U Capital Morning Brief 7 May 2017

GCC Market Indices Current Close Previous Close Change D/D MTD YTD Index Index Point % % % U Capital 20 Index 1,011.87 1,014.76 -2.89 -0.28% -0.30% -3.91% U Capital GCC 50 Index 1,141.23 1,142.72 -1.49 -0.13% -0.54% -3.14% U Capital MENA 200 Index 1,012.36 1,006.01 6.35 0.63% 0.61% -0.62% Bloomberg GCC200 Index 63.69 63.88 -0.19 -0.30% -0.61% -2.35% Securities Market 5,475.92 5,492.42 (16.50) -0.30% -0.68% -5.31% Saudi Stock Exchange 6,924.08 6,967.71 (43.63) -0.63% -1.27% -3.97% Stock Exchange 6,752.79 6,798.73 (45.94) -0.68% -1.32% 17.48% Exchange 9,938.28 9,955.40 (17.12) -0.17% -1.25% -4.78% Stock Exchange 1,331.22 1,330.90 0.31 0.02% -0.33% 9.08% Dubai Financial Market 3,419.73 3,419.06 0.67 0.02% 0.14% -3.15% Abu Dhabi Sec. Exchange 4,617.16 4,581.26 35.90 0.78% 2.09% 1.56% Source: Bloomberg

World Markets* Country Value Change D/D Commodity Prices* Price Change D/D Europe % USD USD % FTSE 100 United Kingdom 7,297.4 49.33 0.68 Brent Crude (per bbl) Updated 49.10 0.72 1.49 DAX Germany 12,716.9 69.11 0.55 WTI Crude (per bbl) Updated 46.22 0.70 1.54 CAC 40 France 5,432.4 59.98 1.12 Oman Crude Oil (Last Closing) 48.38 0.79 1.66 United States DJIA USA 21,006.9 55.47 0.26 S&P 500 USA 2,399.3 9.77 0.41 Gold100 OZ (per oz) 1,221.60 (6.50) (0.53) NASDAQ USA 6,100.8 25.42 0.42 Silver (per oz) 16.34 0.02 0.09 Asia Pacific NIKKEI 225 Japan 19,445.7 135.18 0.70 Platinum (per oz) 913.46 9.81 1.09 HANG SENG Hongkong 24,476.4 (207.53) (0.84) Copper, MT 5,585.00 42.00 0.76 Selected Middle East Aluminium, MT 1,903.00 (10.00) (0.52) Tunis Se Index Tunis 5,715.2 40.88 0.72 Lead, MT 2,181.00 (9.00) (0.41) EGX 30 Index Egypt 12,709.9 106.37 0.84 Zinc, MT 2,582.00 13.00 0.51 Nickel, MT 9,140.00 125.00 1.39 Source: Bloomberg, U-Capital- at 8:30AM M uscat time Source: Bloomberg, U-Capital- at 8:30AM M uscat time

Cross Rate for Major Currencies* Currency Code USD/1 Unit Units/1 USD Euro EUR 1.100 0.909 British Pound GBP 1.298 0.770 Japanese Yen JPY 0.009 112.710 Chinese Renminbi CNH 0.145 6.900 Indian Rupee INR 0.016 64.375 Russian Ruble RUB 0.017 57.947 Canadian Dollar CAD 0.733 1.365 Australian Dollar AUD 0.742 1.347 Source : Bloomberg Note: all prices/indices are updated till 8:30 AM M uscat time.* markets are closed on Saturday and Sunday

1 P.O.BOX 1137, PC 111 – CPO, Sultanate of Oman l CR No. 1279406 l Tel: +968 2494 9000 l Fax: +968 2494 9099 l Email: [email protected] l Web: www.u-capital.net

OMAN ECONOMIC & CORPORATE NEWS

U Capital acts as financial advisor for the privatization process of MEDC In line with the government’s directives, Nama Holding will soon start the divestment of a minority portion of Muscat Electricity Distribution Co (MEDC), a member of Nama Group. The divestment of a minority portion of MEDC’s share capital will be through a combination of private placement and an initial public offering (IPO), in association with Ubhar Capital (U Capital) as a financial advisor for the privatization process. Source: Muscat Daily

U Capital: Better investment activities; near start of first phase of MEDC privatization program The MSM30 closed the week down by 0.9% at 5,475.92 points, however, speculations and select bulk deals were among the main factors, which aided the market volumes and values in the previous week. Source: Muscat Daily

Oman starts shipment of limestone from Duqm port Port of Duqm has started the first shipment of limestone from the port’s commercial quay. A vessel has been loaded with 55,000 metric tons of limestone and has sailed to India, according to a press release. Source: Times of Oman

Logistics, tourism set to perk up economy Logistics and tourism are two major economic growth drivers and according to the special issue of Central Bank of Oman’s publication Al Markazi. The two sectors have gained prominence under Tanfeedh, the national economic diversification program. Source: Oman Tribune

GDP at producer price declines 7.8pc in 2016 The Sultanate’s GDP at producer prices declined 7.8 per cent to 25.50 billion rials last year compared with prior year figures while GDP at market prices fell 5.1 per cent to 25.48 rials billion, according to a report from the National Centre for Statistics and Information (NCSI). Source: Oman Tribune

Salalah port, SASCO group sign deal for logistics solution Port of Salalah has signed a memorandum of understanding (MoU) with SASCO International for Logistics Services to develop comprehensive logistics solution for enhancing bilateral trade with Yemen via Mazyunah. Source: Times of Oman

Investments in gemstones sector rise in the Sultanate for Q1 of 2017 The Ministry of Commerce and Industry (MoCI) declares that the total amount of gold, silver and platinum allies and forgings stamped in the first quarter of 2017 reached 3,739 kilograms, valued at RO 85,343 as against 3,369 kilograms valued at RO 72,940 in 1Q16. Source: Gulf Base

MIDDLE EAST ECONOMIC & CORPORATE NEWS

Dubai repays $600m Sukuk Trust Certificates The Government of Dubai, acting through the Department of Finance (DOF), has announced that the $600 million Sukuk Trust Certificates issued on 2nd May 2012 under its $5 Billion Trust Certificate Issuance Program, reached maturity on 2nd May 2017. Source: Gulf Base

GCC vehicles' sales to hit 19m in 3 years The GCC automotive market is set for solid growth over the next three years mainly driven by the regional heavyweights and the UAE, said a report on the eve of Automechanika. Source: Gulf Base

Middle East carriers’ traffic growth slowed to 4.9 per cent in March: IATA Traffic growth of Middle East carriers slowed down to 4.9 per cent in March compared to a year ago, which was a considerable decline from January and February year-over-year demand growth, the latest IATA report revealed. Source: Times of Oman

Saudi mutual fund assets up 19% in Q1 The value of assets in Saudi Arabia’s mutual funds rose 19 percent year-on-year (YoY) to SAR 104.5 billion by the end of Q1 2017, data issued by the Saudi Arabian Monetary Authority (SAMA) showed. Source: Argaam

2 P.O.BOX 1137, PC 111 – CPO, Sultanate of Oman l CR No. 1279406 l Tel: +968 2494 9000 l Fax: +968 2494 9099 l Email: [email protected] l Web: www.u-capital.net

Insurers are poised for growth on Saudi sukuk issue, says S&P Saudi insurance companies are poised for growth if they are allowed to invest in the Kingdom’s planned Islamic bond issue, says S&P Global Ratings. Last April, Saudi Arabia issued SAR 33.75 billion in sukuk, which raised a total of SAR 123.75 billion. Source: Argaam

Saudi Arabia should revisit energy tariffs, says Tasnee CEO Saudi Arabia should consider revising feedstock and energy prices, as they weigh on petrochemical producers, Tasnee chief executive Mutlaq Al-Morished told Al-Ekhbariya TV this week. Source: Argaam

Saudi mortgage firm in talks to buy portfolios Saudi Arabia’s first mortgage-refinancing firm has started approaching banks to buy their mortgage portfolios as the Kingdom aims to boost lending for homes, Bloomberg reported citing Housing Minister Majed Al Hogail. Source: Argaam

Emaar in talks to sell stake in entertainment unit: report US-based Blackstone Group LP and Luxembourg-based CVC Capital Partners are in talks to buy a stake of up to 40 percent in Dubai developer Emaar Properties’ entertainment division, Bloomberg reported Wednesday, citing sources familiar with the matter. Source: Argaam

INTERNATIONAL ECONOMIC & CORPORATE NEWS

Fed's Williams sees balance sheet as future policy tool San Francisco Federal Reserve Bank President John Williams on Saturday reiterated his view that the U.S. central bank should begin trimming its massive balance sheet later this year, in part so the Fed has more tools at the ready when the next recession hits. Source: Reuters

US unemployment rate hits 10-year low at 4.4% US job growth rebounded sharply in April and the unemployment rate dropped to 4.4%, near a 10-year low, pointing to a tightening labor market that could seal the case for an interest rate increase next month despite moderate wage growth. Source: MenaFN

COMMODITIES NEWS

Gold heads for biggest weekly drop in six months Gold pared gains on Friday after data showed U.S. job growth rebounded in April and stayed on track for its biggest weekly loss in six months as expectations for a U.S. interest rate hike in June grew and euro zone political risk receded. Source: Reuters

3 P.O.BOX 1137, PC 111 – CPO, Sultanate of Oman l CR No. 1279406 l Tel: +968 2494 9000 l Fax: +968 2494 9099 l Email: [email protected] l Web: www.u-capital.net

Ubhar Capital SAOC (U Capital)

Website: www.u-capital.net PO Box 1137 PC 111, Sultanate of Oman Tel: +968 2494 9000 Fax: +968 2494 9099 Email: [email protected]

Disclaimer: This report has been prepared by research department in Ubhar Capital SAOC (U Capital), and is provided for information purposes only. Under no circumstances is to be used or considered as an offer to sell or solicitation of any offer to buy. While all reasonable care has been taken to ensure that the information contained therein is not untrue or misleading at the time of publication, we make no representation as to its accuracy or completeness and it should not be relied upon as such, and the bank accepts no responsibility whatsoever for any direct or indirect consequential loss arising from any use of this report or its contents. All opinions and estimates included in this document constitute U Capital’s Research department judgment as of the date of production of this report, and are subject to change without notice. This report may not be reproduced, distributed or published by any recipient for any purpose.

4 P.O.BOX 1137, PC 111 – CPO, Sultanate of Oman l CR No. 1279406 l Tel: +968 2494 9000 l Fax: +968 2494 9099 l Email: [email protected] l Web: www.u-capital.net