MENA MARKETS December 3 — 7, 2017

WEEKLY RESEARCH MENA MARKETS December 3 — 7, 2017

TOP NEWS

details in  GCC banks outlook stable, Moody’s says PAGE 1  U.A.E. says committed to tax reforms as EU puts It on blacklist  Qatar finance minister: 2018 budget to focus on making economy self-sufficient  Qatar central bank's international reserves, liquidity edge up in October  No net outflows from Qatari banking sector in November, QNB says  MSCI keeping Qatar’s official FX rates after central bank pledge  World Bank approving $1.15 billion development policy loan for Egypt  Egypt repaying $4 billion of debt to African Export-Import Bank  Saudi Arabia's SABIC looking at investing in the U.S.  SABIC to open office in Iraq as relations improve  Saudi Aramco awarding U.S. General Dynamics offshore security contract  Emaar and Dubai Properties in talks with banks for loan financing: sources  Adnoc Distribution's UAE IPO to price in middle of indicated range: book-runners  Tunisia and Abu Dhabi Investment Authority to sell BTE stake  GEMS Education picking banks for $5bln London IPO: sources  Dubai's DP World raising stake in Brazilian port to 100%

MARKETS EQUITIES Price % 1 W Saudi Arabia 7085.51 1.16%  Most Gulf stock markets were under pressure this week after geopolitical news Abu Dhabi 4276.93 -0.42% from Yemen and Qatar that has heavily influenced the bourses for weeks turned negative. Dubai 3393.46 -1.03% Qatar 7773.59 0.77%  The Saudi index ended higher for the second consecutive week, while Oman 5066.09 -0.83% remaining above key technical resistance level, which has capped the market since mid-October. The Saudi market has also been buoyed in recent days by Egypt 14294.73 -1.97% easing worries about the impact of authorities’ crackdown on corruption. On Kuwait 6186.94 -0.15% Thursday, the Saudi market had its heaviest trading volume since June. Bahrain 1267.39 -1.27%  The Qatari index posted its first weekly gain in a month despite heavy Jordan 2108.73 -0.65% fluctuations. The index surged the first 2 sessions on hopes for progress in more data in PAGE 2 resolving Qatar’s diplomatic dispute with four other Arab states. But it dropped in the following 3 sessions after hopes were dashed when Saudi Arabia, the UAE and Bahrain, in an apparent snub of Qatar, did not send their heads of state to FX Rates vs USD vs EUR this week’s regional summit in Kuwait. The extent of the Qatari market’s SAR 3.75 4.42 disappointment was seen in the fact it ignored a big piece of positive news by AED 3.67 4.32 index compiler MSCI. QAR 3.70 4.35  The Abu Dhabi index had its 8th weekly loss in a row, while hitting on OMR 0.385 0.453 Wednesday, 4244.50, its lowest level since November 30, 2016 (1-year low) EGP 17.789 20.942 KWD 0.302 0.356 BHD 0.377 0.444 JOD 0.710 0.835 LEBANON more data in PAGE 3

BEIRUT S.E. Price* % 1 W BONDS Mat YTM* BANK OF BEIRUT FUNDS SOLIDERE A 7.94 -1.00% LEB 5.45 Nov-19 6.44 SINCE NAME CY NAV* YTD (%) SOLIDERE B 7.91 -0.50% LEB 6.15 Jun-20 6.81 INCEPTION BANK OF BEIRUT 18.80 - LEB 6.10 Oct-22 7.13 BEIRUT PREFERRED FUND II USD 1,001.40 3.62% 22.83% BoB Priority 21.00 - LEB 6.65 Apr-24 7.35 BANK AUDI 5.60 1.82% LEB 6.60 Nov-26 7.46 OPTIMAL INVESTMENT FUND LBP 100,327.46 6.69% 58.48% BLOM BANK 11.06 - LEB 6.75 Nov-27 7.53 BOB LBP GROWTH FUND A LBP 123,839.32 5.65% 23.84% BYBLOS BANK 1.58 -1.25% LEB 6.65 Feb-30 7.68 BLC BANK 0.93 - LEB 7.05 Nov-35 7.83 BOB LBP GROWTH FUND B LBP 100,133.91 5.48% 21.09% BEMO BANK 1.30 - LEB 7.25 Mar-37 8.03 * NAV as of December 7, 2017 (click for more details) * December 8, 2017 *MID Value more data in PAGE 3

Copyright: Bank of Beirut 2017 - Research Department - Global Markets Division Friday, December 08, 2017 MENA MARKETS December 3 — 7, 2017 MAIN 1 2 3 4

reporters on the sidelines of a conference that the central TOP NEWS bank would repay the remaining $1.2 billion on Dec. 7. Egypt's foreign reserves were $36.723 billion at the end of November, having climbed steadily since it secured a $12 billion, 3-year IMF Gulf Cooperation Council Banks Outlook Stable, Moody’s Says loan programme last year as it tries to lure back foreign The outlook for GCC banks is stable overall reflecting strong investors and revive its ailing economy. An IMF team financial fundamentals, particularly in the largest banking completed its second review of Egypt's performance under systems, that provide resilience to profitability and loan the programme last month and its board is expected to quality challenges from slower economies. Fiscal and approve a third, $2 billion, disbursement this month. geopolitical risks pose challenges, however, continue to pose Saudi Arabia's SABIC looking at investing in the U.S. challenges for various countries, says Moody's Investors Service in a report today. Although fiscal consolidation efforts Petrochemicals company Saudi Basic Industries Corp is in the region will persist, key regional infrastructure projects, considering several possible investments in the US, while state such as UAE Expo 2020, World Cup Qatar 2022 and the Saudi oil giant Saudi Aramco IPO is looking at gas prospects abroad, National Transformation Program will support capital Saudi energy minister said on Wed. However, Saudi Aramco's spending and credit growth which should expand by 5% in interest in gas investments is closer to home, probably in 2018. Banks' capital levels will remain broadly stable and well Africa or the Mediterranean, Khalid al-Falih told reporters on above Basel III minimum regulatory requirements, in a context the sidelines of an industry conference in Abu Dhabi. of modest credit growth in 2018. SABIC to open office in Iraq as relations improve UAE says committed to tax reforms as EU puts It on blacklist SABIC plans to open an office in Iraq soon, Saudi Arabia's UAE remains fully "committed to maintaining highest energy minister said during a visit to Iraq's southern oil city of international standards of financial oversight and tax Basra, as relations between Riyadh and Baghdad thaw. regulation," and will continue to work with partners, the Speaking at an oil and gas conference in Basra, Khalid al-Falih ministry of finance says in a statement. “We have committed called for increased economic cooperation and praised to a reform process which will be finalized by Oct. 2018, and existing coordination with Iraq to help balance the oil market we are absolutely confident this will ensure the UAE is swiftly and boost crude prices. KSA’s Industrialization & Energy removed from the list". The EU agreed on a tax blacklist of 17 Services Co (TAQA) is also opening an office in Iraq which will countries that could potentially face sanctions for failing to "enhance the presence of the Saudi private sector in Iraq and bring their standards in line with the bloc; the list includes support initiatives to expand investments," he added. UAE, Bahrain, Tunisia among others. Aramco award US Gen. Dynamics offshore security contract Qatar 2018 budget to focus on making economy self-sufficient Saudi Aramco has awarded a contract to the local subsidiary of Qatar's 2018 state budget will focus on developing local U.S. company General Dynamics as the state oil giant aims to industries and the private sector, as the country works to increase security at its offshore facilities, Saudi Aramco said on make itself self-sufficient in the face of a boycott by other Arab Wednesday. Industry sources told Reuters in July the contract states, Finance Minister Ali Sherif al-Emadi said on Tuesday. involves installing long-range integrated security systems at The government will use subsidies to develop some sectors of nine offshore sites in the Gulf. Apart from General Dynamics, the economy and boost growth, he said in a speech, adding Aramco received bids from other defense firms, including that Qatar expected to be wholly self-sufficient in some dairy Raytheon Co of the United States, Germany's Rheinmetall AG , products by next June 4. Leonardo's Selex ES Saudi Arabia. Qatar c.bank international reserves, liquidity edge up in Oct Emaar and Dubai Properties in talks for loan financing (Reuters) Emaar Properties, builder of the world's tallest The Qatar central bank's international reserves and foreign tower, is in discussions with banks to obtain loan facilities in currency liquidity rose slightly in October, official data showed partnership with Dubai Properties, another major developer, on Monday, as capital outflows caused by sanctions imposed sources familiar with the matter said. Discussions are taking by other Arab states appeared to ease. The reserves and place on a bilateral basis with individual banks for a financing liquidity, a measure of the central bank's ability to support the package which, according to one of the sources, could be as riyal currency, rose to $36.1 billion in October from $35.6 billion large as around 4 billion dirhams ($1.01b). The money would in September. Saudi Arabia, the United Arab Emirates, Bahrain back projects including a shopping mall and a tower, as Emaar and Egypt cut diplomatic and transport ties with Doha in June, - which last month sold a 20% stake in subsidiary Emaar prompting banks and investors from those countries to Development in an IPO that raised $1.31b- embarks on new withdraw billions of dollars from Qatar. developments despite sluggish property prices in Dubai. No net outflows from Qatari banking sector in Nov, QNB says Adnoc Distribution's UAE IPO to price in middle of range There were no net outflows of funds from Qatar's banking sector in Nov, the head of economics at QNB, the country's Abu Dhabi National Oil Company (Adnoc) is expected to price largest bank, said on Tuesday. Institutions and investors from the initial public offering of its fuel distribution unit at the mid- other Gulf states pulled billions of dollars of deposits out of point of a revised indicative price range, bookrunners said on Qatari banks in the months after four Arab countries imposed Thursday. Adnoc is due to float 1.25 billion shares, or 10% of an economic boycott of Doha in June. Rory Fyfe told an Adnoc Distribution, on the Abu Dhabi stock market on Dec 13, international business conference that net outflows had now potentially valuing the deal at $852 million. Abu Dhabi's state- ceased. He also predicted the non-hydrocarbon part of Qatar's owned oil firm is likely to price the IPO at 2.50 dirhams, against economy would grow 4.5% this year. Outflows from banks a revised indicative price range of 2.35-2.65 dirhams per share have decreased in recent months as Gulf depositors have run set earlier this week, the bookrunners said in a statement. out of remaining funds to withdraw, and as Qatari banks have Tunisia and Abu Dhabi Investment Authority to sell BTE stake found new sources of foreign money. Tunisia and the Abu Dhabi Investment Authority plan to sell MSCI keep Qatar’s official FX rates after central bank pledge their majority stake in Banque de Tunisie et des Emirats (BTE) Index provider MSCI Inc. will continue using the onshore bank by launching a tender next week, the bank said on foreign exchange rates of Qatar’s riyal to calculate Wednesday. This sale is for 77.8% of the bank's capital with benchmarks after the central bank pledged to provide dollars Tunisia and Abu Dhabi each owning 38.9%. The tender will be at the official rate to stock investors. “MSCI will continue to open from December 11 until Jan 15, the bank said in closely monitor the accessibility of the Qatari FX market and statement. Rothschild Bank and KPMG Tunisie have been may potentially decide to switch to the offshore FX rates in the mandated as advisers, it said. Established in 1982, BTE future should the situation materially deteriorate,” the reported a net profit of 0.9m dinars for its 2016 financial year. company said in an statement Dec. 5. GEMS Education picking banks for $5bln London IPO: sources World Bank approve $1.15b development policy loan for Egypt GEMS Education's owners have chosen JP Morgan , Credit The World Bank Group said its executive board approved on Suisse , Bank of America Merrill Lynch and Morgan Stanley to Tuesday a $1.15 billion development policy loan for Egypt to lead the private schools group's planned flotation, sources support the country's economic reform programs. The loan is familiar with the matter said. GEMS, which operates more the last in a series of three annual loans totaling $3.15 billion than 250 schools across 14 countries, could have a market issued from 2015 to 2017, the World Bank said in a statement. capitalisation of around $4.5-$5 billion, the sources said, in a The $1.15 billion loan, which supports Egyptian economic London IPO which is expected to take place in 2018. Backed by reforms aimed at creating jobs, ensuring energy security, Dubai-based Fajr Capital, Bahraini state investment fund strengthening public finances and enhancing business Mumtalakat and investment firm Blackstone, GEMs said on competitiveness, includes financing contributions of $500 Monday it had secured a $1.25 billion loan to refinance existing million from the World Bank Group, $500 million from the borrowings and support growth. African Development Bank and $150 million from Britain. Dubai's DP World raising stake in Brazilian port to 100% Egypt repaying $4bn of debt to African Export-Import Bank Dubai ports operator DP World said on Monday it had completed the purchase of an additional 66.67% stake in Egypt has paid back a total of $4 billion of its debts to the Empresa Brasileira de Terminais Portu?rios (Embraport), African Export-Import Bank, the central bank was reported as Brazil's largest private multi-modal port terminal. DP World saying on Tuesday. The central bank had paid back $2 billion of purchased the stake from Odebrecht Transport (OTP), the a $3.2 billion loan, Egyptian state news agency MENA parent company of which has been selling assets since being reported, while newspaper El-Borsa said that it had also paid caught up in one of Brazil's biggest corruption scandals. The back $2 billion under a repurchase agreement. African Export- deal raises DP World's shareholding to 100% in Embraport, Import Bank Executive Vice President Amr Kamel told which will be rebranded to DP World Santos. Copyright: Bank of Beirut 2017 - Research Department - Global Markets Division MENA MARKETS December 3 — 7, 2017 MAIN 1 2 3 4

EQUITIES

Price As at ∆ 1 W NET ∆ 1 W % High Low

TADAWUL ALL SH INDEX SA 7085.51 07-Dec 81.54 1.16% 7,120.45 7,004.91

ADX GENERAL INDEX UA 4276.93 07-Dec -18.19 -0.42% 4,338.11 4,244.50

DFM GENERAL INDEX UA 3393.46 07-Dec -35.29 -1.03% 3,444.84 3,381.67

QE Index QA 7773.59 07-Dec 59.33 0.77% 8,001.34 7,728.23

MSM30 Index OM 5066.09 07-Dec -42.38 -0.83% 5,111.17 5,064.13

EGX 30 INDEX EG 14294.73 07-Dec -287.49 -1.97% 14,726.86 14,277.47

KUWAIT SE PRICE INDEX KW 6186.94 07-Dec -9.56 -0.15% 6,238.34 6,123.01

BB ALL SHARE INDEX BH 1267.39 07-Dec -16.31 -1.27% 1,286.42 1,262.62

AMMAN SE GENERAL INDEX JO 2108.73 07-Dec -13.74 -0.65% 2,130.32 2,108.48

TOP MOVERS GAINERS LOSERS 1 DAR AL ARKAN REAL ESTATE DEV SR 39.87% 1 KUWAIT CABLE VISION SAK KU -52.20% 2 NAFAIS HOLDING KU 30.00% 2 INOVEST CO BSC BJ -25.64% 3 AJIAL REAL ESTATE ENTMT KU 29.35% 3 CREDIT RATING & COLLECTION KU -19.35% 4 COMMERCIAL BANK OF KUWAIT KU 26.98% 4 SPECIALIZED INVESTMENT COMPO JO -18.07% 5 WETHAQ TAKAFUL INSURANCE CO KU 22.51% 5 INOVEST CO BSC BJ -16.84% 6 KUWAIT & MIDDLE EAST FIN INV KU 20.93% 6 GULF FRANCHISING HOLDING CO KU -16.67% 7 MAKKAH CONSTRUCTION & DEVEPL SR 20.67% 7 MEDICARE GROUP QA -15.62% 8 EZDAN HOLDING GROUP QA 19.61% 8 MIDDLE EGYPT FLOUR MILLS EG -13.46% 9 ETIHAD ATHEEB TELECOMMUNICAT SR 19.61% 9 AL-DEERA HOLDING CO KU -10.94% 10 METHANOL CHEMICALS CO SR 17.87% 10 AL-MASSALEH REAL ESTATE CO KU -10.70%

TOP MARKET CAPS TOP TRADING VOLUMES (WEEKLY AVG) (in MILLIONS) 1 SAUDI BASIC INDUSTRIES CORP SR 0.92% 1 DAR AL ARKAN REAL ESTATE DEV SR 74.10 2 EMIRATES TELECOM GROUP CO UA 0.30% 2 DRAKE & SCULL INTERNATIONAL UA 66.76 3 SAUDI TELECOM CO SR 0.68% 3 ALINMA BANK SR 37.45 4 QATAR NATIONAL BANK QA 1.28% 4 PORTO HOLDING SAE EG 30.23 5 AL RAJHI BANK SR 0.24% 5 ORASCOM TELECOM MEDIA AND TE EG 28.30 6 NATIONAL COMMERCIAL BANK SR 0.34% 6 CITADEL CAPITAL SAE EG 27.21 7 SAUDI ELECTRICITY CO SR -0.42% 7 AMER GROUP HOLDING EG 25.54 8 DP WORLD LTD UA 1.41% 8 EGYPTIAN RESORTS CO EG 23.19 9 SAUDI ARABIAN MINING CO SR -2.58% 9 SAUDI KAYAN PETROCHEMICAL CO SR 13.27 10 EMAAR PROPERTIES PJSC UA 2.38% 10 DANA GAS UA 12.70

TOP SECTORS MOVERS (where index is officially priced) SAUDI ARABIA ABU DHABI KUWAIT Media 10.41% Industrial 1.49% Insurance Price- 4.16% RE Mgmt & Dev 8.42% Telecommunication 1.23% Industrials Pric 1.01% Capital Goods 5.59% Insurance -0.70% Consumer Svc Pri 0.14%

Food & Beverages -1.33% Energy -4.02% Consumer Goods -3.41% Food & Stapl Ret -0.53% Services -2.18% Parallel Mkt Pri -3.28% Utilities (L2) -0.14% Consumer Staples -2.03% Telecom -2.08% Copyright: Bank of Beirut 2017 - Research Department - Global Markets Division BOB Research MENA MARKETS December 3 — 7, 2017 MAIN 1 2 3 4

CURRENCIES Cross Rates

USD EUR GBP AUD JPY* CHF

Saudi Riyal SAR 3.75 4.42 5.05 2.82 30.15 3.77

UAE Dirham AED 3.67 4.32 4.95 2.76 30.79 3.69

Qatari Riyal QAR 3.70 4.35 4.98 2.77 30.63 3.71

Omani Riyal OMR 0.385 0.453 0.519 0.289 293.72 0.387

Egyptian Pound EGP 17.789 20.942 23.983 13.370 6.35 17.900

Kuwaiti Dinar KWD 0.302 0.356 0.407 0.227 374.40 0.304

Bahraini Dinar BHD 0.377 0.444 0.508 0.283 299.89 0.379

Jordanian Dinar JOD 0.710 0.835 0.956 0.533 159.39 0.718

 Thursday’s closing prices are used to calculate the cross rates  USD/EUR/GBP/AUD/CHF are base currencies

BONDS Sovereign Eurobonds (USD)

LEBANON GULF Maturity Range (yrs) Maturity YTM Maturity Range (yrs) Country Maturity YTM 0 - 1 Nov-18 6.10 1 - 2 DUBAI Dec-18 1.81 1 - 2 May-19 6.30 DUBAI Feb-19 1.89 Nov-19 6.44 ABU DHABI Apr-19 1.41 2 - 4 Mar-20 6.83

Apr-20 6.80 QATAR Apr-19 2.28 Jun-20 6.81 2 - 4 QATAR Jan-20 2.61 Apr-21 7.10 DUBAI Oct-20 2.59 4 - 7 Oct-22 7.13 ABU DHABI May-21 2.55 May-23 7.28 QATAR Jun-21 2.90 Apr-24 7.35 DUBAI Jun-21 2.94 Nov-24 7.39 4 - 7 QATAR Jan-22 3.03 Dec-24 7.40 7 - 10 Feb-25 7.41 7 - 10 ABU DHABI May-26 3.25 Jun-25 7.43 QATAR Jun-26 3.53 Nov-26 7.46 10 - 30 QATAR Jun-30 4.01 Mar-27 7.49 QATAR Jan-40 4.39 Nov-27 7.53 QATAR Jan-42 4.39 10 - 30 May-29 7.65 DUBAI Jan-43 5.12 Feb-30 7.68 QATAR Jun-46 4.37 Apr-31 7.73 Mar-32 7.78 Nov-35 7.83 Mar-37 8.03 Yields are MID values and shown strictly for information purpose and subject to change at any time

Copyright: Bank of Beirut 2017 - Research Department - Global Markets Division MENA MARKETS December 3 — 7, 2017 MAIN 1 2 3 4

DISCLAIMER

This document is for information purposes only and does not take account of the specific circumstances of any recipient. Bank of Beirut Group The information contained herein does not constitute the provision of investment advice. It is not intended to be and should not be construed as a recommendation, offer or solicitation to acquire, or dispose of, any of the financial instruments mentioned in this document and will not form the basis or a part of any contract or commitment whatsoever. Lebanon The information in this document is based on data obtained from sources believed by Bank of Beirut to be reliable and in www.bankofbeirut.com good faith, but no representations, guarantees or warranties are made by Bank of Beirut with regard to accuracy, completeness or suitability of the data. The opinions and estimates contained herein reflect the current judgment of the Australia author (s) on the data of this document and are subject to change without notice. The opinions do not necessarily corre- spond to the opinions of Bank of Beirut. Bank of Beirut does not have an obligation to update, modify or amend this www.banksyd.com.au document or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. United Kingdom The past performance of financial instruments is not indicative of future results. No assurance can be given that any www.bankofbeirut.co.uk opinion described herein would yield favorable investment results. Any forecasts discussed in this document may not be achieved due to multiple risk factors including without limitation market volatility, sector volatility, corporate actions, Germany the unavailability of complete and accurate information and/or the subsequent transpiration that underlying assump- tions made by other sources relied upon in the document were inapposite. www.bankofbeirut.de Neither Bank of Beirut nor any of its respective directors, officers or employees accepts any responsibility or liability whatsoever for any expense, loss or damages arising out of or in any way connected with the use of all or any part of this Sultanate of Oman document. www.bankofbeirut.com.om

For more info about:

Local Subsidiaries Click here

Local Network For further inquiries, comments, and trading services, please contact: Click here Global Markets Division

Phone: +961 1 960501 Overseas Email: Click here [email protected] [email protected]