Strictly Private & Confidential. This is not research and is not intended as such.

This presentation represents Abraaj Capitals views on certain trends prevalent in the MENASA region and the impact of the global economic downturn on the region. Please also refer to the disclaimer at the end.

Emerging With Confidence

Reassessing the Investment Case for MENASA One Year On
September 2009

Emerging With Confidence Table of Contents

Middle East, North Africa & South Asia: A Region Without Parallel .. 3
The MENASA Region The Regions Connectivity with the Global Economy

Performance Through the Crisis: Assessing the Impact of the Global Downturn . 6
GDP Growth Trends The Real Economy Financial Sector Oil Real Estate Currencies and Inflation

Explaining the Last Twelve Months: Why Did Regional Economies Perform Relatively Well? .17
Nature of the Economies Low Leverage Sovereign Strength

Looking Forward With Confidence: What Will Drive Further Growth? 26

Macro Perspective Petrodollars People Policies Pent-up Demand

Middle East, North Africa & South Asia: A Region Without Parallel
The MENASA region includes the GCC, Levant, Turkey, North Africa and South Asia (India and Pakistan), linked to the global economy through global trade, particularly oil and gas exports, capital flows and human connectivity / immigration

Note: While we treat MENASA as a single bloc we acknowledge that South Asia (India in particular) can distort statistics given its size. We also acknowledge that many institutions look at MENA rather than MENASA. Therefore, where possible, we separate out the statistics for India and/or South Asia.
3

The MENASA Region

MENASA has a combined GDP of US$ 3.7 trillion growing at 5.9% p.a., with a population of 1.6 billion
Turkey Levant
2008 Nominal GDP: US$ 48 billion 08/09 Real GDP Growth: 6.0% / 2.5% 10-13 Real GDP Growth: 3.8% 2008 Population: 10 million
Morocco Tunisia Lebanon Jordan Algeria Kuwait Qatar Libya Egypt Bahrain Saudi Arabia UAE Oman India Pakistan

2008 Nominal GDP: US$ 730 billion 08/09 Real GDP Growth: 1.1% / -5.6% 10-13 Real GDP Growth: 3.5% 2008 Population: 72 million
Turkey

Pakistan
2008 Nominal GDP: US$ 165 billion 08/09 Real GDP Growth: 2.0% / 3.7% 10-13 Real GDP Growth: 4.9% 2008 Population: 177 million

North Africa
2008 Nominal GDP: US$ 528 billion 08/09 Real GDP Growth: 5.5% / 3.1% 10-13 Real GDP Growth: 5.7% 2008 Population: 164 million

GCC
2008 Nominal GDP: US$ 1,049 billion 08/09 Real GDP Growth: 6.4% / 0.0% 10-13 Real GDP Growth: 4.6% 2008 Population: 40 million

India
2008 Nominal GDP: US$ 1,226 billion 08/09 Real GDP Growth: 6.1% / 5.5% 10-13 Real GDP Growth: 8.1% 2008 Population: 1,148 million

One region: Complimentary and diversified resources including hydrocarbon wealth and a large pool of skilled labor
Cultural ties: The MENASA region has common religions, common customs, shared languages and has had periods of common governance ranging from the Persian Empire to the British Empire As recently as the 1960s, the Gulf countries currency was the Gulf Rupee. It was issued by the Reserve Bank of India

Trade ties: Trade between the MENASA countries increased from US$ 45 billion in 2002 to US$ 229 billion in 2007, growing at an annual rate of 38% Capital flows and investments: In-bound M&A activity increased more than six-fold between 2002 and 2008 while cross-border investments have become deeper Labor mobility: In 2008, MENASA countries received more than US$ 59 billion in remittances, of which US$ 16 billion originated from the region itself, predominately the GCC Approximately 25% of the population in the GCC countries originate from India and Pakistan Intra-regional travel increased from 33 to 58 million passengers from 2000 to 2007
4

Source: EIU as of July 2009, IMF, Bloomberg, PCTAS, UN Comtrade, McKinsey & Company

The Regions Connectivity with the Global Economy

The MENASA region is linked to the global economy through global trade, capital flows and human connectivity / immigration
Global trade: Countries in MENASA are linked to the global economy through trade, particularly the export of oil and gas from MENA and services from India MENASAs total exports-to-GDP ratio of 33% is on par with major exporting countries such as China For MENA, the total exports-to-GDP ratio is 44%. Excluding hydrocarbons, MENA exports account for 14% of GDP
Germany Malaysia MENA Korea

Total Exports-to-GDP Ratios

90%

45%

44%

40%

33% 32% 23% 21% 17% 16%

Average*: 32%
14% 14% 9% US

Italy

MENA (ex. Oil & Gas)

China

Capital flows: Private capital inflows into the Middle East increased from US$ 31 billion to US$ 414 billion from 2003 to 2007, with its share of such inflows versus other developing countries increasing from 7% to 19% Human connectivity: Significant influx of individuals plus movement of people throughout the MENASA region, be it in the form of labor or tourists, has increased the connectivity of the region with the rest of the world 47% of the workforce in Saudi Arabia and 90% of the workforce in the UAE is made up of expatriates Turkey, Egypt and Saudi Arabia rank in the top 25 global tourist destinations Dubai is the 8th most visited city in the World The region attracted over 100 million international visitors in 2007 and is expected to attract over 160 million visitors in 2017

Note: Analysis based on total exports of goods on a FOB basis; Data for all countries as of 2008 except UAE (2007), Egypt (LTM as of 6/30/08), Morocco (2007), India (LTM as of 3/31/08), Japan (2007) * Average does not include MENA excluding oil & gas

Middle East Private Capital Inflows

500 19% 400 300 200 100 0 2003 2004 2005 2006 2007 Inflows (US$ billions) % of Emerging Markets 7% 10% 10% 19% 25% 20% 15% 10% 5% 0%

* Private capital flows comprise direct investment, portfolio investment, and other long- and short-term investment flows 5

Source: Government Sources, UN Comtrade, WTO, KITA, Turkstat, EIU as of July 2009, IMF, Zawya, McKinsey & Company, Euromonitor

South Asia

France

MENASA

Japan

UK

Given its strategic location, MENASA has also become a global hub in the logistics and transportation sectors

Performance Through the Crisis: Assessing the Impact of the Global Downturn
While the MENASA region has not been immune from the effects of the credit crisis in Western markets and consequent global downturn, as reflected in falling oil prices, declining real estate and equity market values and rising NPLs, the region as a whole has avoided a recession and the outlook remains strong with businesses in growth mode and consumer confidence rising

Performance Through the Crisis GDP Growth Trends

Despite a slowdown in 2009, countries in MENA and South Asia continue to post positive GDP growth with the region as a whole still expected to grow at a healthy rate of 1.5% in 2009 and 5.9% p.a. from 2010-2013
Due to the increased interconnectivity of the region with the global economy, the global economic crisis has had a negative impact on growth causing a historical annual growth rate of c. 7% over the past five years to slow in 2009 For oil-exporting countries, a sharp drop in oil demand led to a price correction and eventually, production cuts. For example, Saudi Arabia and Qatars hydrocarbon export revenues are expected to decrease by 48% and 34%, respectively, in 2009 Real GDP growth for the GCC is expected to be flat in 2009 due to oil production cuts. The non-oil sector continues to drive growth in the GCC with this sector expected to grow 3.2% in 2009* Tightening credit is expected to slow growth in the GCC particularly due to its impact on project finance Growth in countries such as Turkey/Egypt, which are dependant on external capital flows, is expected to be negatively impacted by a sharp fall in FDI of 54% and 44%, respectively In Egypt, strong domestic consumer demand is expected to offset this decline Turkey contracted by 14.3% in Q1 09 due to a drop in private sector consumption, investment expenditures and industrial production. However, with the banking sector in good shape, a manageable public debt position, low household debt and a strong government response, the outlook for the rest of the year is positive
na In di a Ch i

Real GDP 2008 and 2009e Growth Rates

9.0% 8.0% 6.1 % 5.5% 3.7% 2.0% 5.5% 3.1 % 6.0% 4.9% 2.5% 6.4% 5.1 % 4.4% 2.0% 1% .1 (0.0%) 0.6% 3.9% 1% .1

2008e real GDP growth 2009e real GDP growth

1 .5%

(1 .0%)

(1 %) .1 (2.6%) (2.7%) (3.3%) (4.5%) (5.6%)

North Africa North Africa

MENASA MENASA

Pakistan Pakistan

Levant Levant

MENA MENA

Real GDP Growth (2010-2013 CAGR)

8.5% 8.1%

5.9% 5.7% 4.9% 4.6% 4.5% 4.1% 3.9% 3.8%

3.5% 2.7% 1.4% 1.3%

Despite the slowdown in 2009, the regions outlook compares favorably to most of the rest of the world with medium-term growth projected at an average of c. 6% for MENASA and 4.5% for MENA

EN AS No A rth Af ric a Pa kis ta n

Br az il La tA m Le va nt Tu rk ey W or ld EU 15

EN A

G C

* Real GDP growth of non-oil sector based on IMF projections, which estimates real GDP growth of 1.3% (higher than EIU estimates as shown in the graphs) Source: EIU as of July 2009 (Note: EIU forecasts oil (WTI) price of US$ 62.5 / barrel in 2009), IMF

US

Turkey Turkey
7

GCC GCC

India India

Brazil

US

LatAm

China

World

EU15

Performance Through the Crisis Role of Oil in GDP Trends

While the oil sector provides a source of income for governments, the non-oil sectors contribute a larger share to GDP growing at a faster pace
The oil economy The oil and gas exporting countries of the MENASA region include the GCC, Libya and Algeria Primary source of income for oil exporting governments (most of which have low to no tax regimes), e.g. oil revenues account for c. 80% of GCC budget revenue Main source of liquidity, driving domestic credit expansion and allowing access to international credit markets Drives sentiment within these economies This sector of the economy is a state run enterprise with limited scope for private investment The non-oil economy Abundant oil-driven liquidity and concerted effort on the part of oil exporting economies to diversify away from hydrocarbons has created a fast growing non-oil sector Non-oil sectors contribute c. 50-70% of the GCC economies1 The non-hydrocarbon sector employs 98.5% of the labor force in the gulf oil states As production cuts cause the oil sector to contract the non-oil sector of the GCC is still expected to grow at 3%+ in 2009 Primary focus of private investment

GCC Liquidity M2, Private Credit and Oil Price (%YOY)

50 Priv ate credit 40 30 20 10 M2 0 Apr-03 Aug-04 Dec-05 OPEC basket (RHS) Apr-07 Aug-08 100 80 60 40 20 0 -20 -40 -60
8.0% 6.0% 4.0% 2.0% 0.0% (2.0%) (4.0%) (6.0%)

Oil and Non-Oil Real GDP Growth for GCC

2005

2006

2007 Oil

2008 Non-Oil

2009

2010

1. Depending on price of oil with some economies being more dependant on oil than others. Based on 2006 real GDP contribution the non-oil sector contributed 68% of GDP for the GCC Source: IMF, BAS-ML, Standard Chartered

Performance Through the Crisis The Real Economy

Corporates in the MENASA region continued to record strong top-line performance across several sectors in Q1 2009
At the height of the crisis, corporate performance in many sectors across the region proved resilient, with positive growth in a number of industries This growth has been driven partly by the relatively early stage nature of many of these markets, in particular consumer-related sectors, and has been driven by both organic initiatives and external acquisitions Average Q1 2009 vs. Q1 2008 sales growth for all listed companies in MENA was c. 20% In general companies in key sectors of the real economy in the major MENASA markets out-performed their counterparts in the S&P 500 and Nikkei indices as well as those in a number of other emerging markets* by a significant margin Infrastructure-related sectors such as telecommunications, utilities and healthcare also posted strong results, further highlighting the growth stage of many sectors in the region
10% 2% S&P 3% NA EM* Saudi UAE Turkey Egypt India Saudi UAE Turkey Egypt India -2% S&P -5% Nikkei -6% EM* Saudi

Sales Growth (Q1 2009 vs. Q1 2008) Publicly-listed Companies by Sector

Industrials Consumer Goods 14%

12% 4% 1%

14%

10%

-4% -11% S&P -17% Nikkei -9% -6% Turkey Egypt UAE Turkey Egypt India -21% -34% EM* Saudi Saudi S&P Nikkei EM* Saudi Saudi

-2% -22% -29% UAE UAE Turkey Egypt

India

Healthcare 27% 17% 20% 18%

Consumer Services

30% 12% 9% NA

-10%
Turkey Egypt India UAE Turkey Egypt India

Nikkei

Telecommunications 27% 26%

Utilities

22% 7%

23%

41%

2% -1% S&P -7% Nikkei EM* Saudi UAE Turkey Egypt India UAE Egypt -5% S&P

4%

3%

5%

3% -1%

NA

Nikkei

EM* Saudi UAE Turkey Egypt India Turkey Egypt

* EM includes companies listed in Hong Kong, Singapore, Malaysia, China and Brazil Source: HSBC, Bloomberg

Performance Through the Crisis The Real Economy

A review of Abraajs IGCF partner companies, many of which operate in recession-resistant industries, confirms the strong performance of corporates in 2009
Sales Performance and Growth IGCF Portfolio (US$ million)
Q1 2009 vs. Q1 2008
Transportation

H1 2009 vs. H1 2008 21 47 5

A $237 $251 $107 $173 $144 $150 $136 $154 $13 $15 $1,708 $1,919 $294 $699 $55 $71 $123 $181 $25 $36

$104 $126 $61 $89 $72 $75 $68 $73 $6 $7 $724 $828 $131 $149 $22 $32 $53 $73 $14 $20

6 61 5

C
Social Services

13

11 14 14

13 12 138

F
Infrastructure

43 39

29 47

InfrastructureIndia

47 CY Q1 2008 CY Q1 2009 CY H1 2008

45 # % growth

CY H1 2009

Note: Infrastructure Growth Capital Fund (IGCF)Company B, C, D, I & J quarterly performance derived from annual and half-year results; Results for Company D, E, G, H, I & J are converted from local currency to USD at a constant exchange rate to ensure currency fluctuations are not included in results Source: Abraaj analysis 10

Performance Through the Crisis The Real Economy

Business and consumer confidence is on the rise with only a marginal increase in unemployment as compared to other harder hit countries
After trending down for nearly a year, confidence indices bottomed out in February 2009 but are now back on the rise Consumer confidence and optimism towards the future is increasing. In a recent survey, 44% of respondent in the Middle East believed their financial position would be better in a year. In addition, recently India and UAE ranked as the 2nd and 7th most optimistic countries in the world in the Nielsen Global Consumer Confidence Index The region has witnessed only a very small number of high profile debt restructurings and defaults and nothing like to the extent in more developed markets Unemployment in the region has increased at a much slower pace compared to some of the harder hit economies in the developed world Employment remains an issue, however. Some countries such as Jordan, Pakistan, Tunisia and Turkey have high unemployment (14% to 16% for 2009e). Governments have acknowledged the need to address the issue and are adopting policies to boost employment, including private sector investment Remittances have dropped only slightly; Lebanon is not expecting to see a significant decline, Jordan has only witnessed a 3.4% drop (first four months of 2009 vs. same period in 2008), Pakistan has experienced a 23% increase (H1 09 vs. H1 08) while Egypt has witnessed a 16% drop (Q1 09 vs. Q1 08)

Business Confidence GCC and Turkey

120 110 100 90 80 70 60 50 Feb-07 Jun-07 Oct-07 Feb-08 GCC Business Confidence Index 69.2 100.0 99.8 105.4 96.0 92.0 99.4 96.9 79.4 74.8 71.2 59.4 Jun-08 Oct-08 Feb-09 Jun-09 Turkey Business Confidence Index 75.9 67.8 113.5 114.2

Increase in Unemployment (2008 to 2009e)

78%

47% 31%

29% 17% 9%

United States

Japan

France

Germany

MENA

South Asia
11

Note: Data for Bahrain, Kuwait, Lebanon, Libya, Oman and UAE not available

Source: EIU as of July 2009, Gulf News, TCMB, Central Bank of Turkey, Bayt.com, YouGov, Nielsen

Performance Through the Crisis Financial Sector: Banks

The region has not witnessed any large scale commercial bank failures and the threat of increasing NPLs and a slowdown in lending have largely been mitigated by decisive government action
The most immediate impact of the downturn has been an increase in NPLs, which in many case have doubled albeit from previously low levels. While NPLs have increased, they are well below the average peak NPLs of 32% in past crises such as Japan in 1997, Norway in 1991 and India in 1993 Banks in the region had minimal exposure to sub-prime and other toxic assets in the West; however the rise of NPLs coincided with a sharp correction in certain regional real estate and equity markets, most notably in the UAE and Kuwait, negatively impacting those banks that were overexposed to these sectors and requiring government intervention Lending growth has slowed significantly but is still growing. However, growth is projected at a much slower pace going forward. An analysis of the average loan growth for 16 of the largest banks in MENA shows annual loan growth between 2005-2008 of 35.4% falling to 8.6% p.a. between 2008-2011
35.0

NPLs to Gross Loans of Selected MENA Banks

UAE
6% 5% 4% 3% 2% 1% 0%

Saudi Arabia

Qatar

Oman Kuwait Egypt

D NB A

Government Stimulus Packages for Banking System

15.0%

In order to shore up the balance sheets of certain banks as well as increase liquidity and support lending, governments have injected capital, as required, into the banking system. Importantly, the governments, most notably in the GCC, have close linkages with the financial sector and were therefore able to act swiftly in supporting the commercial banks and pumping liquidity into the financial system Despite government intervention, however, liquidity concerns remain in the GCC and the exact impact on asset quality remains uncertain as disclosures of provisions and nonperforming assets remain limited
Source: Citi, BAS-ML, HC Brokerage

30.0 25.0 20.0 15.0 10.0 5.0 0.0 Kuwait Saudi Arabia Qatar Oman Turkey Stimulus Package (US$ billion) % of GDP UAE * 0.0% 5.0% 10.0%

* Funds having been made available were only partially utilized 12

DI B FG B UN B AD CB Al A R aj NB hi Ba n SA k M BA Q N B CB Do Q h Ba a B nk a n M k us ca t Bu NB rg an K Ba nk CI B
2008 2009E

Performance Through the Crisis Financial Sector: Capital Markets

The regions capital markets witnessed sharp corrections along with other global markets but have recently begun to recover
Equity markets in the region have tended to follow the global markets but with greater volatility. Regional markets have begun to recover with Turkey and India, in particular, outperforming both developed and other emerging markets In addition to a change in outlook dragging equity markets down, a reversal of capital flows particularly related to international portfolio rebalancing also negatively impacted equity markets
180 160 140 120 100 80 60 40 20 0 Jan-07 Dow Jones
Dow Jones MSCI GCC Egypt CASE Sensex India Turkey ISE MSCI EM Returns 2008 peak to 12/31/08 YTD 2009 (32.8%) 8.2% (59.6%) 21.5% (61.5%) 44.9% (53.8%) 67.1% (50.9%) 66.9% (54.6%) 55.3%

Equity Market Performance

May-07

Sep-07

Jan-08 Egypt CASE

May-08

Sep-08

Jan-09

May-09

Sep-09

MSCI GCC

Sensex India

Turkey ISE

MSCI Emerging Markets

Debt markets, in particular sovereign debt, went through a similar period of turmoil and recovery, most notably following the collapse of Lehman Brothers. One impact on the local debt markets was the increase in the CDS spreads on bonds issued by government related entities, highlighting a perceived increase in risk associated with these issuances or the sponsoring government. In Dubai, the CDS spreads reached the highest levels in the region, peaking at over 950bps reflecting to some extent a perceived fear of lack of federal support for the emirate of Dubai. It has since dropped to 350bps. With the exception of Dubai, CDS spreads are now all c. 200bps or below
0 Jan-08 200 600 400 1000 800 1200

CDS Spreads on Government Related Issuers

2008 Hi Lo Dubai 470 39 Abu Dhabi 282 53 Saudi Arabia 245 53 Qatar 263 32 Egypt 800 102 Turkey 849 167 YTD 2009 Hi Lo 977 348 475 110 335 82 380 86 688 183 522 193

May-08 Dubai

Sep-08 Abu Dhabi Saudi Arabia

Jan-09 Qatar

May-09 Egypt Turkey

Sep-09

Source: Bloomberg

13

Performance Through the Crisis Oil

The global economic slowdown resulted in a fall in global oil demand, leading to both a fall in prices and production cuts by OPEC members
Global oil demand declined by 0.5 million barrels a day in 2008 and is projected to decline by another 1.7 million barrels per day in 2009. A large portion of this decline is from the OECD economies The fall in demand resulted in a price correction which saw oil prices decline from highs of US$ 145 in July to lows of U$ 30 in December 2008, briefly falling below the 2009 average budget breakeven price for the GCC of c. US$ 54 For non-oil exporting countries such as Egypt, Turkey, India and Pakistan, lower prices alleviated some inflationary pressures To support the market, OPEC agreed to cut output by 4.2 million bpd, or 5% of daily world demand. The GCC accounts for the bulk of these cuts, with Saudi Arabia alone having absorbed 33% of this cut, or 1.4 million barrels per day Given the scale of the production cuts and perceived improvement in the global macroeconomic environment, prices have begun to recover since Q2 2009 and have stabilized around US$ 70 per barrel
160 140 120 100 80 60 40 20 0 Jan-07
Source: BAS-ML, EIA, News sources, Bloomberg

Change in World Oil Supply and Demand (mb/d)

2.0 1.0 0.0 (1.0) (2.0) (3.0) 2007 2008 OECD demand Total demand 2009 Non-OECD demand Total supply 2010

WTI Spot Price (US$ / barrel)

$54/bbl: 2009 GCC budget breakeven price

2007 High Low $99.2 $50.5 2008 High Low $145.3 $30.3 YTD 2009 High Low $73.7 $34.0

May-07

Sep-07

Jan-08

May-08

Sep-08

Jan-09

May-09 Sep-09
14

Performance Through the Crisis Real Estate

Real estate prices, which had previously witnessed a significant run-up, have since corrected back to 2007 levels
After experiencing a strong run-up, real estate prices declined across the region, with some markets such as Dubai witnessing a 40-60% drop, while drops in Doha, Istanbul and Mumbai were 40%, 10-40% and 5-40%, respectively Price decline was concentrated in the high-end residential segment, which was driven by significant speculative behavior in certain locations such as Dubai, Abu Dhabi and Kuwait. The middle-income and affordable housing segment did not experience as sharp a drop, especially in markets with large domestic populations such as Cairo and Riyadh Rental prices on office and residential properties have declined across the region, although the correction has been less severe than that of sales prices. The drop in rental prices has been a plus in terms of controlling double-digit inflation levels Abu Dhabi There are signs of price stabilization. Focusing on the hardest hit market, the UAE, there are indications that prices have bottomed out. In a May 2009 report, HSBC noted that prices had increased for two successive months in the UAE, rising 4% in April and 5% in May. Deutsche Bank issued a report stating that the average price for apartments and villas in the UAE rose 6.5% month-on-month in June 2009 and Jones Lang LaSalle found there has been a convergence between asking and achieved prices, signaling stability in the market
Source: JLL, IMF, Colliers International, News sources Note: Index; March 2008 = 100

Real Estate Price Index

Decline in Rental Prices

Period Peak to Q1 09 Peak to Q1 09 End-08 to Q1 09 Impact Office rents declined 20%-30% Office rents declined 15%-45%; residential rents declined 20%-40% Grade A office rents declined 10%15%; high-end residential rents declined 15% Office rents declined 13% Grade A office rents declined slightly; residential rents declined c. 25%

Dubai Doha

Riyadh Istanbul

Q1 08 to Q1 09 Mid-08 to Q1 09

Office rents for the highest-quality properties have not suffered a decline due to a lack of supply 15

Performance Through the Crisis Currencies and Inflation

Certain countries in the region have witnessed a weakening of currencies and a drop in inflation due to the global economic crisis
Currencies The Gulf currencies are fixed (pegged to the U.S. Dollar or a basket of currencies for Kuwait) India, Pakistan, Turkey and Egypt have floating currencies. Their performance against the U.S. Dollar has been mixed There was a minimal impact on the Egyptian pound The Turkish Lira, Indian Rupee and Pakistan Rupee have gone through a period of significant devaluation since the third quarter of 2008 While the Turkish Lira and Indian Rupee have begun to regain some ground against the US Dollar in the second quarter of 2009, they continue to trade at depressed levels Inflation In 2008, regional economies witnessed a significant rise in inflation The increase in inflation was primarily due to rising food, fuel commodities and especially housing cost

Falling prices accompanying the global economic crisis have resulted in a decrease in inflation in most countries since Q4 2008 Falling food and real estate prices have helped ease the pressure on a majority of the population facing difficulties with rising prices during the economic boom Falling oil prices have benefitted oil importers, such as India, Pakistan, Egypt and Turkey

Currency Performance (Daily Exchange Rate to the US$)

160

Inflation (YoY % Change in Consumer Price Index)

20% 20% 18% 15% 13% 11% 9% 8% 6% 15% 14% 10% 8% 4% 7% 10% 9% 8% 6%

140 120

9%
100 80 60 Jan-08

1% EGYPT
May-08 Turkey (Lira) Sep-08 Egypt (Pound) Jan-09 May-09 Sep-09 India (Rupee) Pakistan (Rupee)

INDIA 2007

PAKISTAN 2008

QATAR

Q1 2009

SAUDI ARABIA Q2 2009

TURKEY

Source: EIU, Oanda.com

16

Explaining the Last Twelve Months: Why Did Regional Economies Perform Relatively Well?
Structurally strong regional economies, primarily reliant on domestic consumption, fixed investment and government spending, supported in many cases by significant hydrocarbon revenues and reserves, have performed relatively well. The low degree of leverage throughout the system, at the consumer, corporate and banking sector levels, supported where necessary by swift action from regional governments, has resulted in avoiding a regional credit crisis and knock on into the real economies

17

Explaining the Last Twelve Months Nature of the Economies

Strong domestic demand, including healthy contributions from private sector investment and government consumption, has helped the region perform well
Countries in the MENA and South Asia regions have relatively balanced domestic economies with considerable room for additional growth Private consumption is currently at c. 50% of GDP for most economies in the region, a figure that compares favorably to emerging markets such as China (which has historically been focused on fixed investments, particularly in export driven industries), however it remains well below that of other emerging markets such Brazil (61%) Turkey has relatively high private consumption at 70% of GDP, reflecting the relatively developed nature of its economy The GCC, with private consumption contributing 30% of GDP, offers much room for future growth, especially given its young population and large number of people expected to enter the workforce Across the region, private consumption is expected to remain resilient. Within MENA, Turkey is the only major economy that will post negative growth, with a decline of 6%. However, in the GCC, North Africa and South Asia, private consumption is set to rise 2%, 5% and 5%, respectively. Among the main drivers contributing to this resilience are positive demographic changes and the nature of consumption in the region, which is primarily nondiscretionary, especially in those countries with large populations such as Egypt and Saudi Arabia. In addition, low reliance on leverage has enabled consumers to keep spending despite the credit crunch

Breakdown of GDP (2008)

100% 85% 70% 55% 40% 25% 10% -5% MENA S. Asia Private consumption GCC N. Africa Turkey China Brazil Japan Malaysia US Government consumption Gross fixed investment & Stockbuilding Net exports

2008-2009e Private Consumption Real Growth

9% 5% 2% 1% (1%) (2%) (4%) (6%) MENA* S. Asia GCC* North Africa Turkey China Brazil Japan Malaysia US (1%)

5%

Source: EIU as of August 2009. Domestic demand is private consumption + government consumption + gross fixed investment & stockbuilding excluding net exports (exports less imports) from GDP and note that net importing countries will have a domestic demand component in excess of 100% of GDP. * Does not include UAE and Kuwait

18

Explaining the Last Twelve Months Nature of the Economies

Healthy contributions from private sector investment and government consumption have added to domestic demand resilience
Fixed investments for the most part have continued at or above historic levels for the region. The primary exception to this case is Turkey, which is expected to post negative growth of 25%. In the rest of the region businesses continue to invest, in particular in North Africa, where fixed investment is expected to increase by 6%
(5%) 4% 4% 6%

2008-2009e Gross Fixed Investment & Stockbuilding Real Growth

12%

A primary driver of this continued investment is pent-up demand across many industries, which is spurring private sector investment. Importantly, a lot of this pent-up demand is in infrastructure-related industries such as hospitals and schools where such investments cannot be delayed Significant investment is also being seen in industries in which the region enjoys a competitive advantage, such as petrochemicals and logistics In terms of government consumption, countries across the region are expected to post healthy increases. Turkey will post an increase of 5%, while MENA is up 5% and South Asia is up 11%. These rates are above most other countries, including both developed and emerging markets The growth in government consumption is an important indicator of the ability of these governments to enact counter-cyclical policies
MENA* S. Asia
* Does not include UAE and Kuwait Source: EIU as of August 2009

(12%) (16%) (16%) (21%) (25%) MENA* S. Asia GCC* North Africa Turkey China Brazil Japan Malaysia US

2008-2009e Government Consumption Real Growth

12% 11%

8% 6% 5% 5% 4% 4% 4% 2%

GCC*

North Africa

Turkey

China

Brazil

Japan Malaysia

US

19

Explaining the Last Twelve Months Nature of the Economies

Low dependence on consumer driven exports has made the region less susceptible to a slowdown in Western consumer spending. Oil demand has reduced but not to levels that have threatened
A majority of MENASAs exports are raw materials rather than finished goods or consumer products. This provided a degree of insulation against a decline in consumer spending, particularly from a decrease in demand from developed economies and more specifically from US consumers, whose expenditure has recently accounted for c. 18% of global GDP Certain countries in the region, particularly Turkey, are more dependent on the export of consumer products and this has been reflected in its projected negative 2009 GDP growth (see slide 7) Although c. 24% of Indias exports are consumer-based, the country has a lower dependence on exports in general than Turkey, with total exports accounting for 14% of GDP versus 18% for Turkey GCC and North Africa exports primarily consist of oil and gas, which account for 81% of total exports for the GCC and 72% of total exports for North Africa Production cuts have caused export revenues to decline but not to levels that are a threat, with state budgets breaking even at around US$ 54 per barrel (see slide 14) In addition, the nature of exports of global commodities and universal products has meant that a drop in demand from the developed markets has been offset, to some extent, by an increase in demand from the emerging markets Generally, MENAs exports are increasingly destined for fast growing emerging markets, particularly in Asia. For instance, the GCCs largest export destinations now include China, Thailand, South Korea and Japan Reduced oil prices have benefitted the non-oil exporters and eased inflation pressures

Consumer Driven Exports as a % of Total Exports

63% 47% 46% 38% 37% 33% 32% 28%
100% 90% 80% 70% 60%

Breakdown of Exports for the MENASA Region

24% 24%

50%

22% 11% 9% 7% 6% 6% 3%

40% 30% 20% 10% 0% GCC North Africa Levant Turkey India Pakistan
Hydrocarbons (incl. mineral fuels/oils/by-products) Agricultural & animal products Manufactured products Textiles and textile products Chemicals, minerals and other raw materials Other

Germany

MENASA

MENA

UK

USA

Italy

North Africa

Malaysia

Japan

India

Turkey

France

Levant

Korea

China

Consumer driven exports include: Machinery and transport equipment (Land, Sea and Air); Consumer goods (ex. food, beverages & animal products); Gems, pearls and other precious metals; Art, antiques and other collectibles. Note: Analysis based on total exports of goods on a FOB basis

Pakistan

GCC

Note: Analysis based on total exports of goods on a FOB basis; Only top 4 export types available for Bahrain (88% of total), Qatar (94% of total), Saudi Arabia (90% of total) and Libya (86% of total); Textiles and textile products includes carpets & floor coverings, leather materials & products and finished goods 20

Note: Data for all countries as of 2008 except UAE (2007), Egypt (LTM 6/30/08), Morocco (2007), India (LTM 3/31/08), Japan (2007) Source: Government Sources, UN Comtrade, WTO, KITA, Turkstat, EIU as of July 2009

Explaining the Last Twelve Months Nature of the Economies

Long-term reform and investment initiatives by regional governments have successfully broadened the regions economic base and created diversified economies
Diversification efforts on the part of regional governments have paid-off In 1975, oil revenues accounted for 47% of Saudi Arabias GDP. In 2008, this had declined to 31%, with transportation & communication, services and manufacturing more than doubling their contribution to GDP Similarly for India, in 1974/1975, agriculture revenues accounted for 43% of GDP. By 2007/2008, this contribution had decreased to 20% and contributions of trade, transportation & communications had increased by c. 75% while business, financial & real estate services had doubled

Real GDP Contribution by Sector*

GCC (2006) Egypt (2007/2008)
Real Suez estate Canal Financial 3% services Other 4% 8% 26% Wholesale & retail 11% 14% Agriculture Transport & comm. 15% 5% Oil & gas 15% Manufacturing

Other 19% Construction 32% 7% 7% 15% Finance, business & real estate Hydrocarbons

10% Manufacturing 10% Services

Construction

This trend is ongoing and diversification efforts remain a priority for regional governments. For example; In the GCC, between 2000 and 2006, hydrocarbon contribution dropped from 35% of GDP to 32% of GDP while manufacturing and construction, finance, business & real estate and services all accounted for a greater proportion of GDP in 2006 than in 2000 In Turkey, between 2000 and 2008, agriculture contribution to GDP declined by 3%, while transportation and communication account for a greater proportion of GDP

Turkey (2008)

India (2007/2008)
Public administration & defense & other Manufacturing Agriculture, forestry & fishing, mining & quarrying 20%

Other 18% Agriculture Real estate 9% 5% 10% 13% Wholesale & retail 24%

6% 15%

Construction

Business, financial & real estate services

13% 15%

24% 28% Trade, hotels, transport & comm. Manufacturing, construction, electricity, gas & water

Financial services

Diversification efforts and the leveraging of strategic competitive advantages has allowed the region to become a global hub for several industries including petrochemicals and transportation

Transportation & comm.

Note: GDP comparison based on real terms. * Real GDP based on 1999/2000 prices for GCC, India & Turkey and 2002/2003 prices for Egypt Source: McKinsey & Company, Central Banks, Turkstat, BAS-ML, Beltone, News sources

21

Explaining the Last Twelve Months Low Leverage

Strong capitalization of the regions banks enabled them to absorb the impact of the global downturn
The regions banks tend to have lower exposure to systemic financial vulnerabilities given the more restrictive regulations and less sophisticated nature of the financial markets
15% 16% 16% 16% 16%

Capital Adequacy Ratios of MENASA Banks

Basel II requirement: 8%
18% 18% 21% 19%

Central banks in the region have acted conservatively in setting Capital Adequacy Ratios (CARs), requiring ratios above Basel II requirements. As a result of these relatively high CARs, most of the banks in the region have been able to internally absorb rising NPLs
Tunisia 10% 11%

12%

12%

13%

13%

13%

Lebanon

Kuwait

Bahrain

Algeria

Pakistan

Jordan

Turkey

India

Egypt

Libya

Oman

UAE

Qatar

Most banks, particularly those in countries such as Egypt, India and Turkey, have not been reliant on wholesale funding mechanisms for growth, as reflected by their relatively low loans-to-deposits ratios In the few cases where banks relied on wholesale funding, most notably in the UAE, Kuwait and Qatar, the governments provided necessary support as required

Note: Bahrain figure as of end of 2008 and only includes conventional retail banks; Kuwait and Qatar figures as of Dec 2008; Oman, Algeria and Libya figures as of end of 2007; Saudi Arabia figure as of end of 2007; UAE figure as of June 2008; All remaining figures are 2008 or latest available

Morocco

2008 Mortgage penetration MENASA Banks Loans-to-Deposits of as % of GDP

112% 101% 90% 92% 83% 105% 115% 120%

An important point to note is the traditional linkages between these governments and the financial sector (ownership in many cases), with governments indicating a clear willingness to intervene to ensure the well-being of the financial system A lack of structured products in the banking system and on balance sheets and minimal exposure to toxic assets from
55%

78%

Turkey

Kuwait

GCC Average

Egypt

Qatar

USA

UAE

India

Western Markets have also contributed to relative stability and solvency

Source: IMF / country authorities, Credit Suisse, Nomura

Saudi Arabia

UK
22

Saudi Arabia

Explaining the Last Twelve Months Low Leverage

Corporates and consumers were not as highly levered and therefore were not forced to cut back spending
Corporates in the region were in a good position pre-crisis to navigate through the downturn given their low degree of leverage Average debt to capital ratios in MENASA are well below those in other markets. This low leverage is driven in part by three factors: (a) the lack of sophisticated financial products in the market; (b) the need for companies to maintain flexible balance sheets to capitalize on growth opportunities; and (c) the equity culture inherent in the region
25% 18% 55% 47% 46%

Corporate Debt /Total Capital for Listed Companies in MENA & South Asia

Western Europe United States

Japan

South Asia

MENA

Note: Based on companies with market caps > US$ 150 million and average daily trading values > US$ 2 million

Consumers in the region are also relatively under-levered. A primary indicator of this is the low degree of retail credit penetration in the region, when compared to developed markets. As a result, consumers have not been forced to cut back spending due to over-leverage, indicating that the temporary slowdown was more of a crisis of confidence than anything else and that there remains significant potential for growth in consumer spending
5% 15% 10% 25% 20%

Retail Loans* as %penetration as % of South Asia Mortgage of GDP in MENA and GDP

Retail loans as a % of GDP are much lower in the region

Malaysia Thailand Ukraine Bulgaria Romania Germany

Turkey

Kuwait

Croatia

Russia

Mortgage penetration is also low in the region, ranging from 0.1% of GDP in Egypt to 12% in the UAE compared to 82% and 73% in the UK and US, respectively

* Excludes mortgages; Note: Most data as of end-2008 23

Source: Bloomberg, BAS-ML

Indonesia

Oman

Egypt

Qatar

Japan

India

China

Brazil

KSA

UAE

USA

UK

versus other countries

0%

Explaining the Last Twelve Months Sovereign Strength

Several regional governments have accumulated large reserves during the last five years
Over the past few years government budgets amongst the oil producers have been set conservatively and as a result, even at low oil prices they break even. Breakeven oil prices for most GCC government budgets in 2008 remained below US$ 50/barrel, despite the rise in the average oil price to c. US$ 100/barrel. As a result, it is estimated that in 2008, the GCC had a budget surplus of c. 30% of GDP or c. US$ 315 billion Conservative budgets coupled with the oil windfall from the last five years has allowed regional governments to accumulate substantial wealth The extent of this wealth is reflected in the size of accumulated foreign reserves and sovereign wealth funds Based on current unofficial estimates, its existing accumulated reserves and overseas assets alone would enable Qatar to continue 2008 spending levels for more than two years, Saudi Arabia to continue for more than three, Kuwait more than four, and the UAE for more than five years (without further revenues) Based on IMF data, official reserves of MENA (excluding Turkey) were US$ 181 billion in 2004 and have grown to US$ 866 billion in 2008. The oil exporting economies, i.e. the GCC, Algeria and Libya in particular, have accumulated vast reserves The region has some of the largest Sovereign Wealth Funds (SWFs) in the world. These SWFs can and have been called upon to provide domestic macroeconomic and financial stability

GCC Breakeven Oil Price* (2008, $ per barrel)

100 80 60 40 20 0 Saudi Arabia UAE Qatar Oman Bahrain Kuwait**
2008 average oil price

* Based on official 2008 budget targets **Kuwait announced one-off budget transfer of c. US$20 billion to capitalize social security system

2008 Estimated Assets of Major SWFs (US$ billion)

Abu Dhabi Investment Authority* Saudi Arabian Monetary Authority Norway Pension Fund - Global Kuwait Investment Authority Russian Reserve Fund Russian Wealth Fund Qatar Investment Authority
* Bar represents maximum figure in range 24

500-875 350 371 250 125 32 60

Source: IMF, BAS-ML, McKinsey & Company, Steffen Hertog, News sources

Explaining the Last Twelve Months Sovereign Strength

Backed by large reserves, MENA governments are committed to bolstering economic growth through infrastructure and development spending
Regional governments have committed to continue spending, especially in the GCC, where accumulated reserves will be called on to finance a potential budget deficit of 5% of GDP in 2009 or an estimated US$ 44 billion Countries, such as the UAE, Bahrain and Oman, have increased budgets for 2009 with the UAE budget 21% higher than for 2008 Breakdown of budgets demonstrates the focus on sectors that will benefit long-term sustainability such as education and healthcare
Health & social affairs (11%) Municipality services Water, agriculture Telecomm. & (4%) transport & infrastructure (4%) (7%)

Saudi Arabia Budget Breakdown (2009)

Education & manpower (26%)

Other (32%)

Credit insts & gov't programs (16%)

MENA countries have recently continued c. US$ 2 trillion worth of projects supporting long-term economic development Saudi Arabia has established a 5-year US$ 400 billion infrastructure investment plan earmarked for airports, seaports, transport hubs, schools, universities, and knowledge-based industries Abu Dhabi is planning to invest an estimated US$ 100 billion between now and 2030 to develop its petrochemicals industry Qatar continues to invest in projects such as the New Doha Port project and the development of Education City In Algeria planned spending on energy projects between 2009 and 2014 is US$ 69 billion

Note: Total 2009 budget = US$ 127 billion

UAE Budget Breakdown (2009)

Other (8%) Infrastructure (5%) Social benefits (13%) Education (23%)

Other social services (15%) Justice & security (36%)

Note: Total 2009 budget = US$ 11.5 billion; Education allocation assumed to be part of social services

Source: Nomura, Credit Suisse, MEED, IMF, BAS-ML, News sources

25

Looking Forward With Confidence: What Will Drive Further Growth?

The MENASA region is projected to be one of the fastest growing regions in the world driven by petrodollars, people, policies and pent-up demand resulting from historic underinvestment in key sectors

26

Looking Forward With Confidence Macro perspective

Petrodollars MENA has 44% of global crude oil reserves with only 29% production share, 27% of natural gas reserves with only 14% production share Lowest lifting costs $ 2-6 / bbl vs. $ 18 / bbl in US McKinsey estimates the GCC will receive revenues of US$ 5 trillion to US$ 9 trillion by 2020 if oil prices average US$ 50 to US$ 100 per barrel People Sizeable population of c.1.6 billion people expected to grow to c.1.75 billion by 2013. MENA will grow by 1.7% p.a. Growing middle-class & rising incomes, combined with increased urbanization and labour mobility Low household leverage Latent consumer demand for goods and services, and infrastructure Impetus for labor intensive industries growth

Real GDP Growth (10-13 CAGR)

8.5% 8.1%

5.9% 5.7% 4.9% 4.6% 4.5% 4.1% 3.9% 3.8% 3.5%

Projected to be one of the fastest growing regions in the world

2.7% 1.4% 1.3%

In di a NA N SA or th Af ri c a Pa ki st an

NA

W or ld

hi na

15 EU

Br az il La tA m Le va nt Tu rk ey

Policies Regional governments drive to achieve: Economic diversification, liberalization & deregulation Infrastructure development & transition to knowledgebased economies Creates privatization and public-private-partnership opportunities, as well as a favorable investment environment

M E

M E

Pent-up demand Historic underinvestment in key sectors of regional economies has resulted in severe capacity shortfall and underpenetration Pent up demand and strong investment opportunities e.g. 39,000 hospitals to reach OECD levels by 2017 7,000 schools required to meet regional demand by 2015
27

Source: EIU as of July 2009, McKinsey & Company, Abraaj analysis, BP Statistical Review of World Energy as of June 2009

Looking Forward With Confidence Petrodollars

Hydrocarbons are expected to continue to generate significant income for the region
Cumulative GCC Oil Revenues (US$ trillions)
Oil price: US$ 30 Oil price: US$ 50 Oil price: US$ 70 Oil price: US$ 100 6.4 5.1 3.8 2.4 1.1 0.6
0.6 2007 2008 1.1 2010 1.5 2012 1.9 1.5 0.8 0.9 2.4 2.8 3.2 1.9 1.3 1.0 1.3 1.1 1.5

MENAs vast hydrocarbon resources are a critical source of revenue, specifically for the GCC, with hydrocarbons accounting for 60%-90%+ of government revenues In the near-term, the global economic crisis has led to lower demand for oil and gas. However, on the back of improved economic indicators, large infrastructure focused stimulus packages, rallies in the equities markets around the world and a weak U.S. dollar, investors are now expecting demand to climb. The result has been a steady increase and stabilization of oil prices over the past few months In the medium-term, oil prices are expected to rise in response to an increase in global consumption as the global economy recovers starting in 2010 and the loose monetary and fiscal policies governments have put in place to combat the recession, especially in Asia, take effect. Bloomberg consensus forecasts average oil prices of US$ 75 per barrel in 2010 and US$ 85 per barrel in 2011 In the long-term, McKinsey estimates that the GCC will receive revenues of US$ 5 trillion through 2020 even if oil prices were to average only US$ 50 / barrel over that period and revenue of US$ 9 trillion with oil prices at an average of US$ 100 / barrel The MENA region enjoys the highest reserves to production ratio in the world at 1.5x compared to 0.4x in North America, and easily the lowest cost of extraction globally. Consequently, the regions share of global production is expected to increase even further over time, providing a longterm source of revenues

8.8 7.6
2.2 1.5

2.6

2014

2016

2018

2020

MENA Reserves to Production Ratio

1.5x

44% 29%
0.4x 0.5x

22% 16% 6% 11%

1.2x

10% 8%

MENA

North America

Europe & Eurasia

S. & Cent. America

Oil Proved Reserves

Oil Production

Reserves / Production Ratio

28

Source: IEA, BP Statistical Review of World Energy as of June 2009, BAS-ML, EIU as of July 2009, McKinsey & Company

Looking Forward with Confidence People

A young growing population will continue to drive demand for goods and services, provide the labor force for future growth and development and spur governments to continue investing
MENASAs population is c. 1.6 billion (MENA has a population of c. 285 million while South Asia contributes the rest) and is expected to grow by 1.6% p.a. to c.1.75 billion by 2013. MENAs population will grow by 1.7% p.a. The region is home to a rising middle class experiencing tremendous growth in income GDP per capita has grown at a CAGR of 16% from 2003 to 2008 and is expected to increase at a CAGR of 6% to 2013
$802

MENASA Private Consumption (US$ billions)

8-13 CAGR MENASA 0 8%
$1,289 $1,132 $1,070 $791 $874 $1,166 $1,101 $978 $1,233

$1,422

$1,562

This wealth creation will support continued consumption of goods and services Private consumption in MENASA is expected to increase at a rate of 8% per year from 2008 to 2013 General Electric (GE) generated US$ 8 billion in revenues from its Middle East and Africa business in 2007, an increase of ~45% from 2006
2008 2009
India

2010
Pakistan Turkey

2011
GCC

2012
North Africa Levant

2013

Demographic Breakdown
2005 SA / MENA total pop. (millions): 1,296 / 272
5% 4%

Work pop MENA: 44% / 120 mm

Work pop SA: 42% / 547 mm

Population growth will also lead to increased need for hard infrastructure such as housing, roads and energy, as well as soft infrastructure such as healthcare and education, in addition to financial services and consumer goods Over half the regions population is under the age of 25 resulting in increased per capita spending as the young population enters the workforce The proportion of people aged 55 and above will increase from c. 10% of the population in 2005 to c. 15% in 2025 further increasing demand for local services such as healthcare
Source: EIU as of July 2009, UN Population Division as of July 2009, AME Info

Age group 65+ 55-64 45-54 35-44 25-34 15-24

2025 SA / MENA total pop. (millions): 1,678 / 357

7% 7%

Work pop MENA: 52% / 186 mm 52% / 186 mm

Work pop SA: 50% / 838 mm

31 % 34%

0-14 South Asia MENA

25% 26%

29

Looking Forward with Confidence Policies

Governments have made efforts to open their economies, improve the ease of doing business and attract foreign investment. They are also committed to diversification and domestic investment
GCC, Turkey & the Levant Privatization programs targeting several sectors including banking and financial services, energy and commodities, water and electricity, transportation and education. For example; Jordans privatization program has completed over 60 transactions; the UAE has successfully divested major transportation operations (Air Arabia and DP World); Saudi Arabia has a privatization program with a pipeline of assets worth approximately US$ 800 billion Low or no tax policies are helping the countries attract foreign capital and talent

Morocco

Turkey Tunisia Lebanon Jordan Kuwait Qatar Libya Egypt Bahrain Saudi Arabia UAE Oman India Pakistan

13 out of 16 MENASA countries are members of the WTO; Algeria, Lebanon and Libya still need to gain membership

Algeria

North Africa Increasing international partnerships & global cooperation Growing capital markets, favorable rules on foreign ownership and privatization programs have led to increasing foreign investment FDI flows as a % of GDP more than doubled between 2000 and 2008

India & Pakistan Governments have enacted economic reforms to boost foreign investment and ownership Broad privatization programs exist in several industries including energy, manufacturing and banking and financial services India has established over 400 economic zones to promote growth and investment
30

Source: EIU as of July 2009, McKinsey & Co., News articles, WTO

Looking Forward with Confidence Pent-up Demand

Historic underinvestment in regional economies has resulted in severe capacity shortfalls & underpenetration across various sectors creating pent-up demand and strong investment opportunities
Healthcare (Total Hospitals Required)
Gap 39,000 Hospitals

Education (Total Schools Required)

Gap 7,000 Schools

Investment requirement US$ 18bn

37,374 13,827 MENASA 2007 15,834 MENASA 2017

57,230
3,393 53,836

50,629
2,857 47,773 MENA / SA current South Asia MENA

At OECD levels of beds / 1,000 of population MENASA level of beds / 1,000 of population
Power Generation Capacity (Gigawatts)
Investment requirement US$ 90bn Investment requirement US$ 50bn

MENA / SA 2015

Dairy Consumption Fluid Milk (Annual Litres / Kilo Per Capita)

89.1 87.5 72.2 65.9 29.2 28.7 25.2 20.8 20.0 19.7 14.5

142 158 South Asia

50 44 North Africa Required

60 75 GCC

AE

KS A

EU

Q at ar

pt

t Ku wa i

Br az

Ba hr ai

us s

Eg y

by 2017; by 2030; by 2015

Financial Services (Banking Assets as % of 2008 GDP)

350% 314% 122% 85%

Low Cost Airlines (Share of Seat Capacity)

26%
56% 50% 39% 27%

24%

19%

9% 5%

ke y

an y

Ar ab ia

yp t

ia

G er m

Tu r

Sa ud i

Pa

kis ta n

hi n

In d

Eg

USA

Europe

Asia

Source: EIU, McKinsey & Company, Citi, World Bank, UN, Euromonitor, Abraaj analysis

O m

Installed Gigawatt Capacity

MENA
31

an

il

ia

Conclusions
The MENASA region includes countries with an increasing importance to the global economy The region has been buffered from the worst effects of the global downturn due to the structural strength of its constituent economies including strong domestic demand and low-reliance on Western consumers, hydrocarbon reserves, diversification initiatives, low systemic leverage and sovereign strength Key sectors in the region continue to record double-digit growth even in the face of the worst global economic crisis in more than a generation The future outlook will be better still as years of reform and state investment initiatives bear fruit and record hydrocarbon revenues and a demographic dividend all contribute to real economy growth

32

Disclaimer
The information contained in this presentation is given without any liability whatsoever to Abraaj Capital Limited, any of its affiliates or related entities or their respective members, directors, officers or employees (collectively "Abraaj") for any loss whatsoever arising from any use of this presentation or its contents or otherwise. No representation or warranty, express or implied, is made or given by Abraaj as to the accuracy, completeness or fairness of the information or opinions contained in this presentation. In particular, no representation or warranty is made that any projection, forecast, calculation, forward-looking statement, assumption or estimate contained in this presentation should or will be achieved. There is a substantial likelihood that at least some, if not all, of the forward-looking statements included in this presentation will prove to be inaccurate, possibly to a significant degree. The information contained in this presentation does not constitute investment, legal, tax or accounting advice. Recipients of this presentation should conduct their own due diligence and other enquiries in relation to such information and consult with their own professional advisors as to the accuracy and application of the information contained in this presentation and for advice relating to any legal, tax or accounting issues relating to a potential investment in the MENASA region, including in respect of a fund managed or sponsored by Abraaj. This presentation does not constitute a recommendation to invest in the MENASA region, or in any such fund. Certain information contained in this presentation concerning economic trends and performance is based on or derived from information provided by independent third party sources. Abraaj cannot guarantee the accuracy of such information and has not independently verified the assumptions on which such information is based. Abraaj disclaims any responsibility for any errors or omissions in such information, including any financial calculations, projections, and forecasts in this presentation. This presentation does not constitute or form part of, and should not be construed as, or relied upon in respect of, any offer for sale or subscription of, or solicitation of any offer to purchase or subscribe for, any interests in any fund managed or sponsored by Abraaj. Any such offer, subscription or solicitation will be made by means of an offering document to be issued by Abraaj in connection with any such offering and any decision to purchase or subscribe for such funds should be made solely on the basis of the information contained in such offering document. This presentation is being made on a confidential basis and is intended for discussion purposes only and is solely for your information and may not be reproduced or further distributed to any other person or published, in whole or in part, for any purpose. If you were provided with a copy of this presentation by a person other than Abraaj, then it is not intended to be read by you and you should destroy the copy. By viewing this presentation you agree to be bound by the foregoing limitations and restrictions and, in particular, will be taken to have represented, warranted and undertaken that: (i) you have read and agree to comply with the contents of this notice including, without limitation, the obligation to keep this presentation and its contents confidential; and (ii) you will not subscribe for or purchase any interests in any fund managed or sponsored by Abraaj except on the basis of information in the private placement memorandum for such fund.

33

Middle East Private Equity: Investing in Foresight

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