MENA Economic 2008

Global Research
Economic
MENA
MENA Economic Overview

Resilient Amidst Global Downturn...
November 2008
Global Research
Global Investment House Tel: (965) 2295 1000 - Fax: (965) 2295 1299 research@global.com.kw www.globalinv.net
Table of Contents
Global Economic Overview MENA Economic Overview MENA Capital Markets Country Proles Algeria Bahrain Egypt Iran Iraq Jordan Kuwait Lebanon Morocco Oman Palestine Qatar Saudi Arabia Syria Tunisia UAE Yemen Top 100 Companies Global Investment House 1 2 7 25 37 38 41 44 47 50 53 56 59 62 65 68 71 74 77 80 83 86 89 MENA Economic Overview - November 2008
Global Economic Overview
Slowdown in Global Economy
Source: IMF Report WEO November 2008
World economy, which enjoyed healthy growth rates of 5.1% and 5.0% for 2006 and 2007 respectively, is expected to slowdown signicantly in coming years. Emerging Asian giants will also not be able to escape the slowdown in economy.
Global Investment House
Real GDP Growth
MENA Economic Overview - November 2008
Growth Driven by Emerging Markets

GDP GROWTH (%) World Output Advanced Economies United States Euro Area Japan United Kingdom Emerging & Developing Market Africa Russia China India Middle East
Source: IMF Report WEO November 2008
2006 5.1 3.0 2.8 2.8 2.4 2.8 7.9 6.1 7.4 11.6 9.8 5.7
2007 5.0 2.6 2.0 2.6 2.1 3.0 8.0 6.1 8.1 11.9 9.3 6.0
July 2008 Projections November 2008 Projections 2008 2009 2008 2009 3.9 3.0 3.7 2.2 1.5 0.5 1.4 -0.3 1.6 0.1 1.4 -0.7 1.3 0.2 1.2 -0.5 0.7 0.5 0.5 -0.2 1.0 -0.1 0.8 -1.3 6.9 6.1 6.6 5.1 5.9 6.0 5.2 4.7 7.0 5.5 6.8 3.5 9.7 9.3 9.7 8.5 7.9 6.9 7.8 6.3 6.4 5.9 6.1 5.3
Global growth in 2008 will be primarily driven by emerging economies. However the growth in the world output is expected to slowdown to 3.7% in 2008, down from 5.0% in 2007.
Global Investment House 4 MENA Economic Overview - November 2008
Decline in Global Markets

Subprime related losses Decline across markets
US$ bn
Source: Bloomberg, Global Research
2008 YTD till October
The recent crisis, which started from subprime mortgages in US, has spread across the world causing banks to write down signicant amounts. The total write downs till date (October 2008) have reached US$684.5bn. There has been decline across the markets on account of investors exiting their positions in order to preserve capital and minimize losses.
Government Interventions (Sep-08 Onwards)

Country UK US Germany China France The Netherlands Sweden Russia Japan Spain Korea Italy
Source: Bloomberg
Relief Package ( US$ bn) 850.0 700.0 650.0 586.0 468.0 260.0 205.0 186.0 170.5 130.0 130.0 52.0
Rate Cut 2.00% 1.00% 1.00% 0.81% 1.00% 1.00% 1.00% 0.20% 1.00% 1.00% 1.00%
New Rate 3.00% 1.00% 3.25% 6.66% 3.25% 3.25% 3.75% 11.00% 0.30% 3.25% 4.00% 3.25%
The unprecedented level of crisis has called for massive government intervention in the form of bailout packages to nancial sector and interest rate cuts.
MENA Economic Overview
MENA Economic Growth

Strong Nominal GDP growth in MENA Among the fastest growing economies in the world
Source: IMF, Global Research
High real GDP growth rates of 6% and above achieved in the recent years. The medium-term outlook for the region is generally favorable with Middle East expecting to grow at 6.1% in 2008 and 5.3% in 2009 while Africa expected to grow at 5.2% in 2008 and 4.7% in 2009.
Real GDP (% Growth)
Nominal GDP (US$bn)
Robust Growth in the Region

Real GDP Growth
16.8% 21.4%
Sovereign Ratings - Moodys Qatar Aa2 Kuwait Aa2 UAE Aa2 Saudi Arabia Aa3 Bahrain Aa3 Oman Aa3 Tunisia A3 Jordan Baa3 Morocco Ba1 Egypt Ba1 Lebanon B3
Source: Bloomberg
Growth is expected to remain strong in the MENA region.

Oil vs. Non-Oil GDP

Oil vs Non-Oil sectors (GCC)
7.7% 7.7% 7.3% 6.5% 7.2%
(US$/b)
Break-even Oil prices (2008)

6.9% 4.5%
5.6%
1.9%
Non-oil sectors like construction, retail, transportation, and nancial services have contributed signicantly to growth. The break-even oil price for the scal accounts is much lower indicating that most oil exporters can easily absorb lower world oil prices.
1.8%
10
All-Round Macro Performance

Fiscal Surplus as a % of GDP (MENA) Current Account Surplus (MENA)
% of GDP
US$ bn
Current Account Balance (US$bn)

(As a percent of GDP)
National savings are expected to rise considerably in 2008, with the total scal surplus rising to 11 percent of GDP in 2008. All GCC countries have large current account surplus creating substantial liquidity.
Cash is King
Increasing Ofcial Reserves External Debt
Driven by the oil exports, external positions have continued to strengthen in 2008 with gross ofcial reserves of the region increasing substantially. Gross ofcial reserves of the region have increased almost vefold in the last ve years, and are set to surpass US$1.0 trillion in 2008.
12
% of GDP
US$ bn
Ination Expected to Come Down

MENA & GCC Ination GCC Country-wise Ination
During recent years, countries in MENA region have witnessed increase in ination due to high growth in money supply, high rents due to supply-side constraints, commodity price boom, dollar depreciation and rising cost of labor. However, we expect ination to come down in coming months on account of steep decline in commodity prices including oil, decline in global food prices and slowdown in real estate activities.
Banking System Adequately Capitalized

Bank Regulatory Capital to Risk Weighted Assets (2007) Bank Capital to Assets (%) - (2007)
Source: GFSR - IMF
MENA Banks with high regulatory capital do not face the same level of risk as that faced by banks in advanced economies. MENA Banks also have very minimal exposure to subprime mortgages in US.
Full Support of Government

MSCI Arabian Markets Index
775 725 675 625 575 525 475
KUWAIT: Discount rate cut by 125bps to 4.5%; KD500mn pumped in local markets UAE: Repo rate cut by 50bps to 1.5%; lowers the interest rate on facilities to support liquidity at banks from 5% to 3%
QATAR: QIA to buy up to 20% of the capital of local banks, to boost their share prices KUWAIT: KIA considers investing KD1bn in the local stock market; injects KD100mn in the stock market
KUWAIT: KIA injects over KD50mn in Al Raed Fund UAE: CB offers an additional AED70bn (total AED120bn) to local banks
KUWAIT: KIA statement to boost investments on the local bourse
KUWAIT: Bank's lending limit raised from 80% to 85%
SAUDI ARABIA: Government guarantees bank deposits worth over SR810bn

SAUDI ARABIA: SAMA injects US$2-3bn to overcome tightness in foreign currencies market
UAE: CB announced injection of AED50bn into the inter-bank market.

BAHRAIN: Repo and lending rate cut to 4.75% from 5.25%; CB Governor announces banking system sound and strongly capitalized. SAUDI ARABIA: SAMA willing to pump liquidity of SR150bn to help the banks if required
SAUDI ARABIA: Demand deposit statutory requirement decreased from 13% to 10%
SAUDI ARABIA: SAMA cuts repo rate by 50 basis points & reduced its cash reserve requirements for local banks to 10% from 13% UAE: Government guarantees bank deposits & interbanking lending
SAUDI ARABIA: Repo rate cut by 100bps to 4% Kuwait: Discount rate cut to 4.25% Bahrain: R epo rate cut by 125bps to 3.5%
11-Oct
13-Oct
15-Oct
17-Oct
19-Oct
21-Oct
23-Oct
25-Oct
27-Oct
29-Oct
11-Sep
13-Sep
15-Sep
17-Sep
19-Sep
21-Sep
23-Sep
25-Sep
27-Sep
Source: Global Research, MSCI
29-Sep
15
31-Oct
1-Oct
3-Oct
5-Oct
7-Oct
1-Sep
3-Sep
5-Sep
7-Sep
9-Sep
9-Oct
FDI- Middle Eastern Countries

Country Kuwait Bahrain Qatar Oman Saudi Arabia UAE Jordan Lebanon Syria Yemen Iraq Palestine Iran
Source: World Investment Report 2008
2005 234 1,049 1,298 1,688 12,097 10,900 1,774 2,791 500 302 515 47 918
Inow (US$ mn) 2006 2007 122 2,915 159 1,623 18,293 12,806 3,219 2,739 600 1,121 383 19 317 123 1,756 1,138 2,377 24,318 13,253 1,835 2,845 885 464 448 21 754
2005 5,142 1,135 352 234 53 3,750 163 122 61 65 89 40 452
Outow (US$ mn) 2006 2007 8,207 980 127 328 1,257 10,892 138 70 55 56 305 139 386 14,203 1,669 5,263 570 13,139 6,625 48 233 55 54 147 56 302
16
FDI North African Countries

Country Egypt Algeria Sudan Libya Morocco Tunisia
Source: World Investment Report 2008
Inow (US$ mn) 2005 5,376 1,081 2,305 1,038 1,653 782 2006 10,043 1,795 3,541 2,013 2,450 3,312 2007 11,578 1,665 2,436 2,541 2,577 1,618
Outow (US$ mn) 2005 92 23 128 74 13 2006 148 35 7 534 445 33 2007 665 290 11 479 652 20
North African countries have been the net recipients of FDIs led by Egypt. During 2007, Egypt received FDIs worth US$11,578mn while outows amounted to US$665mn. Among the Middle Eastern countries, Saudi Arabia and UAE have been largest recipients of FDI. During 2007, Saudi Arabia received FDIs worth US$24,318mn while outows amounted to US$13,139mn.
17
Private Equity
Private Equity Funds Raised in MENA Region
6,000 5,000
Private Equity as a Percentage of GDP

3.5%
(US$ mn)
4,000 3,000 2,000 1,000 0 2004 2005 2006 2007 1H 2008

US A UK 1.7%
Potential for PE in the Region
0.3%
ME NA
Source: EMPEA Estimate
Source: Global Research
MENA Private Equity Investments (2006- 1H08)

4,00 0 69 3,00 0 69 70 60 50 40 2,00 0 30 1,00 0 16 20 10 2006 20 07 1H 2008 0
Exits by Value and Number in MENA region (2006-1H08)

3 ,0 0 0 24 20
(US$ mn)
(US$ mn)
2 ,0 0 0
16 12
1 ,0 0 0
8 4
2006
Exits Values
0 2007 1H 2008
Number of transactions
Investment Size
Number of transactions
Source: Zawya Private Equity Monitor
18
Private Equity Investments in MENA

PE deals by Sector (2007 1H08)
Telecoms and IT 1% Retail Oil & Gas 2% Transport 7% 8% Construction Services 3% 5% Healthcare 11% Others 15% Financial Services 11%
PE deals by Country (2005-2007)

3,500 3,000 2,500
(US$ mn)
2,000 1,500 1,000 500 0 2005 2006 2007
Consumer Goods 3% Basic Materials 34%
UA E
Eg y p t
Sau d i A rab ia
Jo rd a n
T u rkey
Oth e rs
Shift in investment focus away from oil & gas to service-based and consumer-oriented businesses
- Healthcare, Financial, Education, Services and Transport are the most promising sectors
The geographic focus of regional funds is changing and becoming more diverse Mandates & operations broaden to include regions like Turkey, Egypt and other North African countries Saudi Arabia is the market to watch out for the signicant opportunities it offers.
MENA IPO Scenario

Capital Raised
15,000 12,000 9,000
US$ mn
Volume & Number of Deals (9M-08)
5,000
1,452.5
US$mn
90.
6%
4,000 3,000 2,000 1,000 Jan Feb Mar Apr May Jun Jul Aug Sep
6,000 3,000 0
983.6 5,900.7
11,672.1
12 10 8 6 4 2 0
9M-2007
GCC
Other MENA
9M-2008
Total size of offerings (US$mn)
No. of issues
US$ mn
Despite the Global downturn, IPO activity was high in the rst nine months of 2008 with a record US$13bn raised in 50 IPOs as compared to US$6.9bn in 54 IPOs during the same period last year. Average oversubscription of 15.7x compared to 10.2x last year. Activity slowing down in the short run
Global Investment House 20
Capital Raised
8,000.0 7,000.0 6,000.0 5,000.0 4,000.0 3,000.0 2,000.0 1,000.0 1Q-2007 2Q-2007 3Q-2007 4Q-2007 1Q-2008 2Q-2008 3Q-2008
GCC
MENA (excluding GCC)
MENA
IPO Activity (9M-08)

Capital Raised by Exchange
DIFX 5% Cairo SE 4% Saudi SE 75% Casablanca SE 4% Dubai FM 4% Doha SM 4% Others 4%
Source: Zawya IPO Monitor
Number of Deals by Exchange

Cairo SE 4% DIFX 4% Casablanca SE Dubai FM 10% 8% Doha SM 2% Tunis SE 4%
Saudi SE 26% Amman SE 26% Over The Counter 6% Abu Dhabi SE 4% Muscat SM 4% Kuwait SE 2%
Saudi Arabia represented the largest issuer with 13 IPOs aggregating US$9.7bn and represented 26% of the total number of deals and 75% of the capital raised. It was followed by UAE where a total of US$1.3bn was raised in 8 IPOs.
21
IPO Activity (9M08)

Capital Raised by Sector
Mining and Metals 19% Oil & Gas 17%
Deals by Sector
Oil & Gas 10% Mining and Metals 6%
Telecoms and IT 15%
Telecoms and IT 4% Construction 8% Real Estate 10% Conglomerates 8%
Financial Services 25%
Construction 10%
Others 2%
Real Estate 5%
Consumer Goods 3%
Consumer Goods 6% Automotive Transport 4% 4%
Conglomerates 4%
Other 8%
Source: Zawya IPO Monitor
The nancial services sector is the most active sector with more than 30% of the total number of deals and over 25% of the total capital raised.
Sukuk Activity
Global Sukuk Issuance Trend
35,000 30,000
US$ mn
GCC Sukuk Issuance

15,000 12,000
US$ mn
25,000 20,000 15,000 10,000 5,000 0 2004 2005 2006 International 2007 9M-2008
-43
9,000 6,000 3,000 0 9M-07 9M-08 14,151 8,056
Source: Zawya Sukuk Monitor
GCC
Sukuk market is fast emerging as the most signicant form of Islamic nancing. However, the credit crunch was felt on the sukuk issues with far fewer issues in 2008. GCC region accounted for 56% of the Global sukuk issuance. Although the number of issues during 9M-2008 stood 34 as compared to 36 during same period last year, the total funds raised decreased by 43%.
Sukuk Trend
GCC Sukuk Issuance By Sector
9M-2007
Government 2% Oil & Gas 15% Power & Utilities 9% Financial Services 21%
Power & Utilities 17%
9M-2008
Oil & Gas 17%
Government 11%
Construction 5% Conglomerates 3% Transport 11%

Real Estate 42%
Construction 3%
Conglomerates 2%
Real Estate 34%
UAE continued to remain the most active market for sukuk with a total of 10 issues worth US$5.3bn issued during 9M 2008. Real Estate companies dominated with a total of 8 issues worth US$4.85bn raised during 9M 2008 as compared to 7 issues worth US$3.42bn raised during the same period last year.
GCC Sukuk Issuance 9M-2007 No. of Total Size Country Issues (US$mn) UAE 6 6,590 Saudi Arabia 5 5,716 Bahrain 20 710 Qatar 1 300 Kuwait 4 835 Total 36 14,151
9M-2008 No. of Total Size Issues (US$mn) 10 5,300 3 1,669 18 597 2 301 1 190 34 8,057
24
MENA Capital Markets
Market Depth
Market Cap (in US$bn) 2006 Saudi Kuwait Egypt Dubai Abu Dhabi Doha Casablanca Amman Bahrain Muscat Tunis Beirut 326.3 143.8 93.6 86.9 80.7 60.9 47.8 29.8 21.1 12.9 4.2 8.3 2007 YTD 2008 519.0 210.5 138.0 125.3 110.7 95.5 67.1 41.2 27.0 23.0 5.0 10.8 387.0 199.4 113.3 71.2 85.1 99.0 65.7 49.5 27.3 20.0 7.2 13.9 Value Traded (in US$bn) 2006 1,402.8 59.2 50.3 94.7 19.2 20.5 9.1 20.1 1.3 2.3 3.5 2.0 2007 682.1 135.5 65.2 103.2 47.8 29.9 11.4 17.4 1.1 5.2 1.3 1.0 YTD08 436.4 110.5 86.3 73.3 58.3 38.7 8.3 25.5 1.6 7.8 1.9 1.1 No of Listed companies 2006 86 180 595 36 60 36 63 193 50 180 48 16 2007 111 196 435 45 61 40 71 212 51 190 54 14 Sep08 127 200 377 53 62 43 77 226 52 186 51 12
Source: Bloomberg, Global Research. YTD 2008 till September
MENA markets have matured over the years.

Performance of MENA Markets

60% 47% 40% 27% 20% 0% 51% 40% 30% 34% 21% 3% 6% 42% 55% 47% 33% 44%
MSCI GCC countries
BAHRAIN
QATAR
SAUDI ARABIA
OMAN
KUWAIT
UAE
MSCI Arabian Market
JORDAN
EGYPT
LEBANON
MOROCCO
TUNISIA
-20% -40% -60%
-11%
-8%
-18%
-22%
-20%
-30%
-38%
-40% -57%
-51%
-45%
-54%
2007
Source: MSCI, Global Research
2008YTD (Oct08)
MENA markets performed spectacularly during 2007 driven by strong macroeconomic factors and improved corporate earnings. Most of the MENA markets declined during 2008 taking cues from global markets and also due to exit of foreign investors.
Decline in MENA Markets

MENA region has also been impacted by the recent credit crisis and subsequent market meltdown. Foreign investors have been exiting emerging markets (MENA markets are no exception) with an aim to preserve capital. With currency revaluation in GCC region talks dying down (with the strengthening of US Dollar), speculative funds invested in these currencies have also moved back. The recent decline in oil prices has been a concern for investors. Investigations into the irregularities in the real estate practices in Dubai has also been a concern. However, we believe that MENA markets has over-reacted to current crisis as the economic fundamentals are very strong and GCC corporates have minimal exposure to toxic mortgages. We expect MENA markets to recover from the current levels as the shares currently are trading near their bottom levels from the fundamental valuation point of view.
28
Correlation Between Markets (2008 YTD)

Saudi Arabia UAE Egypt Oman Qatar Kuwait Bahrain US UK Crude Oil
Saudi Arabia 1.00 0.60 0.57 0.52 0.51 0.42 0.34 0.35 0.16 0.12
UAE 0.60 1.00 0.57 0.64 0.68 0.41 0.50 0.16 0.30 0.19
Egypt 0.57 0.57 1.00 0.44 0.49 0.40 0.38 0.20 0.24 0.17
Oman 0.52 0.64 0.44 1.00 0.66 0.48 0.53 (0.07) 0.19 0.20
Qatar Kuwait Bahrain 0.51 0.68 0.49 0.66 1.00 0.51 0.59 (0.10) 0.23 0.26 0.42 0.41 0.40 0.48 0.51 1.00 0.56 (0.05) 0.05 0.16 0.34 0.50 0.38 0.53 0.59 0.56 1.00 0.09 0.28 0.21
US 0.35 0.16 0.20 (0.07) (0.10) (0.05) 0.09 1.00 0.53 0.16
UK 0.16 0.30 0.24 0.19 0.23 0.05 0.28 0.53 1.00 0.42
Crude Oil 0.12 0.19 0.17 0.20 0.26 0.16 0.21 0.16 0.42 1.00
With increased globalization and cross-border investments, global markets are becoming more correlated and GCC markets are no exception to this. Infact, the correlation between GCC markets & global markets have increased markedly in 2008 as compared to previous years.
Good Growth in Protability...

Country Kuwait Bahrain Qatar Oman Saudi Arabia UAE Egypt Jordan Lebanon Morocco Tunisia
2005 96.7% 2.9% 48.1% 22.5% 42.0% 81.6% 68.4% 95.1% 35.6% 30.5% 6.3%
2006 -21.9% 36.7% 26.3% 17.5% 18.3% 10.3% 14.2% -18.8% 47.2% 28.5% 22.4%
2007 74.7% 10.3% 21.0% 50.7% 11.0% 40.7% 33.0% 28.4% 34.5% 19.0% -11.2%
1H-08 -9.7% 1.4% 63.3% 52.3% 12.0% 40.9% 36.0% 28.0% -
Corporates in MENA have beneted signicantly from the macroeconomic factors and growth outlook remains positive.
Attractive Valuations
Market PE (x)
21 18 15 12 9 6 3 0
Saudi Arabia Lebanon Morocco S&P 500 Kuwait Bahrain Nikkei Oman Jordan Egypt FTSE UAE Qatar SSE Composite Sensex MSCI World
18.6 16.5 14.3 11.6 9.5 8.5 8.3 9.1 9.7 9.4 7.7 12.3 13.1 10.3 12.5
12.2
In terms of P/E multiples, the majority of equity markets in the MENA region are trading at a single digit multiple offering excellent opportunity for entry. The MENA equity markets looks cheaper than the MSCI World Index which is currently trading at a P/E multiple of 12.2x. Within the MENA region, the most attractive in terms of P/E multiple is Oman with the lowest PE of 8.3x, followed by UAE with a multiple of 8.5x and Bahrain that is trading at a P/E multiple of 9.1x.
PE Bands
Kuwait
60,000.0 50,000.0 40,000.0 30,000.0 20,000.0 10,000.0 10,000.0 9,000.0 8,000.0 7,000.0 6,000.0 5,000.0 4,000.0 3,000.0 2,000.0 1,000.0
Dubai
Oct-06
Oct-07
Jan-07
Jul-08
Apr-07
Apr-08
Oct-08
Jan-08
Jul-07
Oct-06
Oct-07
Jan-07
Jul-08
KWSEIDX Index Value at 5x
Apr-07
DFMGI Index Value at 7x
KWSEIDX Index Value at average PE of 11x
DFMGI Index Value at average PE of 14x

20,000.0 18,000.0 16,000.0 14,000.0 12,000.0 10,000.0
Oman

4,000.0
Bahrain
3,000.0
2,000.0
8,000.0 6,000.0 4,000.0 2,000.0
1,000.0
Oct-06
Apr-08
Oct-07
Jan-07
Jul-08
O c t- 06
Oct-07
Jan-07
Jul-08
Apr-07
Apr-08
Oct-08
Jan-08
Jul-07
MSM30 Index Value at 9x

MSM30 Index Value at average PE of 13x

BHSEASI Index Value at 8x

BHSEASI Index Value at average PE of 10x
Apr-07

Currently, the Muscat Stock Market (MSM) is the cheapest market in terms of valuation in the entire GCC region. As at 29th Oct08, the index closed at 6,119.2 points representing a PE of 8.3x.
Apr-08
Oct-08
Jan-08
Jul-07
Oct-08
Jan-08
Jul-07
PE Bands (cont...)
Saudi Arabia
13,000.0
16,000.0
Qatar
14,000.0
12,000.0 11,000.0
12,000.0
10,000.0
10,000.0
9,000.0
8,000.0
8,000.0
6,000.0
7,000.0
4,000.0
6,000.0
Oct-06
Oct-07
Apr-07
Apr-08
Oct-08
Jan-07
Jul-07
Jan-08
Jul-08
2,000.0
Oct-06
Oct-07
Jan-07
Jul-08
SASEIDX Index Value at 15x

SASEIDX Index Value at average PE of 19x
60,000.0 55,000.0 50,000.0 45,000.0 40,000.0 35,000.0 30,000.0 25,000.0 20,000.0 15,000.0 10,000.0 5,000.0 -

Apr-07
DSM Index Value at 8x
DSM Index Value at average PE of 14x
Egypt

6,000.0 5,500.0 5,000.0 4,500.0 4,000.0 3,500.0 3,000.0 2,500.0 2,000.0 1,500.0
Jordan
Oct-06
Apr-08
Oct-07
Jan-07
Jul-08
Oct-06
Oct-07
Jan-07
Jul-08
CASE Index Value at 8x

CASE Index Value at average PE of 14x
Apr-07

Apr-08
Oct-08
Jan-08
Jul-07
Apr-07
JOSMGNFF Index Value at 8x
JOSMGNFF Index Value at average PE of 14x
The Tadawul index, the largest by size in the region, suffered decline in the recent times following the global credit crisis. With this the market PE has come down to 11.6x.
Apr-08
Oct-08
Jan-08
Jul-07
Oct-08
Jan-08
Jul-07
Good Time to Buy!

14.00 12.00 10.00 8.00 6.00 4.00 2.00 4.6 4.9 3.7 2.9 2.7 3.3 3.7 3.1 5.0 3.7 1.9 3.9 5.7 4.7 2.4 3.2 1.1 3.4 3.9 2.0 1.6 5.6 4.1 2.5 2.2 2.9 3.7 3.1 3.6 2.5 4.4 2.1 5.2
Dividend Yield (%)

11.5
1.9
Saudi Arabia
Bahrain
Tunisia
Abu Dhabi
Lebanon
Dubai
Oman
Jordan
MSCI GCC
2006
2007
2008
MENA equities have sequentially increasing & highly attractive dividend yields...
8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 1.8 2.1 1.7 3.6 2.8 1.7 1.9 1.8 3.9 4.3 3.0 2.1 1.4 2.3 1.6 3.6 2.6 1.2 1.9 1.4 3.4 2.1 1.6 1.5 1.6 1.1 1.0 5.1 4.1 2.9 1.8 2.6 2.9 1.2
P/BV (x)
7.5
Saudi Arabia
Abu Dhabi
Lebanon
Bahrain
Tunisia
Oman
D uba i
Jordan
MSCI GCC
2006
2007
2008
and are trading at a very low premium to book value...

MSCI EM
Kuwait
Egypt
Qatar
MSCI EM
Kuwait
Egypt
Qatar
Attractive Yield
Country Saudi Arabia Dubai Kuwait Qatar Bahrain Oman Japan China India Malaysia Pakistan US UK Dividend Govt. Bond Yield Yield* 3.91% 3.92% 3.41% 4.25% 4.90% 1.88% 3.25% 5.00% 5.00% 4.50% 5.60% 4.50% 2.40% 0.50% 2.33% 4.30% 2.00% 7.00% 6.00% 4.00% 9.00% 13.00% 3.26% 1.60% 5.99% 6.25% Difference -0.01% -0.84% 3.03% -1.75% 0.50% 1.10% 1.90% -1.97% -5.00% 2.00% -4.00% 1.66% -0.26%
Source: Bloomberg, Global Research *Yield on Government Bond maturing after one year except for Dubai
The recent correction in the MENA markets has resulted in attractive dividend yields. Kuwait scores high on this parameter.
Rebound of Markets is On the Cards ...

We believe MENA region will be among the few regions in the World to avoid Global recession. The core earnings performance of the MENA equities have been robust which afrms our view that fundamentals of the corporate sector remain strong. Majority of the Central Banks in the region have issued statements conrming minimal exposure to US subprime mortgages. We have seen timely interventions by the regional Governments and Central Banks in the form of bailout packages and interest rate cuts which we believe will improve the liquidity in the markets. In our view, valuation look very attractive and this is the time to buy as most of the markets are seemingly bottoming out. Further market support by sovereign wealth funds during these critical times will go a long way boosting investors condence in the markets.
36
Country Proles
Algeria
Algeria- Economic Snapshot

2003 Economic Performance GDP at Current Prices (ADbn) GDP at Current Prices (US$bn) Growth Rate of GDP at Current Prices (%) GDP at Constant Prices (ADbn) Growth of GDP at Constant Prices (%) Per Capita GDP at Constant Prices (AD000) Ination, Average Consumer Prices (%) Population (mn) Government Finance (ADbn)* Total Revenues and Grants** Total Expenditures Budget Balance Balance of Payment (US$bn)*** Trade Balance Total Exports Total Imports Current Account Capital Account Overall Balance Money and Banking (ADbn)*** Money Supply (M1) Quasi-Money Net Foreign Assets 5,247.5 67.8 0.2 4,731.2 0.1 148.6 0.0 31.8 1,947.5 1,691.4 256.1 11.9 24.5 -12.6 9.6 -1.4 8.2 1630.3 1724.0 2342.6 2004 6,135.9 85.1 0.2 4,977.2 0.1 153.8 0.0 32.4 2,215.2 1,891.8 323.4 15.1 32.2 -17.1 11.9 -1.9 10.0 2160.5 1577.5 3119.2 2005 7,544.0 102.7 0.2 5,231.1 0.1 159.0 0.0 32.9 3,082.7 2,052.0 1,030.7 26.4 46.5 -20.0 21.1 -4.2 16.9 2421.4 1736.2 4179.7 2006 8,460.5 116.8 0.1 5,335.7 0.0 157.9 0.0 33.8 3,639.9 2,452.7 1,187.2 33.3 54.8 -21.5 28.2 -11.2 17.0 3167.6 1766.1 5515.1 2007 9,232.7 134.3 0.1 5,581.1 0.0 162.2 0.0 34.4 3,803.9 2,751.4 1,052.5 34.1 60.3 -26.3 29.5 -0.4 29.1 4214.3 1763.7 7402.6 2008F 11,849.9 171.3 0.3 5,852.3 0.0 168.2 0.0 34.8 5,095.5 3,400.9 1,694.5 22.0 44.3 -22.3 22.3 -2.5 19.8 4732.7 1869.3 8290.4
*Estimated balances in 2007 and 2008, ** Excluding privatization receipts, which are classied under nonbank nancing, ***Provisional balances in 2007 and provisional midyear balances in 2008 Source:IMF, AfDB, OECD, Banque dAlgerie and Global Research
39
Algeria - Economic Snapshot

Being ranked the second African country holding proven natural gas reserves, as well as the third in terms of oil reserves, Algerias economy is highly dependent on the hydrocarbon sector, constituting more than 90% of the Countrys exports in 2007. The government aims at adopting various reforms in non-oil sectors including the nancial services and telecommunications. The growth of the petroleum sector, accompanied by the improved government spending have helped accelerating real GDP by 4.6%, reaching AD5,581.1bn in 2007. The economic growth is expected to remain strong in 2008
Top African Countries Holding Proven Natural Gas Reserves
Trilion Cubic Feet 200 184 180 160 140 120 100 80 60 40 20 0 Nigeria Algeria Egypt Rest of African Countries 59 88 159
Source: Energy Information Administration, Global Research
Real GDP Development

7,000 8% 6,000 7%
6% 5,000 5% 4,000 4% 3,000 3% 2,000 2% 1,000
1%
0 2003 2004
GDP at constant prices (ADbn)
0% 2005 2006 2007 2008

Growth of GDP at constant prices(%)-(right scale)
40
Bahrain
Bahrain - Economic Snapshot

Economic Performance Nominal GDP Nominal GDP Growth Real GDP Real GDP Growth Per Capita GDP Oil Activities / GDP Population Consumer Price Index Exchange Rate Oil Sector Crude Oil Production Oil Exports # Government Finance Revenue Expenditure Surplus / Decit Money Supply # M1 Growth M2 Growth Foreign Trade # Exports Imports Current Account Balance Capital Markets^ General Share Price Index Market Capitalization 2004 (US$bn) (%) (US$bn) (%) (US$) (%) (000) % (BD/US$) (mn bpd) (US$bn) (US$mn) (US$mn) (US$mn) (%) (%) (US$mn) (US$mn) (US$mn) (Points) US$mn 11.2 15.3% 9.5 5.6% 15,846 22.8% 707 2.3% 0.377 0.187 5.5 3,449.3 2,930.0 159.2 4.8% 4.1% 7,537.9 7,365.0 470.3 1,773.7 13,699 2005 13.4 19.8% 10.2 7.9% 18,525 25.0% 725 2.6% 0.377 0.187 7.8 4,433.4 3,419.6 682.5 23.4% 22.0% 10,214.9 9,368.2 1,470.3 2,195.8 17,363 2006 15.8 17.8% 10.9 6.5% 21,291 26.0% 743 2.2% 0.377 0.183 9.2 4,879.5 4,133.8 745.7 21.0% 14.9% 12,167.6 10,487.3 2,181.7 2,217.6 21,122 2007* 18.5 16.8% 11.8 8.1% 23,901 24.6% 772 3.3% 0.377 0.185 10.8 5,402.4 4,822.5 113.8 22.3% 40.8% 13,597.3 11,457.3 2,898.9 2,755.3 27,016 2008** 21.8 18.0% 12.5 6.3% 27,119 25.0% 803 4.5% 0.377 NA 7.8 NA NA NA 40.2% 15.9% 9,448.3 6,242.7 NA 2,462.7 27,258
Source: Central Bank of Bahrain, * Preliminary, ** Global Estimates, # Figures as of year end on December and from January to June 2008 for 2008 ^ Figures as of year end on December and from January to September 2008 for 2008
42
Bahrain - Economic Snapshot

Bahrains economy has been performing exceptionally well during the past few year with the real GDP growing at a CAGR of 7.0% during 2003-07. Non-oil sector will continue to underpin the growth with nancial services, the backbone of Bahrain economy, continuing to benet from the regional investment boom, rapid growth in Islamic banking and the expansion of the insurance sector. Total assets in the banking system rose 31.2% to US$245.8bn in 2007 having increased 33.5% the year before. The Kingdom has long been an open economy that has attracted foreign investment. It has been ranked 2nd among GCC and 18th out of 181 economies in the ease of Doing Business 2009 report by the World Bank.
GDP Composition by Economic Activity 2007 (Nominal)
Others 9.8% Transport, Storage & Communications 6.0% Crude Petroleum & Natural Gas 24.6%
Trade 9.1%
Real Estate & Business Services 7.4% Construction 5.0% Financial Institutions 18.4%
Manufacturing 15.3%
Insurance 4.3%
Source: Central Bank of Bahrain (CBB)
Real GDP Growth

12.0 10.0 8.0 6.0 4.0 2.0 2004 2005
R e a l GD P (U S $b n )
8.0% 7.0% 6.0% 5.0% 4.0% 2006 2007*
R e a l GD P Gro w t h
Source: Central Bank of Bahrain (CBB)
43
Egypt
Egypt - Economic Snapshot

Economic Performance Real GDP ^ Real GDP Growth Rate Per capita GDP Consumer Price Index Population Government Finance Total Revenues and Grants Total Expenditures Cash Surplus/(Decit) Overall Fiscal Surplus/(Decit) Balance of Payment Trade Balance Total Exports Total Imports Current Account Current Account/Nominal GDP Capital & Financial Account Overall balance Money Supply Money Supply - M1 Quasi Money Total Domestic Liquidity (M2) Capital Market Indicators ** CASE 30 Index Market capitalisation Price Earning (P/E) Ratio *** Price to Book (P/B) Ratio *** (LE bn) (%) (US$) (%) (mn) (LE (LE (LE (LE mn) mn) mn) mn) 2002/03 390.7 3.2% 1,161 3.2% 69.2 89,146 127,320 (38,174) (43,559) (6,615) 8,205 (14,820) 1,943 2.42% (2,734) 546 67,212 317,050 384,262 1,155.5 171.9 8.8 2.1 2003/04 407.0 4.1% 1,117 10.3% 70.5 101,881 145,987 (44,107) (45,877) (7,834) 10,453 (18,286) 3,418 4.34% (5,016) (158) 77,606 357,305 434,911 2,568.0 233.9 15.6 4.4 2004/05 425.2 4.5% 1,247 11.4% 71.9 110,865 161,610 (50,747) (51,643) (10,359) 13,833 (24,193) 2,911 3.25% 3,378 4,478 89,685 404,199 493,884 6,324.7 456.3 22.0 9.1 2005/06 454.3 6.8% 1,460 4.2% 73.6 151,266 207,811 (56,545) (50,386) (11,986) 18,455 (30,441) 1,752 1.63% 3,511 3,253 109,274 451,082 560,356 6,973.4 534.0 21.0 5.9 2006/07 486.5 7.1% 1,651 11.0% 77.5 180,215 222,029 (41,815) (54,698) (15,817) 22,018 (37,834) 2,696 2.11% 1,134 5,282 131,290 531,398 662,688 10,549.7 768.3 19.1 8.6 2007/08 * 798.1 7.2% 2,142 11.7% 77.5 218,500 277,432 (58,932) (59,234) (23,415) 29,356 (52,771) 888 0.53% 7,137 5,420 170,579 596,085 766,664 7,059.2 623.6 14.4 5.7
(US$ mn) (US$ mn) (US$ mn) (US$ mn) (US$ mn) (US$ mn) (US$ mn) (LE mn) (LE mn) (LE mn) (Points) (LE bn) (Times) (Times)
^ Using 2001/02 prices for the period 2002/03 to 2006/07 and prices of 2006/07 for 2007/08, * Preliminary, ** Figures as of year end on December and from January to September 2008 for 2008, *** P/E and P/B ratios are based on the most active companies only (Liquid Market) Source: Central Bank of Egypt, Ministry of Finance, The Egyptian Exchange (EGX) and Global Research
45
Egypt - Economic Snapshot

The Egyptian economy has been able to maintain its robust GDP growth during the previous three years, at around 7% annually. This strong growth has positioned Egypt to become an attractive Foreign Direct Investment (FDI) destination, which rose by 19.4% in FY 2007/08, reaching US$13.2bn. The current challenge facing the Egyptian economy is the rising ination rate, which reached 21.5% in September 2008, as it rose on the back of the surging food and fuel prices worldwide. With the ease of these prices internationally, the ination is believed to be brought down.
GDP Composition by Economic Activity 2007/08
Others, 6.2% General Government, 8.4% Real Estate, 2.7% Tourism, 3.7% Insurance, 3.6% Financial Services, 3.7% Wholesale & Retail Trade, 11.2% Suez Canal, 3.4% Communication, 3.2% Oil & Other Manufacturing Ind., 16.3% Const. & Building, 4.3% Transport & Warehousing, 4.1% Agriculture, Forestry & Fishing13.2% Oil, 6.9%
Natural Gas, 9.1%
Source: Central Bank of Egypt (CBE) and Global Research
Real GDP Growth

900 800 700 600 500 400 300 200 100 0 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 3.2% 4.1% 4.5% 6.8% 7.1% 7.2% 8% 7% 6% 5% 4% 3% 2% 1% 0%
Real GDP (LE bn)
Real GDP Growth Rate (%)
Source: Central Bank of Egypt (CBE) and Global Research
46
Iran
Iran- Economic Snapshot

Economic Performance GDP at current prices Growth of GDP at current prices GDP at constant prices Growth of GDP at constant prices Per Capita GDP at constant prices Population at mid year Ination, average consumer prices Government Finance Total Revenues and Grants Total Expenditures Cash Surplus/(Decit) Debt External Debt External debt/Nominal GDP Balance of Payment Trade Balance Exports Imports Current Account Current Account/Nominal GDP Capital and Financial Account Overall Balance Money and Banking Money supply (M1) Quasi-money Net foreign assets Domestic credit (Net) of which claims on private sector International reserves (IRR bn) (%) (IRR bn) (%) (IRR000) (mn) (%) (IRR bn) (IRR bn) (IRR bn) (US$bn) (%) (US$bn) (US$bn) (US$bn) (US$bn) (%) (US$bn) (US$bn) (IRR bn) (IRR bn) (IRR bn) (IRR bn) (IRR bn) (US$bn) 2003 1,095,303 19.4% 379,838 N/A 5,642.7 67.3 15.6 78,836.6 231,923.1 (128,335.8) 17.1 12.7 4.4 34.0 29.6 0.8 0.6% 4.5 4.2 217,356.8 309,239.6 62,249.7 730,906.0 554,800.0 24.7 2004 1,384,819 26.4% 398,234 6.8% 5,826.8 68.3 14.8 103,587.3 330,884.1 (130,509.1) 23.1 14.3 5.7 43.9 38.2 1.4 0.9% 7.4 7.5 252,815.1 433,052.1 206,727.2 873,806.0 625,715.0 33.256 2005 1,687,905 21.9% 420,928 4.8% 6,066.1 69.4 13.4 200,375.0 415,793.1 (184,667.3) 24.8 13.2 21.3 64.4 43.1 16.6 9.0% (0.2) 14.8 317,919.4 603,100.0 298,734.6 1,070,839.0 1,112,786.0 46.8 2006 2,038,432 20.8% 446,880 5.7% 6,339.1 70.5 11.7 231,125.8 421,334.1 (123,131.0) 23.2 10.4 26.0 76.1 50.0 20.4 9.3% (4.4) 11.4 414,544.9 869,654.5 425,030.8 1,414,560.0 1,491,297.0 60.5 2007 2,623,177 28.7% 477,683 6.2% 6,776.1 70.5 17.2 298,203.1 425,199.7 (147,691.2) 26.1 9.1 40.8 97.4 56.6 34.1 11.6% (12.4) 15.1 535,707.3 1,104,585.7 470,779.5 1,797,546.0 1,987,387.0 81.7
Source: Central Bank Of The Islamic Republic Of Iran, Statistical Center of Iran, BP, IMF
48
Iran- Economic Snapshot

Ranked second in the world in terms of both oil and natural gas reserves, Iran is highly dependent on the hydrocarbon sector constituting 84% of the countrys export in 2007. The government has a substantial privatization program in the pipeline across several major sectors of the economy. Led by the surge in Irans oil revenues in addition to the growth of non-oil sector, nominal GDP grew from US$96 bn in 2000/01 to US$293 bn in 2007/08. The real GDP growth rate is expected to improve in 2008 to reach 6.2%, up from 5.7% in 2007.
Largest Proven World Oil Reserves By Country
300 250
billion of barrels
200
150
100
50
0 Saudi Arabia Iran Iraq Russian Federation
Source: Energy Information Administration, Global Research

400 350 300 250
US$ bn
35% 30% 25% 20% 15% 10% 5% 0% 2003 2004 2005

Nominal GDP (LHS)
200 150 100 50 0 2006 2007 2008

Growth of Nominal GDP (RHS)
49
Iraq
Iraq- Economic Snapshot

Economic Performance Nominal GDP Nominal GDP Growth Real GDP Real GDP Growth Per Capita GDP Population Consumer Price Index Oil Sector Crude Oil Production Oil Exports Oil Exports Price Government Finance Revenue Expenditure
Surplus/(Decit) Money Supply M1 Growth M2 Growth Exports Imports Current Account Balance Capital Markets General Price Index Market Capitalization Number of Shares Traded Value of Trading
2004 (US$bn)(2) % (US$mn) % (US$ ) mn % mn bpd (US$bn) US$ per barrel (US$bn) (US$bn)
(US$bn) % % (US$bn) (US$bn) (US$bn) Points (US$bn) bn (US$bn)
2005 52.6 33.4% 28.2 3.3% 1,882.2 28.0 37.0% 1.9 22.5 48.3 33.3 21.7
11.6 12.3% 19.8% 23.7 23.5 1.9 45.6 2.6 55.6 313.2
2006 78.6 49.4% 39.4 39.6% 2,692.6 28.8 53.2% 2.0 29.2 58.0 40.3 31.3
9.0 35.6% 43.6% 18.7 30.5 -9.4 25.2 1.6 57.9 125.4
2007 88.7 12.8% 39.5 0.4% 2,946.3 29.7 30.8% 2.2 37.1 66.4 42.8 27.6
15.2 40.5% 27.9% 8.7 4.3 6.0 34.5 1.7 152.9 364.9
2008(1) 100.0 12.8% 41.7 5.5% 3,289.8 30.4 14.0% 2.3 64.6 105.3(3) N/A N/A
N/A N/A 5.7%(4) 10.4 4.7 N/A 37.5(5) 1.8(5) 43.2(5) 78.7(5)
39.4 62.1% 27.3 23.0% 1,453.2 27.1 27.0% 2.1 17.7 34.6 27.1 26.4
0.7 75.8% 76.2% 17.8 21.3 -2.4 64.9 1.4 14.3 109.2
Source: Central Bank of Iraq (CBI), Central Organization for Statistics and Information Technology (COSIT), IMF, Global Research (1) Forecast (2) US$ 1= ID 1,216 (3) As of October 08 (4) Up to June 08 (5) As of March 08
51
Iraq - Economic Snapshot

Central Bank of Iraq has recently lowered interest rates to 15% to spur growth. Increasing surpluses from oil revenues is expected to accelerate the economic growth. In order to boost its oil revenues, Iraq has opened oil reserves to foreign companies.
Source: CBI, Global Research
Iraq Oil Sector

US$/b
Iraq has also been promoting FDI in order to drive growth. Al-Maabar of Abu Dhabi, which will build a US$10bn project in Iraq, is considered the largest FDI in Iraq. The real GDP growth rate is expected to improve in 2008 to reach 5.5%, up from 0.4% in 2007.
Ination Trend Ination Trend

200.0% 150.0% 100.0% 50.0% 0.0% -50.0% 2004 2005 2006 2007
Food
Clothing
Furniture
Fuel and Electricity
Transport
Health
Rent
Source: CBI, Global Research
52
Jordan
Jordan - Economic Snapshot

Economic Performance Nominal GDP at market prices (JD mn) Nominal GDP growth rate Real GDP at 1994 prices (JD mn) Real GDP growth rate Per capita GDP at current market prices (US $) Population ( mn) Consumer Price Index Government Finance (JD mn) Total Revenues & Grants Expenditure Surplus/Decit Money Supply ( in JD mn)(a) M1 Growth M2 Growth Foreign Trade Exports Imports Current Account Balance Current Account Balance/ GDP Capital Markets (b) General Share Price Index Market Capitalization (JD mn) Number of Shares Traded Value of Trading (JD mn) 2003 7,228.70 6.40% 6,286.30 4.18% 1,390.13 5.20 1.60% 2,613.00 2,809.80 -196.8 26.06% 12.4 2,184.90 3,600.20 882.6 12.2 1,761.47 7,772.75 1,008.56 1,855.18 2004 8,090.70 11.92% 6,824.40 8.56% 1,498.28 5.40 3.40% 2,958.50 3,180.50 -222 9.35% 11.7 2,753.00 5,148.10 62.9 0.8 2,729.10 13,033.80 1,338.70 3,793.20 2005 8,941.50 10.52% 7,307.20 7.07% 1,625.73 5.50 3.50% 3,062.10 3,538.90 -476.8 27.20% 17.0 3,049.70 6,606.00 -1559.4 -17.4 4,259.70 26,667.10 2,582.60 16,871.00 2006 9,997.40 11.81% 7,768.10 6.31% 1,753.93 5.70 6.30% 3,469.00 3,912.20 -443.2 12.44% 14.1 3,689.90 7,274.60 -1,133.30 -10.8 3,013.70 21,078.20 4,104.30 14,209.90 2007 11,225.30 12.28% 8,230.70 5.96% 1,902.59 5.90 5.40% 3,971.50 4,586.00 -614.5 5.84% 10.6 4,063.60 8,665.30 -2,110.40 -18.0 3,675.00 29,214.20 4,479.40 12,348.10 2008* 13,463.00 19.93% 8,683.93 5.50% 2,207.05 6.10 15.80% 2,766.60 2,857.10 -90.5 19.13 14.6 4,623.39 11,092.31 -3,453 -25.6 3,070.47 35,037.91 4,643.89 18,081.04
Source: CBJ, Zawya.com., Global Research , * Estimates, (a) August End, (b) September End
54
Jordan - Economic Snapshot

Consumer demand is expected to improve slightly in 2009-10 on the back of slackening ination, however, growth is expected to remain constricted by the worsening global economic situation. Fiscal decit is expected to widen in 200809, and the government is expected to remain heavily dependent on foreign grants. The budget decit is expected to constitute around 4.6 percent of 2009 GDP including foreign assistance or 9.2 percent excluding foreign assistance. The current account is expected to narrow in 2009-10, as Jordan benets from lower oil prices and the availability of discounted Iraqi crude oil. Foreign Direct Investment (FDI)s rose by 49.0 percent in 2008.
Nominal GDP By Economic Sector
Domestic Household Services 0.4% Producers of Private NonAgriculture prot services for 2.2% Households Mining and quarrying Produces of 0.6% 4.5% Government Services 17.5% Manufacturing 18.2% Social and Personal Services 5.0%
Electricity and Water 2.3% Construction 5.1%
Finance, Insurance, Real Estate & Business Services 18.7%
Trade, Restaurants and hotels 11.6% Transport and Communication 14.0%

JD mn 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2003 2004
Domestic Debt
35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2005 2006 2007 2008*
Net Domestic Debt
Net domestic debt to GDP
55
Kuwait
Kuwait - Economic Snapshot

Economic Performance Nominal GDP Nominal GDP Growth Real GDP Real GDP Growth Per Capita GDP Population at mid Year CPI Ination Oil Sector Crude Oil Production Oil Exports Oil Exports Price Government Finance Revenue Expenditure Surplus/(Decit) Money Supply M1 Growth M2 Growth Foreign Trade Exports Imports Current Account Balance Current Account Balance / GDP Capital Markets General Price Index Market Capitalization Number of Shares Traded Value of Trading 2004 (US$bn)(2) % (US$bn) % (US$ 000) mn % mn bpd (US$bn) US$ per barrel (US$bn) (US$bn) (US$bn) % % (US$bn) (US$bn) (US$bn) % Points (US$bn) bn (US$bn) 65.9 22.8% 58.3 10.7% 23.9 2.8 1.3% 2.3 29.6 34.1 26.1 20.8 5.3 21.5% 12.1% 31.7 14.0 20.1 30.6% 6,409.5 75.2 33.5 51.8 2005 88.7 34.7% 65.0 11.4% 29.7 3.0 4.1% 2.6 46.6 48.7 33.7 23.7 10.0 17.4% 12.3% 49.3 17.3 37.7 42.5% 11,445.1 142.1 52.2 97.6 2006 110.9 25.0% 69.0 6.3% 34.8 3.2 3.1% 2.7 58.0 58.9 51.6 25.8 25.8 -4.8% 21.7% 61.1 18.8 56.3 50.7% 10,067.4 143.8 37.6 59.2 2007 119.7 8.0% 72.1 4.5% 35.2 3.4 5.5% 2.6 63.1 66.4 58.3 38.7 19.6 16.8% 19.3% 66.5 22.5 50.7 42.4% 12,558.9 210.5 70.4 135.5 2008(1) 131.6 9.9% 76.7 5.9% 36.1 3.6 11.3%(3) 2.6(4) 98.5 104.4(4) 71.5 36.5 35.1 14.2%(4) 13.4%(4) 48.6(3) 12.4(3) 84.2 64.0% 9,789.3(5) 160.4(5) 71.1(5) 122.5(5)
Source: CBK, Global Research, Zawya, IIF, (1) Forecast, (2) 266 ls= $1, (3) Up to June 2008, (4) Up to September 2008, (5) Up to October 2008
57
Kuwait - Economic Snapshot

Central Bank of Kuwait cut its discount rate to 4.25% and its Repo rate to 2% on Oct 30. Kuwait plans to produce 1bn cubic feet of gas by the year 2015. Kuwait Stock Exchange have lost 29.65% YTD, the second lowest among GCC exchanges after Bahrain. Kuwait Oil prices have continued its slide, reaching US$57.7 as of Oct. 30. With the recent developments in the nancial markets, CBK have guaranteed all deposits in every local bank. Ination have reached 11% in August 2008 and is expected to come down along with the decline in the global commodity prices.
GDP By Sector
Social & Personal Services 12.4% Business Services 0.8% Real Estate 4.1% Financial Insts 11.8% Transport & Comm 6.6% Wholesale & Retail 3.3% Construction 1.7%
Manufacturing 4.8% Elec, Gas & Water 1.1%
Others 1.4% Oil & Gas 52.1%
Source: CBK, Global Research
Interest Rates
10 8 6 4 2 0 2004 2005 2006 2007 2008 %
Deposit Rate
CBK Discount Rate
Lending Rate
Source: CBK, Global Research
58
Lebanon
Lebanon - Economic Snapshot

Economic Perfromance Nominal GDP Nominal GDP Growth Real GDP Real GDP Growth Per Capita GDP Population at mid Year Consumer Price Index Government Finance Revenue Expenditure Surplus/(Decit) Money Supply M1 Growth M2 Growth Foreign Trade Exports Imports Current Account Balance Current Account Balance / GDP Capital Markets BLOM Index Market Capitazation Number of Shares Traded Value of Trading 2004 (US$bn) % (US$bn) % (US$ 000) millions % (US$bn) (US$bn) (US$bn) % % (US$bn) (US$bn) (US$bn) % Points (US$bn) mn (US$mn) 21.47 8.2% 19.57 5.9% 6.0 3.5 2.3% 4.69 5.51 -0.82 -3% -6% 1.60 8.2 -2.7 12.5% 630.0 2.3 24.5 197.8 2005 21.56 0.02% 19.77 1.1% 6.0 3.6 4.7% 4.63 5.18 -0.54 13% -4% 2.01 8.1 -1.5 7.0% 1273.0 4.9 89.7 923.4 2006 21.86 1.4% 18.98 -4.0% 6.0 3.6 7.2% 4.18 5.19 -1.01 8% 6% 2.27 8.9 -0.8 3.2% 1177.03 8.3 134.8 2.031 2007 22.19 5.4% 19.25 1.5% 6.0 3.7 3.0% 5.37 6.68 -1.31 6% 23% 3.20 11.2 -1.4 6.1% 2008* 22.96 3.4% 20.41 6.0% 6.2 3.7 7.2%** 3.16*** 3.50*** -0.34 N/A N/A 3.82 10 N/A N/A
1501.77 1539.62**** 10.8 15.3**** 114.2 44.4**** 994 N/A
Source: Beirut Stock Exchange, Central Bank of Lebanon, www.databank.com.lb, IMF, IIF *Estimate, *As of July 2008, ** As of June 2008, *** As of July 2008 ****As of October 17, 2008
60
Lebanon - Economic Snapshot

The economic performance of Lebanon is expected to pick up on the back of improving domestic situation. Central Bank has stated that the economy is safe from global crisis and has assured that it will not let any bank to fail. Tourism sector, which is one important drivers of the economy, is expected to improve as number of tourists are expected to reach 1,328,593, a 30% increase from 2007. Government reforms which awaits the Parliament acceptance could yield revenues mounting to US$1.5bn. The real GDP growth rate is expected to improve in 2008 to reach 6.0%, up from 1.5% in 2007.
Trade 23.2%
GDP Breakdown
Public administration 11.5% Agriculture and Energy and water supply livestock 0.6% 5.2% Industry 11.6%
Construction 8.2%
Transport and communication 7.3%
Source: Ministry of Finance, BDL, IMF, Global Research
Services 33.6%
Budget Decit
LL bn 0 -500 39.1% -1,000 30% -1,500 -2,000 -2,500 -3,000 -3,500 -4,000 -4,500 -5,000 2001 2002 2003 2004 2005 2006 2007 Up to June 08 -4,228.3 -4,292.3 1.5% -2,797.8 -3,026.2 -8.3% -3,938.0 -23.2% -30% -7.5% -3,892.6 -3,837.9 -20% -1.4% 0% 20% -1,990.8 10% 50% 40%
-10%
Total Decit/Surplus (cash basis)
Growth rate
61
Morocco
Morocco - Economic Snapshot

Economic Performance Nominal GDP (US$ bn) Nominal GDP Growth Real GDP Growth Per Capita GDP (US$ at market prices) Population (mn) Consumer Price Index Government Finance Revenue (US$ bn) Expenditure (US$ bn) Surplus / (Decit) (US$ bn) Money Supply M1 Growth M2 Growth Foreign Trade Exports FOB (US$ bn) Imports CAF (US$ bn) Current Account Balance (US$ bn) Current Account Balance / GDP Capital Markets No. of listed Companies Market Capitalization (US$ bn) Market Cap./GDP MASI Index Performance (All Shares Index) MADEX Index Performance ( Most Active Shares Index) 2004 57.8 5.9% 4.8% 1,934 29.9 1.5% 13.0 14.5 (1.5) 9.8% 9.9% 10.1 18.1 1.0 1.7% 53 23.6 43.3% 14.7% 11.0% 2005 60.4 4.5% 3.0% 2,002 30.2 1.0% 13.7 16.9 (3.2) 14.8% 14.3% 11.4 21.1 1.3 2.1% 55 28.9 50.0% 22.5% 23.7% 2006 66.1 9.4% 7.8% 2,167 30.5 3.3% 15.8 16.9 (1.1) 17.3% 16.1% 12.8 24.1 1.4 2.2% 65 47.8 79.0% 71.1% 77.7% 2007 70.5 6.6% 2.7% 2,285 30.8 2.0% 18.6 18.3 0.3 20.6% 19.1% 13.7 29.6 (0.1) -0.1% 73 67.1 101.6% 33.9% 35.1% 2008* 77.9 10.5% 6.5% 2,498 31.2 3.9% 13.2 11.8 1.4 2.2% 2.4% 9.0 17.7 65.7 -5.7% -6.0%
Source: Central Bank, Ministry of Finance and privatization, Casablanca Stock Exchange, * All 2008 data are based on latest available data while 2008 economic performance data are estimated.
63
Morocco - Economic Snapshot

Economy is based on agriculture, services, and manufacturing. Tourism and off-shoring business are major sources of foreign exchange. Though growth is still affected by climate conditions as seen in 2007 when drought reduced agriculture production and GDP growth declined to 2.7%, diversication has made the economy more resilient. Morocco depends on imported fuel which is heavily subsidized, putting a strain on budget. With low external debt, there was no impact on the nancial system in the recent nancial crisis, however a looming recession could affect tourism, exports and foreign investments.
US$ bn
GDP By Sector (2007)

General public administration and social security 10% Agriculture 13% Fishing 1% Mining 2% Other services** 26%
Industry 15%
Water & Electricity 3% Post & telecommunication 4% Transport 4% Construction and public works 7% Hotels and restaurants 3% Trade 12%
Source: Ministry of Finance, BDL, IMF, Global Research, ** Finance & insurance, Corporate & personal services, Education, Health & Social services, & others
Public Debt
35 30 25 20 15 10 5 0 2004 2005
Internal Debt
2006
External Debt
2007
64
Oman
Oman - Economic Snapshot

2004 Economic Performance Nominal GDP Nominal GDP Growth Real GDP Real GDP Growth Per Capita GDP Population at mid Year Consumer Price Index Crude Oil Production Oil Exports Oil Exports Price Money Supply*** M1 Growth M2 Growth Foreign Trade Exports (Actuals as at May08) Imports (Actuals as at May08) Current Account Balance Current Account Balance / GDP Capital Markets**** General Price Index Market Capitalization (US$bn) % (US$bn) % (US$) millions (1997=100) 000s bpd mn barrels US$ per barrel % % (US$bn) (US$bn) (US$bn) % Points US$bn 24.7 13.6% 17.4 5.4% 10,230.5 2.4 99.8 780.8 263.6 34.4 12.8% 4.0% 13.3 (8.8) 0.8 3.2% 3,375.1 7.6 2005 30.8 24.6% 18.4 5.7% 12,273.3 2.5 101.7 775.3 262.1 50.3 24.3% 21.4% 18.7 (9.0) 4.2 13.5% 4,875.1 12.7 2006 35.6 15.6% 19.4 5.7% 13,818.5 2.6 105.2 737.5 233.2 61.7 9.0% 24.9% 21.6 (10.9) 4.4 12.3% 5,581.6 12.9 2007 39.9 12.1% 20.7 6.4% 14,550.2 2.7 111.4 710.4 222.0 65.2 56.3% 37.2% 24.7 (16.0) 3.2 8.0% 9,035.5 23.0 2008E 43.9 10.0% 22.2 7.4% 15,243.1 2.9 123.9* 745.8** 216.8 70.0 11.8% 15.5% 14.5 (9.0) 2.7 6.2% 7,265.2 15.0
Number of Shares Traded Value Traded
mn (US$bn)
345.4 1.9
515.4 3.6
1,110.9 2.3
3,422.2 5.2
1,882.4 5.3
Source: Central Bank of Oman, IMF, Ministry of National Economy, Bloomberg, MSM & Global Research * End Aug08, ** 7M08 annualized for 2008, *** YTD Aug08 for 2008, **** As on 23Oct08 for 2008.
66
Oman - Economic Snapshot

Oman is on track to achieve its diversication objectives as declared in Vision 2020 with manufacturing sector to contribute 15.0% of GDP by 2020. With specic intentions to increase the nonhydrocarbon component of the GDP, major steel & Aluminium projects in Sohar have commencing operations in 2008. Albeit, Omani economy posting a real GDP growth of 5.7% in 2006 & IMF expecting it to register 6.4% & 7.4% respectively for 2007 & 2008, ination hit a record high of 13.6% in Aug08. We expect Oman to clock a real GDP growth of 7% to 8% in 2008 on the back of its diversication efforts in real estate, tourism & manufacturing sectors.
Oil vs. Non-oil GDP
(RO bn) 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 3.4 2003
Oil GDP
6.3 6.1 5.0 5.5 5.8 2005 Non-oil GDP 6.6 9.3 7.1
4.0 2004
2006
2007
Source: MNOE, Global Research
Mn Bls 350 300 250 200 150 100 50 0 2002
Annual Oil Production & Exports
2003
2004
2005
2006
2007
Annual Total Oil Production
Annual Oil Exports
Source: MNOE, Global Research
67
Palestine
Palestine - Economic Snapshot

Economic Indicators Economic Performance (a) Nominal GDP (USmn) Nominal GDP Growth Real GDP (USmn) Real GDP Growth GDP/Capita (US) Population (mn) Ination (%) Government nance (US$ mn) Revenue (actuals) Expenditure Suplus/ Decit Monetary Sector (b) Credit to Private Sector Private Sector Deposits Foreign trade (US$ mn) Exports fob Imports fob Capital Markets (c ) General Share Price Index Market Capitalisation (USD) Number of Shares Traded Value of Trading (USD) 2004 4,077.0 12.5% 4,247.7 6.3% 1,246.2 3.6 3.0 1,562.1 1,909.2 (347.1) 1,064.1 3,478.7 348.8 1,954.9 277.6 1,096,525,380 103,642,845 200,556,709 2005 4,478.0 9.8% 4,502.6 6.0% 1,281.6 3.7 3.5 1,943.5 1,925.6 17.9 1,355.6 3,613.7 317.6 2,313.3 1,128.6 4,457,227,305 369,567,295 2,069,178,223 2006 4,394.0 -1.9% 4,107.0 -8.8% 1,129.2 3.8 3.8 1,079.5 1,728.0 (648.5) 1,402.0 3,826.1 354.2 2,522.9 605.0 2,728,811,088 222,689,351 1,067,951 2007 4,294.1 -2.3% 4,135.8 0.7% 1,112.8 3.8 1.9 2,628.0 2,877.0 (249.0) 1,326.7 4,594.9 429.0 2,667.4 527.3 2,474,679,018 299,422,814 813,469,091 2008F 6,641.0 54.7% 4,168.9 0.8% 1,602.0 N/A 9.2 N/A N/A N/A 1,374.7 5,085.4 N/A N/A 644.8 2,907,247,292 288,086,726 1,048,719,179
Source: PCBS, PMA,MOF, and PSE a) 2008 gures are IMF estimates, b) Latest gures from the PMA, c) latest gures as of the rst nine months of 2008
69
Palestine - Economic Snapshot

Since 2000, GDP has been on a downward trend. Despite a slight increase in 04-05, the settlement expansions and movement restrictions have caused GDP growth to slow in 2006. According to IMF estimates, Real GDP is expected to grow by 0.8 % and 3-7 % for the years 2008, 2009. The Palestinian Reform & Development Plan (PRDP) was presented in the donor conference on Dec 2007, where USD7.4 billion that have been pledged as aid to the economy. Unemployment and poverty remain very high, due to closure policy on Gaza since the events of June 14, 2007. The worsening political and security situation will prove detrimental to further economic growth.
GDP By Economic Activity
Households with Employed Persons, 0.2% Agriculture and Fishing, 8.2% Public Administration & Defense, 14.5% Mining, Manufacturing, Elec. & Water, 12.7%
Construction, 2.5% Other Services, 21.9% Wholesale 7 Retail Trade, 10.0%
Financial Intermediation, 4.7%
Transport, Storage & Communication, 11.6%
Source: Palestinian Central Bureau of Statistics
Public Debt
5,000.0 4,500.0 4,000.0 3,500.0 3,000.0 2,500.0 2,000.0 1,500.0 1,000.0 500.0 0.0 2003 2004 2005 2006 2007
Public Debt /GDP
45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%
Public Debt (mn USD)
Nominal GDP (USmn)
Source: PMA, IMF estimates, Global Research
70
Qatar
Qatar - Economic Snapshot

Economic Performance Nominal GDP Nominal GDP Growth Real GDP Real GDP Growth Per Capita GDP Population Consumer Price Index Oil Sector Crude Oil Production Oil & Gas Exports Government Finance Revuenue Expenditure Money Supply M1 Growth M2 Growth Foreign Trade Exports Imports Current Account Balance Current Account Balance / GDP Capital Markets General Price Index Market Capitalization Number of Shares Traded Value of Trading 2003 (US$bn) % (US$bn) % (US$) mn (%) (mn bpd) (US$bn) (US$bn) (US$bn) (%) (%) (US$bn) (US$bn) (US$bn) (%) (Points) (US$bn) (mn) (US$bn) 23.5 21.5 19.4 3.5 32,788 0.7 2.3 0.75 11.0 8.4 7.4 79.3 15.8 13.4 4.4 5.8 24.4 287.8 26.7 190.0 3.2 2004 31.7 34.8 23.5 20.8 41,703 0.8 6.8 0.78 15.0 15.1 9.9 29.4 20.5 18.7 5.4 7.6 23.8 424.7 40.4 316.6 6.4 2005 42.5 33.8 24.9 6.1 47,794 0.9 8.8 0.79 20.8 17.9 14.0 53.2 43.3 25.8 9.1 7.5 17.6 779.2 87.1 1033.1 28.3 2006 56.8 33.7 28.0 12.2 54,496 1.0 11.8 0.82 27.8 23.4 18.2 24.7 37.9 34.1 14.8 9.5 16.7 487.2 60.9 1865.4 20.5 2007 71.0 25.1 32.5 15.9 57,936 1.2 13.8 0.81 34.0 31.7 21.3 26.9 32.7 42.0 19.8 10.4 14.7 684.0 95.5 3411.3 29.9
Source: Qatar Central Bank, Qatar Planning Council and Global Research, IMF
72
Qatar - Economic Snapshot

Nominal GDP growth slowed in 2007 to 25.1% as compared to 33.7% in 2006. The contribution of Oil and Gas sector declined from 57.2% in 2006 to 56.5% in 2007. Qatars rapid economic growth will soon see it topping the list of the wealthy countries in the world, as measured by GDP per capita. Qatars GDP per capita increased to US$57,936 in 2007 from US$54,496 in 2006. Despite rising import spending the currentaccount surplus increased from US$5.8bn in 2003 to US$10.4bn in 2007.
(US$ bn)
Qatar Gas Reserves & Production
Qatar Gas Reserves & Production
70 60 50 40 30 20 10 0 2001 2002 2003 2004 2005 2006 2007
Proven Gas Reserves (Trillion Cubic Meters)
Gas Production (Billion Cubic Meters)
Source: BP Statistical Review - 2008
Current Account as a Percentage of GDP
Medium term outlook is very favorable with strong growth expected to be driven by the hydrocarbon sector, as well as by diversication into higher value-added petrochemicals and other sectors such as real estate, nancial and service sector related industries. The scal and external positions are expected to remain very comfortable.
Global Investment House 73
Source: Qatar Central Bank, Global Research
(%)
Saudi Arabia
Saudi Arabia - Economic Snapshot

Economic Performance Nominal GDP Nominal GDP Growth Real GDP Real GDP Growth Per Capita GDP Population at mid Year Consumer Price Index Oil Sector Crude Oil Production Oil Exports Oil Exports Price Government Finance Revenue Expenditure Surplus/(Decit) Money Supply M1 Growth M2 Growth Foreign Trade Exports Imports Current Account Balance Current Account Balance / GDP Capital Markets General Price Index Market Capitazation Number of Shares Traded Value of Trading 2004 (US$bn) % (US$bn) % (US$bn) millions % mbpd (US$bn) US$ per barrel (US$bn) (US$bn) (US$bn) % % (US$bn) (US$bn) (US$bn) % Points (US$bn) mn (US$bn) 250.3 16.7 192.6 5.3 11,043.1 22.7 0.4 8.9 110.4 34.5 104.6 76.1 28.6 21.6 21.3 126.0 44.7 51.9 26.9 8,206.2 306.0 10,298.3 473.0 2005 315.3 26.0 203.2 5.5 13,650.8 23.1 0.6 9.4 161.1 50.2 150.5 92.4 58.1 4.5 10.0 180.6 59.5 90.0 44.3 16,712.6 646.2 12,281.3 1,103.7 2006 348.7 10.6 209.6 3.1 14,724.1 23.7 2.3 9.1 189.1 61.1 179.6 104.9 74.8 10.3 20.0 209.6 63.8 98.9 47.2 7,933.3 326.9 54,439.7 1,402.8 2007 381.5 9.4 216.8 3.4 15,737.1 24.2 4.1 8.7 204.9 68.7 165.7 118.1 47.6 22.6 23.7 233.4 82.5 95.0 43.8 11,175.9 519.0 58,860.0 682.1 2008F 442.5 16.0 229.6 5.9 17,897.0 24.7 11.5 10.4 335.6 96.0 N/A N/A N/A 9.3# 10.6# 368.8 192.0 171.0 76.0 6,160.8* 322.4* 42,637^ 436.42^
Source: SAMA, IMF & Global Research, N/A - Not Available, * As of 23rd October, # Till August, ^ Jan-Sep
75
Saudi Arabia - Economic Snapshot

Saudi Arabias economic performance has been exceptional since the beginning of the decade, with nominal GDP nearly doubling. 2008 is forecasted to be another exceptional year with record scal and current account surpluses. Increased oil production will result in real GDP growth accelerating. The kingdom joined the ranks of the top 20 countries worldwide in the World Banks Ease of Doing Business 2009 survey. The growth outlook for the Saudi Arabian economy looks robust.
(US$bn)
Foreign Direct Investment

27.5 25.0 22.5 20.0 17.5 15.0 12.5 10.0 7.5 5.0 2.5 2003 2004 2005 2006 2007
FDI Inows
FDI Outows
Source: World Investment Report - UNCTAD
Trade Performance (US$bn)

250 200 150 100 50 2003 2004
Exports
160 140 120 100 80 60 40 20 2005

Imports
2006
2007
Decit/Surplus
Source: SAMA
76
Syria
Syria - Economic Snapshot

2003 Economic Performance Nominal GDP Nominal GDP Growth Real GDP Real GDP Growth Per Capita GDP Population at mid Year Consumer Price Index Crude Oil Production Oil Exports Revenue Expenditure Surplus/(Decit)
Money Supply
2004 24.2 18.4 20.8 6.7 1,366 17.9 4.4 455.0 2,601.4 6.6 6.7 -0.1 11.1 13.2 6.6 7.5 0.6
2005 27.9 18.1 21.3 4.5 1,544 18.3 7.2 415.8 3,347.0 6.7 6.9 -0.2 14.4 11.9 7.9 9.4 0.3
2006 32.9 14.6 23.1 5.1 1,785 18.7 10.4 386.2 3,261.1 8.4 7.8 0.6 -3.8 8.4 9.7 10.2 0.9
2007E 40.8 19.3 25.6 6.6 N/A N/A 4.7 364.7 N/A N/A N/A N/A 6.3 12.4 N/A N/A N/A
(US$bn) % (US$bn) % (US$) millions % Thousands of bpd (US$mn) (US$bn) (US$bn) (US$bn) % % (US$bn) (US$bn) (US$bn)
20.7 5.0 19.7 1.1 1,236 17.6 5.1 477.8 3,207.7 6.2 6.4 -0.2 9.4 8.1 5.1 4.6 0.7
M1 Growth M2 Growth
Foreign Trade
Exports Imports Current Account Balance

Source: Central Bank of Syria, OPEC, & IMF
78
Syria - Economic Snapshot

Syrias oil production, a major source of the government revenues, had been declining over the previous years. Syria is reaping the benets of its economic reforms especially nancial reforms that boosted the banking sector. Foreign investments had been pouring into Syria in all sectors, specically real estate, and manufacturing. Syria is phasing out of energy subsidies because of the increase in domestic demand and increase in prices combined with falling oil production. Syria has achieved good economic growth over the past few years.
Oil Share of Total Revenue
SP bn 500 400 300 200 100 0 2002 2003 2004 2005 2006
Non-oil
Oil Revenue
Source: Central Bank of Syria
GDP By Sector
22% 20%
10%
28% 20% Agriculture

Gov. Services
Mining & Manuf.

Other
Wholesale & Retail Trade
Source: Central Bank of Syria
79
Tunisia
Tunisia - Economic Snapshot

Economic Performance Nominal GDP Nominal GDP Growth Real GDP Real GDP Growth Per Capita GDP Population at mid Year Consumer Price Index Government Finance Revenue Expenditure Surplus/(Decit) Money Supply M1 Growth M2 Growth Foreign Trade Exports Imports Current Account Balance Current Account Balance / GDP Capital Markets BVMT Price Index Market Capitalization Number of Shares Traded Value of Trading 2004 (US$bn) % (US$bn) % (000 US$) millions % (US$bn) (US$bn) (US$mn) % % (US$bn) (US$bn) (US$mn) % Points (US$bn) mn (US$bn) 26.86 10% 15.7 6.1% 2.69 10.0 3.6% 9.70 9.92 (200.4) 10% 11% 9.20 12.18 -551.0 2% 975 2.35 43 0.52 2005 28.78 7% 16.3 3.8% 2.85 10.1 2.0% 9.38 9.94 (561.4) 14% 12% 10.53 13.20 -304.0 1% 1,142 2.93 83 1.26 2006 31.40 9% 17.2 5.5% 3.08 10.2 4.5% 9.75 10.60 (853.8) 13% 12% 11.88 15.27 -634.0 2% 1,599 4.19 143 3.51 2007 34.24 9% 18.3 6.4% 3.36 10.2 3.1% 10.59 11.51 (922.3) 9% 11% 14.82 18.65 -925.0 3% 1,936 4.98 102 1.33 2008* 36.60 6.8% 19.3 5.5% 3.86 10.4 7.1%** 9.01 10.31 (1,296) N/A N/A 16.20 20 -1,417 4% 2,133*** 6.82**** 97***** 2.03*****
Source: BVMT, Central Bank of Tunisia, National Istiitute of Statistics *Based of Global Research Estimate and IIF estimate ** As of April 2008, *** As of October 17, 2008, **** Data As of Octber 19 2008, ***** Data from January 2008 to September 30th 2008
81
Tunisia - Economic Snapshot

Economic performance of Tunisia has been pleasing for the past few years. Privatization proceeds have yielded TD5.3bn, part of the proceeds were used to pay-off debt. In 2009, Tunisia is set to become the top wind producer in Africa. It will produce 120MW of electricity thus enabling it to save 134,000 tons of oil. Sama Dubai is building a $25bn Mediterranean Gate that will hold 14 luxury hotels, 14km promenade around Lac-du Sud, will create 350,000 and is expected to account for 0.6% of the GDP in 15 years. Tunisia is expected to achieve real GDP growth rate of 5.5% in 2008 as compared to 6.4% in 2007.
Global Investment House 82 GDP Breakdown (2007)
Others 3%
Industry 30%
Services 33%
Manufacturing Industries 17%
Energy 7% Agriculture and Fishing 10%
Source: Central Bank of Tunisia, Global Research
Ination (CPI) Ination

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 4.5 3.6 2 .7 2 3.1
2 003
200 4
2005
20 06
200 7
Source: National Institute of Statistics, Global Research
United Arab Emirates (UAE)
UAE - Economic Snapshot

Economic Performance Nominal GDP Nominal GDP Growth Real GDP (US$bn) Real GDP Growth Per Capita GDP Oil Activities / GDP Population Ination (Consumer Price Index) Oil Sector Crude Oil Production Oil Exports Oil Export Price Government Finance Revenue Expenditure Surplus / Decit Money Supply # M1 Growth M2 Growth Foreign Trade Exports and Re-Exports (FOB) Imports (FOB) Current Account Balance Capital Markets ^ NBAD Index Market Capitalization Value of Trading 2004 (US$bn) (%) (US$bn) (%) (US$) (%) (mn) (%) (mn bpd) (000 bpd) (US$/bbl) (US$bn) (US$bn) (US$bn) (%) (%) (US$bn) (US$bn) (US$bn) (Points) US$bn US$bn 105.3 20.1% 90.0 9.7% 24,364 31.9 4.3 5.0 2.34 2,248 36.1 25.8 26.2 (0.4) 38.7% 23.3% 91.0 63.4 10.6 8,482.0 82.3 18.2 2005 139.7 32.7% 97.4 8.2% 34,026 33.8 4.1 6.2 2.38 2,224 53.6 39.2 28.4 10.7 29.2% 33.8% 117.3 74.5 24.4 17,213.6 231.4 140.6 2006 170.1 21.7% 106.5 9.4% 40,218 38.3 4.2 9.3 2.57 2,507 63.5 54.7 34.9 19.7 14.9% 23.2% 145.6 88.0 36.0 10,280.1 168.7 120.4 2007* 198.7 16.8% 112.1 5.2% 45,178 38.7 4.4 11.1 2.53 2,720 71.7 93.9 40.6 53.3 51.4% 41.7% 180.9 116.6 37.0 13,735.2 257.4 151.0 2008** 235.7 18.6% 119.9 7.0% 51,521 38.0 4.6 12.9 NA NA NA NA NA NA 34.4% 19.6% NA NA NA 12,109.6 220.0 134.7
Sources: Central Bank of UAE, NBAD, OPEC, IIF, * Preliminary, ** Global Estimates, # Figures as of year end on December and from January to June 2008 for 2008, ^ Figures as of year end on December and from January to September 2008 for 2008
84
UAE - Economic Snapshot

The UAE continues to remain one of the most dynamic and diversied economies in the GCC region. The economy has been posting high growth rates with the Real GDP growing at a CAGR of 8.1% for the four year period from 2003-2007. Construction, real estate, banking and tourism have been the main drivers underpinning the real GDP growth. Real estate sector which had experienced very strong growth in recent years is likely to cool down a bit. Fiscal position remains sound, with buoyant global oil prices continuing to support large surpluses. However, external debt has increased sharply, driven by substantial increases in private sector borrowing.
GDP Composition by Economic Activity 2007 (Nominal)
Others 25.0% Crude oil and Natural Gas 35.0%
Construction 8.0% Real Estate and Business Services 8.0%
Wholesale, Retail trade and Repairing services 11.0%
Manufacturing 13.0%
Source: Central Bank of UAE
Real GDP Growth

120.0 100.0 80.0 60.0 40.0 20.0 0.0 2004 2005 2006 2007* 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0%
Real GDP (US$bn)
Real GDP Growth
Source: Central Bank of UAE
85
Yemen
Yemen -Economic Snapshot

(Jan -Dec) Nominal GDP Nominal GDP Nominal GDP growth Real GDP Real GDP Real GDP growth GDP per capita Population Oil & Gas Contribution to GDP Oil & Gas /GDP Government Finance Total Revenues Total Expenditures Surplus /(Decit) Oil Revenues Money Supply and Ination M1 M2 Benchmark deposit rate Ination Consumer Price Ination (all items) Foreign Trade Total Exports Total Imports Trade Balance Current Account Balance Exports of Oil Oil Exports to Total Exports (Units) (YR bn) (US$ bn) (%) (YR bn) (US$ bn) (%) (US$) (mn) (YR bn) (%) (YR bn) (YR bn) (YR bn) (YR bn) (YR bn) (YR bn) (%) (%) (US$ bn) (US$ bn) (US$ bn) (US$ bn) (US$ bn) (%) 2003 2,177.5 11.8 14.9 1,794.3 9.7 3.8 599.0 19.7 481.2 22.1 664.5 825.3 (160.8) 480.2 347.5 797.4 13.0 10.8 3.9 3.6 0.4 0.2 3.5 88.0 2004 2,563.5 13.8 18.7 1,850.3 10.0 4.0 682.0 20.3 579.4 22.6 782.5 858.0 (75.5) 579.1 390.5 917.2 13.0 12.5 4.7 3.9 0.8 0.2 4.3 92.0 2005 3,207.0 16.4 25.1 1,957.5 10.0 4.6 799.0 21.1 753.6 23.5 1,107.6 1,179.3 (71.7) 752.7 442.5 1,049.5 13.0 11.8 6.4 4.7 1.7 0.6 6.0 92.8 2006 3,791.4 19.1 17.1 2,045.5 10.3 3.2 884.0 21.7 1,095.7 28.9 1,449.4 1,418.6 30.8 1,085.2 558.5 1,351.4 13.0 18.2 7.3 5.9 1.4 0.2 6.7 92.0 2007E 4,318.3 21.7 16.5 2,141.7 10.8 3.1 972.0 22.4 971.6 22.5 1,507.6 1,669.8 (162.2) 963.0 613.7 1,586.2 13.0 12.5 7.1 7.2 -0.1 -1.3 6.1 86.1
Source: Central Bank of Yemen, Central Statistical Organization, World Bank, IMF, & Global Research *Gross reserves after deducting commercial bank foreign currency deposits with central bank, **(negative = inow)
87
Yemen -Economic Snapshot

Yemen, a relatively small non-OPEC oil producer, has its economy highly dependent on its petroleum resources. With the expectations of depleting oil resources, the country needs to act fast on diversifying its economic base to ensure future growth. The real GDP growth of 4.6% in 2005 registered a decrease to 3.2% in 2006, and is estimated to decline to 3.1% in 2007 and 2008. To diversify Yemens earnings by focusing more on non-oil sectors of the economy and foreign investment, the government initiated the economic reform program in 2006. The countrys petroleum and non-petroleum sectors are largely dependent on foreign investment inows. Thus, attracting investments remain an important challenge for the government especially in the wake of political instability and security threats.
Global Investment House 88 GDP Composition By Sector (2007)
13%
46%
41%
Agriculture
Industry
Services
Source: Central Statistical Organization & Economist Intelligence Unit
Net Public Debt

1,500.0 1,300.0 1,100.0 900.0 700.0 500.0 300.0 100.0 2003 2004 2005 2006 2007E % 55.0 50.0 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0
Net Public Debt (YR bn)
Net Public Debt to GDP (%)
Source: Central Bank of Yemen & IMF
Top 100 Companies
Top 100 Companies

Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Name SABIC Saudi Telecom Al Rajhi Bank Emirates Telecom Corporation (Etisalat) Mobile Telecommunications Co (Zain) Maroc Telecom Samba Financial Group Industries Qatar National Bank of Kuwait Kuwait Finance House Arab Bank Saudi British Bank Mashreqbank Saudi Electricity Riyad Bank Qatar National Bank Emaar Properties Kingdom Holding Emirates NBD Banque Saudi Fransi Country Saudi Arabia Saudi Arabia Saudi Arabia UAE Kuwait Morocco Saudi Arabia Qatar Kuwait Kuwait Jordan Saudi Arabia UAE Saudi Arabia Saudi Arabia Qatar UAE Saudi Arabia UAE Saudi Arabia Industry Petrochemicals Telecom Islamic Banking Telecom Telecom Telecom Banking Diversied Banking Islamic Banking Banking Banking Banking Utilities Banking Banking Real Estate Holding Company Banking Banking Closing Price (in US$ - as on 01st Nov08) 19.1 16.2 17.5 4.4 4.3 20.1 18.6 29.4 5.7 6.8 24.0 18.3 73.5 2.6 6.6 40.5 1.5 1.4 1.7 15.1 Market Cap (US$ mn) 57,272.7 32,400.7 26,317.2 26,088.8 18,271.0 17,697.8 16,697.8 16,160.7 15,517.8 14,088.8 12,808.5 10,970.5 10,759.9 10,699.2 9,881.6 9,764.1 8,855.0 8,554.6 8,500.4 8,469.9 YTD Return (%) (56.0) (24.3) (43.3) (14.5) (39.6) 26.3 (41.4) (21.6) (13.9) (21.2) (12.2) (21.9) 14.0 (31.9) (48.5) (13.2) (63.5) (59.6) (49.7) (51.3)
90
Top 100 Companies Continued

Closing Price (in US$ - as on 01st Nov08) 0.2 33.2 25.1 3.1 31.9 9.1 4.6 0.4 37.7 6.1 5.7 7.3 25.7 31.1 3.2 0.6 3.2 3.6 3.4 9.9 Market Cap (US$ mn) 7,788.5 7,132.6 6,268.4 6,161.3 6,147.8 5,948.3 5,897.9 5,810.0 5,533.9 5,382.2 5,166.9 5,081.9 5,055.6 4,930.9 4,839.9 4,834.9 4,819.8 4,800.3 4,799.6 4,542.0 YTD Return (%) (40.0) (39.4) (38.4) (10.3) (59.8) (7.3) (71.8) (28.8) 8.8 (64.7) (53.1) (4.6) (2.1) N.A. (63.5) (54.0) (9.5) 27.5 251.5
Rank 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Name TCI Orascom Construction Industries Saudi Arabian Fertilizer Co National Bank Of Abu Dhabi Attijariwafa Bank Arab National Bank Commercial Bank Of Kuwait DP World Qatar Telecom Rabigh Rening and Petrochemical Co. Orascom Telecom Holding Etihad Etisalat Co Qatar Islamic Bank Banque Marocaine Du Commerce Alinma Bank Dubai Financial Market Saudi Kayan Petrochemical Al Ahli Bank Of Kuwait Zain KSA Ezdan Real Estate Co
Country Iran Egypt Saudi Arabia UAE Morocco Saudi Arabia Kuwait UAE Qatar Saudi Arabia Egypt Saudi Arabia Qatar Morocco Saudi Arabia UAE Saudi Arabia Kuwait Saudi Arabia Qatar
Industry Telecom Construction Fertilizers Banking Banking Banking Banking Logistics Telecom Petrochemicals Telecom Telecom Islamic Banking Banking Islamic Banking Financial Services Petrochemicals Banking Telecom Real Estate
91

Closing Price (in US$ - as on 01st Nov08) 1.1 15.9 3.3 0.9 240.4 6.1 3.5 2.4 49.3 10.8 1.1 34.8 22.9 1.4 6.5 0.2 200.2 0.7 3.0 18.2 Market Cap (US$ mn) 4,508.2 4,494.2 4,473.2 4,438.8 4,425.9 4,423.6 4,383.3 4,137.2 4,109.7 4,095.6 3,845.6 3,788.1 3,770.2 3,658.8 3,603.4 3,587.2 3,496.8 3,456.9 3,441.4 3,423.8 YTD Return (%) (44.1) (17.3) (40.3) (29.4) (13.6) (56.5) (34.4) (32.2) 1.2 (15.3) (55.6) 10.0 1.3 (56.5) (23.6) (0.3) 0.7 (49.8) 9.9 (52.8)
Rank 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60
Name Emirates Integrated Telecom (du) Douja Prom Addoha First Gulf Bank Ahli United Bank Compagnie Generale Immobilie Dar Al Arkan Real Estate Gulf Bank Telecom Egypt Arab Potash Company Aamal Holding Dubai Islamic Bank Almarai Solidere Aldar Properties Qatar Gas Transport (Nakilat) Isfahans Mobarakeh Steel Co. Lafarge Ciments Abu Dhabi Commercial Bank KIPCO Commercial Bank Of Qatar
Country UAE Morocco UAE Bahrain Morocco Saudi Arabia Kuwait Egypt Jordan Qatar UAE Saudi Arabia Lebanon UAE Qatar Iran Morocco UAE Kuwait Qatar
Industry Telecom Real Estate Banking Banking Real Estate Real Estate Banking Telecom Fertilizers Diversied Islamic Banking Food Real Estate Real Estate Energy Transport Steel Building Materials Banking Holding Company Banking
92

Closing Price (in US$ - as on 01st Nov08) 3.7 0.5 4.3 12.8 6.3 4.7 0.5 2.3 170.8 5.2 11.0 5.7 2.0 2.7 1.1 3.1 1.3 1.5 70.0 9.7 Market Cap (US$ mn) 3,419.9 3,372.4 3,237.7 3,206.3 3,153.1 3,141.2 3,075.0 3,002.4 2,983.2 2,949.3 2,917.0 2,856.9 2,813.5 2,773.6 2,654.3 2,639.8 2,629.4 2,625.0 2,573.6 2,551.8 YTD Return (%) (31.3) (42.3) 2.7 30.8 (27.8) (35.0) (0.3) (56.3) (6.4) (63.0) (34.4) (39.5) (9.3) (37.9) (54.6) (49.2) 0.1 48.4 2.2 (19.7)
Rank 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80
Name Saudi Arabian Mining Co Abu Dhabi National Energy Co Oman Telecommunications Co Housing Bank For Trade and Finance NMTC Jabal Omar Development Co National Iranian Copper Industries Co. National Industries Group Groupe ONA Yanbu National Petrochemical Saudi Hollandi Bank Savola Commercial Bank Of Dubai The Public Warehousing Co (Agility) Sorouh Real Estate Company Emaar Economic City Chadormalu Mineral & Ind. Co. Arkan Building Materials Co Bank Audi Sal - Audi Saradar Barwa Real Estate Co
Country Saudi Arabia UAE Oman Jordan Kuwait Saudi Arabia Iran Kuwait Morocco Saudi Arabia Saudi Arabia Saudi Arabia UAE Kuwait UAE Saudi Arabia Iran UAE Lebanon Qatar
Industry Materials Utilities Telecom Banking Telecom Real Estate Materials Diversied Diversied Petrochemicals Banking Food Banking Logistics Real Estate Real Estate Mining Building Materials Banking Real Estate
93

Closing Price (in US$ - as on 01st Nov08) 2.3 6.2 2.6 3.3 0.6 2.7 1.8 7.7 1.6 5.1 30.3 1.2 2.0 4.9 204.8 0.6 17.3 21.8 2.0 1.2 Market Cap (US$ mn) 2,518.0 2,485.2 2,473.3 2,471.3 2,403.8 2,347.8 2,342.3 2,299.0 2,291.9 2,281.1 2,274.1 2,263.9 2,245.9 2,242.1 2,232.0 2,229.8 2,185.7 2,183.1 2,178.6 2,154.1 YTD Return (%) (52.0) (34.8) (18.0) (46.3) 0.2 (43.5) (29.2) (22.0) (63.1) 80.1 (31.1) 46.3 (56.6) 8.6 0.4 2.7 (23.0) 68.6 (44.6)
Rank 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100
Name Bank Muscat Kuwait Foods (Americana) Burgan Bank Masraf Al Rayan Isfahan Renery Co. Gol-E-Gohar Iron Ore Co. Global Investment House Bank Albilad Bahrain Telecom Co Saudi Investment Bank Jordan Phosphate Mines Abu Dhabi Islamic Bank National Bank of Fujairah National Industrialization Co. Socit Nationale dInvestissement Omid Investment Management Co. Qatar International Islamic Bank Qatar Electricity & Water Co Gulf General Investment Co Union National Bank
Country Oman Kuwait Kuwait Qatar Iran Iran Kuwait Saudi Arabia Bahrain Saudi Arabia Jordan UAE UAE Saudi Arabia Morocco Iran Qatar Qatar UAE UAE
Industry Banking Food Banking Islamic Banking Petrochemicals Mining Financial Services Islamic Banking Telecom Banking Materials Islamic Banking Banking Holding Company Holding Company Holding Company Islamic Banking Utilities Financial Services Banking
94
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MENA Economic 2008

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MENA Economic 2008

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Global Research

MENA Economic Overview

Global Economic Overview

Slowdown in Global Economy

Source: IMF Report WEO November 2008

Global Investment House

Real GDP Growth

MENA Economic Overview - November 2008

Growth Driven by Emerging Markets

Decline in Global Markets

Source: Bloomberg, Global Research

2008 YTD till October

Global Investment House

MENA Economic Overview - November 2008

Government Interventions (Sep-08 Onwards)

MENA Economic Overview

MENA Economic Growth

Source: IMF, Global Research

Global Investment House

Real GDP (% Growth)

Nominal GDP (US$bn)

MENA Economic Overview - November 2008

Robust Growth in the Region

Source: IMF, Global Research

Growth is expected to remain strong in the MENA region.

Oil vs. Non-Oil GDP

Break-even Oil prices (2008)

Source: IMF, Global Research

Global Investment House

MENA Economic Overview - November 2008

All-Round Macro Performance

Current Account Balance (US$bn)

(As a percent of GDP)

Source: IMF, Global Research

Global Investment House

MENA Economic Overview - November 2008

Ination Expected to Come Down

Source: IMF, Global Research

Banking System Adequately Capitalized

Source: GFSR - IMF

Full Support of Government

775 725 675 625 575 525 475

KUWAIT: KIA statement to boost investments on the local bourse

KUWAIT: Bank's lending limit raised from 80% to 85%

SAUDI ARABIA: Government guarantees bank deposits worth over SR810bn

UAE: CB announced injection of AED50bn into the inter-bank market.

Source: Global Research, MSCI

Global Investment House

MENA Economic Overview - November 2008

FDI- Middle Eastern Countries

2005 5,142 1,135 352 234 53 3,750 163 122 61 65 89 40 452

Global Investment House

MENA Economic Overview - November 2008

FDI North African Countries

Global Investment House

MENA Economic Overview - November 2008

Private Equity as a Percentage of GDP

4,000 3,000 2,000 1,000 0 2004 2005 2006 2007 1H 2008

Potential for PE in the Region

Source: EMPEA Estimate

Source: Global Research

MENA Private Equity Investments (2006- 1H08)

Exits by Value and Number in MENA region (2006-1H08)