Global Research GCC Market Performance Markets - GCC November 2015

GCC Markets Performance – October 2015

 GCC markets traded mixed during October on mixed corporate results  Trading improved, except in the UAE and Bahrain  Market capitalization declined 1.4%MoM in October

GCC markets close mixed in October GCC markets ended mixed in October due to mixed sentiments over corporate earnings across markets. Markets remained volatile during the month. Trading remained thin during the holidays for Hijari New Year. The MSM30 was the major gainer (2.4%MoM), followed by the QE (1.2%MoM) and the KSE (0.9%MoM). The ADX was the biggest loser (-4.0%MoM), followed by the TASI (-3.8%MoM), the DFM (-2.5%MoM) and the BSE (-2.0%MoM).

Combined market capitalization drops 1.4%MoM The combined market capitalization of GCC bourses declined 1.4%MoM to USD930.5bn in October from USD944.1bn in September. The Saudi bourse, which recorded a 2.3%MoM fall in market capitalization, accounted for the largest share (USD433.5bn or 46.6%). Qatar accounted for USD168.1bn (18.1%), while Abu Dhabi and Dubai constituted USD200.4bn (21.5%) of the total. Kuwait, Oman, and Bahrain together contributed USD128.5bn to the total.

GCC trading increase in October Trading across GCC markets improved in October. The volume of shares traded rose 1.1%MoM; however, trading volumes across markets remained low due to the Hijari New Year holidays. Value traded increased 13.7%MoM due to a rise in trading value across countries, except the UAE and Bahrain. Moreover, trading was volatile due to mixed corporate earnings.

Market Performance in October 2015

110

GCC Markets GCC 107

104

101

98

95 1-Oct-15 5-Oct-15 9-Oct-15 13-Oct-15 17-Oct-15 21-Oct-15 25-Oct-15 29-Oct-15 Saudi Qatar Kuwait (Price) KWSE (Weighted) Abu Dhabi Dubai Oman Bahrain MSCI EM Index MSCI World Index

Indices % Chg (MoM) % Chg (YTD) KSE Price Index 0.9% -11.6% Tadawul All Share Index -3.8% -14.5% DFM Index -2.5% -7.2% ADX Index -4.0% -4.6% Bahrain All Share -2.0% -12.4% QE Index 1.2% -5.5% MSM30 Index 2.4% -6.5% Global Investment House Source: Zawya, Bloomberg, Reuters & Global Research www.globalinv.net

Global Research – GCC GCC Markets

GCC Aggregate Market Capitalization Market Cap (USDbn) Market Cap (USDbn) % Chg % of total Country October 2015 September 2015 (MoM) October 2015 Kuwait 85.0 85.4 -0.5% 9.1% Saudi Arabia 433.5 443.6 -2.3% 46.6% Abu Dhabi 112.9 115.6 -2.4% 12.1% Dubai 87.5 89.0 -1.6% 9.4% Qatar 168.1 167.1 0.6% 18.1% Oman 23.7 23.3 1.7% 2.5% Bahrain 19.8 20.1 -1.6% 2.1% Total GCC 930.5 944.1 -1.4% 100.0% Source: Respective stock exchanges, Zawya and Global Research

GCC Aggregate Trading Activity

Country October 2015 September 2015 Value traded As a % of total Value traded As a % of total Volumes (mn) Volumes (mn) (USDbn) value traded (USDbn) value traded Bahrain 0.01 28.0 0.0% 0.06 86.3 0.2% Kuwait 0.69 2,647.0 2.3% 0.68 2,460.2 2.6% Oman 0.21 378.21 0.7% 0.17 237.36 0.6% Qatar 1.58 167.5 5.2% 1.50 126.5 5.7% Saudi Arabia 25.19 4,240.7 83.4% 21.16 3,574.7 79.7% UAE 2.52 5,126.9 8.3% 2.99 5,966.4 11.3% GCC Total 30.20 12,588.2 100.0% 26.56 12,451.6 100.0% Source: Respective stock exchanges, Reuters, Zawya & Global Research

GCC markets volatile in October; long-term fundamentals remain stable GCC markets ended mixed in October due to varied corporate earnings results for 9M15 across bourses. Globally, investor sentiments improved due rebound in oil price, monetary easing in China, more expected stimulus from European Central Bank (ECB) and Fed’s statement of expected rate hike in December; these affected GCC markets as well. However, trading volume was thin due to the Hijari New Year holidays.

Despite the volatility in oil prices, we believe the outlook for GCC economies will remain intact in the long term, supported by stable growth in infrastructure expenditure and diversification into non-oil sectors. Although all GCC countries have been recording a deficit/lower surplus during the past nine months, local governments are committed to essential developmental activities to diversify their economies away from the oil to the non-oil sector, which would boost revenue. Furthermore, some of the countries are already planning to overcome their deficits by increasing taxes and issuing bonds, which would cut down the shortfall. Net-net, oil-dependency of GCC economies would reduce gradually over the next few years.

In terms of valuation, the one-year forward PE ratio of GCC markets stands at 10.3–13.2x, broadly lower than that of emerging market peers. Major GCC markets, such as the UAE and Qatar, are a part of the MSCI Emerging Markets Index. Furthermore, the KSA is likely to be included in the index in 2017. FTSE upgraded Qatar to Secondary Emerging Market from Frontier Market in September 2015. Given these developments, the growth outlook for the stock market appears positive.

2 Global Research – GCC GCC Markets

GCC Market Valuation – EPS Growth versus Price to Earnings

20%

Dubai Japan 15%

10%

5% Qatar Kuwait

India China 0% 5.0x 7.0x 9.0x 11.0x 13.0x 15.0x 17.0x 19.0x Abu Dhabi US -5% Hong Kong Saudi Arabia Oman

-10% year growth EPS forwardyear

1 1 Egypt UK -15%

-20%

1 year forward PE

Source: Bloomberg & Global Research

Fed’s statement of expected rate hike in December, easing concerns over China boost investor sentiment In October, global equity markets rallied, following negative investor sentiment in the past two months. The rally was due to a rebound in oil prices and easing concerns over China. An expected stimulus from the ECB and a possible rate hike by the US Federal Reserve in December boosted investor sentiments. Meanwhile, mixed corporate earnings kept trades volatile.

US markets closed the month in the green owing to the US Federal Reserve’s statement of raising the interest rate in December. Mixed corporate earnings and positive economic data improved investor sentiment. In the US, consumer spending marginally rose in September. Employment cost increased in 3Q15, while the Chicago PMI rebounded in October. Improving oil prices helped to lift up investor sentiments. Moreover, easing concerns over China improved trading activity.

European markets closed in the green at the end of the month on hints of additional quantitative easing measures from the ECB. Furthermore, the US Federal Reserve’s statement of raising the interest rate in December supported the market movements. Mixed corporate earnings were reported during the month.

Asian markets closed higher in October due to positive global cues and easing concerns over China. Investor sentiment in the region improved as the economic outlook for China stabilized and the country’s central bank cut borrowing rates to support the economy.

3 Global Research – GCC GCC Markets

Bahrain BSE falls 2.0%MoM in October BSE declined 2.0%MoM in October after falling 1.8%MoM in September and 2.4%MoM in August. The market activities remained mixed over the earning results; however, concerns over volatility in oil prices continued to weigh on the market. Positive global cues partially offset the negative investor sentiments. The market witnessed a steep fall during the first half of the month and attempted to recover during the next half. On YTD basis, the market lost 12.4%.

According to the government release, Bahrain’s total financial reserves for the financial year ended 2014 stood at USD501.369mn compared with USD412.123mn in 2013.

BSE – Index and Volume Performance and Sectoral Performance

1,280 4.0

1,275 3.5 BSE -2.0% 1,270 3.0

1,265 Hotel & Tourism 2.1%

1,260 2.5 Services 0.0%

1,255 2.0 mn in

1,250 1.5 Insurance -1.4% 1,245 1.0 1,240 Commercial Banks -1.6% 1,235 0.5 Investment 1,230 0.0 -3.4%

Industrial -5.0%

1-Oct 6-Oct

11-Oct 14-Oct 20-Oct 27-Oct -8% -3% 2% 7% Volume (RHS) Index (LHS)

Source: Zawya, Gulfbase & Global Research

Sectoral performance In October, four sectors ended in the red, while one closed higher and one ended flat. Industrial (-5.0%MoM) topped the losers, followed by Investment (-3.4%MoM), Commercial Banks (-1.6%MoM), and Insurance (-1.4%MoM). Services closed flat; Hotel & Tourism (2.1%MoM) was the sole gainer during the month.

The Industrial sector declined due to weakness in Aluminium Bahrain Co. (-5.2%MoM). The Investment sector contracted due to a fall in Khaleeji Commercial Bank (-3.3%MoM), Albaraka Banking Group (-3.9%MoM), and Arab Banking Corporation (-11.5%MoM).

Heavyweight sector Commercial Banks ended the month in the red, primarily led by Al Ahli United Bank (- 1.4%MoM), followed by BBK (-1.4%MoM) and Bahrain Islamic Bank (-25.2%MoM). Hotel & tourism grew, driven by a 3.1%MoM rise in Gulf Hotels Group.

Trading declines in October Trading on the BSE declined in October. Volume traded decreased to 28.0mn shares from 86.3mn shares last month, while trading value reduced to USD0.01bn from USD0.06bn.

4 Global Research – GCC GCC Markets

BSE Trading Statistics – Top 5

Top Gainers Value % Chg 52 wk 52 wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Investcorp Bank BSC* 640.000 6.7% 640.000 451.600 4.9 0.57 0.5 0.51 GFH Financial Group BSC* 0.170 6.5% 0.230 0.150 38.4 0.48 0.0 0.37 BMMI BSC 0.850 4.9% 0.860 0.755 11.8 2.02 0.3 0.33 Ithmaar Bank BSC* 0.160 3.3% 0.175 0.120 NA 0.85 1.8 0.47 Gulf Hotel Group BSC 0.830 3.1% 0.940 0.767 14.9 2.07 0.3 0.38

Top 5 Losers Value % Chg 52 wk 52 wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Bahrain Islamic Bank BSC 0.100 -25.2% 0.188 0.118 7.0 1.15 0.1 0.25 Arab Banking Corporation* 0.500 -11.5% 0.770 0.490 7.2 0.40 0.2 1.56 Aluminium Bahrain BSC 0.440 -5.2% 0.555 0.440 4.7 0.68 1.0 1.66 Al Salam Bank Bahrain BSC 0.100 -4.6% 0.190 0.103 13.8 0.72 0.1 0.60 Bahrain Cinema Co BSC 1.400 -4.1% 1.620 1.400 14.0 2.35 0.8 0.25

Top 5 Volume Traded Volume % Chg 52 wk 52 wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (mn) Ithmaar Bank BSC* 0.160 3.3% 0.175 0.120 NA 0.85 11.2 0.47 Khaleeji Commercial Bank BSC 0.060 -3.3% 0.071 0.047 9.5 0.54 6.2 0.16 Seef Properties BSC 0.200 0.0% 0.210 0.188 7.4 0.72 3.4 0.24 Ahli United Bank BSC* 0.690 -1.4% 0.800 0.685 8.3 1.25 2.9 4.45 Aluminium Bahrain BSC 0.440 -5.2% 0.555 0.440 4.7 0.68 0.8 1.66

Top 5 Value Traded Value % Chg 52 wk 52 wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Ahli United Bank BSC* 0.690 -1.4% 0.800 0.685 8.3 1.25 2.0 4.45 Ithmaar Bank BSC* 0.160 3.3% 0.175 0.120 NA 0.85 1.8 0.47 Seef Properties BSC 0.200 0.0% 0.210 0.188 7.4 0.72 1.8 0.24 Aluminium Bahrain BSC 0.440 -5.2% 0.555 0.440 4.7 0.68 1.0 1.66 Khaleeji Commercial Bank BSC 0.060 -3.3% 0.071 0.047 9.5 0.54 1.0 0.16 Source: Reuters & Global Research, *Price data in USD

5 Global Research – GCC GCC Markets

Market capitalization The total market capitalization of companies listed on the BSE decreased 1.6%MoM to USD19.8bn in October from USD20.1bn in September. Market capitalization of the top 10 listed companies fell 1.7%MoM.

Largest 10 Listed Companies by Market Capitalization (in BHDbn)

Company Oct-15 Sep-15 Oct-14 MoM% YoY% Ahli United Bank BSC 1.68 1.68 1.86 -0.2% -9.7% National Bank of Bahrain BSC 0.75 0.66 0.80 -11.6% -5.8% Aluminium Bahrain BSC 0.62 0.74 0.72 2.1% -13.7% Arab Banking Corporation BSC 0.59 0.27 0.81 -3.9% -27.5% Bahrain Telecommunications Co BSC 0.54 0.66 0.57 -5.1% -5.8% BBK BSC 0.46 0.54 0.47 -0.5% -3.7% Al Baraka Banking Group BSC 0.26 0.18 0.34 6.6% -23.2% Investcorp Bank BSC 0.19 0.46 0.15 -1.4% 27.6% Ithmaar Bank BSC 0.18 0.17 0.21 3.3% -13.9% GFH Financial Group BSC 0.14 0.13 0.34 6.4% -58.6% Total Market Capitalization (Top 10 stocks) 5.41 5.50 6.27 -1.7% -13.8%

Source: Reuters and Global Research

6 Global Research – GCC GCC Markets

Kuwait KSE grows 0.9%MoM in October The Kuwait Stock Exchange (KSE) rose 0.9%MoM in October after declining 1.6%MoM in September. The index was volatile during the month due to mixed performance by blue chips. The market managed to end up in the green supported by 3Q15 earnings surprises from Real estate and Consumer Goods sectors. On YTD basis, the index lost 11.6%.

Kuwait Authority for Partnership Projects (KAPP) has restarted work on the long delayed USD7bn metro project. KAPP has updated feasibility studies and are expecting to start the procurement in 1Q16. Other major development was in Oil and Gas sector. Kuwait’s National Petroleum Company signed an USD16bn contract to build the regions’ biggest refinery, which is expected to have a capacity of 615,000 bpd. KNPC expects the refinery to start working in November 2019.

KSE Index and Volume Performance and Sectoral Performance

5,820 250 5,800 KSE 0.9% 5,780 200 Real Estate 4.7% 5,760 Consumer Goods 3.3% 150 Industrial 1.3% 5,740 5,720 Telecom 0.9% 100

in mn in Health Care 5,700 0.9% Banks 5,680 50 0.7% 5,660 Basic Material 0.7% 5,640 0 Financial Services 0.1%

Technology -1.9% 6-Oct

1-Oct Oil & Gas -2.7%

11-Oct 18-Oct 21-Oct 26-Oct 29-Oct Consumer Services -3.2% Volume (RHS) Index (LHS) Insurance -5.4%

-10% -5% 0% 5% 10%

Source: Kuwait Stock Exchange & Global Research

Sectoral performance In October, four sectors ended in the red, while eight ended in the green. Real Estate (4.7%MoM) led gainers, followed by Consumer Goods (3.3%MoM), Industrial (1.3%MoM), Telecom (0.9%MoM), Healthcare (0.9%MoM), Banks (0.7%MoM), Basic Material (0.7% MoM), and Financial Services (0.1%MoM). Conversely, Insurance (- 5.4%MoM) declined the most, followed by Consumer Services (-3.2%MoM), Oil and Gas (-2.7%MoM), and Technology (-1.9%MoM). Gains in Real Estate were primarily led by a strong performance from Tamdeen Real Estate Company (6.8% MoM), followed by United Real Estate Company (6.5%MoM), and The Commercial Real Estate Co. (4.9%MoM). The rise in Consumer Goods (3.3%MoM) was led by Danah Al Safat Foodstuff Company (8.8%MoM), followed by Livestock Transport & Trading Co. (9.5%MoM). Insurance declined, dragged by Gulf Insurance Group (-4.8%MoM), followed by Al Ahleia Insurance Co. (-4.9% MoM). Consumer Services fell due to a drop in IFA Hotels & Resorts Co. (-15.3%MoM), followed by Sultan Center Food Products Co. (-12.6% MoM). Trading activity improved in October October 2015 witnessed upbeat trading activity, with the value of shares improving a marginal 0.5%MoM to USD0.69bn from USD0.68bn in September and volume rising 7.6%MoM to 2.6bn shares. 7 Global Research – GCC GCC Markets

KSE Index Trading Statistics – Top 5

Top 5 Gainers Value % Chg 52 wk 52 wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Mushrif Trading and 63.0 43.2% 84.0 40.5 69.4 0.49 11.8 0.07 Contracting Co Real Estate Trade Centers Co 32.5 38.3% 49.0 21.5 25.9 0.17 0.1 0.01 Gulf Petroleum Investment Co 53.0 27.7% 94.3 38.0 NA 0.46 17.6 0.07 Nafais Holding Co 148.0 25.4% 172.0 78.0 8.8 0.99 0.7 0.21 Jeeran Holding Co 63.0 21.2% 74.0 45.5 2.3 0.35 0.4 0.03

Top 5 Losers Value % Chg 52 wk 52 wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) United Foodstuff Industries 140.0 -26.3% 242.0 138.0 10.8 1.00 0.0 0.02 Group Co First Takaful Insurance Co 65.0 -23.5% 90.0 65.0 NA 1.20 0.0 0.02 Burgan Company for Well 94.0 -20.3% 232.0 75.0 9.5 0.35 0.1 0.07 Drilling Trad and Maint Independent Petroleum Group 260.0 -17.5% 470.0 250.0 21.6 0.48 0.2 0.13 IFA Hotels and Resorts Co 166.0 -15.3% 218.0 146.0 NA 1.66 0.0 0.31

Top 5 Volume Traded Volume % Chg 52 wk 52 wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (mn) Al Dar National Real Estate Co 30.5 -3.2% 43.0 17.0 428.6 1.09 349.7 0.04 Investors Holding Group Co 29.0 1.8% 63.0 16.0 12.3 0.34 247.3 0.06 Hits Telecom Holding Co 30.5 8.9% 46.5 24.5 NA 0.36 117.4 0.09 National Ranges Co 25.0 0.0% 45.5 21.5 NA 0.24 112.0 0.02 Gulf Petroleum Investment Co 53.0 27.7% 94.3 38.0 NA 0.46 106.2 0.07

Top 5 Value Traded Value % Chg 52 wk 52 wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) National Bank of Kuwait SAK 820.0 1.2% 942.9 761.9 14.2 1.47 90.6 13.64 Kuwait Finance House KSCP 560.0 -1.8% 727.3 540.0 19.6 1.53 57.9 8.80 Mobile Telecommunications Co 375.0 -5.1% 640.0 350.0 9.2 0.94 43.7 5.35 Agility Public Warehousing Co 540.0 -3.6% 847.6 520.0 11.9 0.75 41.1 2.16 Al Dar National Real Estate Co 30.5 -3.2% 43.0 17.0 428.6 1.09 38.0 0.04 Source: Gulfbase, Reuters & Global Research

8 Global Research – GCC GCC Markets

Market capitalization In October 2015, the market capitalization of KSE-listed companies fell 0.5%MoM to USD85.0bn. The market capitalization of the top 10 listed companies decreased 0.8%MoM.

Top 10 Listed Companies by Market Capitalization (in KWDbn)

Company Oct-15 Sep-15 Oct-14 MoM% YoY% National Bank of Kuwait SAK 4.1 4.1 4.7 1.3% -11.2% Kuwait Finance House KSCP 2.7 2.7 3.4 -1.7% -21.0% Mobile Telecommunications Co KSC 1.6 1.7 2.7 -5.1% -40.4% Ahli United Bank BSC 1.3 1.3 1.4 -1.0% -5.4% Kuwait Food Co KSCP 0.9 0.9 1.2 7.5% -26.6% Boubyan Bank KSCP 0.9 0.8 1.0 2.5% -10.4% Burgan Bank SAKP 0.8 0.8 1.0 -3.5% -15.2% Kuwait Projects Company Holding KSCP 0.8 0.9 1.0 3.6% -18.5% Gulf Bank KSCP 0.8 0.8 1.0 -1.9% -18.2% Commercial Bank of Kuwait KSC 0.7 0.8 0.9 -13.3% -22.4% Total Market Capitalization (Top 10 stocks) 14.8 14.9 18.3 -0.8% -19.5% Source: Reuters, Zawya & Global Research

9 Global Research – GCC GCC Markets

Oman MSM30 increases 2.4%MoM in October The MSM30 index rose 2.4%MoM in October after falling 1.4%MoM in September and sliding 10.5%MoM in August. Market sentiment was positive over the earnings season and helped the market to push back to gains. Trade remained choppy during the month; market movements in the second half were flattish. On YTD basis, the index fell 6.5%.

In October, Oman sold its first sovereign Islamic bond, with a minimum subscription of OMR500,000 (USD1.3mn). The OMR denominated issue would have tenure of five years and mature in 2020. Shariah-compliant banks in the country would benefit from this move owing to new investment opportunities.

MSM30 – Index & Volume and Sectoral Performance

6,000 40 5,950 35 MSM 30 2.4% 5,900 30 5,850 25 5,800 Banking & Investment

5.9% 5,750 20

5,700 mn in 15 5,650 10 Services & Insurance 1.6% 5,600 5,550 5 5,500 0

Industrial 0.4%

1-Oct 6-Oct

11-Oct 14-Oct 20-Oct 25-Oct 28-Oct 0% 5% 10% Volume (RHS) Index (LHS)

Source: Zawya, Gulfbase, and Global Research

Sectoral performance In October 2015, all three sectors ended in the green. During the month, Banking & Investment (5.9%MoM) gained the most, followed by Services & Insurance (1.6%MoM) and Industrial (0.4%MoM).

The heavyweight Banking & Investment sector rose primarily due to gains in HSBC Bank Oman (2.5%MoM), followed by Bank Muscat (1.1%MoM), Bank Nizwa (27.4%MoM), Sohar Bank (10.6%MoM), and Sharqiya Investment Holding Co. (4.7%MoM). Bank Muscat reported a 7.5%YoY growth in its 3Q15 earnings, which boosted the sentiment. However, rest of the banks reported a poor bottom-line in 3Q15.

The Services & Insurance sector grew, led by gains in Sembcorp Salalah (3.0%MoM), followed by Renaissance Services Co. (10.7%MoM), Oman Qatari Telecommunications Co. (1.6%MoM), and Sohar Power (11.8%MoM).

The Industrial sector was almost flat during the quarter; Al Anwar Holding Co. (9.4%MoM) was the key gainer, adding to the gains of the overall sector, partially offset by losses in United Finance Co. (-6.6%MoM) and Global Financial Inv. Co. (-3.7%MoM).

Trading activity rises in October Trading on the MSM30 index increased in October, with the volume traded gaining 59.3%MoM to 378.2mn shares from 237.4mn shares in September. The total turnover rose 24.0%MoM to USD0.21bn.

10 Global Research – GCC GCC Markets

MSM30 Trading Statistics – Top 5

Top 5 Gainers Value % Chg 52 wk 52 wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Bank Nizwa SAOG 0.080 27.4% 0.096 0.060 NA 0.91 17.0 0.30 Port Services Corp SAOG 0.160 19.4% 0.410 0.134 NA 0.41 0.3 0.04 Oman Textile Holding Co 0.360 13.0% 0.410 0.220 NA 0.37 1.0 0.01 Al Izz Islamic Bank SAOG 0.080 11.9% 0.098 0.065 NA NA 2.5 0.19 Oman Fisheries Co SAOG 0.060 11.8% 0.078 0.042 NA 0.50 0.1 0.02

Top 5 Losers Value % Chg 52 wk 52 wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) United Power Co SAOG 2.700 -9.9% 5.158 1.600 5.5 NA 0.0 0.01 Oman Flour Mills Co SAOG 0.470 -7.8% 0.620 0.470 9.0 1.25 0.2 0.19 Oman Oil Marketing Co SAOG 2.000 -7.4% 2.260 2.000 10.9 2.45 0.3 0.32 United Finance Co SAOG 0.130 -6.6% 0.151 0.111 7.6 0.97 0.2 0.10 Galfar Eng & Contracting 0.090 -6.5% 0.180 0.083 NA 0.23 4.5 0.06

Top 5 Volume Traded Volume % Chg 52 wk 52 wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (mn) HSBC Bank Oman SAOG 0.120 2.5% 0.165 0.109 22.0 0.80 1,033.3 0.62 Bank Nizwa SAOG 0.080 27.4% 0.096 0.060 NA 0.91 87.0 0.30 Al Anwar Holdings SAOG 0.190 9.4% 0.287 0.122 4.4 1.14 48.8 0.07 Renaissance Services SAOG 0.180 10.7% 0.612 0.155 8.7 0.27 19.8 0.13 Bank Muscat SAOG 0.540 1.1% 0.682 0.467 7.1 0.93 19.2 3.19

Top 5 Value Traded Value Company % Chg 52 wk 52 wk MCAP Close P/E P/B Traded MoM High Low (USDbn) (USDmn) HSBC Bank Oman SAOG 0.120 2.5% 0.165 0.109 22.0 0.80 294.7 0.62 Bank Muscat SAOG 0.540 1.1% 0.682 0.467 7.1 0.93 26.9 3.19 Al Anwar Holdings SAOG 0.190 9.4% 0.287 0.122 4.4 1.14 24.3 0.07 Sembcorp Salalah 2.710 3.0% 2.740 1.825 20.1 3.03 21.3 0.67 Oman International Dev. & Inv. 0.510 4.6% 0.506 0.340 12.0 1.43 19.5 0.73

Source: Reuters & Global Research

11 Global Research – GCC GCC Markets

Market Capitalization Market capitalization of the companies listed on the MSM30 index grew 1.7%MoM to USD23.7mn in October from USD23.3mn in September. Market capitalization of the top 10 listed companies increased 1.3%MoM.

10 Largest Listed Companies by Market Capitalization (in OMRbn)

Company Oct-15 Sep-15 Oct-14 MoM% YoY% Bank Muscat SAOG 1.23 1.25 1.54 -1.8% -20.1% Oman Telecommunications Co SAOG 1.22 1.21 1.25 0.8% -2.1% National Bank of Oman SAOG 0.40 0.39 0.44 2.7% -9.3% Bank Dhofar SAOG 0.38 0.36 0.48 3.8% -21.6% Ahli Bank SAOG 0.29 0.29 0.28 2.0% 4.4% Sembcorp Salalah Power and Water Co SAOG 0.26 0.25 0.22 3.6% 15.5% Bank Sohar SAOG 0.25 0.23 0.25 8.7% 2.6% HSBC Bank Oman SAOG 0.24 0.22 0.33 9.0% -26.7% Raysut Cement Co SAOG 0.23 0.23 0.42 -1.7% -46.1% Phoenix Power Co SAOG 0.22 0.22 0.00 0.0% NA Total Market Capitalization (Top 10 stocks) 4.72 4.66 5.21 1.3% -9.3% Source: Reuters and Global Research

12 Global Research - GCC GCC Markets

Qatar QSE rises 1.2%MoM in October The Qatar Stock Exchange (QSE) advanced 1.2%MoM in October after falling 0.9%MoM in September. After three straight months of decline, the index registered gains due to bullish sentiment of foreign investors and domestic institutions. The index also experienced lower selling pressure from retail investors due to optimism about the earnings season. Trading volumes were largely consistent over the month.

US companies expressed significant confidence in the profitability of their Qatari operations in the coming years and expected to do more business, as per the inaugural edition of a report titled “US Business Outlook in Qatar”, coauthored by US Chamber of Commerce, the American Chamber of Commerce in Qatar (AmCham Qatar) and Ernst & Young (EY).

The bourse added a product offering to its participants by successfully launching the rights trading of Gulf Warehousing Company (GWCS) on 18 October.

Qatar: Index, Volume, and Sectoral Performance 12,000 16 14 QE 1.2% 11,600 12 Transportation 5.8% 10 11,200 Real Estate 4.6%

8

Telecom 2.5%

10,800 6 in mn in 4 Consumer Goods 1.7% 10,400 2 Industrial 1.0% 10,000 0

Insurance -0.3% 7-Oct

1-Oct Banks & FS

13-Oct 25-Oct 29-Oct 19-Oct -1.1%

Volume (RHS) Index (LHS) -2% 0% 2% 4% 6% 8%

Source: Zawya, Gulfbase, & Global Research

Sectoral performance In October, just two sectors ended in the red, while six recorded gains. Banks & Financial Services (-1.1%MoM) was the top loser, followed by Insurance (-0.3%MoM). Among the gainers, Transportation (5.8% MoM) rose the most, followed by Real Estate (4.6%MoM), Telecommunication (2.5%MoM), Consumer Goods (1.7%MoM) and Industrial (1.0%MoM).

The fall in the Banks & Financial Services sector was mainly due to a decline in Islamic Holdings Co. (-8.3%MoM), followed by Al Ahli Bank (-6.0%MoM), partly offset by gains in Dlara Brokerage & Investment Holding Co. (5.6%MoM) and Qatar Islamic Bank (3.4%MoM). The drop in the Insurance sector was mainly due to a fall in sector heavyweight Qatar Insurance (-0.1%MoM).

Gains in the Transportation sector (5.8%MoM) were mainly due to the double-digit rise in sector heavyweight Qatar Gas Transport Co. (10.7%MoM), followed by Qatar Navigation Co. (1.3%MoM). The Real Estate sector did not have any losers and the rise was mainly due to gains in Ezdan Holding Group (4.3%MoM), Barwa Real Estate (5.2%MoM), and followed by United Development Company (5.0%MoM).

The Telecommunication sector rose mainly due to an increase in Vodafone Qatar (6.4%MoM), followed by a rise in OOREDOO (1.0%MoM). The gain in the Consumer Goods sector was mainly led by Qatar Fuel (6.9% MoM), followed by Salam International Investment Co. (3.8%MoM), partly offset by a decline in Al Meera Consumer Goods Co. (-6.2%MoM). 13

Global Research – GCC GCC Markets

Trading rises in October Trading on the QSE increased in October. The value traded grew 5.5%MoM to USD1.6bn. The volume traded increased 32.3%MoM to 167.5mn in October from 126.5mn in September.

QSE Index Trading Statistics – Top 5

Top 5 Gainers Value % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Qatari German Company for 16.7 23.6% 19.9 8.6 NA 1.18 18.5 0.05 Medical Devices QSC Qatar Gas Transport Co Ltd 24.6 10.7% 25.3 19.3 14.2 3.62 116.9 3.75 Aamal Co QSC 14.5 7.4% 18.4 9.9 13.9 1.29 10.4 2.43 Qatari Investors Group QSC 46.6 7.1% 56.5 33.0 24.0 2.53 27.5 1.57 Qatar Fuel QSC 162.5 6.9% 231.0 131.6 11.8 2.07 35.9 3.76

Top 5 Losers Value % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Islamic Holding Group QSC 102.6 -8.3% 223.0 90.1 41.7 6.51 23.9 0.11 Al Khaleej Takaful Group QSC 33.7 -6.5% 51.3 31.5 16.5 1.29 1.5 0.23 Al Meera Consumer Goods Co 234.4 -6.2% 288.9 160.1 22.9 3.48 19.7 1.27 QSC Ahli Bank QSC 47.0 -6.0% 54.5 42.1 14.0 2.02 0.3 2.50 Commercial Bank QSC 53.2 -5.7% 69.8 52.4 10.7 1.03 38.9 4.73

Top 5 Volume Traded Volume % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (mn) Vodafone Qatar QSC 14.5 6.4% 21.6 12.0 NA 2.21 30.8 3.34 Mazaya Qatar Real Estate 16.3 3.6% 23.5 14.6 9.8 1.32 26.3 0.47 Development QSC Qatar Gas Transport Co Ltd 24.6 10.7% 25.3 19.3 14.2 3.62 17.7 3.75 Ezdan Holding Group QSC 19.5 4.3% 21.8 13.1 32.9 1.69 16.5 14.17 Barwa Real Estate Co QSC 44.9 5.2% 54.4 35.3 3.1 1.09 9.4 4.76

Top 5 Value Traded Value % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Gulf International Services QSC 64.1 -1.4% 131.0 53.6 8.2 3.15 141.4 3.26 Vodafone Qatar QSC 14.5 6.4% 21.6 12.0 NA 2.21 125.0 3.34 Qatar National Bank SAQ 182.5 -2.7% 237.0 159.9 11.6 NA 120.8 35.49 Mazaya Qatar Real Estate 16.3 3.6% 23.5 14.6 9.8 1.32 119.4 0.47 Development QSC Industries Qatar QSC 123.0 0.0% 200.0 118.0 12.4 2.40 109.5 20.23 Source: Gulfbase, Reuters, & Global Research

14 Global Research – GCC GCC Markets

Market capitalization The total market capitalization of companies listed on the QSE rose to USD168.1bn in October vis-à-vis USD167.1bn in September. The market capitalization of the top 10 listed companies was flat from September to October.

Top 10 Listed Companies by Market Capitalization (QARbn)

Company Oct-15 Sep-15 Oct-14 MoM% YoY% Qatar National Bank SAQ 127.7 131.2 150.0 -2.7% -14.8% Industries Qatar QSC 74.4 74.4 114.0 0.0% -34.7% Ezdan Holding Group QSC 51.7 49.6 52.3 4.3% -1.0% Masraf Al Rayan QSC 32.4 32.3 38.2 0.5% NA Qatar Islamic Bank SAQ 27.9 27.0 26.5 3.4% 5.5% Mesaieed Petrochemical Holding Co QSC 26.4 26.6 39.9 -0.9% -33.9% Ooredoo QSC 24.9 24.7 39.6 1.0% -37.0% Qatar Electricity and Water Co QSC 23.4 23.0 20.0 1.5% 16.7% Barwa Real Estate Co QSC 17.5 16.6 16.7 5.2% 4.5% Commercial Bank QSC 17.4 18.4 21.9 -5.7% -20.8% Total Market Capitalization (Top 10 stocks) 423.7 423.8 519.0 0.0% -18.4%

Source: Reuters, Zawya, & Global Research

15 Global Research – GCC GCC Markets

Saudi Arabia TASI falls 3.8%MoM in October In October, Saudi Arabia’s TASI declined 3.8%MoM following a 1.6%MoM fall in September. After a slightly sluggish start to the month, the market gained momentum on an announcement by the US Energy Information Administration (EIA) that global oil demand is expected to increase the most in 2016. Moreover, it indicated that the global crude oil supply glut may be easing, added to the positive sentiment in the market. However, toward the end, the market was weighed down by anticipation of the Government of Saudi Arabia reducing subsidies and spending levels as well as increasing taxes to cover the budget deficit amid a low oil price environment.

In October, BlackRock, the world's largest asset management company, was granted regulatory approval to trade local stocks in Saudi Arabia. According to the Capital Market Authority (CMA), Saudi Arabia will relax its rules for direct investment by foreigners in its stock market, as this would help the Kingdom get included in the global indices.

TASI: Index, Volume, and Sectoral Performance

8,000 350 TASI -3.8% 7,800 300 Media & Publishing 20.5% Transport 6.7% 250 7,600 Telecom & IT 2.4%

Energy & Utilities 2.0% 200 Petrochemical 0.2% 7,400

in mn in Industrial Inv. -1.8%

150 Multi-Inv. -2.5% 7,200 100 Building & Const. -3.8% Insurance -4.6% 7,000 50 Retail -4.8% Banks & FS -5.1% 6,800 0 Agriculture & Food -6.6%

Real Estate Dev. -7.3%

5-Oct 7-Oct

1-Oct Cement -8.0%

21-Oct 11-Oct 13-Oct 15-Oct 19-Oct 25-Oct 27-Oct 29-Oct Hotel & Tourism -10.1% Volume (RHS) Index (LHS) -20% -10% 0% 10% 20% 30%

Source: TASI, Gulfbase, & Global Research

Sectoral performance In October, 10 sectors ended in the red, while five ended higher. Hotel & Tourism (-10.1%MoM) declined the most, followed by Cement (-8.0%MoM), Real Estate Development (-7.3%MoM), Agriculture & Food (-6.6%MoM), Banks & Financial Services (-5.1%MoM), Retail (-4.8%MoM), Insurance (-4.6%MoM), Building & Construction (-3.8%MoM), Multi-Investment (-2.5%MoM) and Industrial Investment (-1.8%MoM). The gains were broadly driven by Media & Publishing (20.5%MoM), Transportation (6.7%MoM), Telecom & IT (2.4%MoM), Energy Utilities (2.0%MoM) and Petrochemical (0.2%MoM).

The Banking sector’s performance was dragged down by a decline in Alinma Bank (-11.0%MoM), Al Rajhi Bank (- 6.2%MoM), Bank Al Jazira (-12.6%MoM), Banque Saudi Fransi (-5.2%MoM), and SABB (-4.3%MoM), and Saudi Hollandi (-14.3%MoM).

The fall in the Real Estate sector was due to a drop in Dar Al Arkan Real Estate Development Co. (-7.3%MoM), Emaar the Economic City (-11.4%MoM), Jabal Omar Development Co. (-7.3%MoM) and Knowledge Economic City (-13.4%MoM).

The gain in the Telecom sector was majorly ascribed to an increase in Saudi Telecom Co. (4.6%MoM), whereas Etihad Etisalat Co. ended flat.

16 Global Research – GCC GCC Markets

Trading increases in October Trading on the TASI increased in October. The volume of shares traded rose 18.6%MoM to 4.2bn in October from 3.6bn in September. The value of shares traded increased to USD25.2bn in October from USD21.2bn in September.

TASI Index Trading Statistics – Top 5

Top 5 Gainers Value % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Saudi Research and Marketing 18.4 42.8% 20.9 12.3 146.1 1.31 41.4 0.40 Group SJSC Al Sagr Cooperative Insurance 28.3 36.6% 46.9 18.0 17.1 2.09 130.3 0.20 Co SJSC Saudi Printing and Packaging 17.2 18.7% 27.6 12.6 16.6 1.11 77.3 0.30 Co SJSC Jazan Development Co SJSC 12.9 16.2% 19.2 10.0 40.1 1.07 86.5 0.17 Arabian Shield Cooperative 28.4 16.1% 53.0 22.6 33.8 2.30 65.3 0.15 Insurance Co SJSC

Top 5 Losers Value % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Al Ahlia for Cooperative 8.1 -20.1% 19.6 7.8 NA 1.49 56.7 0.07 Insurance Co SJSC Al Tayyar Travel Group Holding 65.3 -14.4% 114.5 61.3 11.7 4.11 543.6 3.49 Co SJSC Tabuk Cement Co SJSC 17.7 -14.3% 28.5 16.6 16.4 1.38 11.3 0.40 Saudi Hollandi Bank SJSC 28.3 -14.3% 49.1 27.8 8.0 1.49 38.9 4.36 Saudi Airlines Catering Co 119.2 -14.2% 202.8 114.0 14.4 7.92 156.8 2.54 SJSC

Top 5 Volume Traded Volume % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (mn) Alinma Bank SJSC 15.0 -11.0% 25.2 14.3 15.8 1.24 1,561.3 5.82 Dar Al Arkan Real Estate 6.5 -7.3% 13.0 6.2 16.2 0.39 793.8 1.83 Development Co SJSC Saudi Kayan Petrochemical Co 8.5 3.0% 14.9 7.4 NA 0.93 624.8 3.40 SJSC Emaar The Economic City 9.6 -11.4% 17.7 9.2 38.2 0.99 537.7 2.12 SJSC Saudi Basic Industries Corp 82.6 4.9% 112.5 70.3 12.4 1.56 230.1 66.20 SJSC

Top 5 Value Traded Value % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Alinma Bank SJSC 15.0 -11.0% 25.2 14.3 15.8 1.24 4,280.4 5.82 Saudi Basic Industries Corp 82.6 4.9% 112.5 70.3 12.4 1.56 3,306.8 66.20 SJSC Dar Al Arkan Real Estate 6.5 -7.3% 13.0 6.2 16.2 0.39 882.1 1.83 Development Co SJSC Saudi Arabian Mining Co SJSC 29.8 2.1% 48.4 23.2 32.6 1.35 811.1 9.16 Al Rajhi Banking and 51.6 -6.2% 69.0 48.4 12.5 1.96 755.4 22.21 Investment Corp SJSC Source: Gulfbase, Reuters, & Global Research

17 Global Research – GCC GCC Markets

Market capitalization In October, the market capitalization of companies listed on the TASI declined 2.3%MoM to USD433.5bn from USD443.6bn in September. The market capitalization of the top 10 listed companies, however, rose 0.2%MoM.

Top 10 Listed Companies by Market Capitalization (SARbn)

Company Oct-15 Sep-15 Oct-14 MoM% YoY% Saudi Basic Industries Corp SJSC 246.8 235.5 332.3 4.8% -25.7% Saudi Telecom Co SJSC 128.0 122.5 149.0 4.5% -14.1% National Commercial Bank SJSC 108.0 107.0 0.0 0.9% NA Al Rajhi Banking and Investment Corp SJSC 83.7 89.0 106.4 -5.9% -21.4% Saudi Electricity Co SJSC 70.8 68.3 70.6 3.7% 0.3% Kingdom Holding Co 63.9 66.9 83.0 -4.4% -23.0% Jabal Omar Development Co SJSC 55.3 59.7 48.1 -7.4% 15.0% Almarai Co SJSC 47.1 50.5 48.0 -6.7% -1.9% Samba Financial Group SJSC 45.7 46.3 55.0 -1.3% -16.8% Saudi British Bank SJSC 40.2 42.0 57.8 -4.3% -30.4% Total Market Capitalization (Top 10 stocks) 889.6 887.7 950.1 0.2% -6.4% Source: Reuters, Zawya, & Global Research

18 Global Research – GCC GCC Markets

UAE – Abu Dhabi ADX declines 4.0%MoM in October Abu Dhabi’s ADX shed 4.0%MoM in October after rising 0.2%MoM in September. During the start of the month, the market posted some gains on expectations that the US Federal Reserve would delay the impending interest rate hike. Following this, some recovery in crude oil prices underpinned the stock market, mainly driven by gains in petrochemical and energy stocks. However, later, the market broadly trended sideways for some time ahead of the third quarter corporate earnings. However, toward the end, another spell of weakness in crude oil prices weighed on the market. Moreover, weakness in some of the global equity markets kept the overall investor sentiment subdued.

In October, Abu Dhabi Securities Exchange indicated that it is in discussion with two financial institutions to act as market makers. Currently, National Bank of Abu Dhabi is the only market maker the exchange has. Moreover, the bourse is also in discussion with several companies regarding potential public listings on its secondary market.

ADX: Index, Volume, and Sectoral Performance

4,650 160 4,600 140 ADX -4.0% Telecom 7.8% 4,550 120 4,500 Services 0.2% 100 Health Care 0.0% 4,450 80 Construction 0.0% 4,400 60 Industrial -0.9%

4,350 in mn in

Insurance -1.4% 4,300 40 Investment & FS -2.2% 4,250 20 Consumer -3.8% 4,200 0 Real Estate -5.2%

Banks -8.2%

1-Oct 7-Oct

20-Oct 26-Oct 13-Oct Energy -12.7% Volume (RHS) Index (LHS) -20% -10% 0% 10%

Source: Zawya, Gulfbase, & Global Research

Sectoral performance In October, seven sectors ended in the red, two remained flat, and two closed higher. Energy (-12.7%MoM) declined the most, followed by Banks (-8.2%MoM), Real Estate (-5.2%MoM), Consumer (-3.8%MoM), Investment & Financial Services (-2.2%MoM), Insurance (-1.4%MoM) and Industrial (-0.9%MoM). Among the gainers, Telecommunication (7.8%MoM) advanced the most, followed by Services (0.2%MoM). Healthcare and Construction sectors remained flat.

Decline in the Real Estate sector was led by weakness in Aldar Properties (-5.0%MoM), Eshraq Real Estate (- 7.5%MoM), and RAK Properties (-4.9%MoM).

The fall in the Banks sector was ascribed to Abu Dhabi Commercial Bank (-2.0%MoM), First Gulf Bank (- 11.5%MoM), Invest Bank (-11.8%MoM), Union National Bank (-8.9%MoM) and National Bank of Abu Dhabi (- 8.6%MoM). The fall in these stocks was partly offset by a gain in Bank of Sharjah (4.6%MoM) and National Bank of Umm Al Qaiwain (4.7%MoM). The Investment & Financial Services sector ended lower due to a decline in Waha Capital (-2.3%MoM).

The Telecommunication sector was boosted by gains in Emirates Telecommunication Corp. (7.8%MoM), whereas Sudan Telecommunication (-3.3%MoM) declined.

Trading declines in October Trading on the ADX decreased in October. The volume of shares traded declined 44.1%MoM to 1.2bn in October from 2.1bn in September. The value traded fell 18.9%MoM to USD1.0bn.

19 Global Research – GCC GCC Markets

ADX Trading Statistics – Top 5

Top 5 Gainers Value % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Green Crescent Insurance Co 0.6 26.0% 0.9 0.5 NA 0.53 0.2 0.02 PJSC National Corp for Tourism and 4.5 12.5% 6.2 3.8 16.7 3.66 0.1 0.66 Hotels Emirates Telecommunications 15.3 7.8% 15.9 9.4 17.1 3.26 372.6 36.23 Group Co PJSC Union Insurance Co PSC 1.2 7.1% 1.2 1.0 30.5 1.14 0.0 0.11 Abu Dhabi Ship Building PJSC 2.8 6.5% 4.0 1.3 NA 1.49 1.0 0.16

Top 5 Losers Value % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) National Bank of Fujairah PJSC 3.5 -34.3% 5.3 3.5 7.0 1.11 0.2 1.12 Al Khazna Insurance Co PSC 0.3 -22.5% 0.6 0.3 NA 0.33 3.2 0.04 National Marine Dredging PSC 4.5 -14.9% 7.3 4.3 3.6 0.35 0.4 0.30 Dana Gas PJSC 0.5 -14.6% 0.7 0.4 16.4 1.21 45.9 0.87 Abu Dhabi Aviation 2.8 -13.3% 3.9 2.7 4.9 0.56 7.4 0.33

Top 5 Volume Traded Volume % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (mn) Dana Gas PJSC 0.5 -14.5% 0.7 0.4 16.4 1.21 323.3 0.87 Aldar Properties PJSC 2.3 -5.0% 3.4 1.9 7.1 1.01 164.2 4.84 Eshraq Properties Co PJSC 0.6 -7.5% 1.4 0.6 NA 0.63 159.0 0.38 Emirates Telecommunications 15.3 7.8% 15.9 9.4 17.1 3.26 90.5 36.23 Group Co PJSC RAK Properties PJSC 0.6 -4.9% 0.9 0.5 8.7 0.32 75.1 0.30

Top 5 Value Traded Value % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Emirates Telecommunications 15.3 7.8% 15.9 9.4 17.1 3.26 372.6 36.23 Group Co PJSC First Gulf Bank PJSC 12.4 -11.5% 16.8 12.1 9.6 1.67 154.6 15.07 Aldar Properties PJSC 2.3 -5.0% 3.4 1.9 7.1 1.01 107.9 4.84 Abu Dhabi Commercial Bank PJSC 7.5 -2.0% 8.9 5.1 8.1 1.47 74.8 11.00 Dana Gas PJSC 0.5 -14.6% 0.7 0.4 16.4 1.21 45.9 0.87 Source: Reuters, Gulfbase, & Global Research

20 Global Research – GCC GCC Markets

Market capitalization In October, the market capitalization of companies listed on the ADX declined 2.4%MoM to USD112.9bn. The market capitalization of the top 10 listed companies declined 1.7%MoM.

Top 10 Listed Companies by Market Capitalization (AEDbn)

Company Oct-15 Sep-15 Oct-14 MoM% YoY% Emirates Telecommunications Group Co PJSC 133.1 123.5 90.9 7.7% -0.9% First Gulf Bank PJSC 55.6 62.8 70.8 -11.5% -21.5% National Bank of Abu Dhabi PJSC 45.3 49.6 63.9 -8.6% -29.1% Abu Dhabi Commercial Bank PJSC 42.0 42.8 44.2 -2.0% -5.1% Aldar Properties PJSC 17.9 18.9 25.2 -5.0% -28.8% Union National Bank PJSC 15.4 16.9 18.9 -8.9% -18.6% Abu Dhabi Islamic Bank PJSC 13.3 14.0 19.7 -5.0% -32.3% National Bank of Ras Al Khaimah PSC 11.4 11.8 14.8 -3.4% -22.7% United Arab Bank PJSC 7.6 7.7 8.0 -1.4% -5.4% National Bank of Umm Al Qaiwain PSC 5.7 5.5 5.6 4.7% 1.8% Total Market Capitalization (Top 10 stocks) 347.3 353.4 362.0 -1.7% -4.1%

Source: Reuters & Global Research

21 Global Research – GCC GCC Markets

UAE – Dubai DFM falls 2.5%MoM in October Dubai Financial Market (DFM) declined 2.5%MoM in October after falling 1.9%MoM in September. Broadly, the weakness recorded in the third quarter continued for the month. The market posted some gains initially due to expectations of a delay in interest rate hike by the US Federal Reserve and some recovery in crude oil prices. However, in the second half of the month, the market broadly trended downward, mainly due to weakness in global equity markets and softer crude oil prices. In October, International Finance Corporation (IFC), a member of the World Bank Group, listed a USD100mn sukuk on Nasdaq Dubai. This raised the nominal value of sukuk listed on Dubai to USD36.8bn.

DFM: Index, Volume, and Sectoral Performance

3,750 350 DFM -2.5% 3,700 300 3,650 Insurance 4.1% 250 3,600 Services 3.8% 3,550 200 Consumer Staples 1.9% 3,500 150 Telecom 0.0%

3,450 in mn in 100 Industrial -1.7% 3,400 Transportation -1.8% 3,350 50 3,300 0 Banks -2.3%

Real Estate & Const -2.6%

1-Oct 6-Oct

14-Oct 20-Oct 25-Oct 28-Oct 11-Oct Investment & FS -7.0% Volume (RHS) Index (LHS) -10% -5% 0% 5%

Source: Zawya, Gulfbase, & Global Research

Sectoral performance In October, Investment & Financial Services (-7.0%MoM) declined the most, followed by Real Estate & Construction (-2.6%MoM), Banks (-2.3%MoM), Transportation (-1.8%MoM) and Industrial (-1.7%MoM). The Telecommunication sector remained flat. Among the gainers, Insurance (4.1%MoM) rose the most, followed by Services (3.8%MoM) and Consumer Staples (1.9%MoM).

The decline in the Investment & Financial Services sector was ascribed to weakness in Dubai Financial Market Co. (-14.9%MoM), Dubai Investment Company (-4.6%MoM), Al-Madina For Finance & Investment Co. (-1.7%MoM) and Shuaa Capital (-10.9%MoM). This was partly offset by an increase in Ekttitab Holding Co. (4.4%MoM) and Gulf General Investment Co. (0.6%MoM).

The decline in the heavyweight Real Estate & Construction sector was mainly ascribed to a fall in Arabtec (- 11.4%MoM), Union Properties (-8.8%MoM), Damac Properties (-2.3%MoM), Deyaar Development (-9.3%MoM) and Emaar Properties (-0.2%MoM). This was partly offset by gains in Emaar Malls Group (1.3%MoM).

The Banking sector, another index heavyweight, was weighed down by weak performance of Amlak Finance (- 14.7%MoM), Dubai Islamic Bank (-3.4%MoM), Gulf Finance House (-5.1%MoM), Al Salam Bank (-4.7%MoM) and Mashreq Bank (-6.3%MoM). This decline was partly offset by gains in Ajman Bank (3.4%MoM) and Emirates NBD (3.2%MoM).

Trading remains mixed in October Trading on the DFM remained mixed in October, with the volume traded increasing 2.5%MoM to 3.9bn and the value of shares traded decreasing 13.9%MoM to USD1.5bn.

22 Global Research – GCC GCC Markets

DFM Trading Statistics – Top 5

Top 5 Gainers Value % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Gulf Navigation Holding PJSC 0.5 37.1% 0.6 0.2 16.8 0.98 51.4 0.08 Takaful Emarat Insurance PJSC 1.7 32.9% 1.7 0.5 39.4 2.97 2.9 0.07 Amanat Holdings PJSC 0.8 7.7% 1.0 0.6 NA NA 56.2 0.52 Dubai Islamic Insurance and 0.6 6.3% 1.0 0.5 15.1 1.03 1.5 0.04 Reinsurance Co PSC Dubai Parks and Resorts PJSC 1.3 4.1% 1.3 0.6 NA NA 65.0 2.12

Top 5 Losers Value % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Dubai Financial Market PJSC 1.4 -14.9% 2.9 1.4 28.8 1.39 60.9 3.01 Amlak Finance PJSC 1.7 -14.7% 2.9 0.8 NA 1.59 80.1 0.69 Marka PJSC 1.2 -14.0% 1.5 1.0 NA NA 1.1 0.17 Arabtec Holding PJSC 1.6 -11.4% 4.2 1.5 NA 1.44 170.0 1.96 Shuaa Capital PSC 0.5 -10.9% 1.0 0.4 46.3 0.47 7.4 0.14

Top 5 Volume Traded Volume % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (mn) Gulf Navigation Holding PJSC 0.5 37.1% 0.6 0.2 16.8 0.98 385.6 0.08 Arabtec Holding PJSC 1.6 -11.4% 4.2 1.5 NA 1.44 336.7 1.96 Amanat Holdings PJSC 0.8 7.7% 1.0 0.6 NA NA 265.5 0.52 Dubai Parks and Resorts PJSC 1.3 4.1% 1.3 0.6 NA NA 189.5 2.12 Drake and Scull International PJSC 0.6 -7.5% 1.2 0.5 18.3 0.44 176.7 0.35

Top 5 Value Traded Value % Chg 52-wk 52-wk MCAP Company Close P/E P/B Traded MoM High Low (USDbn) (USDmn) Emaar Properties PJSC 6.5 -0.2% 10.2 5.7 11.8 1.25 310.5 12.09 Arabtec Holding PJSC 1.6 -11.4% 4.2 1.5 NA 1.44 170.0 1.96 Dubai Islamic Bank PJSC 6.5 -3.4% 7.9 4.9 6.1 1.51 138.9 6.81 Damac Properties Dubai Co PSC 3.0 -2.3% 3.5 1.5 5.1 0.83 119.1 4.81 Amlak Finance PJSC 1.7 -14.7% 2.9 0.8 NA 1.59 80.1 0.69 Source: Reuters, Gulfbase, & Global Research

23 Global Research – GCC GCC Markets

Market capitalization In October, the market capitalization of companies listed on the DFM fell 1.6%MoM to USD87.5bn. The market capitalization of the top 10 listed companies decreased 1.2%MoM.

Top 10 Listed Companies by Market Capitalization (AEDbn)

Company Oct-15 Sep-15 Oct-14 MoM% YoY% Emirates NBD Bank PJSC 50.0 48.5 53.9 3.2% -7.2% Emaar Properties PJSC 46.2 46.2 71.6 -0.1% -35.5% Emaar Malls Group PJSC 40.7 40.2 41.8 1.3% -2.5% Dubai Islamic Bank PJSC 25.6 26.5 29.9 -3.4% -14.4% Emirates Integrated Telecommunications Co 23.3 23.3 24.6 0.0% -5.2% PJSC Mashreqbank PSC 18.6 19.9 22.0 -6.3% -15.3% Damac Properties Dubai Co PSC 18.0 18.4 0.0 -2.3% NA Commercial Bank of Dubai PSC 17.9 18.0 14.6 -0.3% 23.1% Dubai Financial Market PJSC 11.4 13.4 22.0 -14.9% -48.0% Dubai Investments PJSC 9.2 9.6 11.7 -4.6% -22.0% Total Market Capitalization (Top 10 stocks) 261.0 264.0 292.1 -1.2% -10.6%

Source: Reuters & Global Research

24 Global Research – GCC GCC Markets

Appendix 1: MENA and Global market performance in October 2015

% Chg % Chg Div Yield GCC Markets Indices Up/Down Close P/E (x) P/B (x) (MoM) (YTD) (%) KSE Weighted Index ▼ 388 0.0% -11.5% 14.5 1.1 4.0 KSE Price Index ▲ 5,775 0.9% -11.6% 14.4 1.0 4.5 Tadawul All Share Index ▼ 7,125 -3.8% -14.5% 15.8 1.7 3.6 DFM Index ▼ 3,504 -2.5% -7.2% 11.8 1.2 7.1 ADX Index ▼ 4,322 -4.0% -4.6% 11.9 1.3 5.3 Bahrain All Share ▼ 1,250 -2.0% -12.4% 7.9 0.8 5.4 QE Index ▲ 11,605 1.2% -5.5% 11.9 1.4 4.4 MSM30 Index ▲ 5,928 2.4% -6.5% 10.7 1.3 4.4

% Chg % Chg Div Yield Levant & North Africa Markets Up/Down Close P/E (x) P/B (x) (MoM) (YTD) (%) Egypt - EGX30 ▲ 7,508 2.4% -15.9% 14.7 1.3 1.8 Egypt-- EGX70 ▲ 398 2.4% -29.6% 14.7 1.1 2.4 Jordan-- Amman Fr Flt Index ▼ 2,034 -0.5% -6.1% 18.2 1.2 3.3 Palestine - AlQuds Index ▲ 493 1.6% -2.0% NA NA NA Lebanon - BLOM Stk Index ▼ 1,131 -1.4% -3.3% 7.1 0.8 5.7 Morocco - CASA All Share index ▼ 9,082 -0.4% -5.6% 22.6 2.0 5.0 Tunisia - Tunisia Main Index ▼ 5,113 -3.1% 0.5% 25.7 2.4 2.0

% Chg % Chg Div Yield International Indices Up/Down Close P/E (x) P/B (x) (MoM) (YTD) (%) DJ Average ▲ 17,664 8.5% -0.9% 16.0 3.1 2.4 NASDAQ Composite ▲ 5,054 9.4% 6.7% 28.9 3.7 1.2 S&P500 Comp. ▲ 2,079 8.3% 1.0% 18.8 2.8 2.1 FTSE 100 - UK ▲ 6,361 4.9% -3.1% 25.8 1.8 4.1 Extra DAX ▲ 10,850 12.3% 10.7% 20.0 1.7 2.7 CAC 40 - France ▲ 4,898 9.9% 14.6% 22.4 1.5 3.1

% Chg % Chg Div Yield International Indices Up/Down Close P/E (x) P/B (x) (MoM) (YTD) (%) Bovespa Index ▲ 45,869 1.8% -8.3% 32.4 1.1 4.1 RTS Index ▲ 846 7.1% 6.9% 8.5 0.8 4.9 Bombay BSE Sensex -India ▲ 26,657 1.9% -3.1% 20.7 2.8 1.4 SSE Composite Index - Shanghai ▲ 3,383 10.8% 4.6% 17.4 1.9 1.9 Nikkei 225 Index- Japan ▲ 19,083 9.7% 9.4% 18.9 1.7 1.7 Hang Seng - Hong Kong ▲ 22,640 8.6% -4.1% 9.8 1.2 3.8

Source: Bloomberg and Global Research

25

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