EFG - Regional Monthly - April 8 2010

regional monthly
March Issue
08 april 2010
i. mena markets 02 All MENA markets ended March on a positive note compared to February except for Palestine, which ended
down 4.2% M-o-M. Dubai was the top performer, strengthening 15.7% following the Dubai Government’s
announcement regarding its proposed strategy for restructuring Dubai World and one of its key
subsidiaries, Nakheel. Qatar’s performance was also solid, adding 8.6%.
The Saudi Arabian market was once again the top market in terms of liquidity, trading an average daily
value of USD816 million throughout March. The MSCI Arabia Index underperformed the MSCI Emerging
Markets Index, rising 6.1% versus 8% during the month.
ii. economics 11 egypt

Urban consumer inflation decelerated in February for the first time since August 2009, in line with our
view that inflation will decelerate to an average of 9% Y-o-Y in 2010. We expect interest rates to
remain stable in 2010, in light of the still fragile economic recovery and falling inflation.
The government presented its draft budget to the Cabinet in March, targeting a reduction of the deficit
to 7.9% of GDP in FY2010/11, from an expected 8.4% in the current FY2009/10. Revenue is budgeted to
grow 8.6% Y-o-Y, broadly in line with our estimate as higher economic growth will result in a pickup in
tax revenue. The deficit will be primarily financed through domestic sources, although the Public Debt
Management unit at the Ministry of Finance has said that it plans to issue a USD1 billion Eurobond
towards mid-2010. We believe this move primarily aims to diversify the government's sources of debt
financing.
gcc
On 25 March 2010 the Dubai Government announced a debt restructuring proposal for Dubai World and
Nakheel, which was substantially better than that expected by the market. In particular, the proposed
measures aim to protect the principal amount of the loans, albeit with extended maturities in some
cases. The proposals will now be discussed with creditors and the restructuring process is expected to
take several months to implement.
While a number of issues still have to be ironed out, we believe that the proposal is positive from an
economic perspective, with substantially lower systemic risks and a marked improvement in the visibility
of the process. We believe that the reduction of uncertainty and speculation will be central to supporting
market sentiment towards Dubai.
Our forecasts already incorporate a gradual improvement in sentiment throughout 2010, following an
agreement with creditors on the restructuring of the debt and increased visibility. We therefore maintain
our UAE forecasts, and expect positive real non-hydrocarbon growth of 2.2% and overall real GDP
growth of 2.5% in 2010.
iii. research log 19 List of EFG Hermes Research Publications for March 2010 and one month before.
kindly refer to the

1 important disclosures and
disclaimers on back page
regional monthly
08 april 2010
march issue
i. mena markets
mena markets overview
All MENA markets ended March on a positive note compared to February except for Palestine, which ended down 4.2% M-o-M. Dubai was
the top performer, strengthening 15.7% following the Dubai Government’s announcement regarding its proposed strategy for restructuring
Dubai World and one of its key subsidiaries, Nakheel. Qatar’s performance was solid, adding 8.6%. The Saudi Arabian market was once again
the top market in terms of liquidity, trading an average daily value of USD816 million throughout March. The MSCI Arabia Index
underperformed the MSCI Emerging Markets Index, rising 6.1% versus 8% by the end of March.
In Egypt Orascom Telecom (OT) reported a 4Q2009 net loss of USD46 million. Banglalink, OT's Bangladeshi subsidiary, raised USD102 million
in senior secured bonds in March, denominated in local currency. The bonds will pay a coupon of 13.5%, payable semi-annually, and are due in
2014. The Administrative Court, which was due to rule regarding OT's appeal against the Egyptian Financial Supervisory Authority's (EFSA)
decision to accept France Telecom's (FT) tender offer for Mobinil, decided to postpone the hearing session until 10 April 2010. This is the third
time that the hearing has been postponed, after the State Commissioners' Authority supported the decision to stop the tender offer on 13
January 2010. OT declined 5.4% to EGP5.65, while Mobinil added 1.2% to EGP214.00.
Orascom Construction Industries (OCI) announced that it had reached an agreement with Royal DSM N.V., the global life sciences and
material sciences company headquartered in the Netherlands, to buy DSM Agro and DSM Melamine for EUR310 million on a cash and debt-
free basis with effect from 1 January 2010. The intended sale is expected to be completed in 2Q2010, once regulatory and customary
approvals and notifications have been finalised. Additionally, OCI's 4Q2009 net income dropped 12% Q-o-Q but increased 38% Y-o-Y to
USD105.8 million. OCI jumped 11.9% to EGP264.30.
In the UAE Tabreed, which posted a net loss of AED1,118 million in FY2009, will receive a USD354 million bailout from Abu Dhabi.
Mubadala, Abu Dhabi’s state investment arm, holds a 16.7% stake in Tabreed and will offer the company bridge financing to cover its needs
during its 2010 recapitalisation programme. Tabreed eased 21% to AED0.49. The Dubai Financial Services Authority (DFSA) fined Damas’
founders and majority shareholders, Tawhid, Tawfiq and Tamjid Abdullah, USD3.72 million, in addition to ruling that the brothers repay
USD99.4 million and the value of 1.9 million grams of gold that were withdrawn from Damas for personal use. The DFSA also banned the
brothers from holding a directorship with any Dubai International Financial Centre company for ten years. The founders were ordered to
appoint a new board of directors and auditors by 1 April 2010. Damas inched up 2.9% to USD0.18.
In Kuwait the National Bank of Kuwait (NBK) has obtained approval from the Central Bank to increase its stake in Kuwait’s Islamic lender,
Boubyan Bank, to 60%. The approval is valid for three months, effective from 22 March 2010. NBK currently has a 40% stake in Boubyan
Bank, which it bought in 2009. NBK added 3.1% to KWD1.20 while Boubyan Bank jumped 19.5% to KWD0.52.
In Oman the Central Bank of Oman raised the total Capital Adequacy Ratio (CAR) requirement for all commercial banks to 12% from 10%.
The requirement will become effective from 31 December 2010. Bank Muscat lost 14.5% to OMR0.85, the National Bank of Oman dropped
2.1% to OMR0.32, and Bank Sohar shed 2.1% to OMR0.23. Bank Dhofar however, jumped 9.2% to OMR0.77.
In Qatar Industries Qatar announced its 4Q2009 results, with its net income declining 10% Q-o-Q to QAR1.1 billion. FY2009 net income
fell 33% Y-o-Y to QAR 4.9 billion. Industries Qatar moved up 5.8% to QAR115.30.
one month performance of mena and em markets ytd performance of mena and em markets
21% 15%
18%
12%
15%
9%
12%
9% 6%
6% 3%
3%
0%
0%
-3%
-3%
Czech Republic
Czech Republic
Philippines
Abu Dhabi
South Africa
Colombia
South Africa
Indonesia
Malaysia
MSCI EM
Thailand
MSCI AM
Lebanon
Abu Dhabi
Hungary
Philippines
Morocco
Indonesia
Bahrain
Poland
Colombia
Mexico
Kuwait
MSCI EM
Lebanon
Dubai
Thailand
Morocco
Oman
Taiwan
Egypt
MSCI AM
Jordan
Malaysia
Tunisia
Qatar
Russia
Saudi
Hungary
Turkey
Brazil
Bahrain
China
Chile
Korea
India
Mexico
Israel
Poland
Kuwait
Taiwan
Russia
Qatar
Oman
Jordan
Peru
Tunisia
China
Dubai
Turkey
Egypt
Korea
Brazil
Saudi
Israel
Chile
India
Peru
-6% -6%
Source: MSCI website, Reuters Source: MSCI website, Reuters
kindly refer to the

regional monthly
08 april 2010
march issue
mena and emerging markets

performance of msci arabian markets vs em & world indices average daily turnover
In USD million, unless otherwise stated
130 MSCI EM MSCI World MSCI AM 3M Avg Turnover 1M Avg Turnover
777
816
400
120
110 320
266
265
100
240
181
90
178
152
139
80 160
120
95
78
70
73
80
57
52
44
43
Lebanon 3 21
60
13
Oman 15
Tunisia 56
3
Bahrain 2
0
50
Morocco
Kuwait
Qatar
Saudi
Dubai
Jordan
Egypt
Abu Dhabi
Apr-09
Mar-09
Jul-09
May-09
Jun-09
Aug-09
Oct-09
Sep-09
Nov-09
Dec-09
Jan-10
Mar-10
Feb-10
Source: MSCI website Source: Official websites, EFG Hermes
12m performance of gcc markets 12m performance of north africa & levant markets
Indices are rebased to 100 Indices are rebased to 100
185 Saudi Kuwait Qatar Oman 185 Egypt Lebanon Tunisia Jordan Morocco
Bahrain Dubai Abu Dhabi
160 160
135 135
110 110
85 85
60 60
Mar-09
Jul-09
Mar-10
Apr-09
May-09
Jun-09
Aug-09
Oct-09
Nov-09
Sep-09
Dec-09
Jan-10
Feb-10
Mar-09
Jul-09
Mar-10
Apr-09
May-09
Jun-09
Aug-09
Oct-09
Nov-09
Sep-09
Dec-09
Jan-10
Feb-10
Source: Reuters Source: Reuters
2010e p/e valuations, regional vs em and developed 2010e p/b valuations, regional vs em and developed
Times, unless otherwise stated Times, unless otherwise stated
45 4.0
40 3.5
35 3.0
30
2.5
25
2.0
20
1.5
15
10 1.0
5 0.5
0 0.0
Morocco
Morocco
Qatar
Kuwait
MSCI EM
Qatar
Kuwait
Saudi
MSCI EM
Lebanon
Egypt
Oman
Abu Dhabi
Dubai
Japan
US
Europe
Brazil
Russia
Saudi
Oman
Egypt
Abu Dhabi
Lebanon
Dubai
US
Japan
Europe
Brazil
Russia
India
China
India
China
Source: Bloomberg, EFG Hermes Source: Bloomberg, EFG Hermes
kindly refer to the

regional monthly
08 april 2010
march issue
mena markets in charts

north africa and levant
Egypt: Value Traded & 6m Performance (0%) Egypt: Best Performers, 1m & YTD Egypt: Worst Performers, 1m & YTD
Highest Perf. / Mth Close Chg ADVT Lowest Perf. / Mth Close Chg ADVT
(USD mn) (USD mn)
(USD mn)
500 Volume HFI 700 GB Auto 35.99 30.9% 0.6 Media Prod. City 6.12 -13.6% 1.1
Lecico Egypt 21.93 21.0% 0.2 Telecom Egypt 17.03 -12.7% 6.3
400 650 Housing & Dev. Bank 24.80 18.6% 0.2 Upper Egypt Contr 1.34 -12.4% 2.2
300 600 Sidi Kerir 14.60 14.8% 1.5 Delta Sugar 19.38 -10.2% 0.1
Naeem 0.47 14.6% 0.4 Alex Spin 1.43 -10.1% 0.4
200 550
100 500 Highest Perf. / YTD Close Chg ADVT Lowest Perf. / YTD Close Chg ADVT
(USD mn) (USD mn)
0 450
12-Nov
19-Jan
10-Feb
03-Mar
24-Mar
07-Dec
28-Dec
22-Oct
GB Auto 35.99 46.8% 0.4 Pioneers Holding 4.62 -26.9% 4.0

30-Sep
Sinai Cement 56.65 40.7% 1.1 Cairo Housing 5.95 -22.8% 1.7
Sidi Kerir 14.60 39.7% 1.5 Ascom 17.00 -21.7% 0.6
Lecico Egypt 21.93 33.4% 0.2 Upper Egypt Contr 1.34 -13.2% 2.5
Al Ezz Dekheila 982.00 32.7% 0.8 Mobinil 214.00 -11.2% 2.7
Source: Reuters, Official website Source: Reuters, EFG Hermes Source: Reuters, EFG Hermes
Morocco: Value Traded & 6m Performance (6%) Morocco: Best Performes, 1m & YTD Morocco: Worst Performers, 1m & YTD
(USD mn) (USD mn) (USD mn)
200 Volume MASI 11,300 CGI 1,949 18.1% 1.1 SNEP 376.00 -19.7% 0.2
160 11,000 Comp. Min. de Touissit 1,450 10.7% 0.2 HPS 755.00 -13.0% 0.1
Aluminium du Maroc 1,355 10.2% 0.1 CIH 347.50 -6.8% 0.3
120 10,700
Holcim Maroc 2,121 8.2% 1.1 CDM 785.00 -4.3% 0.1
80 10,400 BMCI 970.00 8.0% 0.3 Groupe ONA 1,325 -4.0% 1.9
40 10,100
Highest Perf. / YTD Close Chg ADVT Lowest Perf. / YTD Close Chg ADVT
0 9,800 (USD mn) (USD mn)
10-Feb
21-Oct
03-Mar
24-Mar
30-Sep
12-Nov
04-Dec
28-Dec
20-Jan
Comp. Min. de Touissit 1,450 56.1% 0.4 SNEP 376.00 -12.6% 0.1
Maroc Leasing 480.00 33.3% 0.2 Brasseries Maroc 3,008 -11.5% 0.2
Soc. Métal. d'Imiter 1,101 32.7% 0.6 BMCE Bank 251.00 -5.3% 1.0
Managem 306.10 27.5% 0.4 Ciments du Maroc 1,810 -3.4% 0.3
Matel PC Market 468.00 27.2% 0.1
Stocks with avg. daily value traded>USD0.1 million

Jordan: Value Traded & 6m Performance (-6%) Jordan: Best Performers, 1 m & YTD Jordan: Worst Performers, 1 m & YTD
(USD mn) (USD mn)
Akary for Industries 2.14 143.2% 0.1 Al-Qaria Food 0.81 -31.9% 0.2
(USD mn)
Specialized Inv. Jordanian 4.95 60.7% 0.4 Specialized Inv. 2.58 -19.4% 1.2
150 Volume AMMAN 2,800
United Arab Investors 0.74 57.4% 4.6 Middle East Div. Inv. 8.00 -19.1% 0.3
120 2,700 Arab Real Estate Dev. 0.50 47.1% 1.9 Falcon Invest. & Fin. 2.12 -15.9% 0.4
90 2,600 Darwish Al-Khalili & Sons 0.61 38.6% 0.6 Amwal Invest 0.96 -12.7% 1.0
60 2,500
30 2,400 (USD mn) (USD mn)
United Arab Investors 0.74 72.1% 2.2 Middle East Complex 0.73 -52.3% 1.5
0 2,300
Taameer 0.75 59.6% 4.2 Al-Qaria Food 0.81 -50.3% 0.2
02-Mar
23-Mar
11-Nov
07-Dec
28-Dec
19-Jan
30-Sep
09-Feb
21-Oct
Sura for Dev. & Inv. 0.80 33.3% 0.1 Specialized Inv. 2.58 -37.5% 1.4
Specialized Inv. Jordanian 4.95 26.9% 0.3 Middle East Div. Inv. 8.00 -30.3% 0.3
Real Estate Dev. 0.52 20.9% 0.3 Tanjamout Co. 0.69 -25.0% 0.5
Stocks with avg. daily value traded>USD0.1 million

kindly refer to the

regional monthly
08 april 2010
march issue
Lebanon: Value Traded & 6m Performance (10%) Lebanon: Best Performers, 1m & YTD Lebanon: Worst Performers, 1m & YTD
(USD mn) (USD mn)
(USD mn) Byblos Bank Priority 2.35 11.9% 0.1 Bank of Beirut 18.60 -0.8% 0.0
20 Volume BLOM 1,650 BLC Bank 1.66 10.7% 0.0
16 1,600 Byblos Bank 2.31 10.5% 0.6
BLOM 99.85 5.7% 0.3
12 1,550
BEMO Bank 4.52 5.1% 0.1
8 1,500
0 1,400 Byblos Bank Priority 2.35 11.9% 0.1 BEMO Bank 4.52 -7.8% 0.0
30-Sep
21-Oct
09-Mar
31-Mar
11-Nov
04-Dec
29-Dec
22-Jan
15-Feb
BLOM 99.85 11.2% 1.0 Solidere A 22.72 -5.3% 2.8

Byblos Bank 2.31 10.5% 1.7 Solidere B 22.80 -4.1% 1.3
Banque Audi 88.00 6.1% 1.5 Bank of Beirut 18.60 -0.8% 0.0
Banque Audi GDR 93.00 4.5% 2.9 HOLCIM (Cim Lib) 12.47 -0.4% 0.1
Tunisia: Value Traded & 6m Performance (15%) Tunisia: Best Performers, 1m & YTD Tunisia: Worst Performers, 1m & YTD
(USD mn) (USD mn)
(USD mn)
20 Volume TUN 4,850 SIMPAR 71.08 73.5% 0.2 STIP 2.95 -14.0% 0.0
Attijari Leasing 34.38 19.0% 0.0 Magasin General 120.99 -8.0% 0.0
16 4,600 ESSOUKNA 7.28 13.6% 0.1 Sotuver 88.00 -7.6% 0.0
12 4,350 UBCI 60.86 11.7% 0.0 Electrostar 8.89 -7.2% 0.0
Tunisie Lait 5.20 8.1% 0.0 SOTETEL 16.74 -5.3% 0.0
8 4,100
4 3,850 Highest Perf. / YTD Close Chg ADVT Lowest Perf. / YTD Close Chg ADVT
(USD mn) (USD mn)
0 3,600
SIMPAR 71.08 90.1% 0.1 Soc. Chimique Alkimia 4.00 -89.0% 0.0
03-Dec
25-Dec
21-Oct
02-Mar
23-Mar
11-Nov
18-Jan
30-Sep
08-Feb
Attijari Leasing 34.38 45.0% 0.0 SOPAT 17.11 -20.8% 0.1

El Wifak Leasing 18.18 34.2% 0.1 Sotuver 88.00 -11.1% 0.0
ESSOUKNA 7.28 33.6% 0.0 Adwya 7.55 -10.5% 0.1
STIP 2.95 30.5% 0.0 Magasin General 120.99 -6.2% 0.1
gcc
Saudi: Value Traded & 6m Performance (8%) Saudi: Best Performers, 1m & YTD Saudi: Worst Performers, 1m & YTD
(USD mn) (USD mn)
Medgulf 30.90 18.4% 5.8 Kingdom Holding 9.35 -16.5% 11.3
(USD mn)
2,400 Volume TASI 6,900 Food Products Co. 21.15 17.8% 3.2 UCA 36.80 -12.2% 8.9
Amiantit 24.45 13.5% 4.0 Al-Jouf Agriculture 34.30 -11.1% 1.4
1,800 6,700 Al-Rajhi Bank 85.50 13.2% 34.0 Cement Yanbu 46.80 -9.6% 2.5
6,500 Maaden 19.00 13.1% 30.8 SAICO 52.25 -8.3% 2.4
1,200
6,300
600 6,100 (USD mn) (USD mn)
0 5,900 Kingdom Holding 9.35 98.9% 30.4 Weqaya Takaful 27.20 -45.3% 7.1
Cement Saudi 73.00 27.0% 3.4 SAICO 52.25 -25.4% 4.0
11-Nov
21-Oct
20-Jan
30-Sep
09-Dec
30-Dec
10-Feb
03-Mar
24-Mar
Medgulf 30.90 26.1% 4.0 SABB Takaful 27.10 -19.3% 2.9

SAFCO 146.75 21.3% 7.7 FIPCO 34.90 -16.3% 2.5
NCCI 87.00 21.3% 6.5 ACE Arabia Coop. Ins. 46.60 -15.3% 2.1
kindly refer to the

regional monthly
08 april 2010
march issue
Kuwait: Value Traded & 6m Performance (-4%) Kuwait: Best Performers, 1m & YTD Kuwait: Worst Performers, 1m & YTD
1,000 Volume KSE 8,300 National Cleaning 0.280 52.2% 4.7 Aref Investment Group 0.094 -11.3% 1.0
800 7,900 Hayat Comm. Co. 0.335 48.2% 1.6 Al-Madina for Fin. & Inv. 0.065 -9.7% 1.3
Mubarrad Transport 0.154 42.6% 4.2 AL SAFWA 0.056 -9.7% 1.9
600 7,500
PIPE 0.335 35.1% 5.1 Hits Telecom Holding 0.096 -9.4% 4.6
400 7,100 Kuwait & Gulf Link 0.335 21.8% 11.1 JEEZAN 0.059 -9.2% 1.8
200 6,700
11-Nov
20-Jan
30-Sep
10-Feb
08-Mar
29-Mar
07-Dec
29-Dec
21-Oct
Kuwait & Gulf Link 0.335 132.6% 6.6 SOKOUK 0.043 -15.7% 1.1
Mubarrad Transport 0.154 116.9% 2.0 Mena Holding 0.290 -14.7% 4.0
National Cleaning 0.280 115.4% 2.6 Aref Investment Group 0.094 -14.5% 1.0
PIPE 0.335 86.1% 2.3 Al-Madina for Fin. & Inv. 0.065 -13.3% 1.3
Portland Cement 1.340 69.6% 3.4 National Ranges 0.034 -12.8% 1.2
Stocks with avg daily value traded>USD1 million

Abu Dhabi: Value Traded & 6m Performance (-7%) Abu Dhabi: Best Performers, 1m & YTD Abu Dhabi: Worst Performers, 1m & YTD
250 Volume ADI 3,500 Aldar Properties 4.61 29.5% 19.0
200 3,250 AD Commercial Bank 2.07 26.2% 1.1
Sorouh 2.48 22.8% 9.2
150 3,000
Natl Bank of AD 12.00 21.7% 1.1
100 2,750 Aabar 2.34 9.3% 2.1
50 2,500
08-Dec
29-Dec
21-Oct
02-Mar
23-Mar
11-Nov
19-Jan
30-Sep
09-Feb
Etisalat 12.50 13.6% 2.7 Aldar Properties 4.61 -7.4% 15.3

First Gulf Bank 18.00 12.1% 2.2 RAK Properties 0.89 -5.3% 4.0
Aabar 2.34 3.1% 2.6 Dana Gas 0.55 -5.2% 1.4
Sorouh 2.48 0.2% 6.2 Waha Capital 0.90 -4.3% 1.2

Dubai: Value Traded & 6m Performance (-16%) Dubai: Best Performers, 1m & YTD Dubai: Worst Performers, 1m & YTD
(USD mn) (USD mn)
(USD mn) Emaar 4.00 34.2% 76.1 Tabreed 0.49 -21.0% 2.2
1,000 Volume DFMGI 2,500 Dubai Financial Market 1.90 31.0% 28.0
800 2,200 Arabtec 2.71 24.9% 33.0
Dubai Islamic Bank 2.72 19.8% 7.9
600 1,900
Islamic Arab Ins. 0.93 16.2% 1.7
400 1,600
(USD mn) (USD mn)
0 1,000 Aramex 1.90 21.0% 1.5 Tabreed 0.49 -39.5% 1.3
02-Mar
23-Mar
11-Nov
19-Jan
30-Sep
09-Feb
08-Dec
29-Dec
21-Oct
Dubai Islamic Bank 2.72 17.2% 4.9 Union Properties 0.51 -25.0% 2.0
Drake & Scull 0.97 7.8% 3.8 Deyaar 0.49 -15.5% 1.7
Air Arabia 0.98 6.5% 3.9 Gulf Finance House 0.92 -14.0% 1.3
Emaar 4.00 3.6% 53.5 DU 2.87 -1.4% 1.3

kindly refer to the

regional monthly
08 april 2010
march issue
Qatar: Value Traded & 6m Performance (1%) Qatar: Best Performers, 1m & YTD Qatar: Worst Performers, 1m & YTD
(USD mn) (USD mn)
(USD mn)
250 Volume DSM20 8,000 Qatar Shipping Co. 39.20 21.0% 4.8 Qatar Intl. Isl. Bank 46.20 -5.1% 3.6
WOQOD 192.00 19.0% 1.2 MAWASHI 17.90 -4.3% 2.0
200 7,600
Comm. Bank of Qatar 73.90 15.1% 8.5 Qtel (QA) 149.80 -3.2% 2.3
150 7,200 Qatar Natl Bank 135.20 14.6% 6.1 First Financial 21.80 -1.4% 1.1
100 6,800 Qatar Navigation 72.80 13.7% 1.5
50 6,400
02-Mar
24-Mar
11-Nov
19-Jan
30-Sep
09-Feb
Al Khaliji Comm. Bank 18.30 29.8% 1.0 NAKILAT 22.80 -5.0% 3.9
07-Dec
29-Dec
21-Oct
Qatar Real Estate Co. 33.00 22.7% 3.7 Barwa Real Estate. 32.10 -2.7% 5.6
Qatar Shipping Co. 39.20 20.6% 2.5 Gulf Holding Company 16.00 -0.6% 1.4
Comm. Bank of Qatar 73.90 19.6% 7.1 Vodafone Qatar 8.35 -0.6% 1.7
Qatar National Bank 135.20 17.9% 4.5

Oman: Value Traded & 6m Performance (2%) Oman: Best Performers, 1m & YTD Oman: Best Performers, 1m & YTD
Volume MSM30
100 7,000 Al Jazeera Steel 0.36 17.0% 0.4 Bank Muscat 0.85 -14.5% 1.8
80 6,750 Bank Dhofar 0.77 9.2% 0.2 Oman Intl Dev. & Inv. 0.43 -11.3% 0.1
Dhofar Intl Dev. & Inv. Co. 0.44 4.8% 0.1 Natl Aluminium Pro. Co. 0.52 -10.7% 1.0
60 6,500 Oman Inv. & Fin. Co. 0.32 3.6% 0.3 Interior Hotels Co. 3.79 -10.0% 0.2
40 6,250 Gulf Investment Service 0.12 3.5% 0.2 Raysut Cement Co 1.60 -8.1% 0.4
20 6,000
30-Sep
11-Feb
21-Oct
04-Mar
25-Mar
11-Nov
09-Dec
31-Dec
21-Jan
Bank Dhofar 0.77 15.8% 0.5 VOLTAMP Energy 0.52 -16.3% 0.1
Al Jazeera Steel 0.36 13.0% 0.3 Al Anwar Holding 0.22 -16.1% 0.7
Ahli Bank - Oman 0.25 12.9% 0.2 Global Financial Inv. 0.10 -14.3% 0.6
Oman Intl Bank 0.32 8.1% 0.2 Oman Intl Dev. & Inv. 0.43 -13.9% 0.1
Dhofar Intl Dev.& Inv. Co. 0.44 7.9% 0.1 Galfar Eng. & Cont. 0.47 -11.2% 0.7
Stocks with avg daily value traded>USD0.1 million

Bahrain: Value Traded & 6m Performance (0%) Bahrain: Best Performers, 1m & YTD Bahrain: Best Performers, 1m & YTD
(USD mn) (USD 000) (USD 000)
10 Volume BAX 1,650 Ahli United Bank 0.68 15.3% 107.1 Arab Ins Group (BH) 0.55 -15.4% 12.1
Al Ahlia Insurance Co. 0.38 8.6% 0.2 Gen Trdg & Food 0.26 -8.5% 0.8
8 1,600
United Gulf Inv. Corp. 0.14 7.7% 31.6 Nass Corp. 0.25 -6.8% 69.2
6 1,550 Bahrain Duty Free 0.76 6.3% 11.9 Bah Natl Holding 0.45 -5.5% 1.0
4 1,500 Khaleeji Comm. Bank 0.11 1.8% 26.4 Bah Mar & Merc 0.60 -5.1% 46.2
(USD 000) (USD 000)
0 1,400
Ahli United Bank 0.68 56.3% 87.9 Ithmaar Bank 0.19 -21.8% 43.2
05-Jan
16-Feb
07-Dec
21-Oct
10-Mar
31-Mar
11-Nov
26-Jan
30-Sep
Bahrain Duty Free 0.76 22.8% 16.6 Esterad Investment Co. 0.27 -10.0% 19.3
Bahrain & Kuwait Ins. Co. 0.67 20.0% 103.9 Bah Flour Mills Co. 0.40 -10.0% 0.8
Bah Ship. Rep. & Engine. 1.78 16.6% 0.0 Arab Banking Corp 0.74 -9.7% 0.4
Al Ahlia Insurance Co. 0.38 13.9% 1.2 Gulf Finance House 0.26 -7.1% 208.5
kindly refer to the

regional monthly
08 april 2010
march issue
investor flows
mena stock exchanges: foreign investor net buying (weekly) global emerging & regional markets net fund flows (weekly)
In USD million, unless otherwise stated In USD million, unless otherwise stated
250 Oman Egypt Abu Dhabi Dubai Qatar 120 Middle East Africa Mid East & Africa 4,000
EMEA GEM(RHS)
200
90 3,000
150
60 2,000
100
50 30 1,000
0
0 0
(50)
(30) (1,000)
(100)
(150) (60) (2,000)

12-Nov
10-Dec
24-Dec
09-Dec
23-Dec
01-Oct
15-Oct
29-Oct
14-Oct
28-Oct
31-Mar
11-Nov
02-Sep
30-Sep
25-Nov
03-Feb
17-Feb
16-Sep
04-Mar
18-Mar
26-Nov
07-Jan
21-Jan
01-Apr
04-Feb
18-Feb
03-Mar
17-Mar
06-Jan
20-Jan
Calculations based on regional dedicated funds
Source: Stock Exchanges and EFG Hermes Source: EPFR
equity fund flows (mthly) global emerging market funds: assets under mgmt. (mthly)
In USD billion, unless otherwise stated In USD billion, unless otherwise stated
Total Emerging Markets Fund Flows 7 Africa EMEA Middle East & Africa 500
Total Developed Markets Fund Flows Middle East GEM (RHS)
40 Total Equity Fund Flows as % of AuM (RHS) 6% 6
400
20 3% 5
4 300
0 0%
3 200
(20) -3%
2
100
(40) -6% 1
0 0
(60) -9%
A pr-09
A pr-09
May-09
May-09
Jul-09
Jul-09
Nov-09
Nov-09
Mar-09
Mar-09
Jun-09
Oct-09
Dec-09
Jun-09
Oct-09
Dec-09
Aug-09
Sep-09
Aug-09
Sep-09
Feb-09
Feb-09
Jan-10
Jan-10
Feb-10
Feb-10
Calculations based on all countries and regional funds Calculations based on regional dedicated funds
Source: EPFR Source: EPFR
global emerging market funds: cash allocation (mthly) global emerging market funds: me & africa allocation (mthly)
In USD billion, unless otherwise stated In USD billion, unless otherwise stated
5 Cash Cash as % of AuM (RHS) 4.4% 15 Africa & Middle East Africa & Middle East % of AuM (RHS) 9.0%
4 3.9%
12 8.6%
3.4%
3 9 8.2%
2.9%
2 6 7.8%
2.4%
1 3 7.4%
1.9%
0 1.4% 0 7.0%
A pr-09
A pr-09
May-09
May-09
Jul-09
Jul-09
Nov-09
Nov-09
Mar-09
Mar-09
Jun-09
Oct-09
Dec-09
Jun-09
Oct-09
Dec-09
Aug-09
Sep-09
Aug-09
Sep-09
Feb-09
Feb-09
Jan-10
Jan-10
Feb-10
Feb-10
Data excludes Israel and Turkey

Source: EPFR Source: EPFR
kindly refer to the

regional monthly
08 april 2010
march issue
prices and valuations

north africa and levant
Mth 1Mth YTD Last Last PER Last Last
Sub-Sector FV Rating
Close* chng chng Yield Ex-Div. Date 2009a/e 2010e 2011e FY Note
Egypt
CIB Banks 65.00 74.26 Buy 5% 19% 2% 30-Mar-10 12.58 11.07 9.15 Dec-09 7-Mar-10
Credit Agricole Banks 12.40 16.25 Buy 11% 18% 6% 21-Apr-09 10.38 9.27 8.04 Dec-09 7-Mar-10
NSGB** Banks 33.01 42.97 Buy 3% 10% 4% 7-Apr-09 7.33 7.62 6.66 Dec-09 7-Mar-10
Egyptian Resorts Real Estate 2.18 3.20 Buy 1% 32% 0% 3-Jun-08 N/R 119.72 18.27 Dec-09 14-Jan-09
Heliopolis Housing Real Estate 32.17 57.00 Buy 7% 15% 4% 15-Nov-09 26.92 31.13 24.76 Jun-09 14-Jan-09
Nasr City Housing Real Estate 33.01 31.00 Neu. 11% 21% 2% 17-Nov-09 33.97 36.80 33.27 Jun-09 14-Jan-09
Palm Hills Real Estate 6.50 7.50 Buy 0% 15% 0% 9.55 9.08 5.33 Dec-09 14-Mar-10
SODIC Real Estate 96.10 N/R N/R 8% 20% 0% N/R 29.82 2.34 Dec-09 14-Jan-10
TMG Holding Real Estate / Hotels 7.64 8.70 Buy 2% 10% 0% 14.02 6.22 2.52 Dec-09 14-Jan-10
OD Holding*** Real Estate / Hotels 19.97 29.50 Buy 14% 17% 0% 16.59 14.52 17.63 Dec-09 14-Jan-10
OCI Fertilizers / Const. 264.30 270.00 Neu. 12% 7% 2% 30-Mar-09 24.03 17.20 11.43 Dec-09 30-Mar-10
El Sewedy Cables Power Components & Services 75.05 84.78 Buy -3% 10% 1% 12-May-09 13.66 11.74 9.05 Dec-08 25-Nov-09
Al Ezz Dekheila Steel 982.00 1,203 Buy 12% 33% 4% 13-Apr-09 15.66 12.53 7.52 Dec-09 16-Mar-10
Ezz Steel Steel 20.94 25.10 Buy 12% 23% 0% 24-Mar-09 N/R 18.00 8.91 Dec-09 31-Mar-10
Lecico Egypt Ceramics 21.93 26.10 Buy 21% 33% 0% 7.96 6.76 6.30 Dec-09 16-Mar-10
EIPICO Pharmaceuticals 37.00 44.40 Buy 9% 12% 3% 14-Apr-09 9.53 9.90 8.57 Dec-09 9-Feb-10
Olympic Group Household Goods 31.25 38.00 Buy 6% 15% 4% 28-Apr-09 16.58 11.17 7.89 Dec-09 25-Nov-09
Eastern Company Tobacco 124.87 154.60 Buy 2% 10% 4% 10-Oct-09 8.21 8.15 7.77 Jun-09 24-Jan-10
Telecom Egypt Fixed Line Operators 17.03 24.78 Buy -13% -7% 4% 28-Apr-09 10.3 8.71 8.00 Dec-09 4-Feb-10
Mobinil Mobile Operators 214.00 257.64 Neu. 1% -11% 4% 29-Mar-10 10.50 10.82 10.61 Dec-09 11-Feb-10
OT (GDR) Mobile Operators 5.12 7.72 Buy -4% 12% 2% 23-Aug-09 14.13 11.37 10.04 Dec-09 23-Mar-10
Maridive Oil Services 4.65 5.04 Neu. 7% 18% 4% 25-Apr-10 16.55 11.85 6.67 Dec-09 31-Mar-10
Sidi Kerir Petrochemicals 14.60 15.80 Buy 15% 40% 7% 21-Apr-09 10.62 8.45 8.96 Dec-09 17-Feb-10
GB Auto Automotive 35.99 43.00 Buy 31% 47% 3% 23.08 10.50 7.38 Dec-09 31-Mar-10
Lebanon
Banque Audi Banks 93.00 N/R N/R
- 4% 4% 2% 17-Apr-09 11.84 11.24 9.38 Dec-09 4-Feb-10
BLOM Banks 99.85 104.20 Buy 6% 11% 3% 15-Apr-09 8.91 8.65 7.59 Dec-09 2-Feb-10
Byblos Bank Banks 2.31 2.60 Buy 11% 11% 2% 25-May-09 9.58 9.49 8.22 Dec-09 2-Feb-10
Solidere A Real Estate 22.72 33.30 Buy 3% -5% 4% 14-Jul-09 17.74 16.75 13.27 Dec-08 14-Jan-10
Morocco
Attijariwafa Bank Banks 289.00 309.80 Buy 2% 7% 2% 22-Jun-09 17.32 16.03 14.63 Dec-08 6-Oct-09
BCP Banks 280.15 296.92 Buy 6% 15% 2% 19-Jun-09 14.08 12.67 12.22 Dec-08 6-Oct-09
BMCE Bank Banks 251.00 150.34 Sell -1% -5% 1% 30-Jun-09 49.74 45.21 39.75 Dec-08 6-Oct-09
*In local currency, unless otherwise stated

**Excluding Goodwill Amortisation
***Price for EGP denominated EDRs traded on the EGX
Source: Reuters, EFG Hermes estimates
kindly refer to the

regional monthly
08 april 2010
march issue
gcc
Mth 1Mth YTD Last Last PER Last Last
Sub-Sector FV Rating
Close* chng chng Yield Ex-Div. Date 2009a/e 2010e 2011e FY Note
UAE
Arabtec Construction 2.71 3.39 Buy 25% 1% 0% 2-Apr-08 6.55 4.24 4.17 Dec-09 3-Mar-10
DEPA LIMITED Construction 0.72 1.18 Buy 31% 36% 5% 2-Apr-09 6.95 6.73 5.47 Dec-09 4-Mar-10
AD Islamic Bank Banks 3.12 3.72 Buy 15% 8% 6% 31-Mar-09 78.80 6.83 4.60 Dec-09 29-Dec-09
AD Commercial Bank Banks 2.07 1.72 Neu. 26% 33% 0% 9-Apr-09 N/R 9.47 6.11 Dec-09 27-Jan-10
Commercial Bank of Dubai Banks 3.15 3.80 Neu. -9% -6% 4% 4-Mar-10 6.97 7.49 5.56 Dec-09 29-Dec-09
Dubai Islamic Bank Banks 2.72 2.03 Sell 20% 17% 9% 8-Apr-10 7.68 8.87 8.46 Dec-08 29-Dec-09
Emirates NBD Banks 3.08 3.20 Neu. 27% 4% 6% 1-Apr-10 5.12 7.97 5.62 Dec-09 15-Feb-10
First Gulf Bank Banks 18.00 18.08 Neu. 7% 12% 2% 9-Mar-10 8.85 9.59 6.41 Dec-09 31-Jan-10
Natl Bank of AD** Banks 12.00 13.48 Buy 22% 6% 3% 24-Mar-10 8.55 8.66 6.83 Dec-09 1-Feb-09
Deyaar Development Real Estate 0.49 0.70 Neu. 7% -16% 0% N/A 93.75 6.08 6.02 Dec-09 14-Jan-10
Emaar Real Estate 4.00 5.86 Buy 34% 4% 0% 27-Mar-08 74.50 3.63 10.15 Dec-09 14-Jan-10
Aldar Properties Real Estate 4.61 5.52 Buy 29% -7% 0% 15-Mar-09 16.71 6.87 8.01 Dec-09 17-Feb-10
Sorouh Real Estate 2.48 5.15 Buy 23% 0% 0% 27-Mar-09 12.84 4.45 6.10 Dec-09 25-Mar-10
Union Properties Real Estate 0.51 0.60 Neu. 9% -25% 0% N/R 2.62 1.84 Dec-09 14-Jan-10
du Integrated Operators 2.87 3.80 Buy 2% -1% 0% 43.46 23.54 13.21 Dec-09 8-Nov-09
Etisalat Integrated Operators 12.50 14.46 Buy 5% 14% 4% 1-Apr-10 11.18 11.50 11.26 Dec-09 31-Mar-09
Air Arabia Transport & Shipping 0.98 1.20 Buy 0% 7% 10% 31-Mar-10 10.11 10.98 10.08 Dec-09 3-Dec-09
Aramex Transport & Shipping 1.90 1.79 Neu. 10% 21% 0% 13.72 12.87 12.82 Dec-09 24-Mar-10
Gulf Navigation Transport & Shipping 0.60 0.43 Sell -5% 2% 5% 11-Mar-10 37.41 21.01 15.29 Dec-09 24-Feb-10
DP World Transport & Shipping 0.52 0.56 Buy 34% 23% 2% 30-Mar-10 28.93 24.22 19.68 Dec-09 25-Mar-10
Dana Gas Utilities 0.89 1.66 Buy 7% -5% 0% 60.68 8.03 4.60 Dec-09 11-Jan-10
Tabreed Utilities 0.49 0.38 Sell -21% -40% 0% N/R 8.66 5.68 Dec-09 17-Mar-10
Saudi
SABIC Chemicals 99.50 105.00 Buy 12% 21% 2% 12-Apr-09 32.90 15.78 11.96 Dec-09 17-Dec-09
SAFCO Chemicals 146.75 164.00 Buy 4% 21% 8% 21-Mar-10 20.33 13.29 12.69 Dec-09 11-Feb-10
YANSAB Chemicals 38.90 42.00 Buy 5% 16% 0% N/R 19.45 10.66 Dec-09 17-Dec-09
Jarir Marketing Co. Retail 145.25 162.54 Buy 6% 9% 5% 15-Feb-10 15.54 14.04 12.09 Dec-09 3-Feb-10
Al Bilad Bank Banks 21.25 15.50 Sell 3% 2% 0% N/R 43.67 30.94 Dec-09 10-Dec-09
Al Jazira Bank Banks 19.15 21.00 Neu. 6% 0% 3% 20-Apr-09 N/R 10.88 8.87 Dec-09 10-Dec-09
Al-Rajhi Bank Banks 85.50 74.70 Neu. 13% 20% 3% 28-Feb-10 19.92 18.24 15.76 Dec-09 19-Oct-09
Arab National Bank Banks 45.70 55.80 Buy 4% 8% 2% 22-Mar-10 14.70 10.65 9.17 Dec-09 20-Oct-09
Banque Saudi Fransi Banks 47.00 53.30 Buy -1% 15% 3% 8-Mar-10 13.76 11.65 9.69 Dec-09 12-Oct-09
Riyad Bank Banks 30.50 34.00 Buy 6% 13% 4% 2-Mar-10 15.53 11.91 9.37 Dec-09 20-Oct-09
SAIB Banks 18.90 21.50 Buy 4% 5% 0% 17.42 8.99 7.60 Dec-09 25-Oct-09
Samba Financial Group Banks 59.00 72.10 Buy 1% 17% 3% 20-Feb-10 12.04 10.22 8.82 Dec-09 19-Oct-09
Saudi British Bank Banks 48.20 54.00 Neu. 1% 11% 2% 21-Jul-09 19.88 13.01 10.72 Dec-09 25-Feb-10
Saudi Hollandi Bank Banks 33.40 38.60 Buy 1% 11% 0% 25-Mar-09 N/R 11.65 9.61 Dec-09 23-Mar-10
Savola Consumer Staples 35.70 39.39 Buy 2% 18% 3% 24-Oct-09 18.76 15.07 15.55 Dec-09 31-Jan-10
National Shipping Company Transport & Shipping 20.30 15.00 Sell 9% 14% 5% 4-Apr-10 17.32 13.04 10.01 Dec-09 20-Jan-10
Saudi Electricity Company Utilities 12.55 12.50 Neu. 3% 12% 6% 6-Apr-10 44.71 40.82 35.89 Dec-09 2-Feb-10
Dar Al Arkan Real Estate 14.15 19.15 Buy 4% 1% 0% 20-Apr-08 7.20 6.57 5.54 Dec-09 21-Jan-10
AKARIA Real Estate 25.90 33.50 Buy 4% 0% 4% 11-Apr-09 26.59 20.97 19.44 Dec-08 14-Jan-10
Saudi Telecom Company Integrated Operators 47.50 66.58 Buy 7% 8% 6% 31-Oct-09 8.74 10.43 9.87 Dec-09 4-Mar-10
Etihad Etisalat Mobile Operators 50.25 67.58 Buy 9% 16% 2% 20-Mar-10 11.67 10.01 9.38 Dec-09 4-Mar-10
Zain KSA Mobile Operators 9.75 9.18 Neu. -2% -4% 0% N/R N/R N/R Dec-09 4-Mar-10
Kuwait
The Sultan Center Retail 0.20 U/R U/R -2% -5% 0% 11.15 8.21 6.35 Dec-08 9-Sep-09
Burgan Bank Banks 0.38 0.63 Buy 1% 10% 0% 25-Mar-08 61.45 7.29 4.88 Dec-09 19-Nov-09
Commercial Bank of Kuwait Banks 0.94 0.77 Sell 1% 1% 0% 15-Mar-09 N/R 25.61 12.68 Dec-09 16-Nov-09
Kuwait Finance House** Banks 1.12 1.29 Neu. 1% 9% 2% 9-Mar-10 23.49 17.09 11.67 Dec-09 21-Feb-09
National Bank of Kuwait*** Banks 1.20 1.15 Neu. 3% 18% 4% 8-Mar-10 14.81 14.06 12.34 Dec-09 2-Feb-10
Jazeera Airways Co. Transport & Shipping 0.20 0.14 Sell -6% 5% 0% N/R 14.27 23.19 Dec-09 13-Dec-09
Zain Group Mobile Operators 1.36 1.48 Neu. 6% 33% 4% 31-Mar-09 26.88 11.50 10.05 Dec-09 31-Mar-10
Oman
Bank Dhofar** Banks 0.77 0.48 Sell 9% 16% 2% 29-Mar-10 21.88 21.14 17.30 Dec-08 6-Oct-09
Bank Muscat Banks 0.85 1.04 Buy -15% 3% 2% 21-Mar-10 12.36 10.25 8.55 Dec-09 21-Mar-10
Bank Sohar Banks 0.23 0.20 Neu. -2% 2% 0% 28.67 19.85 11.98 Dec-09 6-Oct-09
National Bank of Oman Banks 0.32 0.41 Buy -2% 0% 5% 29-Mar-10 13.24 8.84 7.50 Dec-09 20-Oct-09
Qatar
Commercial Bank of Qatar Banks 73.90 113.50 Buy 15% 20% 5% 10-Feb-10 11.00 9.56 7.68 Dec-09 27-Jan-10
Qatar Islamic Bank Banks 80.30 108.80 Buy 7% 3% 7% 24-Feb-10 13.01 12.42 10.53 Dec-09 8-Feb-10
Qatar National Bank Banks 135.20 130.26 Neu. 15% 18% 3% 9-Feb-10 12.60 11.41 11.82 Dec-09 17-Jan-10
NAKILAT Gas Distribution 22.80 38.60 Buy 5% -5% 2% 14-Apr-10 21.46 14.56 12.31 Dec-09 29-Mar-10
Qatar National Navigation Co. Transport & Shipping 72.80 74.50 Buy 14% 13% 5% 15-Mar-10 11.10 10.59 10.00 Dec-09 22-Mar-10
Qatar Shipping Co. Transport & Shipping 39.20 33.90 Sell 21% 21% 10% 11-Apr-10 8.19 19.53 16.79 Dec-09 22-Mar-10
Qatar Electricity & Water Utilities 103.20 138.70 Buy 2% 3% 5% 2-Mar-10 11.20 8.38 7.46 Dec-09 17-Feb-10
Industries Qatar Chemicals 115.30 140.00 Buy 6% 1% 4% 21-Apr-09 17.09 13.98 10.27 Dec-09 22-Oct-09
*In local currency, unless otherwise stated
**Adjusted FV for rights issue
***Adjusted FV for rights issue and bonus share
Source: Reuters, EFG Hermes estimates
kindly refer to the
regional monthly
08 april 2010
march issue
ii. economics
egypt
inflation falls in february
Urban consumer inflation decelerated in February for the first time since August 2009, to 12.8% Y-o-Y from 13.6% Y-o-Y in January. The
outturn was slightly higher than our expectation of 12.4% Y-o-Y, but lower than consensus estimates of 13.3% Y-o-Y. While food prices rose
1.1% M-o-M, due to a broad-based increase in food products, butane gas prices fell 9.9% M-o-M, contributing to the deceleration in Y-o-Y
inflation. February’s outturn is in line with our view that inflation will decelerate to an average of 9% Y-o-Y in 2010, from 11.8% Y-o-Y in 2009,
in the absence of major food supply shocks, low demand pressures as economic recovery remains fragile, and a favourable external inflationary
environment. In addition, we do not expect the government to reduce energy subsidies for consumers, given the vulnerable economic conditions
at both global and domestic levels and in light of the Parliamentary elections this year and the Presidential elections next year.
The main upside risk to our inflation forecast is rising commodity prices, in particular food prices, as they constitute around 45% of the
consumer basket and Egypt relies heavily on imports to feed its population. Although renewed speculation about the government resuming
its programme of phasing out energy subsidies (natural gas and electricity) to non-energy intensive industrial users in June 2010 has erupted,
we expect this to have little impact on the CPI. Firstly, energy represents only a small proportion of the non-energy intensive industries’ cost
base (with the exception of ceramics) and any subsidy reduction is therefore unlikely to have a major impact on end-product prices.
Secondly, the composition of the CPI is heavily skewed towards food prices, which remain the main determinant of inflation levels. Finally,
consumer products are only weakly reflected in the consumer index. For example, in 2009 major auto and white goods manufacturers
reduced their product prices, but this was not reflected in the consumer basket.
fragile recovery and falling inflation point to stable interest rates in 2010
With headline inflation falling and core inflation expected to remain within the Central Bank of Egypt's assumed comfort zone of 6-8%, we
expect stable interest rates in 2010. Growth, although accelerating, remains fragile and driven by the government's successive stimulus
packages and a rebound in tourism. Private investment remains at a nascent stage of recovery, and is yet to contribute positively to growth in
1H2010. In addition, 2009’s successive rate cuts (375bps on the lending rate and 325bps on the deposit rate) only had a limited impact on
credit growth. From late 2008 onwards private corporate credit growth decelerated sharply, and then contracted over the past six months.
government targets a budget deficit of 7.9% of gdp in fy2010/11

The government presented its draft budget to the Cabinet in March, targeting a reduction of the deficit to 7.9% of GDP in FY2010/11, from
a budgeted 8.4% in the current FY2009/10, according to official figures. The projected FY2010/11 deficit is higher than our forecast of 7.0%
of GDP, primarily due to the government’s higher spending expectations and our forecast of a narrower deficit of 8.1% of GDP in
FY2009/10e. The very limited figures in the public domain show that the government expects expenditure to expand around 8.4% Y-o-Y to
EGP389 billion, compared to our estimate of EGP374 billion. The difference mainly arises from the government's higher spending on
subsidies (a rise of EGP13.5 billion) and, to a lesser degree, on wages (a rise of EGP2.7 billion). The figures indicate that the government will
lower its investment spending as it scales down fiscal support, on the expectation that private investment will pickup. Revenue is budgeted
to grow 8.6% Y-o-Y, to EGP281 billion, which is broadly in line with our estimate of EGP284 billion as higher economic growth will result in
a pickup in tax revenue.
Parliament will start its discussion of the draft budget following the approval of the Cabinet, which is expected towards the end of April
2010. We await more details regarding the budget before updating our forecasts.
Although the banking sector enjoys ample liquidity to finance the deficit, the Public Debt Management unit at the Ministry of Finance has
recently announced plans to finance part of the deficit (around EGP5.5 billion) via a Eurobond issuance in mid-2010. We believe this move
primarily aims to diversify the government's sources of debt financing. We also believe the timing of the issuance seeks to benefit from
lower interest rates on emerging market debt, which is currently benefiting from increased appetite from global investors.
Mohamed Abu Basha
kindly refer to the

regional monthly
08 april 2010
march issue
Egypt Macroeconomic Indicators

Egypt FY07/08 FY08/09 FY09/10e FY10/11e Latest Date
Nominal GDP (USD bn) 162.5 188.7 217.7 250.5 - -
Real GDP Growth Rate, % 7.2 4.7 4.9 5.3 5.1 4Q09
CPI Inflation, Annual Average % 11.7 16.5 11.3 7.7 - -
CPI Inflation, FY-end % 20.2 10.0 8.9 9.0 12.8 Feb-10
O/N Deposit Rate, FY-end % 10.5 9.0 8.3 8.8 8.3 Mar-10
Trade Balance (USD bn) (23.4) (25.2) (24.3) (28.6) (4.7) 4Q09
Suez Canal Revenues (USD bn) 5.2 4.7 4.5 5.2 0.3 Feb-10
Tourism Revenues (USD bn) 10.8 10.5 11.3 12.7 2.8 4Q09
Current Account Balance, % of GDP 0.5 (2.3) (2.4) (3.0) 0.1 4Q09
Fiscal Balance, % of GDP (6.8) (6.9) (8.1) (7.0) - -
Net Domestic Debt, % of GDP 53.5 54.1 55.4 56.6 - -
External Debt, % of GDP 19.4 16.7 14.9 13.1 - -
Y-o-Y Growth in Broad Money, % 15.7 8.4 13.3 15.6 9.5 Feb-10
Y-o-Y Growth in Private Sector Credit, % 12.6 5.1 3.0 10.0 (0.3) Feb-10
Source: CBE, Ministry of Finance, and EFG Hermes estimates
inflation and policy rates

Urban consumer inflation decelerated in February for the first time since August 2009, to 12.8% Y-o-Y from 13.6% Y-o-Y in January. Food
prices rose 1.1% M-o-M due to variable increases in some food items, while butane gas prices fell 9.9% M-o-M, contributing to February’s
deceleration in Y-o-Y inflation. The outturn supports our view that inflation will decelerate to an average of 9% Y-o-Y in 2010, from 11.8%
Y-o-Y in 2009, in the absence of major food supply shocks, low demand pressures as the economy remains fragile, and a favourable external
inflationary environment. We therefore believe interest rates are likely to remain stable in 2010.
EGP Movements Short Term Interest Rates Growth in Credit Y-o-Y
EGP/EURO (RHS) % 91-Day T-bill Rate % Government, RHS %
EGP/USD (LHS) ON Deposit Households, RHS
5.75 9.0 16 ON Lending 14 M2d Growth, RHS 60
14 12 Private Business Sector, LHS
50
5.65 8.5 10
12 40
10 8
5.55 8.0 30
6
8
5.45 7.5 4 20
6
2
4 10
5.35 7.0 0
2 (2) 0
5.25 6.5 0 (4) (10)
May-08
Jul-08
Jan-08
Apr-08
Oct-08
May-09
Nov-09
Feb-08
Sep-08
Dec-08
Jan-09
Mar-09
Jun-09
Aug-09
Jan-10
Sep-09
Feb-10
Mar-10
Jun-08
Aug-08
Jun-09
Aug-09
Oct-09
Feb-08
Apr-08
Oct-08
Dec-08
Feb-09
Apr-09
Dec-09
Feb-10
Jan-08
May-08
Jan-08
Mar-08
Aug-08
Oct-08
Mar-09
May-09
Jul-09
Dec-08
Sep-09
Dec-09
Feb-10
Source: Bloomberg, Central Bank
credit and money supply

Broad money growth accelerated to 9.5% Y-o-Y in February from a12M trailing average of 8.3% Y-o-Y. Lending to the public sector remains
the most important source of money growth, rising 25% Y-o-Y in February. Meanwhile, private sector credit contracted 0.3% Y-o-Y in
February, but rose 0.6% M-o-M for the second consecutive month. The recovery in household credit continues to outpace credit to businesses.
We expect public sector borrowing to remain a strong driver of liquidity growth in 2010. Net foreign assets are again becoming an increasingly
important contributor to liquidity, rising 9.5% Y-o-Y and 3.6% M-o-M in February. We believe this is largely thanks to strong flows into T-bills.
Main External Receipts (12 month rolling sum) Inflation (Y-o-Y growth) Monetary Survey (Y-o-Y growth)
Petroleum Balance % CPI % Weighted Growth NDA
Non-Petroleum Balance 40 PPI Weighted Growth NFA
Suez Canal Core Inflation
Tourism 25 Y-o-Y Growth of M2
(USD bn) Remittances 30
Current Account Balance 20
30 20 15
20
10 10 10
0 0 5
(10) 0
(10)
(20) (5)
(30) (20) (10)
Feb-10
Jan-07
Mar-07
Jul-07
May-07
Jan-08
Mar-08
Jul-08
Mar-09
Jul-09
Sep-07
Nov-07
May-08
Sep-08
Nov-08
Jan-09
May-09
Jan-10
Sep-09
Nov-09
Jun-08
Aug-08
Feb-08
Apr-08
Oct-08
Jun-09
Dec-08
Apr-09
Aug-09
Oct-09
Feb-09
Dec-09
Feb-10
Jan-08
(40)
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
Source: Central Bank, CAPMAS

kindly refer to the
regional monthly
08 april 2010
march issue
jordan
Economic growth accelerated in 4Q2009 for the first time since 4Q2008, as we expected, benefiting from higher external demand. However,
the extent of the acceleration (2.9% Y-o-Y from 2.1% in 3Q2009) was disappointing, and meant that FY2009 growth of 2.8% missed our
forecast of 3.3%. We had been expecting more rapid manufacturing growth (which slowed in 4Q2009) to drive growth higher.
Growth in 4Q2009 was mainly driven by solid activity in transport and communications, construction, and government services. Lower
mining (mainly potash and phosphates) continued to weigh on growth, shaving around 0.8pp from overall growth. The strong rebound in the
construction sector was mainly due to strong private sector activity, with the government cutting capital spending in 4Q2009 to control the
widening budget deficit. We expect this strong construction sector performance to continue, albeit at a slower rate, as real estate demand
picks up in 2010. In addition, the latest increase in steel prices, improvement in credit conditions, and pickup in external demand will all help
to sustain this positive performance.
Despite the slightly disappointing 4Q2009, we maintain our 2010 growth forecast of 3.5%. We expect the improvement in external demand,
signs of which are already being seen (tourism arrivals were up 20% Y-o-Y and tourism revenue surged 35% Y-o-Y in 2M2010), to
contribute to accelerating growth. The GCC’s expansionary fiscal policies will support growth in exports, remittances and foreign investment.
We also expect the new income tax law, which has slashed personal and corporate income taxes, to boost consumption. The improvement
in the external environment will help to restore lost confidence, enabling banks to resume lending and support investment, albeit from very
low levels. In addition the recently formed committee that studies the credit needs of large companies seems to be making progress, with
news of an expected agreement with real estate developer, Tameer, and home appliance retailer, Middle East Complex. The main downside
risk to any recovery in growth remains the government's tight fiscal balances, which could lead to higher taxes or a reduction in subsidies.
2008 2009e 2010e 2011e Latest Date Y-o-Y Growth in Credit to Private Sector
Jordan 40%
Real GDP Growth Rate, % 7.9 2.8 3.5 5.2 2.9 4Q09 30%
CPI Inflation, Annual Average % 14.0 (0.6) 4.7 4.9 4.8 Feb-10 20%
Current Account Balance (excl. Grants), % of GDP (11.3) (6.3) (8.2) (9.4) (0.9) 4Q09
Fiscal Balance, % of GDP (2.2) (9.1) (5.8) (4.8) - - 10%
Gross Domestic Debt, % of GDP 38.2 46.9 48.6 49.0 - -
0%
Y-o-Y Growth in Broad Money, % 17.3 9.3 10.7 10.1 8.6 Feb-10 -10%
Y-o-Y Growth in Private Sector Credit, % 13.9 1.3 7.0 14.0 2.2 Feb-10 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
Source: Central Bank of Jordan, IMF, and EFG Hermes estimates
lebanon
In March Lebanon successfully issued the first of two Eurobonds planned for this year. The USD1.2 billion, 10-year bond carried a 6.375%
coupon and is part of the government's plan to refinance USD3.4 billion of maturing debt in 2010. The governor of the Central Bank stated
that as the government has been able to finance itself in LBP with declining interest rates he expects only limited Eurobond issuances to finance
the budget deficit in 2010. The second Eurobond issuance is planned for November 2010.
The 2010 March issuance attracted about three times the offering, reflecting strong demand for Lebanese debt triggered by the country's strong
economic performance as well as a growing demand for emerging market debt in general. Better economic conditions in emerging markets,
compared to developed economies, have increased appetite for emerging market debt. With interest rates being low at a global level, rates
have fallen substantially, encouraging more countries to tap the international market. Last year, Lebanon managed to secure the lowest loan
rate in its history with the issuance of two tranches of Eurobonds, with a coupon of 5.875% on its 5-year tranche and 7% on its 15-year
tranche. Lebanon's case is particularly interesting since local banks and the central bank hold the majority (c60%) of the country's foreign debt.
Lebanon's buoyant economic activity, underpinned by resumed political stability, has also caused Fitch to upgrade Lebanon's long-term foreign
and local currency debt to B from B- on 31 March 2010. The rating agency cited the government's ability to substantially lower its public debt
to 148% of GDP in 2009 (from 180% in 2006), rising FX reserves, and macroeconomic stability, as the main reasons behind its decision to
upgrade its rating. We remain positive on Lebanon’s growth outlook, with ongoing political stability maintaining positive capital inflows in
2010, albeit lower than 2009's record levels. We expect growth of 4% in 2010, with risks being mainly to the upside.
Lebanon 25%
Real GDP Growth Rate, % 7.0 6.0 4.0 4.0 - - 20%
CPI Inflation, average % 10.0 3.0 3.5 4.0 2.9 Feb-10
Trade Balance, % of GDP (44.0) (40.5) (41.2) (41.4) (2.6) Feb-10 15%
Balance of Payments (USD bn) 12.0 24.8 11.7 4.9 0.8 Feb-10
Fiscal Balance, % of GDP (10.1) (9.4) (9.9) (9.2) - - 10%
Gross Domestic Debt, % of GDP 89.9 92.4 90.4 90.6 - - 5%
Y-o-Y Growth in Broad Money, % 14.8 19.5 9.1 8.1 20.7 Feb-10 0%
Y-o-Y Growth in Bank Private Sector Credit, % 18.6 15.2 12.0 15.0 19.3 Feb-10 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
Source: Banque du Liban, IMF, and EFG Hermes estimates
kindly refer to the

regional monthly
08 april 2010
march issue
algeria
Algeria’s trade balance improved markedly in 2M2010, with the surplus rising to USD2.6 billion from USD.047 billion in 2M2009. This was
largely due to the sharp Y-o-Y increase in oil prices, although imports fell 4% Y-o-Y, possibly due to both lower food imports after a good 2009
harvest and administrative controls imposed on imports in 2009. However, the recovery in hydrocarbon export revenue was disappointing given
the 71% Y-o-Y rise in average oil prices in 2M2010. We believe this was largely due to the relative weakness in gas prices over the past year,
with the discount between spot prices for natural gas, of which Algeria is a major exporter, and those for oil widening sharply.
Relative gas price weakness explains Algeria’s recent efforts to persaude global gas producers to keep spot gas prices high, but we think that
it will be difficult to achieve this in 2010, given rising natural gas supply and still uncertain demand. However, we still expect Algeria to show
a sharp improvement in its 2010 current account and fiscal balances due to rising oil prices and production, in spite of low gas prices.
The government continues to aggressively deploy its oil windfall, and we estimate that government spending will account for 66% of non-oil GDP
in 2010, rising 12.6% Y-o-Y. Quarterly import index data suggest an acceleration in investment spending. This is consistent with the government’s
new emphasis on reviving public sector industrial production, with the value of industrial equipment imports rising an average of 57% Y-o-Y in
2H2009. However, a recently launched anti-corruption campaign, with a scope that includes the national oil company, Sonatrach, may keep
public sector investment below potential this year. Anecdotal evidence suggests that the campaign is already slowing activity in the economy, and
we expect that a difficult regulatory environment will result in actual investment spending once again falling short of target in 2010.
Algeria 40%
CPI Inflation, Annual Average % 4.4 5.7 7.0 4.0 5.2 Jan-10
Current Account Balance, % of GDP 20.4 0.1 4.6 1.8 - - 20%
Fiscal Balance, % of GDP 8.6 (11.8) (6.4) (5.1) - -
Y-o-Y Growth in Broad Money, % 16.0 3.9 12.2 9.9 3.9 Dec-09 0%
Y-o-Y Growth in Private Sector Credit, % 16.9 15.4 10.0 15.0 15.4 Dec-09 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
Source: Banque d’Algerie, IMF, and EFG Hermes estimates
morocco
The Bank al-Maghrib (BaM) held its discount rate steady at 3.25% at its quarterly meeting on 30 March 2010, but it reduced the reserve
requirement by 200bps to 6% because of what it described as a ‘liquidity shortfall on the money market’. The BaM aggressively cut reserve
requirements to 8% from 16.5% between December 2007 and September 2009, although it held the requirement steady at its December 2009
meeting. The central bank has provided an average additional MAD17 billion in liquidity (in seven-day advances) to the banking system each
week since the beginning of 2009. We believe that the reduction in the reserve requirement may give marginal support to credit growth in
2010, but with loan-to-deposit ratios high (94% in February) and banks’ capital ratios close to the BaM-mandated minimum, we still expect
private sector credit growth to fall slightly to 9% in 2010 from 9.4% in 2009. Loan growth has averaged 1% M-o-M since December 2009.
The BaM statement estimates real GDP growth of 3-4% in 2010, roughly in line with our estimate of 3.2%. We expect agricultural growth will be
negative in 2010 after an exceptional 2009, pulling down overall growth, although previous investment in irrigation should mean less volatility in
agricultural output than at the beginning of the decade. We believe that the recovery in external demand will be slow, given Morocco’s strong trade
ties to Southern Europe. The most recent monthly trade data, for January 2010, show nominal import growth outpacing export growth Y-o-Y. The
turnaround in imports is partly due to rising oil prices, but non-oil imports are also rising, up 10% Y-o-Y against an average contraction of 13% Y-o-
Y in 2H2009. We think that recovering domestic demand is behind this import growth, particularly as the government stimulus continues in 2010.
Public sector investment is set to rise 20% Y-o-Y in 2010, and this will be critical to driving growth in 2010. Previous low fiscal deficits and a low
debt-to-GDP ratio support our belief that the government can maintain this stimulus into 2011 if necessary. Ratings agency S&P upgraded
Morocco’s foreign and local currency ratings by one notch in mid-March 2010 to reflect the government’s greater ability to borrow.
Morocco 40%
Real GDP Growth Rate, % 5.6 5.2 3.2 4.7 7.8 4Q09 30%
CPI Inflation, Annual Average % 3.9 1.4 2.0 2.5 0.1 Feb-10
Current Account Balance, % of GDP (5.4) (5.6) (6.0) (5.1) (2.0) 3Q09 20%
Fiscal Balance, % of GDP 0.4 (2.2) (2.1) 0.1 - -
Y-o-Y Growth in Private Sector Credit, % 22.9 9.4 9.0 13.0 11.8 Feb-10 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
Source: Bank Al Maghreb, IMF, and EFG Hermes estimates
Mohamed Abu Basha

Simon Kitchen
kindly refer to the
regional monthly
08 april 2010
march issue
dubai: economic implications of the dubai world’s restructuring proposal

creditor friendly proposal announced at end-march
On 25 March 2010 the Dubai Government announced a debt restructuring proposal for Dubai World and Nakheel, which was substantially
better1 than expected by the market, especially as the measures aim to protect the loans’ principals, albeit with extended maturities in some
cases . The proposals will now be discussed with creditors and the restructuring process is expected to take several months to implement.
According to Dubai World’s Chief Restructuring Officer, the response of creditors has been “positive”. After initial consultations, new
measures to improve the deal for some creditors have been leaked to the newswires - the repayment terms differ by type of creditor, with
Nakheel bondholders receiving the most favourable terms. While a number of issues still have to be ironed out, we believe that the proposal
is positive from an economic perspective, with substantially lower systemic risks and markedly improved visibility of the process.
vital to supporting confidence and reducing systemic risks

We believe that one of the most important factors will be the reduction of uncertainty and speculation, which will be central to supporting
sentiment. The proposal highlights that policy makers are aware of the extent of the debt and a plan is in place to tackle the issue.
Particularly notable in the announcement was the greater level of detail and transparency compared to previous statements. In our forecasts
we had expected to see a gradual improvement in sentiment throughout 2010 after an agreement with creditors on the restructuring of the
debt and increased visibility. This will support private consumption growth, which should also benefit from the pickup in tourism and other
external drivers. Based on this assumption, our non-oil GDP growth outlook was stronger than other forecasts (such as the IMF estimates),
and we maintain our forecast of positive real non-hydrocarbon growth of 2.2% in 2010, with overall real GDP growth of 2.5% for the UAE.
Importantly, the payment to bondholders (and some of the money owed to trade contractors) is important for reducing systemic risks in the
economy. A significant portion (up to 80%, according to the IMF) of the Nakheel bonds is held by national banks. The on time repayment of
the bonds is also likely to have a positive impact on opening up the bond market for Dubai’s corporates and for the government in the
medium term. However, the negotiations going forward will be critical, such as the interest paid to banks and contractors on loans with the
extended maturities. A sub-commercial interest rate would act as an effective loss on the loan principal. The government has indicated it
could use payment-in-kind (PIK) notes, where the lender only receives interest at the end of the loan term. While this reduces the cash
demand on the borrower, it will also limit the flow of liquidity beyond the initial payment to banks and contractors.
investments levels still to fall, no changes to our credit growth forecast

Positively, press announcements have suggested that Nakheel shortly will receive USD1.5 billion, without the approval of the restructuring
proposal. These funds could start being channelled to contractors as soon as early April. This should ease some constraints on working capital
and allow the completion of projects close to delivery. However, overall investment activity will remain limited owing to: 1) liquidity
remaining tight for real estate and construction companies (part of the payments will be for work already completed), and 2) Dubai being
close to the end of its investment programme, with an infrastructure oversupply in a number of areas. Consequently, we continue to forecast
that investment levels in Dubai will continue to fall over the next few years. The restructuring proposal does not change the outlook for
halted Nakheel projects with limited progress. Rather it allows customers the option to transfer money invested in stalled projects to those
close to completion or the ability to hold the credit for five years.
We also have not changed our credit growth forecast and do not expect any new lending from banks on the back of this proposal. We
believe that banks will continue to maintain a relatively risk averse stance to lending to the construction and property sectors with the
widening of the payment maturities. Moreover, with a weaker economic outlook in the medium term, new lending opportunities will remain
limited, which coupled with the banks’ inability to raise longer duration funding, will also act as a constraint. Additionally, the pricing on
international bond offerings by UAE-based banks, in our view, is unlikely to improve markedly in the near term as a result of the proposed
restructuring plan. We continue to believe that incremental credit growth in the UAE will largely come from Abu Dhabi.
government resources prioritised towards debt payment

Out of the USD9.5 billion of additional funding for Dubai World and Nakheel earmarked in the restructuring proposal, USD3.8 billion will
have to come from Dubai’s internal resources. This will result in a retrenchment in spending as government revenues are directed towards
debt management. Highlighting this , in February Dubai announced that its government departments have to cut spending by 15% in 2010
to save AED3.7 billion, with the aim of reducing the emirate's deficit by 2011. We believe that the sale of non-core assets will also be
required to raise the additional funding, although the fact that many of the assets were bought on a highly leveraged basis and above
current prices is an issue.
private consumption growth weaker than wider region

Although we expect to see private consumption turning positive in 2010e, a recovery going forward will be weaker than the other GCC
countries. This is partly linked to the heavy exposure to the real estate sector. Ironically, the payments to contractors to finish near
completed projects are likely to increase supply and push down property prices further. In addition, a weaker investment and government
spending environment will also limit the recovery in private spending.
Monica Malik
Mohamed Rahmy
kindly refer to the 1 For more details of the proposal, please see the UAE country section on page 16.
regional monthly
08 april 2010
march issue
saudi arabia
Positively for Saudi Arabia’s investment programme, Aramco looks close to securing USD10 billion for an export refinery project in Jubail (a
joint venture with Total). Both the size and the pricing of the deal are particularly impressive, given the current project finance market.
Although conditions are improving, there is still reduced project lending by banks, and longer tenors are also harder to secure. Indications of
the deal suggest that the pricing was considerably lower than those seen on other post-credit crunch deals, with margins and fees combined
being sub-200 bps above LIBOR. Bankers close to the deal have indicated that the Jubail deal saw heavy interest and was oversubscribed,
despite the banks’ lower margins. The majority of Saudi commercial banks are participating in the financing, along with the Saudi Industrial
Development Fund, Public Investment Fund, together with a number of international banks. Aramco is looking to raise another USD10 billion
for its Yanbu refinery (a joint venture with ConocoPhillips) in 1H2010 and again interest in the project remains high. These two export
refineries, due on stream in 2013-2014, will target the increasing demand for high-quality refined products from Asia and are an integral part
of Saudi Arabia’s investment programme. In a further encouraging sign, February’s data show that bank lending to the private sector rose to
its highest level in five months (up 0.9% M-o-M and 1.6% Y-o-Y in February 2010). The majority of the incremental growth was accounted
for by shorter duration loans (less than one year), possibly indicating an increase in working capital financing requirements of the corporate
sector and a pickup in private sector economic activity.
Meanwhile, inflation accelerated to 4.6% Y-o-Y (+0.5% M-o-M) in February, up from 4.1% (+0.2% M-o-M) in January. This increase was
predominantly led by the ongoing rise in rental and food prices. Notably, the index for rent rose 10.6% Y-o-Y in February, and was 0.7%
higher than January’s level. We expect this pickup in inflation to continue throughout 1H2010, as the impact of the global crisis resulted in a
sharp deceleration in 1H2009’s price levels. We believe that rental prices will continue to drive domestic inflation in 2010, given the current
housing shortage.
2008e 2009f 2010f 2011f Latest Date Y-o-Y Growth in Credit to Private Sector
Kingdom of Saudi Arabia 50%
30%
Current Account Balance, % of GDP 29.0 5.6 12.6 12.4 - -
Fiscal Balance, % of GDP 33.6 (3.3) 2.5 3.6 - - 20%
Y-o-Y Growth in Private Sector Credit, % 27.1 0.0 12.0 16 1.6 Feb-10 10%
Net Claims on the Government (USD bn) (225.6) (205) (221) (230) (206.4) Feb-10 0%
Net Foreign Assets in the Banking System (USD bn) 449.0 435.0 495.0 550 439.9 Feb-10 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10
Source: Saudi Arabia Monetary Agency (SAMA), IMF IFS, and EFG Hermes estimates
united arab emirates

The Dubai Government announced a debt restructuring proposal for Dubai World and Nakheel on 25 March 2010. We believe that the
proposal is positive from an economic perspective and will substantially reduce systemic risks; however, we have not upgraded any of our
forecasts. Under the plan, a further USD9.5 billion of fresh cash will be injected into the two companies, with USD8 billion destined for
Nakheel. Of this, USD5.7 billion will come from an undrawn loan from Abu Dhabi and USD3.8 billion from Dubai. Bondholders have been
prioritised – the Nakheel’s sukuk bonds due in 2010 and 2011 will be paid in full and on time. Bank creditors should also be repaid in full,
although maturities of Dubai World debt are being extended to five and eight years, carrying an as yet unspecified interest rate, while
Nakheel bank lenders will be asked to roll over existing facilities at a new rate. Finally, large trade creditors (including contractors) of Nakheel
will be paid 40% of their claims, with the remaining 60% likely to come in the form of “tradeable securities”, most likely sukuks, with full
payment in five years. This is after individual trade creditors receive a cash payment of up to AED500 000, which will settle the debts of
around half (by numbers) of the contractors. A key issue will be if these securities end up trading at a discount, their original holders, the
trade creditors, would have to sell them at less than par, thereby taking a market-determined haircut. The Dubai Government is proposing to
convert its USD10.1 billion debt claims in Dubai World and Nakheel through the Dubai Financial Support Fund into equity, thus
subordinating its claims to other creditors, and given that Dubai owns 100% of these companies, it is effectively a debt write-off.
Following the initial announcement, newswires have also indicated that the government is also looking to provide a “shortfall guarantee,” under
which the government would pledge to make up the difference between the value of assets to be sold off by Dubai World and the amount due
to be repaid to banks. Moreover, in the event that a sub-commercial interest rate is provided for the extended loans, the government could use
payment-in-kind (PIK) notes, where the lender receives interest at the end of the term.
United Arab Emirates 60%
Real GDP Growth Rate, % 7.4 (4.0) 2.5 3.3 - - 50%
CPI Inflation, Annual Average % 12.3 (5.3) 2.0 3.4 (0.16) Feb-10 40%
Fiscal Balance, % of GDP 21.0 1.2 9.6 12.5 - -
20%
Y-o-Y Growth in Broad Money, % 19.2 7.4 10.4 12.6 7.0 Sep-09
Y-o-Y Growth in Private Sector Credit, % 24.8 6.0 8.0 12 5.6 Sep-09 10%
Net Claims on the Government (USD bn) (34.3) (24.2) (30.4) (2.68) (33.1) Nov-09 0%
Net Foreign Assets in the Banking System (USD bn) 8.8 10.0 20.4 22.6 18.5 Nov-09 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09
Source: Central Bank of the UAE, IMF IFS, and EFG Hermes estimates
kindly refer to the

regional monthly
08 april 2010
march issue
qatar
Monetary data from December show a strong recovery in bank lending; even though in line with our expectation, it remained skewed towards public
sector lending. Overall lending growth has accelerated and reached 26% Y-o-Y in February, up from 10.3% in November. Public sector lending has
been growing at double-digit levels (Y-o-Y) since August, but accelerated from December and peaked at a record 122% Y-o-Y in February, as borrowing
was stepped up on greater implementation of the government’s investment programme, with funding being ramped up to help finance ongoing
projects. This significant increase also needs to be seen in light of a sharp drop in borrowing over January and February 2009, as the public sector
severely slowed down its borrowing from the banking sector to ensure ample liquidity was there for private sector lending. With liquidity concerns out
of the way, the public sector once again resumed borrowing and net claims on the public sector have turned positive since 2Q2009 peaking at QAR40.3
billion in February from QAR9.3 billion in June 2009. Positively, private sector lending accelerated in February to 9.39% Y-o-Y for the first time since
September 2008. We believe that the deceleration in private sector lending has bottomed out, and we will continue to see credit growth to the private
sector gradually inching up (Y-o-Y) to a forecast level of 15% Y-o-Y by end-2010, mostly directed towards government-linked projects.
The Emir endorsed the FY2010-2011 (April-March) budget last month, which came broadly in line with our expectation and points to another
expansionary budget. Spending is slated to grow 25% Y-o-Y to USD32.4 billion over last year’s budget, with the focus remaining on
implementation of the government’s investment programme. We forecast that actual spending will increase by 21.1% Y-o-Y to USD38.4 billion
compared to an estimated increase in spending of around 19.0% in FY2009-2010. We estimate that government spending as a percent of non-
oil GDP is the highest in Qatar out of the GCC countries, just above 70%, and thus will provide a strong economic stimulus. Investment
spending constitutes 37% of total planned expenditure, with around USD9.8 billion (30% of total spending) allocated to infrastructure projects.
With higher government investment spending, we expect that real non-oil GDP will accelerate to 8.5% in 2010 from 7% in 2009.
Qatar 100%
Nominal GDP (USD bn) 100.4 81.1 107.5 121.4 20.7 3Q 2009
CPI Inflation, Annual Average % 15.1 (4.9) 1.8 2.5 (4.5) Feb-10 60%
Current Account Balance, % of GDP 14.1 11.3 21.3 35.2 - -
Fiscal Balance, % of GDP* 10.7 1.1 6.5 8.3 - - 40%
Y-o-Y Growth in Private Sector Credit, % 45.1 10.8 15.0 21.1 9.4 Feb-10 20%
Net Claims on the Government (USD bn) (0.6) 12.9 8.5 (1.3) 12.2 Feb-10 0%
Net Foreign Assets in the Banking System (USD bn) 13.4 13.0 16.3 19.5 12.2 Feb-10 Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10
*We believe that not all of Qatar’s gas revenues are reflected in the official budget figures, which our estimates are based on. The actual fiscal position is likely to be
substantially stronger. Note: Fiscal balance is on fiscal year basis (April-March)
Source: Qatar Central Bank, IMF IFS, and EFG Hermes estimates
oman
CBO Governor Hamud Bin Sangur Al-Zadjali has indicated last month that Oman plans to raise OMR122 million (USD316.9 million) in two
Government Development Bonds (GDB) in 2010. The OMR-denominated GDB issues have over the past two decades been closely linked with
financing the government’s five-year development plans and covering fiscal shortfalls. However, the build-up in fiscal surpluses since 2003 and
strengthening of Oman’s reserve position has limited the need for new bonds. Between 2004 and 2008, no new issuances were made, and
subsequent issuances (in September 2008 and 2009, along with the planned ones in 2010) are, in our view, largely aimed at refinancing
maturing bonds, while providing local banks (who are the largest subscribers of GDBs) with alternative investment opportunities. With a higher
oil price estimate for 2010 (USD80 p/b for Brent crude), we are forecasting that Oman’s fiscal balance will swing back to a surplus of USD3.3
billion (5.3% of 2010 GDP) after posting a small deficit in 2009. This will enable the government to comfortably continue with its spending
plans. We are expecting that overall government expenditure will accelerate 9% Y-o-Y to USD20.6 billion after growing 2% in 2009.
In its first non-liquidity driven support measure since end-2008, the CBO raised the minimum Capital Adequacy Ratio (CAR) requirement for
all banks to 12% from 10%, effective end-2010. We expect a very limited macroeconomic impact of this move, as the capitalisation of Omani
banks is already above this level. We therefore regard CBO’s latest move as a precautionary regulatory measure that further strengthens banks’
ability to weather any unforeseen deterioration in credit quality and cushions against any stress – though unlikely – arising from a systemic
risk. Thus, we maintain our 2010e private sector credit growth at 12.2% Y-o-Y.
Oman
60%
Nominal GDP (USD bn) 59.9 52.1 61.9 68.4 11.9 3Q 2009
CPI Inflation, Annual Average % 12.3 3.4 5.5 7.0 1.7 Jan-10 40%
Current Account Balance, % of GDP 9.1 (11.8) (1.6) 1.5 - - 30%
Fiscal Balance, % of GDP 13.3 (2.0) 5.3 7.1 - -
Y-o-Y Growth in Broad Money, % 23.1 4.6 9.3 15.4 4.8 Jan-10 20%
Y-o-Y Growth in Private Sector Credit, % 44.0 4.9 12.2 16.0 4.8 Jan-10 10%
Net Claims on the Government (USD bn) (6.20) (5.97) (6.70) (7.80) (6.2) Jan-10 0%
Net Foreign Assets in the Banking System (USD bn) 11.3 11.4 14.3 15.8 12.0 Jan-10 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
Source: Central Bank of Oman, IMF IFS, and EFG Hermes estimates
kindly refer to the

regional monthly
08 april 2010
march issue
kuwait
Kuwait will realise a substantial fiscal surplus in FY2009-2010 (April-March). According to the latest official data, Kuwait posted a
preliminary budget surplus of KWD8.33 billion (USD28.9 billion) in the first 11 months of the fiscal year. Revenues reached KWD 16.0 billion
(USD55.5 billion), nearly twice as much as projected for the whole FY2009-2010, but down 24.1% for FY2008-20009. The budget was based
on a conservative oil price of USD35 p/b for Kuwaiti crude. Despite this oil price, the fiscal surplus will widen as a result of substantially
lower government spending. Total spending over the same period was USD26.6 billion (KWD7.68 billion), just 63.4% of the full-year plan.
We, however, expect a rise in government spending and thus a lower fiscal surplus at the end of the fiscal year when pledged expenditure
not included so far will be added to the closing statements. The lower expenditure in FY2009-2010 is mostly a result of lower extraordinary
expenditure such as transfers to state pension funds. Nevertheless, unlike other GCC countries, current and capital spending growth is likely
to have decelerated, especially earlier in the fiscal year. We are forecasting a fiscal surplus of USD26.0 billion, equivalent to 23.6% of 2009
GDP. Importantly, we forecast that government spending will pick up in FY2010-2011, which will be central in driving the pickup in non-oil
activity. We believe that this spending will be broad based, with increases in both current and capital expenditure. In February, the
parliament approved an USD104 billion development plan for the next four years, starting 1 April. However, high levels of bureaucracy will
be one of the central factors that will limit the implementation of the investment programme.
Meanwhile, the Kuwaiti Information Minister Sheikh Ahmed al-Abdullah al-Sabah, who is also the Oil Minister, survived a no-confidence vote in
March, after being questioned for allegedly failing to uphold media laws and protect national unity. While the vote was close (22 MPs voted
against the minister, with 25 of the 49 votes in favour of removing him), it highlights that parliament is narrowly in favour of the government.
Kuwait 40%
Real GDP Growth Rate, % 5.7 (3.8) 3.4 4.1 - - 30%
CPI Inflation, Annual Average % 10.6 4.5 4.0 4.6 - -
Fiscal Balance, % of GDP* 7.4 23.6 24.3 25.3 - -
Y-o-Y Growth in Private Sector Credit, % 16.7 6.1 8.5 10 5.3 Feb-10
Net Claims on the Government (USD bn) (9.7) (11.2) (13.6) (12) (10.5) Feb-10 0%
Net Foreign Assets in the Banking System (USD bn) 27.6 32.9 37.6 42.6 34.9 Feb-10 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10
*Fiscal balance is on fiscal year basis (Apr.-Mar.)
Source: Central Bank of Kuwait, IMF IFS, and EFG Hermes estimates
bahrain
Bahrain issued a 10-year USD-denominated bond last month. The bond was heavily oversubscribed, leading to an increase in the issue size to
USD1.25 billion from USD1 billion. Similarly, pricing of the bond was tightened to 200 bps over mid-swap rates from an initial guidance of
210 bps. Owing to its attractive pricing, offering a higher coupon (5.5%) than the recent 10-year issuance of neighbouring Qatar (5.25%),
the bond managed to attract international interest, with over 40% of subscriptions coming from the US, while other European and Asian
investors also showed strong interest.
While this issue will help create a benchmark yield curve for future corporate and financial institutions’ USD issuances, more importantly, we
believe that the Bahraini Government is building on improved sentiment levels and investor interest, as evident by the lower borrowing
costs, to diversify its financing sources. Higher borrowing levels will enable the government to expand its planned expenditure and press
ahead with projects, which it had previously put on hold or cancelled due to its stretched fiscal position, without having to excessively tap
into its reserves, especially as oil prices are currently at a more comfortable level. Bahrain had already raised the legal upper limit for its
outstanding fixed income debt to BHD1.9 billion (USD5 billion, or 22% of our 2010 GDP estimate) in end-2009 to allow for this higher
borrowing level. We therefore increased our 2010 growth forecast for government spending (USD5.9 billion) from 2% to 5% Y-o-Y. We
believe that current spending will continue to dominate overall fiscal expenditure; however, with the availability of more resources, we are
likely to see some funding, albeit limited, trickle down to projects and investment expenditure. With higher oil price levels in 2010, we are
forecasting that Bahrain’s fiscal deficit would narrow to a manageable USD164 million (0.7% of 2010 GDP) from an estimated USD1 billion
in 2009 (-5.3% of GDP). We still, however, maintain our real non-oil GDP growth at 2.7%, despite the increase in our forecast fiscal
expenditure, owing to the limited impact government spending has in driving real non-oil GDP.
Bahrain 60%
Nominal GDP (USD bn) 21.9 20.4 22.3 23.7 - - 50%
Real GDP Growth Rate, % 6.3 1.5 2.2 2.5 - -
40%
Current Account Balance, % of GDP 10.3 (1.4) 1.7 2.7 - - 30%
Fiscal Balance, % of GDP 6.7 (5.3) (0.7) 0.1 - - 20%
Y-o-Y Growth in Broad Money, % 19.7 5.8 12.5 8.6 7.0 Jan-10 10%
Y-o-Y Growth in Private Sector Credit, % 43.0 (3.1) 5.5 13.0 -3.1% Nov-09 0%
Net Claims on the Government (USD bn) (1.7) (0.2) (2.0) (2.8) (0.2) Nov-09 -10%
Net Foreign Assets in the Banking System (USD bn) 7.3 5.8 8.5 10.3 5.6 Nov-09 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09
Source: Central Bank of Bahrain, IMF-IFS, and EFG Hermes estimates
Monica Malik
Mohamed Rahmy
kindly refer to the
regional monthly
08 april 2010
february issue
No. of Issuance Price at

iii. research log Authors Pages Date Issuance Rating Fair Value (FV)
publications march 2010

Qatar National Bank (QNB) Sanchez-Cabezudo, CFA 04 07-Apr-10 QAR 138.7 Neu. QAR 130.3
1Q2010 Results: A Strong Set of Numbers;...
Egypt Economics Note Abu Basha 04 31-Mar-10

4Q2009 GDP Breakdown:...
MENA Strategy Note Research Team 11 31-Mar-10

1Q2010 Earnings Preview
GB Auto Farrag, CFA 20 31-Mar-10 EGP 36.0 Buy EGP 43.0

Local Market Recovery Surprises; Upgrade to Buy
Zain Group Ananian 06 31-Mar-10 KWD 1.36 Neu. KWD 1.48

Zain Africa Sale: Almost There, Reduce to Neutral Ghobrial
Etisalat Maher 03 31-Mar-10 AED 11.4 Buy AED 14.5

Adjusting FV for Bonus Shares Ananian
Maridive and Oil Services (MOS) Riaz 11 31-Mar-10 USD 4.65 Neu. USD 5.04
Taking Profits: Downgrading Recommendation to Neutral Hassouna
Ezz Steel Shams El Din 03 31-Mar-10 EGP 20.9 Buy EGP 25.1
Iron Ore Pricing:... Guindy
Orascom Construction Industries (OCI) Shams El Din 03 30-Mar-10 EGP 266.0 Neu. EGP 270.0
Positive on DSM’s Agro / Melamine Deal:...
Qatar Gas Transport (Nakilat) Redwan 05 29-Mar-10 QAR 22.8 Buy QAR 38.6
Core business in line, Valuation Attractive, BUY
UAE Strategy Note Iqbal / Malik 03 26-Mar-10

Dubai World Restructuring Better Than Expected Ansari / Kapadia
UAE Indices Nessim 03 25-Mar-10

2Q2010 - Indices Rebalancing Announcement
Egypt Indices Difrawy 03 25-Mar-10

2Q2010 Egypt Indices Rebalancing Announcement Sadek
Sorouh Real Estate Kapadia 03 25-Mar-10 AED 2.42 Buy AED 5.15
Adjusting FV for Stock Dividend Abbas
DP World Redwan 04 25-Mar-10 USD 0.48 Buy USD 0.56

Recovery on Track
Ezz Steel Shams El Din 04 24-Mar-10 EGP 19.2 Buy EGP 25.1
4Q2009 Results: First Glance Comments
Aramex Riaz 12 24-Mar-10 AED 1.88 Neu. AED 1.79

Freight Recovery Drives Our Forecast Upgrades;... Hassouna
MENA Focus List Iqbal / Kitchen 04 24-Mar-10

Add Ezz Steel, OT, Emaar & Depa Nessim / Difrawy
Saudi Hollandi Bank (SHB) Ansari 05 23-Mar-10 SAR 33.70 Buy SAR 38.60
Buy on Normalising Earnings
Orascom Telecom (OT) Ananian 09 23-Mar-10 USD 5.01 / Buy USD 7.72 /
Has the Stock Bottomed Out? Maher EGP 5.46 EGP 8.50
kindly refer to the

regional monthly
08 april 2010
february issue

Authors Pages Date Issuance Rating Fair Value (FV)
Qatar Navigation / Qatar Shipping Redwan 03 22-Mar-10

Arbitrage Opportunity
Bank Muscat Ansari 04 21-Mar-10 OMR 0.817 Buy OMR 1.040

Raising Estimates, ... Varghese
UAE Strategy Note Iqbal 09 21-Mar-10

Dubai World: Where Do We Go From Here? Nessim
Orascom Construction Industries (OCI) Shams El Din 04 21-Mar-10 EGP 248.3 Neu. EGP 270.0
4Q2009: Fertilisers Outperform, Construction Awards Disappoint
Tabreed Riaz 10 17-Mar-10 AED 0.48 Sell AED 0.38

Now With a High Risk of Dilution, Reiterate Sell Hassouna
Lecico Baddour, CFA 05 16-Mar-10 EGP 20.0 Buy EGP 26.1

4Q2009 Results: A Strong End to the Year, Reiterate Buy Kashef
Al Ezz Dekheila Shams El Din 04 16-Mar-10 EGP 816 Buy EGP 1,203
4Q2009's Consolidated Results: First Glance Comment Guindy
Orascom Telecom (OT) Ananian 05 14-Mar-10 USD 5.46 / Buy USD 7.72 /
4Q2009 Preview: Do Not Expect A Good Quarter EGP 5.85 EGP 8.50
Palm Hills Developments (PHD) Hasman 03 14-Mar-10 EGP 6.3 Buy EGP 7.5
Adjusting FV for Rights Issue
Egypt Banking Sector Note Sanchez 38 07-Mar-10

Core Business on Firmer Footing;...
CIB - Upgrading to Buy 03 04-Mar-10 EGP 62.50 Buy EGP 74.26

NSGB - Still At a Discount 03 04-Mar-10 EGP 31.50 Buy EGP 42.97
CAE - Small Franchise, But Strong Fundementals 04 04-Mar-10 SAR 9.85 Neu. SAR 9.18
MENA Economics Note Malik / Abu Basha 33 04-Mar-10

Clear Skies, but Prepared for Rain Rahmy / Kitchen
Saudi Telecom Sector Note Ghobrial 15 04-Mar-10

2009: Mobile Additions Peak Ananian
Saudi Telecom Company- Margins Still a Consern 04 04-Mar-10 SAR 44.2 Buy SAR 66.6
Mobily - Trimming Forecasta; Maintain Buy 03 04-Mar-10 SAR 47.6 Buy SAR 67.6
Zain KSA - Lower FV; Balance Sheet Still a Headache 04 04-Mar-10 SAR 9.85 Neu. SAR 9.18
DEPA Limited Kapadia 38 04-Mar-10 USD 0.55 Buy USD 1.18

Behind the Curve, Ahead of the Game Abbas
DP World Redwan 38 04-Mar-10 USD0.38 Buy USD0.56

Thrown Out with the Bathwater, Initiate with Buy
Al Ezz Dekheila Shams El Din 04 03-Mar-10 EGP841.5 Buy EGP1,203

Upgrading Estimates on Higher Price Outlook, ... Guindy
Ezz Steel Shams El Din 10 03-Mar-10 EGP18.8 Buy EGP25.1

Steel Prices Set to Rise Further, Upgrading to Buy Guindy
Arabtec Kapadia 04 03-Mar-10 AED2.10 Buy AED3.39

4Q2009 Results: A Loss, Yet Not a Negative Surprise Abbas
Jordan Economics Note Abu Basha 03 02-Mar-10

Fiscal Risks To Hurt Confidence
Maridive and Oil Services Riaz 05 01-Mar-10 USD4.35 Buy USD5.20

Aramco Project to Drive Top Line in 2010 Hassouna
kindly refer to the

regional monthly
08 april 2010
february issue

publications february 2010

Saudi British Bank (SABB) Ansari 04 25-Feb-10 SAR50.00 Neutral SAR54.00
NPLs Rise, Coverage Drops; Lowering Rating to Neutral
Egypt Strategy Note Kitchen 05 25-Feb-10

Looking for Entry Points Difrawy
Egypt Economics Note Abu Basha 05 24-Feb-10

4Q2009 Current Account Unexpectedly in Surplus...
Gulf Navigation Redwan 14 24-Feb-10 AED0.61 Sell AED0.43

Macro Outlook Improving but Still Overpriced
Kuwait Finance House (KFH) Sanchez-Cabezudo, CFA 04 21-Feb-10 KWD1.18 Neutral KWD1.39
4Q2009 Results: Weaker than Expected; Reiterate Neutral Rating
MENA Economics Note Malik 02 21-Feb-10

EUR Weakness: Implications for MENA Currencies Kitchen/Abu Basha
UAE Strategy Note Iqbal 09 18-Feb-10

Thoughts on the Alleged Offer in Dubai World's ... Nessim
Eastern Company Farrag 05 18-Feb-10 EGP128.0 Buy EGP154.6

2Q2009/10 Results: Resilient, Despite Higher Finance Costs
Aldar Properties Kapadia 04 17-Feb-10 AED3.87 Buy AED5.52

4Q2009 Results: Disappointing Quarter but .. Abbas
Sidi Kerir Petrochemicals Company (SIDPEC) Shams El Din 22 17-Feb-10 EGP12.5 Buy EGP15.8
Strong Fundamentals and a Cheap Valuation... Youssef
Qatar Electricity and Water Company (QEWC) Riaz 10 17-Feb-10 QAR99.0 Buy QAR138.7
Dividends Underpin Fair Value, Reiterate Buy Hassouna
Credit Agricole Egypt Sanchez-Cabezudo, CFA 04 16-Feb-10 EGP10.93 Buy EGP16.65

4Q2009: Earnings in Line, Loan Growth Better than Expected
Zain Group Ghobrial 03 16-Feb-10 KWD1.08 Buy KWD1.29

Out of Africa? Deal Multiples Should be Good News... Ananian
ENBD Ansari 04 15-Feb-10 AED2.55 Neutral AED3.20
4Q2009 Results
Mobinil Ananian 06 11-Feb-10 EGP221.0 Neutral EGP257.6

4Q2009 - Pressure on Additions... Ghobrial
SAFCO Shams 07 11-Feb-10 SAR137.0 Buy SAR164.0

Nitrogen Fertiliser Outlook Strengthens, Upgrading to Buy Guindy
Egypt Economics Abu Basha 02 10-Feb-10

Inflation Accelerates in January, Outlook Unchanged
2010 Egypt Research Yearbook Research Team 120 09-Feb-10
MENA Strategy Research Team 10 09-Feb-10

4Q2009 Earnings Preview: Update
GB Auto Nour Farrag, CFA 08 09-Feb-10 EGP27.5 Neutral EGP30.7

Betting on Iraq’s Pent-Up Demand, But Risks Abound
Orascom Telecom (OT) Sanchez-Cabezudo, CFA 15 08-Feb-10 USD5.61 / EGP6.70 Buy USD7.72 / EGP8.50
Multiple Scenario Risks More Than Priced In, Re-Iterate Buy
Qatar Islamic Bank (QIB) Sanchez-Cabezudo, CFA 04 08-Feb-10 QAR75.2 Buy QAR108.8
4Q2009 - Credit Quality Much Better than Expected
kindly refer to the

regional monthly
08 april 2010
february issue

Egypt Telecom Sector Ananian 21 04-Feb-10

More Growth Than We Thought There Was Ghobrial/Maher
Telecom Egypt - Stronger Cash Flow Supports Higher FV 06 04-Feb-10 EGP19.7 Buy EGP24.8
Mobinil - FV Up But We Remain Neutral 03 04-Feb-10 EGP226.3 Neutral EGP257.6
Bank Audi Sanchez-Cabezudo, CFA 04 04-Feb-10 USD89.05 N/R N/R

4Q2009 - Earnings Ahead of Our Forecast ...
Jarir Marketing Co. Baddour, CFA 04 03-Feb-10 SAR134.0 Buy SAR162.5

Preliminary 4Q2009 Results:... Amin/Kashef
Saudi Electricity Company (SEC) Riaz 14 02-Feb-10 SAR12.10 Neutral SAR12.50

Downgrading Estimates but Dividend Waiver Supports FV Hassouna
National Bank of Kuwait (NBK) Sanchez-Cabezudo, CFA 04 02-Feb-10 KWD1.12 Neutral KWD1.27
4Q2009 Ahead of Our Forecasts, ...
Byblos Bank Sanchez-Cabezudo, CFA 04 02-Feb-10 USD2.12 Buy USD2.60

4Q2009 Results: Mainly Positive Surprises,...
BLOM Bank Sanchez-Cabezudo, CFA 04 02-Feb-10 USD89.95 Buy USD104.2

4Q2009: Earnings Higher Than Expected...
National Bank of Abu Dhabi (NBAD) Ansari 04 01-Feb-10 AED11.40 Buy AED14.83
4Q2009 Results
Sorouh Real Estate Kapadia 04 01-Feb-10 AED2.33 Buy AED5.41

4Q2009 Results Abbas
kindly refer to the

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disclosures
We, EFG Hermes Research Team, hereby certify that the views expressed in this document accurately reflect our personal views about the securities and companies
that are the subject of this report. We also certify that neither we nor our spouses or dependants (if relevant) hold a beneficial interest in any of the securities that
we have individually commented on in this report.
EFG Hermes Holding owns 930 GDRs in Ezz Steel, 4,300 GDRs in Lecico, 10,000 GDRs in Orascom Construction Industries, 282 GDRs in Orascom Telecom some of
the Egyptian securities that are subject of this report as at 06 April 2010. EFG Hermes Holding also owns 207 local shares in Commercial Bank of Kuwait, some of
the Kuwaiti Securities that are subject of this report as at 07 April 2010. EFG Hermes Holding also owns 10,000 local shares in Commercial Bank of Qatar, 6,200
local shares in Industries Qatar, 71,500 local shares in Qatar Gas Transportation, 4,667 local shares in Qatar Navigation, 5,000 local shares in Qatar National Bank,
and 6,000 local shares in Qatar Electricity and Water, some of the Qatari Securities that is subject of this report as at 7 April 2010. EFG Hermes Holding also owns
1,250,000 local shares in Emaar Properties, one of the Emirati Securities that are subject of this report as at 7 April 2010. Funds managed by EFG Hermes Holding
and its subsidiaries for third parties may own the securities that are the subject of this report. EFG Hermes may own shares in one or more of the aforementioned
funds or in funds managed by third parties. The authors of this report may own shares in funds open to the public that invest in the securities mentioned in this
report as part of a diversified portfolio over which they have no discretion.
The Investment Banking division of EFG Hermes may be in the process of soliciting or executing fee earning mandates for companies that are either the subject of this
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disclaimer
Our investment recommendations take into account both risk and expected return. We base our long-term fair value estimate on a fundamental analysis of the
company's future prospects, after having taken perceived risk into consideration. We have conducted extensive research to arrive at our investment recommendations
and fair value estimates for the company or companies mentioned in this report. Although the information in this report has been obtained from sources that EFG
Hermes believes to be reliable, we do not guarantee its accuracy, and such information may be condensed or incomplete. Readers should understand that financial
projections, fair value estimates and statements regarding future prospects may not be realized. All opinions and estimates included in this report constitute our
judgment as of this date and are subject to change without notice. This research report is prepared for general circulation and is intended for general information
purposes only. It is not intended as an offer or solicitation with respect to the purchase or sale of any security. It is not tailored to the specific investment objectives,
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regional monthly

ii. economics 11 egypt

kindly refer to the

Source: MSCI website, Reuters Source: MSCI website, Reuters

kindly refer to the

mena and emerging markets

Source: MSCI website Source: Official websites, EFG Hermes

Source: Reuters Source: Reuters

Source: Bloomberg, EFG Hermes Source: Bloomberg, EFG Hermes

kindly refer to the

mena markets in charts

GB Auto 35.99 46.8% 0.4 Pioneers Holding 4.62 -26.9% 4.0

Stocks with avg. daily value traded>USD0.1 million

Stocks with avg. daily value traded>USD0.1 million

kindly refer to the

BLOM 99.85 11.2% 1.0 Solidere A 22.72 -5.3% 2.8

Attijari Leasing 34.38 45.0% 0.0 SOPAT 17.11 -20.8% 0.1

Medgulf 30.90 26.1% 4.0 SABB Takaful 27.10 -19.3% 2.9

kindly refer to the

Stocks with avg daily value traded>USD1 million

Etisalat 12.50 13.6% 2.7 Aldar Properties 4.61 -7.4% 15.3

Stocks with avg daily value traded>USD1 million

Stocks with avg daily value traded>USD1 million

kindly refer to the

Stocks with avg daily value traded>USD1 million

Stocks with avg daily value traded>USD0.1 million

kindly refer to the

(150) (60) (2,000)

Data excludes Israel and Turkey

kindly refer to the

prices and valuations

*In local currency, unless otherwise stated

kindly refer to the

government targets a budget deficit of 7.9% of gdp in fy2010/11

Mohamed Abu Basha

kindly refer to the

Egypt Macroeconomic Indicators

Source: CBE, Ministry of Finance, and EFG Hermes estimates

inflation and policy rates

Source: Bloomberg, Central Bank

credit and money supply

Source: Central Bank, CAPMAS

kindly refer to the

Source: Bank Al Maghreb, IMF, and EFG Hermes estimates

Mohamed Abu Basha

dubai: economic implications of the dubai world’s restructuring proposal

vital to supporting confidence and reducing systemic risks

investments levels still to fall, no changes to our credit growth forecast

government resources prioritised towards debt payment

private consumption growth weaker than wider region

united arab emirates

kindly refer to the

kindly refer to the

No. of Issuance Price at

publications march 2010

Egypt Economics Note Abu Basha 04 31-Mar-10

MENA Strategy Note Research Team 11 31-Mar-10

GB Auto Farrag, CFA 20 31-Mar-10 EGP 36.0 Buy EGP 43.0

Zain Group Ananian 06 31-Mar-10 KWD 1.36 Neu. KWD 1.48

Etisalat Maher 03 31-Mar-10 AED 11.4 Buy AED 14.5

UAE Strategy Note Iqbal / Malik 03 26-Mar-10

UAE Indices Nessim 03 25-Mar-10

Egypt Indices Difrawy 03 25-Mar-10