAL MARKETS 7. M&A 110.0 Country Index Close % Change 105.0 USA Dow Jones 10,344.8 6.5% USA S&P 500 1,095.6 5.7% 100.0 USA NASDAQ 2,144.6 4.9% EURO DJ Euro Stoxx 2,797.3 2.0% 95.0 London FTSE 100 5,190.7 2.9% 90.0 Japan NIKKEI 225 9,345.6 (6.9%) China HANG SENG 21,821.5 0.3% 85.0 Nov-01 Nov-08 Nov-15 Nov-22 Nov-29 Do w J o nes Indus tria l S &P 500 NAS DAQ C o m po s ite DJ Euro S to xx F TS E 100 Nikke i 225 Hang S eng COMMODITIES / CURRENCIES Commodity Open Close % Change Currency (USD/) Open Close % Change NYMEX Crude 77.00 77.28 0.4% GBP 0.608 0.608 0.0% Gold 1,045.40 1,179.60 12.8% EUR 0.679 0.667 (1.9%) Silver 16.31 18.49 13.3% SAR 3.750 3.750 0.0% LME Steel 370.00 405.00 9.5% KWD 0.286 0.285 (0.4%) MENA Overview ▲ UAE consumers remain the most optimistic in the Middle East and Asia Pacific region, posting 102 index points higher than the global average of 86, according to the latest Nielsen Consumer Confidence Index, which measures consumer sentiments worldwide. ▲ 3,398 civil building projects worth USD 1.4 trillion are currently active in the Gulf region. ▼ Dubai World, a wholly-owned entity of the Dubai government, announced on November 25 its intention to restructure the debt of Dubai World and Nakheel, its subsidiary by requesting six-month delay on repaying the bonds. - Dubai's surprise move angered some investors who had been reassured by local officials for months that the city would meet all obligations on its USD 80.0 billion of gross debt in spite of recession and a real estate crash. - Investor confidence has also been dented with the Dubai Government and Abu Dhabi Government disagreeing to underwrite Dubai World’s debt. - The European Banks have a debt exposure of ~USD 87.0 billions out of which UK banks have ~USD 50.0 billions worth of exposure. - Moody's immediately cut ratings on some government-related entities to junk status whereas S&P cut ratings on some entities to one level above junk. ▼ Current account surpluses in the GCC region have dropped by USD 50.0 billion to USD 350.0 billion, due to the fall in oil prices, and will shrink further by USD 150.0-USD 200.0 billion next year. ▼ OPEC oil supply fell in October, the first decline since April, due to lower output from Saudi Arabia, Iraq, and Nigeria. - Gulf Arab economies will grow 5.2% in 2010, according to DIFC. - Global issuance of Islamic bonds, or Sukuk, has risen 40.0% in the first 10 months of the year, helped by sovereign issues that will provide benchmark pricing to companies still hesitant to launch. - Expatriates comprise as much as 58.0% of the GCC's workforce and 87.0% of the UAE's workforce, increasing the gap between local and expatriates, recruitment company said. TresVista Financial Services, Pvt. Ltd. © Page 1
    • Issue No. 2.03 MENA MONTHLY NEWS Month of November 2009 Saudi Arabia Sectors % ▼▲ Company % Change 1 Month Index Performance CAGR 0.7% 6,400.0 Top 5 Gainers: Telecom (2.1%) 6,380.0 The Company for Cooperative Insurance 17.7% Banking 1.3% Jazan Development Company 13.5% 6,360.0 6,340.0 Cement 0.5% Anaam International Holding Group 10.3% Saudi Real Estate Company 9.2% SASEIDX Index 6,320.0 Insurance (0.1%) National Petrochemical Company - Saudi Arabia 8.0% 6,300.0 6,280.0 Top 5 Losers: 6,260.0 Trade Union Cooperative Insurance Company (12.2%) 6,240.0 Ash-Sharqiyah Development Company (10.7%) 6,220.0 Saudi Transport and Investment Company (Mubarrad) (9.8%) 6,200.0 Tourism Enterprises Company (9.5%) Nov-01 Nov-08 Nov-15 Nov-22 Nov-29 Saudi Reinsurance Company (8.7%) Macro Economic News ▲ Saudi Arabia has announced that it will provide USD 380.0 million loan to Pakistan, according to an agreement between Pakistan's Economic Affairs Division and a Saudi Fund. ▲ Saudi Arabia’s economy is to grow by 4.0% in 2010, while it is projected to register a contraction of 0.9% in 2009. According to National Commercial Bank, Non-oil GDP growth is projected at 3.3% in 2009 and is expected to improve marginally to 4.2% in 2010. ▲ The value of ongoing and planned projects in Saudi Arabia is estimated at USD 586.0 billion at ~128.0% of its GDP. ▲ Saudi private sector investments in the U.S. last year reached USD 426.7 billion, according to the chairman of the Jeddah Chamber of Commerce and Industry (JCCI). ▲ A report issued by Saudi Arabia's Central Department of Statistics and Information (CDSI) showed that the Kingdom's annualized inflation decreased to 3.5% in October 2009 from 4.4% in September 2009. ▲ According to Standard & Poor’s, banks in Saudi Arabia have been resilient amid the global recession and the debt problems of a few family-owned conglomerates will not trigger credit rating downgrades. ▼ Saudi Arabia could face inflationary pressures during Q4 2009, mostly due to seasonal factors according to the Saudi Arabian Monetary Agency (SAMA). - Saudi Arabia has slashed its foreign assets by USD 59.8 billion in the third quarter of 2009 to fund its record state budget and mitigate the impact of the global financial turmoil. Sector News ▲ Saudi Arabia’s total investment in the real estate sector will exceed the USD 400.0 billion barrier by 2010. ▲ Minister of Commerce and Industry announced that liquidation agreements have been signed for 70.0% of insolvent real estate share businesses. ▲ The Government will shortly finalize plans to build the largest ever gas plant in Saudi Arabia to supply utilities and some industries. The new gas plant is expected to process more than 1.8 billion cubic feet per day (cfpd) of gas. ▲ Saudi Arabia would need to invest USD 80.0 billion in electricity generation and distribution over the next ten years to cater for domestic demand that is growing by 8.0% a year. ▲ Automotive sales in Saudi Arabia will increase by 50.0% to 880,000 units by 2013, representing a 50.0% increase from the same period in 2008. ▲ Oil Minister Ali Al-Naimi said that Saudi Arabia, the world’s biggest oil producer, has started to expand and upgrade its oil and gas production and refine business at a cost of USD 100.0 billion. ▲ Saudi Basic Industries Corporation’s (SABIC) Chief Executive Officer Mohamed Al-Mady said global demand for basic chemicals is improving. ▲ Saudi Arabia's infrastructure sector is forecasted to achieve a real growth of 2.9% in 2009, with the construction industry's value to reach USD 20.7 billion, according to 'Saudi Arabia Infrastructure Report Q1 2010'. ▼ Saudi Arabia's non-oil exports in September fell 19.0% to USD 2.0 billion from a year earlier according to Central Department of Statistics and Information. Saudi's imports in September also fell by 34.0% according to CDSI data. ▼ Container volume at Saudi Arabia's ports declined 8.7% in the first half of 2009 to 68.1 million tons compared to the first half of 2008. Imports at eight ports also declined by 20.7% to 31.9 million tons in the first half of 2009, while exports eased down 1.0% to 42.0 million tons. Company News ▲ SABIC along with China Petroleum and Chemical Corporation announced the launch of their 50-50 owned USD 2.7 billion petrochemical complex in Tianjin city. ▲ Ma’aden announced that it has signed a contract with Saudi Electricity and Saline Water Conversion Corporation to merge a power project and a desalination project and it has secured full government funding for the merger. ▲ Saudi Dredging Company has signed a long-term partnership agreement with Belgian dredging group DEME to jointly construct new ports on the Red Sea coast in the Kingdom. TresVista Financial Services, Pvt. Ltd. © Page 2
    • Issue No. 2.03 MENA MONTHLY NEWS Month of November 2009 ▲ Rabigh Refining and Petrochemical Company announced the launch of USD 10.0 billion refinery and chemicals complex at Rabigh on the Red Sea, which will add 2.4 million tons of petrochemicals to the company's annual production capacity. ▲ The Islamic Development Bank (IDB) has decided to double the growth of its operation plan from 15.0% to 30.0% for the period 2009-11. ▲ Al Oula Mawarid, a subsidiary of Al Oula Real Estate Development Co., plans an industrial real estate project in the Kingdom's eastern region. The project, which will cost more than USD 133.3 million, will involve the construction of an industrial city on an area of 1.3 million sq. m. ▲ Almarai Company will invest USD 533.3 million to expand the business of Hail Agricultural Development Company (Hadco), a company it acquired recently. ▲ Saudi Aramco plans to raise its daily gas supplies by 30.0% within 5 years to 8.0 billion cubic feet, its CEO said. ▲ Saudi Aramco is expected to bring online a new 90,000.0 barrels per day clean diesel unit at its joint-venture refinery with Royal Dutch Shell by December 2010. ▲ Saudi Electricity Company announced that it plans to invest USD 10.1 billion in projects during the next 3 years to boost electricity production in the Kingdom. ▲ Ibn Hayyan Plastic Products Company (TAYF), an affiliate of Saudi Basic Industries Corporation (SABIC) and Albemarle Corporation, has signed an agreement to form a 50-50 joint venture, Saudi Organometallic Chemicals Company (SOCC), to build a world-scale organometallics production facility in Jubail. ▲ Turkey-based TAV Airports Holding signed a 50-50 joint venture agreement with Saudi Arabia-based Al Rajhi Holding Group to maintain and manage various airports on a BOT (Build-Operate-Transfer) basis. ▲ The board of directors of Al Jazeira Services decided to acquire 57.0% stake in Al Amana Building Materials Co. ▲ Saudi Chemical Company announced that it has signed an agreement to acquire 20.0% stake in Explo Track Company (US) which is specialized in advanced electronic systems to store and transport civil and military explosives. ▲ Saudi Ceramics Company announced that it has started commercial production in its second heater project, which has an annual production capacity of 600.0 billion heaters. ▲ Al Ahlia Cooperative Insurance Company approved the acquisition of a 5.0% stake in Najm Insurance Services Company from HH Prince Mohammed Bin Bandar Bin Abdulaziz, which awaits the general assembly's approval. ▲ National Water Company plans to tender a water storage project worth USD 373.4 million in the Jeddah province. ▲ Saad Group has agreed to sell a 19.0% stake in Petra Diamonds Limited, a UK-based mining company focusing on diamond resources, for USD 100.0 million in a private placement. ▲ Saudi Steel Pipe Company announced that it had increased its stake in Global Pipe Company from 25.0% to 35.0%. ▲ Private Saudi conglomerate Aujan Industries, will invest around USD 200.0 million over the next two years to expand its beverage business in Saudi Arabia, Iran, and Iraq. ▲ A US maker of industrial air conditioners has formed a USD 200.0 million joint-venture with Saudi Arabia's Alessa group. ▲ Ethiopian mines and energy minister said that the government has signed a deal with Saudi Arabia's Midroc Gold Co., to extract an estimated 20.0 tons of recoverable gold found in the Horn of African country last month. ▼ Emaar, the Economic City, has canceled a USD 173.3 million contract it signed with UAE-based City Cool to build, own, and operate two cooling stations at the residential and commercial buildings within Bay La Sun Village on the Red Sea. - U.S. based Raytheon has been awarded a USD 59.2 million deal to manufacture and install 21 civil aviation radar surveillance systems for Saudi Arabia's General Authority of Civil Aviation. - Saudi Electricity awards Riyadh transmission deal worth USD 64.0 million to a consortium of KEC and Al-Sharif Group. - Saudi Electricity Company has awarded a USD 120.0 million project to ABB for power generation at the first women university in Saudi Arabia. Liquidity / Capital raising - The annual growth of M3, the broad measure of money circulating in the economy, rose 12.5% in September, compared with 12.3% in the August. - The Saudi Arabian Monetary Agency said it has kept interest rates unchanged in the third quarter of 2009 due to declining inflation and the need to support lending by local banks. It kept its overnight reverse repo rate at 0.3%, and the benchmark repurchase rate at 2.0%. - Bahrain-based Gulf International Bank plans to offer Saudi riyal-denominated bonds in a private placement to boost its funding base and extend the maturity profile of its liabilities. - Saudi Arabia's Capital Market Authority (CMA) said Sunday it has approved Zamil Industrial Investment Co.'s plan to raise its capital by USD 40.0 million. - Saudi bank credit growth edged up 0.1% in October compared to September, which stood at USD 192.7 billion in October, the Saudi Arabian Monetary Agency said. TresVista Financial Services, Pvt. Ltd. © Page 3
    • Issue No. 2.03 MENA MONTHLY NEWS Month of November 2009 Kuwait Sectors % ▼▲ Company % Change 1 Month Index Performance CAGR (4.0%) Top 5 Gainers: 7,400.0 Insurance (2.2%) DAMAC Kuwaiti Holding Company 43.1% 7,300.0 Banks (4.1%) Oula Fuel Marketing Company 39.1% 7,200.0 Food (9.7%) National International Holding Company 26.2% 7,100.0 Kuwait Bahrain International Exchange Company 25.5% KWSEIDX Index Service (2.8%) 7,000.0 International Resorts Company 22.5% Real Estate (3.2%) 6,900.0 Top 5 Losers: Industries (8.6%) Al Madar Finance and Investment Company (32.4%) 6,800.0 6,700.0 Investment (1.0%) Hayat Communications Company (26.1%) Gulf Cable and Electrical Industries Company (25.5%) 6,600.0 Al Abraj Holding Company (24.5%) 6,500.0 Wethaq Takaful Insurance Company (24.1%) Nov-01 Nov-08 Nov-15 Nov-22 Nov-29 Macro Economic News ▲ Kuwait recorded a budget surplus of USD 17.5 billion as of September 2009 due to higher than forecasted oil revenue. The total revenues stood at USD 28.9 billion at the end of September 2009. Oil revenues stood at USD 27.1 billion and spending amounted to USD 11.3 billion. - Iraq and Kuwait are engaged in technical negotiations to strike a deal over production from border oilfields that have been at the heart of previous conflicts. Sector News ▲ Total real estate investments shot up to USD 531.1 million in Q3 2009. ▼ NBK noted that local banks witnessed an increase of USD 2.3 billion in total deposits in October, however, credit growth remained slow and did not match the rise in deposits. ▼ Investment companies alone posted a loss of USD 1.4 billion as they have been hard-hit by the global financial crisis. ▼ Property trade in Kuwait is predicted to fall by 40.0% to USD 5.8 billion this year compared to last year, with a supposition that fluidity is to last in the remaining two months of this year. Company News ▲ Kuwait's Petrochemical Industries Company started operations at a USD 2.0 billion aromatics plant and is expected to hit full capacity by early December. ▲ Kuwait and Canada signed a MoU on trade cooperation, aiming to stress economic and investment relations. ▲ Wataniya Palestine Mobile will invest USD 700.0 million over a period of 10 years to develop and manage its network. ▲ The National Bank of Kuwait has received central bank approval to buy back 10.0% of its shares for a six-month period ending on May 24, 2010. ▼ Zain expects the global financial crisis and currency market turmoil to cut USD 1.0 billion from its forecast revenue of USD 9.0 billion, its chief executive said. ▼ Nomura downgraded its rating for Agility to neutral from buy after the U.S. Department of Defense temporarily halted new contract awards to the firm until a legal dispute is resolved over allegedly overcharging the department on USD 8.5 billion worth of food contracts Liquidity / Capital raising - Kuwait International Bank (KIB) increased its capital by 45.0% by issuing new shares. The shares will be issued at a nominal price of 100.00 fils with a premium of 70.00 fils each. - Kuwait's Commercial Real Estate Co. (Al Tijaria) secured USD 221.0 million 5.0 year credit facility from Commercial Bank of Kuwait to repay Shariah-compliant loans. - Kuwait’s money supply growth (M2) grew by 15.7% to USD 87.1 billion in October 2009 compared to September 2009. M1 rose 6.3% in October 2009 to USD 17.3 billion compared to October 2008. - Banks' total claims on the private sector, which also include their local investments, grew by 7.1% in the year to October 2009 to USD 94.8 billion. - Gulf Finance House is planning to borrow up to USD 200.0 million through a three-year tenor unsecured and convertible Murabaha agreement. - Kuwait's Investment Dar, which owns half of British luxury carmaker Aston Martin, has received a favorable response from creditors to a proposed restructuring plan for USD 3.5 billion of debt under which Dar will make debt repayments to creditors over a five-year period, with the first payment expected by the end of 2010. TresVista Financial Services, Pvt. Ltd. © Page 4
    • Issue No. 2.03 MENA MONTHLY NEWS Month of November 2009 UAE Sectors % ▼▲ Company % Change 1 Month Index Performance CAGR (6.6%) Top 5 Gainers: 2,280.0 Insurance Index 1.1% Kuwait Finance and Investment Company 36.7% 2,240.0 Health Care Index (6.0%) Gulfa Mineral Water and Processing Industries 29.9% Telecom Index (10.5%) 2,200.0 Al Mazaya Holding Company 14.0% Construction Index (9.7%) Aramex 10.8% ADSMI Index 2,160.0 Energy Index (17.7%) Emirates NBD 9.5% 2,120.0 Real Estate Index (9.9%) Top 5 Losers: 2,080.0 Bank&Finance Index (6.6%) Al Madina for Finance and Investment Company (23.5%) Industrial Index (2.9%) Emirates Integrated Telecommunications Company (16.5%) 2,040.0 Gulf General Investment Company (16.5%) Consumer Index (4.6%) 2,000.0 Global Investment House (9.3%) Nov-01 Nov-08 Nov-15 Nov-22 Nov-29 Al Firdous Holding (9.2%) Macro Economic News ▲ UAE's economy will grow 1.5% in 2009 and rebound further in 2010 according to the Dubai International Financial Centre (DIFC). ▲ The Ministry of Economy said Abu Dhabi will spend USD 1.0 trillion on major infrastructure, property, and manufacturing projects. ▲ The Abu Dhabi’s economy grew at 30.0% in 2008 as gross domestic product reached USD 141.5 billion. ▲ UAE's public expenditure is expected to grow 14.0% in 2009 over 2008. ▲ UAE’s GDP is expected to post a growth rate of 6.1% in Q3 2009, against 5.4% in Q2 2009 according to High Planning Commission (HCP). This is due to a slight pickup in foreign demand and a similar upturn in non-agricultural activities. ▲ Abu Dhabi is targeting FDI of 23.0% of GDP by 2030 by attracting more foreign direct investment (FDI) and lift non-oil exports to boost their contribution to the emirate's GDP. FDI currently accounts for 14.0% of the GDP. ▲ The UAE Ministry of Economy has adopted a focused action plan to boost bilateral trade in goods and services with the UK to USD 19.9 billion by 2015 from the current level of USD 12.4 billion, as agreed at the recent UAE-UK Joint Economic Committee, Meeting. ▼ DP World, DEWA, and DIFC Investments were downgraded to A3 from A1, while Jebel Ali Free Zone and Dubai Holding Commercial Operations were downgraded to Baa1 from A3. ▼ Dubai has shocked investors by asking for a debt standstill at Dubai World, the government's flagship holding company. Dubai's surprise move angered some investors who had been reassured by local officials for months that the city would meet all obligations on its USD 80.0 billion of gross debt in spite of recession and a real estate crash. After this announcement, it raised USD 5.0 billion from two Abu Dhabi banks. - Annual consumer inflation averaged 1.9% year to date but prices fell 0.1% in October 2009 compared to September 2009. Government Regulations ▲ Dubai is implementing the ATA Carnet system to facilitate trade and allow the temporary admission of merchandise and goods, the Dubai Chamber of Commerce and Industry announced. ▲ A new Abu Dhabi Government decree stipulates that a landlord cannot evict tenants unless they have resided in that property for a minimum of five years. ▲ The Central Bank of UAE has implemented the Basel-II system asking for tougher capital adequacy levels for a sound banking industry under which the banks have been directed to maintain a minimum capital requirement of 11.0% at all times, which would be increased to 12.0% by June 30, 2010. - According to the new corporate governance regulations to come into effect in May 2010, company board members will be prohibited from engaging in significant financial dealings with firms in which they have a controlling interest. The new rules define a significant financial transaction as that which exceeds 5.0% of the paid capital of the company served by the board member, or AED 5.0 million (USD 1.4 million), whichever is less. Sector News ▲ The travel and tourism industry is expected to directly contribute 5.4%, or USD 12.9 billion, to the UAE's GDP in 2009, according to the World Travel and Tourism Council (WTTC). ▲ Abu Dhabi Terminals (ADT) handled in excess of 436,000 containers for the ten months ended October 2009, an increase of 42.0% compared to same period in 2008. ▲ The UAE civil building construction market has 1,845 ongoing projects worth USD 657.0 billion according to Proleads. ▲ UAE banks set aside a further USD 1.1 billion in specific provisions for non-performing loans (NPLs) in Q3 2009, totaling USD 7.6 billion as on September 30, 2009. ▲ The Dubai Airshows’ final tally of contracts and purchase commitments were valued at more than USD 14.0 billion. ▲ The UAE has joined a group of seven countries in further liberalizing its air space by signing Bilateral Air Service Agreements under the International Air Transport Association's (IATA) Multilateral Statement of Policy Principles. ▲ The UAE has pumped nearly USD 27.2 billion into the real estate sector over the past 5 years, more than double the total capital channeled into property projects in the previous five years. TresVista Financial Services, Pvt. Ltd. © Page 5
    • Issue No. 2.03 MENA MONTHLY NEWS Month of November 2009 ▲ Turkey, one of the largest suppliers of building and construction materials to the UAE, is seeing a slow but gradual recovery in the demand for construction material in the Emirates, after a sharp decline this year. ▼ About 17,000 new companies have been registered during the period of January-July 2009, against 17,345 in the same period last year which representing a decline of 1.0%. ▼ Mergers and acquisitions (M&A) activity involving UAE firms declined by 29.0% to USD 14.8 billion for ten months ended October 2009 compared to the same period in 2008. ▼ Ex-factory cement prices in Dubai have dropped between 8.0% and 13.5% since October and by 33.0% since March, according to a senior industry official. ▼ The average price of concrete fell 11.0% in October, with the price of standard UAE ready mix concrete falling to USD 86.30 per metric tonne and the price of UAE sulphate resistant ready-mix concrete lowering to USD 87.80 per metric tonne, according to the Statistics Centre of Abu Dhabi. - Residential rents in Abu Dhabi are expected to remain weak for the rest of 2009 after modest declines in the third quarter in central locations, but are likely to stabilize in 2010. Company News ▲ Emirates National Oil Company has agreed to buy the remaining 48.0% stake it does not own in Dragon Oil for USD 1.9 billion as the refiner and marketer plans to expand exploration. ▲ Etisalat plans to spend USD 1.4 billion to boost its fibre optic coverage. The company plans to boost its fibre optics coverage to 90.0% from the current 60.0% by 2011. ▲ National Marine Dredging Co. (NMDC) has won USD 626.1 million contract by Zakum Development Co. to create 4 artificial islands offshore Abu Dhabi Island. ▲ Abu Dhabi’s International Petroleum Investment Company (IPIC) and its joint venture partner Pak-Arab Refinery (PARCO) will build a USD 5.0 billion oil refinery in Pakistan which will have an output capacity of 250,000 barrels per day. ▲ The National Marine Dredging Company (NMDC) has been awarded USD 373.4 million contract by the Abu Dhabi Urban Planning Council (UPC) to construct the Mussafah canal. ▲ Abu Dhabi Airports Company recorded a 7.0% increase in passengers over the course of 2009 to date, and during the month of October, it saw a 2.8% increase in passenger numbers and 24.3% increase in cargo compared to the same period last year. ▼ Emirates NBD have exposure of up to USD 350.0 million to two Saudi conglomerates now restructuring their debt, Emirates NBD Chief Executive Rick Pudner said. Liquidity / Capital raising - Net treasury debt increased by 15.1% to USD 21.8 billion in September 2009. - The Dubai Civil Aviation Authority will pay off its USD 1.0 billion Sukuk that matured by using proceeds from the USD 1.9 billion bond issued by the Department of Finance. - Abu Dhabi National Energy Co. (TAQA) is looking to raise up to USD 716.8 million in a Canadian bond offering in Q1 2010 to refinance a credit facility, and will continue to focus on consolidating its portfolio and control costs - The money supply growth rate stood weakened at 6.1% in September 2009, compared to 12.3% in September 2008 and 6.4% in August 2009. The growth rate in commercial banks loans decreased to 13.1% in September 2009 compared to September 2008 and 26.0% in September 2007. - Abu Dhabi National Hotels will complete an USD 408.0 million fundraising deal before the end of November. National Bank of Abu Dhabi (NBAD) is acting as lead arranger on the deal and will also be a lender, along with other local banks, United National Bank (UNB) and Abu Dhabi Commercial Bank (ADCB). - Lending for personal loans was down by 6.3% since December 2008. Banks are not pursuing a lending strategy, thus, bank holdings of certificate of deposits have risen 58.4% since the end of 2008. - Growth in broad money supply continued to decelerate to 10.9% in October from 13.4% in September. - Gulf Finance House (GFH) signed an agreement with Deutsche Bank for the placement of its second USD 100.0 million convertible Murabaha facility. - First Gulf Bank has received more than USD 1.0 billion in orders for a planned three-year, dollar-denominated bond with price guidance set at 275 basis points over mid-swaps representing a coupon of 4.0%. - Abraaj Capital Holdings Limited announced that it has completed a USD 375.0 million capital increase to existing shareholders, strengthening its balance sheet to capitalize on strategic buying opportunities, expand its geographic and product coverage, and consolidate its market-leading position. - Aabar Investments raised USD 1.6 billion, 6 month loan from a group of local and foreign banks for general corporate purposes. - The Government of Dubai, acting through the Department of Finance, has raised a further USD 5.0 billion as part of its USD 20.0 billion long term bond programme launched at the beginning of 2009. - Union Properties has put on hold the USD 680.8 million non-convertible bond issue, citing lack of liquidity in the market. TresVista Financial Services, Pvt. Ltd. © Page 6
    • Issue No. 2.03 MENA MONTHLY NEWS Month of November 2009 Egypt Company % Change 1 Month Index Performance CAGR (12.5%) Top 5 Gainers: 640.0 Suez Bags Company 55.8% 620.0 Suez Cement Company 52.1% Alexandria Portland Cement Company 30.6% 600.0 Pioneers Holdings for Financial Investments 14.6% Hermes Index 580.0 Ahli United Bank of Egypt 13.0% Top 5 Losers: 560.0 National Company for Housing for Professional Syndicates (48.0%) 540.0 Egyptian Real Estate Company (47.9%) 520.0 Ismailia National Company for Food Industries (45.0%) Moquette Mac (34.4%) 500.0 Wadi Kom Ombo for Land Reclamation (33.3%) Nov-01 Nov-08 Nov-15 Nov-22 Nov-29 Macro Economic News - The Central Bank of Egypt said annual inflation rose to 6.5% in October 2009 from 6.3% in September 2009. Company News ▲ Palm Hills Development said that the company has formed a joint venture with contractor Hassan Allam Sons to develop 238,560.0 sq. meter of land. The venture's first project will be Park View, a 97,661.0 sq. m residential development in New Cairo. ▲ Pioneers Holding Company, an Egyptian brokerage company and local investment bank Beltone Financial Holding announced that their boards approved plans to merge by issuing 100.0 million shares through a share swap. The Pioneers Holding Company will have a 17.0% stake in the new merged entity and will create a company with assets worth USD 5.4 billion under management. ▲ Crédit Agricole Egypt obtained the approval of the Egyptian Financial Supervision Authority to raise its stake in the Egyptian Housing Finance Company to reach 99.98% from 50.0% stake. - The EGM of Tourism Urbanization Company will be held to approve the 16.0% rights issue. Liquidity / Capital Raising - Sixth of October for Development and Investment Company (SODIC) said it will increase its capital by USD 101.4 million by launching a rights issue to shareholders at USD 12.9 per share. - GB Auto will issue USD 2.7 million non-convertible bonds with a par value of USD 18.40 each. - The EGM of Al Watany Bank of Egypt was held and approved the increase in the bank's capital to USD 200.0 million through a secondary public offering. TresVista Financial Services, Pvt. Ltd. © Page 7
    • Issue No. 2.03 MENA MONTHLY NEWS Month of November 2009 Other Countries Oman ▲ Dubai Mercantile Exchange plans to offer new Oman crude oil trading products in first quarter of 2010 to boost volumes on the exchange. ▲ Assets of commercial banks operating in Oman grew 7.8% to USD 36.1 billion by the end of September 2009, compared with nearly OMR 12.9 billion a year ago. ▲ Capital Market Authority and Central Bank of Oman has approved Al Anwar Holding Company’s request to increase its stake in Tagger Finance from 20.0% to 30.0% of its share capital. ▲ Oman’s oil and gas production rose by 10.1% to 158.3 million barrels during the first eight months of 2009. The total production of crude oil and condensates rose by 6.5% to 194.9 million barrels by the end of August 2009. ▲ Sembcorp Utilities has been selected by the government to develop, finance, own, and operate the estimated USD 1.0 billion Independent Water and Power Project (IWPP) planned at Taqah. ▲ Bank Muscat has signed a Financial Advisory mandate agreement with Oswal Group Global to act as the exclusive financial Adviser for its USD 350.0 million caustic soda project in Salalah. ▲ The Regional Municipalities and Water Resources Ministry is marking the 39th National Day by opening 23 new service projects at a cost of over USD 238.1 million including paving and lighting internal roads, wastewater networks and plants and a recharge dam. ▲ Oman boosted capital expenditure by 22.6% in the first 9 months ending September 2009 as it appears encouraged by surging crude prices to step up spending as part of its anti-crisis measures. ▲ International oil prices are currently hovering at around USD 70.0 per barrel and are expected to significantly shore up Oman’s fiscal and Balance of Payments position during 2009, according to the Executive President of the CBO. ▲ India's Bharat Petroleum Corp said that Oman Oil Co has agreed to raise its stake in 120,000 barrels per day Central India refinery to 26.0% from currently owned 2.0% ▲ The Omani Ministry of Economy said that the Sultanate plans to boost government spending by 9.0% to USD 18.7 billion next year as it seeks to revive the economy after the global economic crisis. ▲ As part of implementing the government's development projects, the Finance Ministry approved 16 agreements and 5 Change Orders worth USD 161.2 million. ▲ Prepaid subscribers continued to dominate the mobile market in Oman garnering 91.0% of the total mobile. ▲ Hydrochem has won a USD 68.6 million contract for the design and supply of a desalination facility for the Salalah Independent Water and Power Project in Oman. ▼ A significant decline in petroleum sector activities has led to a 25.2% contraction in the gross domestic product of Oman during the first six months of 2009. ▼ Oman's revenues declined by 27.0% in the first eight months of the year to USD 11.0 billion compared with USD 15.0 billion in the same period last year, mainly due to a decline in oil earnings. Oman's total expenditure through the eight-month period was USD 11.2 billion, leaving a USD 130.0 million deficit in budget, compared to a surplus of over USD 3.9 billion a year earlier. ▼ Bank Muscat might write down a significant portion of its USD 61.0 million stake in Pakistan’s Silkbank in Q4 2009. Silkbank (35.0% holding) is planning for a rights issue but the Bank may not participate. - State-run Petroleum Development Oman has issued three tenders for the construction of steam production facilities and a power plant in the south of the country. - Certificates of deposit tender was held at the Central Bank of Oman and the amount allotted was OMR 225.0 million. - Dhofar University has decided to increase the issued capital by OMR 8.0 million. - Oman's annual inflation fell to 1.3% in September 2009. - Bank Muscat targets to raise USD 51.8 million in the ninth round of Certificates of Deposit (CDs) auction. The CDs will be issued on November 25, 2009 in three categories with maturity of 12, 36, and 60 months with coupon of 3.25%, 4.75%, and 5.5%, respectively. - Oman Oil Co Ltd will invest USD 262.3 million to buy additional equity shares in Bharat Oman Refineries Ltd (BORL) at a 50.0% premium. Oman Oil will buy the additional equity in BORL at USD 0.30 per share as against its face value of USD 0.20 per share. Jordan ▲ Real estate trading during the first 10 months of 2009 dropped by 31.0% to USD 5.2 billion from USD 7.6 billion during the same period of 2008. ▲ The government started to pay part of dues owed to the construction sector, following complaints by the Jordan Construction Contractors Association during the past few months. ▲ The Dead Sea Development Corporation signed an agreement with the Amazon River Company for Tourism Investment to implement the first project on the shores of the Dead Sea. TresVista Financial Services, Pvt. Ltd. © Page 8
    • Issue No. 2.03 MENA MONTHLY NEWS Month of November 2009 ▲ Income and sales tax revenue rose to USD 3.0 billion for 10 months ended October 2009 compared with USD 2.7 billion during the same period in 2008. Revenues in October 2009 amounted to USD 255.9 million compared with USD 214.6 million in October 2008. ▲ Jordanian investments in the banking sector as of October 2009 amounted to USD 6.8 billion representing 42.2% of total investments. At USD 8.2 billion, Arab investments in the sector accounted for 51.4% while foreign investors had a 6.0% stake with USD 1.0 billion. ▲ Jordanian investments in the insurance sector amounted to USD 477.6 million for a 75.0% equity while Arabs held USD 112.3 million for a 17.6 % stake and foreign investors possessed USD 45.5 million or 7.3%. ▲ The contribution of Jordanian investors in the industrial sector reached USD 4.0 billion representing 48.3% of total investments, Arab investors held USD 1.7 billion accounting for 21.8% and foreign investor possessed USD 2.4 billion for 29.7%. ▲ The trade deficit narrowed by 22.9% for the first 9 months ended September 2009 to USD 5.5 billion from USD 7.1 billion in the same period ended September, 2008 due to lower imports and exports by similar proportions with exports decreasing by 20.5% to USD 4.7 billion in the period. ▲ According to Insurance Commission, primary gross insurance premiums in the Jordanian market increased by 8.0% to USD 431.5 million by the end of October 2009 from USD 401.0 million in the same period ended October 2008. ▲ Governor Umayya Toukan expects local banks to ease lending measures soon and to increase credit extension gradually. ▲ Jordan's Finance Minister, Bassem Al-Salem, said that 2010 budget will focus curbing on state spending, in order to curb the country's budget deficit to as much as USD 966.0 million. ▲ Jordan's trade deficit narrowed 22.9% to USD 5.5 billion from January to September in 2009, compared with the same period in 2008, mainly due to a lower bill for Saudi oil imports. ▼ Jordan’s domestic debt from January to October rose by 17.2% as it reached USD 8.2 billion at the end of October in 2009 compared to USD 7.0 billion at the end of last year, according to Ministry of Finance figures. Bahrain ▲ Investcorp has been appointed to manage two US hedge fund mandates worth a combined USD 310.0 million. ▲ Investcorp's Gulf Opportunity Fund has acquired a 20.0% stake in Gulf Cryo, the Al Huneidi family-owned company. ▲ First Energy Bank plans to establish a USD 1.0 billion polysilicon plant in Saudi Arabia. ▲ Nass Corporation announced that it’s fully owned subsidiary, NASS Contracting Company, has been awarded a USD 79.6 million contract from the Arab Shipbuilding and Repair Yard Company. ▼ Bahrain's domestic public debt increased by USD 437.6 million in Q3 2009 to reach USD 3.1 billion. ▼ Gulf Finance House announced that it has signed an agreement to sell a 10.0% stake out of its 15.0% stake in QInvest to Qatar Islamic Bank at a total price of USD 50.0 million and incurred USD 7.0 million in losses. ▼ Batelco, which owns Umniah, has been fined USD 13.3 million by the Bahrain Telecommunications Regulatory Authority (TRA) for not allowing licensed operators direct access to the FALCON sub-marine cable system. - Ithmaar Bank shareholders voted to transform the Bahrain-based institution into a commercial bank and fuse it with its wholly owned retail subsidiary Shamil Bank. - Hilal Sukuk Company's IFC Hilal Sukuk will be listed on the Bahrain Stock Exchange. - Bahrain-based Ithmaar Bank, Gulf Finance House and Abu Dhabi Investment House plan to launch their joint infrastructure-focused investment bank in Dubai by 2010. - The Telecommunications Regulatory Authority issued a Determination which sets the cost of capital for Batelco and Zain's regulated telecommunications services at 9.5%. - Gulf Finance House has signed an agreement with Deutsche Bank for the placement of its second USD 100.0 million convertible Murabaha facility. - Gulf International Bank has raised USD 533.0 million through a three times oversubscribed bond issue which was launched in Saudi Arabia. The bond was priced at 127.5 basis points over Saudi interbank offered rate. - Gulf Finance House announced that it has received the approval of the Central Bank of Bahrain to increase its capital by USD 300.0 million to USD 500.0 million through a rights issue. - Al Salam Bank shareholders gave its board the go-ahead to enter the market to raise money through the issue of Sukuk. - Esterad Investment Co. said its shareholders will discuss plans to issue medium-term debt instruments and bonds convertible into shares worth up to USD 42.6 million. TresVista Financial Services, Pvt. Ltd. © Page 9
    • Issue No. 2.03 MENA MONTHLY NEWS Month of November 2009 Qatar ▲ Qatar's Ezdan Real Estate Co.'s shareholders have approved the merger of International Housing Group into their company through a share swap at the rate of one Ezdan share against 1.2 shares of the group. ▲ Qatari Diar Real Estate Investment Co., fully-owned by the Qatar Investment Authority, said its mixed-use development in downtown Khartoum will have a total cost of USD 400.0 million. ▲ QNB Al Islami, a fully-owned unit of Qatar National Bank, plans to launch five new branches in Sudan and has been authorized to open 10 additional branches. ▲ Telecom operator Vodafone Qatar said it expects to launch its fixed-line service in 2010 after it receives the related license before the end of November. ▲ Qatar's Autolease Co., a unit of shariah-compliant First Leasing Co., said it plans to boost its capital to USD 54.9 million from USD 13.7 million before the end of the current year. ▲ Qatar National Bank announced the launch of QNB Banque Privée (Suisse), a full private banking subsidiary of the QNB Group based in Geneva, Switzerland. ▲ Qatar Petroleum International signed an agreement with Shell Eastern Petroleum, under which it will buy stakes in two Shell Chemicals joint ventures in Singapore to be completed by December 2009. ▲ The Qatari Prime Minister and Foreign Minister and German Federal Minister of Transport signed a deal to establish the Qatar Railways Development Company with investments of USD 25.0 billion. ▲ Qatar telecom Nawras along with Bahrain Internet Exchange, Mobily and Etisalat signed an agreement with Tata Telecommunications to build a new cable system for the region which will connect the region to the world's major business hubs through the existing Tata Global Network. ▲ Qatar Petroleum International signed an agreement with Thailand's largest industrial conglomerate, Siam Cement, to invest up to USD 4.0 billion in a Vietnam petrochemical complex. ▼ The Qatar Financial Markets Authority has voluntarily suspended the business operations of Gulf Investment Group Company. ▼ Qatar’s economy declined by 29.7% in June 2009 compared to June 2008 mainly due to the falling hydrocarbon prices. - The Commercial Bank of Qatar announced that it will begin a global roadshow in the United States to test the market for a potential bond sale worth at least USD 500.0 million. - Barwa has appointed Bouygues Construction as the main contractor for the USD 1.4 billion Barwa Financial District to be built in the commercial district of West Bay. Mergers & Acquisitions Announced Completion Transaction Value TV/LTM TV/ LTM S. No. Target Acquirer Target Industry date date (In USD mn) Revenues EBITDA 1 BTX Manufacturing and Sales HC Petrochem Co. Ltd. Oil Refining&Marketing 11/25/09 - 563.7 NA NA 2 Multiple Targets Essar Group Telecom Services 11/15/09 - 318.0 NA NA 3 Beltone Financial Ptoneers Holding Finance-Investment Banker 11/08/09 - 127.7 NA NA 4 GMCE Gardiennage Securitas AB-B SHS Security Services 11/25/09 - 3.2 1.71x NA 5 Penguin Marine Boats Service Penguin International Ltd. Marine Services 11/06/09 - 2.5 NA NA About Us: Headquartered in Mumbai, India, TresVista Financial Services Pvt. Ltd provides research, analytics, advisory, investor relations, and other customized services for asset managers, private equity funds, investment banks, operating companies, and other institutions. This document is provided for assistance only and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigation as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult his own advisors to determine the merits and risks of such investment. This newsletter is provided for information purposes only. The information is believed to be reliable and is based on publicly available information, but TresVista does not warrant its completeness or accuracy. Opinions, estimates, and assumptions constitute our judgment as of the date hereof and are subject to change without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Additional information is available upon request. 2009 TresVista Financial Services © TresVista Financial Services Premier House, Plot No.38, 2nd Floor, New Wing, Central Road, MIDC, Andheri (East), Mumbai 400 093. TresVista Financial Services, Pvt. Ltd. © Page 10