Dubai Financial Market Investor Presentation 2011 - 2012 i MENASA Region : Macroeconomics ………………………. 1 Dubai : Middle East‟s Financial Hub ………………………. 5 UAE Capital Markets : DFM / ND / ADX ………………………. 9 Two Exchanges, One Market : DFM & ND …………………….... 14 Corporate Strategy : Going Forward …………………….... 24 www.dfm.ae THE REGION – MENASA / GCC/ UAE AN ECONOMIC POWERHOUSE MENASA REGION : SOLID ECONOMIC FUNDAMENTALS 2 -PROMISING GROWTH Population 2008 1,745 1.7x Oil Reserves & Production (Million) as a % of Global Total 1,347 59% Menasa regions is emerging as a powerful 33% 0.8x 0.1x 1.1x economic bloc 15% 17% 158 9% 8% with tremendous 99 103 8% 38 growth potential, 1% combining the MENASA GCC NORTH LEVANT & IRAN & IRAQ SOUTH ASIAIran AFRICA TURKEY MENASA North America Europe South America sovereign wealth Oil Reserves Oil Production funds (SWFs) of the Mena region to the economic GDP 2008 (USD Billion) 4,248 Expected GDP and Population Growth growth story of, ( 2007 -92014.4 CAGR - %) say, India, hence, 7.3 7.4 7% of global GDP 7.1 6.0 the economic 10.0 paradigm shift towards this region 1,371 2.6 6.9 1,073 2.0 from other 836 1.4 1.5 2.2 1.5 542 426 1.2 2.7 emerging markets. 0.9 MENASA GCC North Levant Iran South US UK MENASA GCC NORTH LEVANT & IRAN & IRAQ SOUTH ASIA Africa Asia AFRICA TURKEY GDP Population Source: www.dfm.ae IMF, World Bank MENASA REGION : SOLID ECONOMIC FUNDAMENTALS 3 -PROMISING GROWTH The UAE, the second biggest Arab economy, is set to record 3.3% growth in GDP this year, led by a focus on adopting industrial policies that will drive sustainable development across the UAE. The UAE’s -IMF 2012 Forecast strong Country GDP Growth Projections fundamentals lessened the Country 2010 2011 2012e 2013e impact of the Bahrain 4.1% 1.5% 3.6% 4.8% global Kuwait 3.4% 5.7% 4.5% Iran 5.1% financial crisis Oman 4.1% 4.4% 3.6% 3.8% Qatar 16.6% 18.7% 6.0% 4.3% Saudi Arabia 4.1% 6.8% 3.6% 4.4% UAE 3.2% 3.3% 3.8% 4.0% Top Destinations for • UAE is leading venue for FDI in MENA Foreign Direct Investment in MENA (2011) after Saudi Arabia $150 $120 • UAE is ranked 22nd globally for Value of Imports and 21st for Exports $90 $60 • The UAE ranked 3rd in the world for „quality of infrastructure‟ $30 $- Billions Saudi Arabia UAE Egypt Qatar Source: www.dfm.ae IMF, World Bank UAE: 4 GROWTH PROSPECTS Oil / Gas as % of GDP (2011) • Recovery in oil prices 21% • Strong growth in the non- BAHRAIN hydrocarbon sector OMAN 41% • UAE‟s service driven economy 41% benefitting from the global trade SAUDI ARABIA 45% to Growth to • USD 50 billion worth of UAE infrastructural projects still under Key Contributors Contributors Key construction in UAE QATAR 61% UAE Trade Matrix UAE Import/Export Projections Source: www.dfm.ae Dubai Chamber of Commerce DUBAI THE FINANCIAL HUB OF MIDDLE EAST DUBAI: 6 VISION & ECONOMIC STRENGTHS “Our vision is clear, our goals are Dubai GDP Share Breakdown by obvious, our strengths are great, our will Economic Sectors – 2011 is strong and we are ready. We want Government Financial Other, 3.36% Dubai to be a global center of Sector, 3.45% Sector, 8.39% excellence, creativity and leadership”. Manufacturin -HH Sh. Mohammed g, 21.14% Ruler of Dubai Dubai’s core Real Estate & Construction, strengths 19.43% remain Well diversified economy based on international trade, banking and Trade, 34.78% fundamentally finance, tourism, information sound technology and real estate Transport, 7.06% Hotel & Restaurants, 2.39% Strengths Reasoning Highly sophisticated financial centre Dubai is ranked 7th as per „International Financial Centres Competitive Assessment Report‟ , a competitive study of 15 key global and regional financial centres done by KPMG Favorable business environment Dubai has been rated very high in ease of doing business ranking 33rd globally. -World Bank Index Strategic location with a strong logistics Trade capacity in UAE has tremendously improved over the years with free-zones infrastructure to bolster trade like JAFZA. Solid tourism sector Hotel occupancy rates remained high throughout 2010, benefitting both tourism and trade activities. - DSC, 2010 Report Source : www.dfm.ae Dubai Chamber of Commerce DUBAI: 7 RECENT EVENTS • Organizational restructuring of government departments & related entities Seems like the stars are • Successful debt restructuring across all sectors with zero defaults aligning for Dubai once again • GDP is projected to grow at 4% and above going forward, as per IMF, way above the average GDP growth of western counterparts While challenges remain, the Dubai economy is on a much sounder footing especially as much of the excesses and speculative elements of the economy have been weeded out. What Dubai is now left with is an unparalleled logistics, commercial, retail, communications and transportation infrastructure in the region - and ready for business in a region that is sitting in a fresh pile of cash thanks to high oil prices. www.dfm.ae DUBAI: 8 GROWTH PROSPECTS Globally fast growing industries Financial with a strong position in Dubai services Tourism Trade Oil and gas Globally faster Professional services growing sectors Communication Transportation Future global and storage Manufacturing growth Average global 2010– 2015 Construction GDP growth Electricity/ Water Agriculture Globally slower Government growing sectors services Very weak Average Strong Dubai’s strength by international standards Sectors qualified to be part of future growth path Source : www.dfm.ae DSP 2015 CAPITAL MARKETS UNITED ARAB EMIRATES CAPITAL MARKETS: 10 KEY EXCHANGES IN THE REGION Istanbul Stock Tunis Stock Exchange Algiers Stock Exchange Casablanca Exchange Damascus Stock Stock Exchange Exchange Beirut Stock Exchange Iraq Stock Exchange Palestine Stock Exchange Tehran Stock Amman Stock Kuwait Stock Exchange Libya Stock Exchange Exchange Exchange Egypt Stock Exchange Qatar Karachi Stock Tadawul Exchange Exchange Muscat Stock Market Sudan Stock Exchange Cash & Fixed Income Equity, Index & Commodity Futures Only UAE offer a wide array of trade exchanges/products in the entire MENA region www.dfm.ae MARKET CAPITALIZATION 11 LIQUIDITY REVIEW END-OF-PERIOD MARKET CAPITALIZATION (2002 – 2011) USD Billion DFM / ND Markets Breakdown (USD Bn) ND 16.7 DFM 55.5 6 7 . 5 1 2 9 4 6 2 . 9 . 114 138 70 9 15 37 86 83 84 72 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source : www.dfm.ae DFM/ND Analytics TRADE VALUES : 12 DFM PERFORMANCE TRADED VALUE - DFM (2002 – 2011) USD Billions Thin trading is recorded across all GCC markets in 2011 with average drop of 50-55% in trade values as compared to 2010 4 4 . 9 8 8 1 3 . 8 1 . 96 . 110 0 1 13 94 103 83 48 20 8 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source : www.dfm.ae DFM/ND Analytics MARKET VELOCITY 13 DFM PERFORMANCE VELOCITY (2002 – 2011) 109.1% 100.5% 96.4% 74.5% 62.5% 37.3% 28.0% 12.4% 7.7% 7.2% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 * Velocity = Annualized Trade Value / Average Market Capitalization Source : www.dfm.ae Arabian Monetary Fund DFM / NASDAQ DUBAI TWO EXCHANGES, ONE MARKET UAE MARKETS : 15 REGULATIONS & OWNERSHIP Regulatory SCA DFSA Authorities (UAE Regulations) (International Regulations) ADX DFM NASDAQ Dubai Stock Exchanges Government of 33.33% Ownership ABU DHABI Structure 100% 19 79.62% . 9 % 1% 66.67% 19.38% Public Stake www.dfm.ae 16 flat between flat movement 2010 remained remained Index - 2011 YTD PERFORMANCEYTD : DFM 1000 1200 1400 1600 1800 200 400 600 800 0 12/30/2010 GENERAL GENERAL INDEX 1/13/2011 1/27/2011 2/10/2011 2/24/2011 3/10/2011 3/24/2011 4/7/2011 4/21/2011 52 5/5/2011 WEEKS INDEXPERFORMANCE 5/19/2011 6/2/2011 6/16/2011 6/30/2011 7/14/2011 7/28/2011 8/11/2011 8/25/2011 9/8/2011 9/22/2011 10/6/2011 10/20/2011 11/3/2011 11/17/2011 12/1/2011 1353 www.dfm.ae 12/15/2011 . 12/29/2011 39 DFM : TRADING PROFILES 17 RETAIL VS. INSTITUTIONAL MIX 2011 – TRADING ACTIVITY PATTERN 100% 90% 80% AVERAGE RETAIL TRADING = 73% Trading 70% 60% Activity : 50% Client type 40% AVERAGE INSTITUTIONAL TRADING = 28.3% 30% Mix 20% 10% AVERAGE INSTITUTIONAL TRADING = 27% TRADING ACTIVITY BY CATEGORY 0% % % % Growth % 15 % % 21 22 movement is 22 27 seen among 29 institutional investors with INSTITUTIONAL 2011 recording RETAIL 27% market % % % share % 85 % % 79 78 78 73 71 2006 2007 2008 2009 2010 2011 www.dfm.ae Source : DFM / ND Analytics DFM : TRADING ACTIVITY 18 LOCAL VS. FOREIGN INVESTMENT UAE VS. NON 31% 30% 37% 40% 44% 48% UAE TRADING ACTIVITY 69% 70% 63% 60% 56% 52% 2006 2007 2008 2009 2010 2011 UAE Non-UAE 5% 12% 15% 12% 18% 20% NON UAE 17% TRADING 22% 12% 23% 22% ACTIVITY 14% 9% 6% 5% 6% 6% 6% 2006 2007 2008 2009 2010 2011 GCC OTHER ARABS OTHERS Source : www.dfm.ae Reuters / DFM / ND Analytics DFM : TRADE MATRICES 19 SECTOR MIX 9.66% 7.11% Trade Activity – 10.58% By Sector Telecom 2011 Financial Services Banking 12.72% Insurance Services Others Industrial 2.33% Real Estate 55.30% 2.19% Transportation 0.11% 0.01% * Includes Materials / Utilities / Consumer Staples Source : www.dfm.ae Reuters / DFM / ND Analytics DFM : OWNERSHIP 20 SHARE OWNERSHIP RATIOS BY TYPE OF INVESTOR BY NATIONALITY 2.60% 4.17% Distribution 4.76% of Share Ownership 36% ARAB 2006 -2011 RETAIL GCC INSTITUTIONAL OTHERS 64% UAE 88.47% FOREIGN OWNERSHIP AS % OF MARKET CAPITALIZATION 13% 12% 12% 12% 10% 8% 2006 2007 2008 2009 2010 2011 Foreign Ownership www.dfm.ae 21 Movement DFM Share Share DFM Price Price 2011 DFM SHARE PRICESHAREDFM : DFM 0 0 0 0 1 1 1 1 .