4 september daily market report

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QE Intra-Day Movement

Qatar Commentary

The QE Index rose 1.1% to close at 13,986.0. Gains were led by the Telecoms

and Banks & Financial Services indices, gaining 1.5% and 1.3%, respectively.

Top gainers were Qatar Islamic Insurance Co. and QNB Group, rising 3.6% and

2.6%, respectively. Among the top losers, Qatar National Cement Co.fell 2.2%,

while Islamic Holding Group declined 2.0%.

GCC Commentary

Saudi Arabia: The TASI Index rose 0.1% to close at 11,068.8. Gains were led by the Building & Const. and Multi-Invest. indices, rising 0.6% each. Advanced Petrochem. Co. gained 9.7%, while Allied Cooperative Ins. was up 5.7%.

Dubai: The DFM Index declined 1.0% to close at 5,120.8. The Investment & Financial Serv. index fell 1.9%, while the Real Estate & Const. index was down 1.0%. Mashreq Bank declined 3.7%, while Shuaa Capital was down 3.1%.

Abu Dhabi: The ADX benchmark index fell 0.8% to close at 5,141.2. The Inv. & Fin. Ser. index fell 2.3%, while the Insurance index declined 1.6%. ABNIC fell 10.0%, while Abu Dhabi Ship Building Co. was down 9.1%.

Kuwait: The KSE Index declined 0.1% to close at 7,453.8. The Oil & Gas index declined 1.7%, while the Consumer Services index was down 0.5%. Al-Deera Holding fell 9.1%, while Alshamel International Holding declined 8.7%.

Oman: The MSM Index rose 0.5% to close at 7,479.3. Gains were led by the Financial and Industrial indices rising 0.9% and 0.1%, respectively. Global Financial Investment rose 6.1%, while Voltamp Energy was up 3.5%.

Bahrain: The BHB Index gained 0.1% to close at 1,471.9. The Commercial Banks index rose 0.5%, while the Industrial index was up 0.1%. Delmon Poultry Co. gained 7.7%, while Al Salam Bank was up 1.9%.

Qatar Exchange Top Gainers Close* 1D% Vol. ‘000 YTD%

Qatar Islamic Insurance Co. 89.10 3.6 78.3 53.9

QNB Group 209.80 2.6 533.6 22.0

Gulf Warehousing Co. 50.50 2.4 10.4 21.7

Qatar Cinema & Film Distrib. Co. 48.00 2.1 0.9 19.7

Qatar International Islamic Bank 90.70 1.8 414.1 47.0

Qatar Exchange Top Vol. Trades Close* 1D% Vol. ‘000 YTD%

Al Khalij Commercial Bank 22.50 1.6 4,187.1 12.6

Ezdan Holding Group 19.00 1.6 1,620.2 11.8

Masraf Al Rayan 56.30 0.4 1,562.9 79.9

Doha Bank 62.30 0.0 622.3 7.0

Vodafone Qatar 21.34 0.7 582.0 99.3

Market Indicators 04 Sep 14 03 Sep 14 %Chg.

Value Traded (QR mn) 812.4 466.4 74.2

Exch. Market Cap. (QR mn) 742,618.0 733,881.4 1.2

Volume (mn) 14.9 9.6 54.2

Number of Transactions 6,867 4,519 52.0

Companies Traded 43 42 2.4

Market Breadth 30:8 19:18 –

Market Indices Close 1D% WTD% YTD% TTM P/E

Total Return 20,859.96 1.1 4.0 40.7 N/A

All Share Index 3,534.49 1.1 3.4 36.6 17.3

Banks 3,470.63 1.3 4.3 42.0 17.0

Industrials 4,615.42 0.9 1.1 31.9 18.7

Transportation 2,313.25 1.1 4.5 24.5 14.8

Real Estate 2,881.78 0.4 1.9 47.6 15.3

Insurance 4,139.00 0.8 1.1 77.2 13.1

Telecoms 1,660.08 1.5 14.1 14.2 23.5

Consumer 7,445.58 0.5 0.4 25.2 27.8

Al Rayan Islamic Index 4,718.21 0.4 2.0 55.4 20.3

GCC Top Gainers## Exchange Close# 1D% Vol. ‘000 YTD%

Advanced Petrochemicals Saudi Arabia 59.50 9.7 4,207.6 45.8

Salhia Real Estate Co. Kuwait 0.39 6.8 162.1 (2.5)

Zamil Industrial Invest. Saudi Arabia 68.57 3.8 296.8 57.6

Solidarity Saudi Takaful Saudi Arabia 24.59 3.7 9,829.6 (5.1)

Bank Albilad Saudi Arabia 52.02 3.7 2,101.9 48.6

GCC Top Losers## Exchange Close# 1D% Vol. ‘000 YTD%

NBQ Abu Dhabi 3.25 (5.8) 1,500.0 (1.5)

Sharjah Islamic Bank Abu Dhabi 2.00 (3.8) 1,562.5 29.9

IFA Hotels & Resorts Co. Kuwait 0.21 (3.7) 0.1 (27.0)

Combined Group Cont. Kuwait 0.92 (3.2) 134.7 (24.5)

Ithmaar Bank Bahrain 0.16 (3.0) 70.0 (30.4)

Source: Bloomberg (# in Local Currency) (

## GCC Top gainers/losers derived from the Bloomberg GCC

200 Index comprising of the top 200 regional equities based on market capitalization and liquidity)

Qatar Exchange Top Losers Close* 1D% Vol. ‘000 YTD%

Qatar National Cement Co. 140.30 (2.2) 37.4 17.9

Islamic Holding Group 99.90 (2.0) 203.5 117.2

Doha Insurance Co. 32.50 (0.6) 0.8 30.0

Qatar Islamic Bank 118.00 (0.6) 356.5 71.0

Qatar General Ins. and Reins. Co. 47.00 (0.5) 3.7 17.7

Qatar Exchange Top Val. Trades Close* 1D% Val. ‘000 YTD%

QNB Group 209.80 2.6 111,472.6 22.0

Al Khalij Commercial Bank 22.50 1.6 94,224.3 12.6

Masraf Al Rayan 56.30 0.4 88,517.5 79.9

Industries Qatar 192.00 1.1 86,446.2 13.7

Qatar Islamic Bank 118.00 (0.6) 42,558.9 71.0

Source: Bloomberg (* in QR)

Regional Indices Close 1D% WTD% MTD% YTD% Exch. Val. Traded

($ mn) Exchange Mkt.

Cap. ($ mn) P/E** P/B**

Dividend Yield

Qatar* 13,985.98 1.1 4.0 2.9 34.7 198.38 203,922.9 17.5 2.3 3.6

Dubai

5,120.75 (1.0) 3.9 1.1 52.0 356.80 98,534.9 21.3 1.9 1.9

Abu Dhabi

5,141.18 (0.8) 1.4 1.2 19.8 119.04 140,911.2 14.5 1.8 3.2

Saudi Arabia

11,068.83 0.1 0.2 (0.4) 29.7 3,079.29 599,426.6 21.3 2.7 2.6

Kuwait 7,453.75 (0.1) 0.7 0.3 (1.3) 64.94 113,284.8 18.5 1.2 3.7

Oman 7,479.33 0.5 1.6 1.5 9.4 20.17 27,475.8 11.3 1.7 3.7

Bahrain 1,471.88 0.1 (0.3) (0.0) 17.9 2.23 54,350.7 11.4 1.0 4.6

Source: Bloomberg, Qatar Exchange, Tadawul, Muscat Securities Exchange, Dubai Financial Market and Zawya (** TTM; * Value traded ($ mn) do not include special trades, if any)

13,800

13,850

13,900

13,950

14,000

14,050

9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00

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Qatar Market Commentary

The QE Index rose 1.1% to close at 13,986.0. The Telecoms and Banks & Financial Services indices led the gains. The index rose on the back of buying support from Qatari shareholders despite selling pressure from non-Qatari shareholders.

Qatar Islamic Insurance Co. and QNB Group were the top gainers, rising 3.6% and 2.6%, respectively. Among the top losers, Qatar National Cement Co. fell 2.2%, while Islamic Holding Group declined 2.0%.

Volume of shares traded on Thursday rose by 54.2% to 14.9mn from 9.6mn on Wednesday. However, as compared to the 30-day moving average of 17.1mn, volume for the day was 13.1% lower. Al Khalij Commercial Bank and Ezdan Holding Group were the most active stocks, contributing 28.2% and 10.9% to the total volume respectively.

Source: Qatar Exchange (* as a % of traded value)

Ratings and Global Economic Data

Ratings Updates

Company Agency Market Type* Old Rating New Rating Rating Change Outlook Outlook Change

National Bank of Oman (NBO)

Moody’s Oman LCR EMTN/FCR EMTN – (P)A3/(P)A3 – – –

Al Hilal Bank (AHB) Fitch Abu

Dhabi LT IDR/ST IDR/VR/SR/SRF

A+/F1/bb-/1/A+ A+/F1/bb/1/A+ Stable –

Abu Dhabi Islamic Bank (ADIB)

Fitch Abu


A+/F1/bb/1/A+ A+/F1/bb/1/A+ – Stable –

Dubai Islamic Bank (DIB)

Fitch Dubai LT IDR/ST IDR/VR/SR/SRF

A/F1/bb/1/A A/F1/bb/1/A – Stable –

Mashreqbank (MASQ)


A/F1/bb+/1/A A/F1/bb+/1/A – Stable –

Commercial Bank of Dubai (CBD)


A-/F2/bb+/1/A- A-/F2/bb+/1/A- – Stable –

The National Bank of Ras Al-Khaimah (RAKBANK)

Fitch Abu


BBB+/F2/bb+/2/BBB+

BBB+/F2/bb+/2/BBB+

– Stable –

Sharjah Islamic Bank (SIB)

Fitch Abu


BBB+/F2/bb+/2/BBB+

BBB+/F2/bb+/2/BBB+

– Stable –

Bank of Sharjah (BOS)

Fitch Abu


BBB+/F2/bb/2/BBB+

BBB+/F2/bb/2/BBB+

– Stable –

Dunia Finance Fitch Dubai LT IDR/ST IDR BB-/B BB-/B – Stable –

National Bank of Fujairah (NBF)

Capital Intelligence

Abu Dhabi

FSR BBB BBB+ – –

Source: News reports (* LT – Long Term, ST – Short Term, FSR- Financial Strength Rating, FCR – Foreign Currency Rating, LCR – Local Currency Rating, IDR – Issuer Default Rating, SR – Support Rating, LC

– Local Currency, LCR – Local Currency Rating, EMTN – Euro Medium-Term Note, VR – Viability Rating, SRF – Support Rating Floor)

Global Economic Data

Date Market Source Indicator Period Actual Consensus Previous

09/04 US Challenger Challenger Job Cuts YoY August -20.70% – 24.40%

09/04 US IPSOS Public Affairs RBC Consumer Outlook Index September 52.4 – 51.5

09/04 US ADP ADP Employment Change August 204K 220K 218K

09/04 US US Census Bureau Trade Balance July -$40.5B -$42.4B -$40.8B

09/04 EU Markit Markit Eurozone Retail PMI August 45.8 – 47.6

09/04 EU European Central Bank ECB Main Refinancing Rate 4-September 0.05% 0.15% 0.15%

09/04 EU European Central Bank ECB Marginal Lending Facility 4-September 0.30% 0.40% 0.40%

09/04 EU European Central Bank ECB Deposit Facility Rate 4-September -0.20% -0.10% -0.10%

09/04 France Markit Markit France Retail PMI August 45.5 – 45.6

09/05 France INSEE Consumer Confidence August 86.0 85.0 86.0

09/04 Germany Deutsche Bundesbank Factory Orders MoM July 4.60% 1.50% -2.70%

09/04 Germany BMW Factory Orders WDA YoY July 4.90% 1.10% -2.00%

09/04 Germany Markit Markit Germany Construction PMI August 47.7 – 48.2

09/04 Germany Markit Markit Germany Retail PMI August 49.4 – 52.1

09/05 Germany Deutsche Bundesbank Industrial Production SA MoM July 1.90% 0.40% 0.40%

09/05 Germany BMWi Industrial Production WDA YoY July 2.50% 0.60% -0.40%

09/04 UK London Gold Market Fix. London Gold Market PM Fix 4-September 1,271.5 – 1,265.5

09/05 UK BoE BoE/GfK Inflation Next 12 Mths August 2.80% – 2.60%

09/05 UK London Gold Market Fix. London Gold Market PM Fix 5-September 1,266.0 – 1,271.5

Source: Bloomberg (s.a. = seasonally adjusted; n.s.a. = non-seasonally adjusted; w.d.a. = working day adjusted

Overall Activity Buy %* Sell %* Net (QR)

Qatari 67.00% 64.32% 21,751,964.79

Non-Qatari 33.00% 35.68% (21,751,964.79)

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News

Qatar

QNBK buys 12.5% stake in Ecobank for close to $290mn –

QNB Group (QNBK) acquired a 12.5% stake (both ordinary and convertible preference shares) in Ecobank Transnational Incorporated. This strategic partnership with a leading pan-African bank is a fundamental step towards QNB’s strategy of being a MEA Icon by 2017. Ecobank Transnational Incorporated (Ecobank) was set up in 1985 in Lomé, Togo, where it is headquartered. Ecobank is the leading pan-African bank with a presence in 36 countries across the African continent and in 4 other countries across the globe. Ecobank is one of the top three banks (by assets) in 14 of the countries in which Ecobank is present. As at June 2014, Ecobank had $23.4bn of assets and had generated $255mn of profit before tax (1H2014) and operates across its unique network of 1,241 branches, 2,500 ATMs and 16,245 POS terminals servicing over 10.8 million customers. With 20,114 employees, Ecobank is the largest employer in the financial sector industry in Middle Africa. QNB Group acquired the 12.5% stake from Nigeria's state-owned Asset Management Company of Nigeria (AMCON). QNBK is now the second-largest shareholder in the bank after South Africa's state-owned Public Investment Corporation Ltd. Ecobank’s CEO Albert Essien said the bank expects its capital adequacy ratio to reach 18.7% by the end of 2014, after debt conversions to equity, up from 17.5% in 1H2014. The minimum capital adequacy ratio in Nigeria is 16%. (QNB Press Release, Reuters)

QNB Group: EM portfolio inflows continue to remain volatile – Portfolio flows to emerging markets (EMs) slowed

sharply in August, based on estimates from the Institute of International Finance (IIF). Net EM portfolio flows were USD9.3bn, the lowest reading since January 2014. The fall was most severe in Emerging Europe, but Africa and the Middle East also faced outflows. Inflows slowed to a crawl in Emerging Asia and Latin America. The latest data shows that EM flows remain highly volatile from month to month but the overall trend is negative. This suggests that investors continue to be worried about economic fundamentals in EMs and are reducing their exposure accordingly (see our commentary dated April 27, 2014). With equity markets in EMs and advanced economies near recent highs, there is also concern that the downward trend in portfolio flows could mark a turning point with a potential market correction ahead. Moreover, the end of the US asset-purchasing program—the so-called tapering of Quantitative Easing (QE)—is now expected in October and investors may be concerned about the potential economic impact of tighter monetary policy and higher global interest rates going forward. (QNB Group)

QC: Qatar unaffected by Mideast unrest, $200bn infrastructure projects on track – Qatar Chamber’s (QC) Vice

Chairman Mohamed bin Ahmed al-Kuwari said that the country’s infrastructure upgrade drive is progressing according to plan. The country is not affected by the ongoing turmoil in the Middle East and stressed that Qatar is focused on delivering more than $200bn worth of infrastructure-related projects. He said that these projects have to be delivered, referring to the construction work in preparation for the FIFA World Cup in 2022 and the Qatar National Vision 2030. (Gulf-Times.com)

Kahramaa to take part in Kuwait talks on water, power –

Qatar’s General Electricity & Water Corporation (Kahramaa) will take part in the 27th meeting of the GCC Electricity & Water Cooperation Committee, which is due to be held in Kuwait on September 9. The meeting will be preceded by a meeting of the

committee of electricity & water undersecretaries, where topics related to the electricity & water sector in the GCC region will be discussed. The meeting will also discuss the most important previous recommendations of the ministerial council to promote joint cooperation in energy and improve its efficiency, in addition to the rationalization of its use as a means of achieving sustainable development. (Gulf-Times.com)

Barwa Bank opens branch at The Pearl – Barwa Bank has

opened a new branch at The Pearl-Qatar, a strategic location to ensure convenience for the bank’s high-end customer base. The new branch is located in Medina Centrale, the heart of The Pearl-Qatar. Barwa Bank will provide its unique Prestige service to tenants living in the vicinity as well as visitors to the area. (Peninsula Qatar)

International

US job growth brakes to eight-month low, labor force shrinks; service sector picks up in August – Employers in

the US hired the fewest number of workers in eight months in August 2014 and more Americans gave up the hunt for jobs, providing a cautious Federal Reserve with more reasons to wait longer before raising interest rates. The Labor Department said non-farm payrolls increased 142,000 last month after expanding by 212,000 in July. The jobless rate fell one-tenth of a percentage point to 6.1%, but that was partly because many people dropped out of the labor force. In addition, manufacturing saw no job growth and retail payrolls declined for the first time since February. Even though job growth slowed, the report still suggested that some of the slack in the labor market was being taken up. Meanwhile, the pace of growth in the US services sector rose in August to its highest level since at least 2008. The Institute for Supply Management (ISM) said its services index rose to 59.6 last month from 58.7 in July, the highest reading since its inception in January 2008. That topped economists' forecasts for 57.5, according to a Reuters survey. While the index only dates to 2008, an examination of subcomponents with a longer track record indicate the August 2014 reading was the highest level of activity since August 2005. Similarly, ISM’s index of business activity rose to 65.0 in August, the highest since a matching December 2004 reading. The index was at 62.4 in July. (Reuters)

ECB cuts rates to ward off Eurozone deflation threat; Draghi sees €700bn stimulus as QE fight waits – The

European Central Bank has cut its interest rates to new record lows on September 4, and has lowered the borrowing costs in its efforts to lift inflation from rock-bottom levels and support a stagnating Eurozone economy. The ECB cut its main refinancing rate to 0.05% from 0.15%. On August 22, ECB President Mario Draghi said indications from financial markets showed inflation expectations exhibited significant declines at all horizons in August. The Eurozone’s inflation slowed to 0.3% last month, sinking deeper below the ECB's target of 2% and raising the specter of deflation. The ECB also said it had lowered the rate on bank overnight deposits to -0.20%, which means banks need to pay to park funds at the central bank, and cut its marginal lending facility to 0.30%. Meanwhile, Draghi signaled at least €700bn of fresh aid for the moribund economy and left a fight with Germany over sovereign-bond purchases for another day. Pledging to significantly steer the ECB’s balance sheet back toward the €2.7tn level of 2012 from €2tn now, the ECB president announced a final round of interest-rate cuts and a plan to buy privately owned securities. Meanwhile, German industrial output posted its biggest monthly increase since March 2012 of 1.9% in July, rising far more than forecast and

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marking a strong start to 3Q2014 for a key sector of Europe's powerhouse economy. (Reuters, Bloomberg)

Greece sees return to growth in 3Q2014 – Greek Finance

minister Gikas Hardouvelis said that his government expects its economy to grow in 3Q2014, the country’s first quarterly expansion since the start of a crippling recession in 2008, which has wiped out nearly a quarter of GDP. Hardouvelis’ comments are the first confirmation that the government expects a return to growth in the July-September period, as forecast by analysts. Greece and its EU-IMF lenders are projecting an overall growth of 0.6% in 2014 thanks to a surge in tourism and signs of a rebound in investment. Greece's economy shrank 0.3% YoY in 2Q2014, contracting to its slowest pace since late 2008 on the back of a strong tourist season. (Reuters)

Japanese PM remains neutral on next tax hike – Japan's

economy minister Akira Amari said Prime Minister Shinzo Abe stands utterly neutral on whether to decide on raising the sales tax again next year, but he will be very cautious in his decision given the potential blow to the economy. Amari said the government is ready to roll out a stimulus package to limit the economic impact, if it decides to raise the sales tax next year. Abe is due to decide in December 2014 whether to proceed with a second-stage rise in the sales tax to 10% in October 2015 in a bid to rein in Japan's massive public debt. April's rise to 8% from 5% triggered the biggest contraction in three years in 2Q2014, followed by a run of other weak indicators, raising doubts on whether Japan should go ahead with the hike. Amari said he expects a cautious decision, particularly if there is any risk of the economy relapsing into deflation, which would ruin the very aim of Abe's reflationary policies known as "Abenomics". (Reuters)

Fitch: China local Government bond law to improve budget transparency – Fitch Ratings said the revisions to China's

Budget Law, passed on August 31, represent a significant reform, providing a framework for greater transparency and accountability for local government debt management. Fitch expects that these changes will eventually improve the quality of budget management and the debt sustainability of local authorities. The moves will also facilitate efforts by the central government to align local authorities' objectives directly with the public service provision. Fitch believes the measure is a step forward in a long-awaited process to manage China's government debt issues through the migration of liabilities on to the sovereign balance sheet. This view is reflected in China's 'A+'/Stable rating. The new budget law provides a framework for regulation that includes clear guidelines, in addition to formalizing proposals for enabling local governments to issue debt directly for the first time. Local governments are not allowed to issue debt directly on their own credit profile, as they have relied partly on off-balance sheet local government financing vehicles (LGFVs). This means that local authorities could potentially be exposed to a rise in explicit debt stemming from LGFVs. (Reuters)

Regional

IATA: Mideast airlines log strongest passenger traffic growth in July 2014 – According to the International Air

Transport Association (IATA), airlines in the Middle East recorded the strongest growth in passenger traffic at 9.2% in July 2014, ahead of a capacity expansion of 8.2%. As per the IATA report, overall passenger demand grew 5.3% over July 2013. Similarly, load factor rose 0.7 percentage points to 78%. The Mideast carriers are benefitting from the strength of regional economies and the solid growth in business-related premium travel. The international passenger demand rose by 5.5% YoY in July 2014. This was outstripped by a capacity expansion of

6.2%, which slight weakened the load factor to 81.9%. (GulfBase.com)

Goldman Sachs plans debut Sukuk issue – US-based global

bank Goldman Sachs is planning to raise at least $500mn from its first issue of Islamic bonds. The US-based bank will meet investors in Qatar on September 10, 2014 and the UAE on September 11, 2014 to discuss Sukuk sales. If the issue goes ahead after the investor meetings, Goldman will become the second non-Islamic bank to sell Sukuk, after the Middle Eastern unit of HSBC, which did a $500mn deal in 2011. (Reuters)

Fitch Affirms Saudi Arabia at 'AA'; outlook stable – Fitch

Ratings has affirmed Saudi Arabia's long-term foreign and local currency Issuer Default Ratings (IDRs) at 'AA'. The outlooks on the long-term IDRs are Stable. The country ceiling has been affirmed at 'AA+' and the short-term foreign currency IDR at 'F1+'. (Reuters)

APC to invest SR3.75bn in PDH plant in Korea; BoD recommends SR164mn dividend – Advanced Petrochemical

Company’s (APC) board of directors has approved the equity investment of 35% in propane dehydrogenation (PDH) plant with South Korea’s SK Gas for the production of Propylene in South Korea. The estimated cost of the project is about SR3.75bn, which will be financed 40% from equity and 60% from debt. The project has commenced construction activities and it is scheduled to start in 1H2016, with a nameplate capacity of 600,000 metric tons per annum. Meanwhile, the company’s BoD approved the revised dividend distribution policy to be on a quarterly basis and recommended the distribution of 10% dividend (SR1 per share), amounting to SR164mn for 3Q2014. Shareholders, who are registered in Tadawul’s registers as on September 30, 2014, will be eligible to receive the dividend. (Tadawul)

Al-Eqtisadiah: Saudi-French trade rises to SR455bn in 20 years – According to Al-Eqtisadiah daily, the volume of trade

between Saudi Arabia and France reached SR454.7bn over the last 20 years (1994-2013), growing at an estimated rate of 166.7%. The trade balance between the two countries registered a surplus in favor of Saudi Arabia in 17 years. France registered surpluses in only three years. However, the trade balance witnessed a robust growth at 69.3% in favor of Saudi Arabia at SR5.13bn in 2013 as compared to 2012 figures. The highest level of trade exchange happened in 2013 at SR51.8bn. Saudi Arabia imported goods valued at SR19.7bn in 2013, an increase of 5.7% as compared to 2012 figures, representing 3.1% of its total imports in 2013. (GulfBase.com)

Crystal Lagoons unveils SR15bn project in Kingdom –

Crystal Lagoons Corporation, the patented technology developer of giant crystalline lagoons, has launched an eight-hectare lagoon project in Saudi Arabia. The lagoon will be the centerpiece of the 240-hectare mixed-use project under development by the Prince Sultan Cultural Centre near Jeddah. The new project, which is Crystal Lagoon's second such development in Saudi Arabia, has been valued at SR15bn and will include a dedicated medical city, cultural center, education facilities, luxury hotels, residential villas, along with the country's first ever Jack Nicklaus nine-hole golf course. The phase one of this multi-phased project is scheduled for completion in 2015. (GulfBase.com)(Bloomberg)

Zamil Towers wins SR134.5mn contract from MEEDCO–

Zamil Towers & Galvanizing Company (Zamil Towers), a wholly-owned subsidiary of Zamil Industrial Investment Company, has been awarded a contract worth approximately SR134.5mn by the Middle East Engineering & Development Company (MEEDCO). Zamil Towers has to supply lattice towers and

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gantries for the 380kV double circuit overhead transmission line between Tabuk Bulk Supply Point (BSP) and Tabarjal BSP in the northern region of Saudi Arabia. The duration of the contract is 16 months, with the company set to begin supply of the towers and gantries in 4Q2014. The project will link the generating plants in Tabuk and Tabarjal and streamline the operation of the Saudi electrical power system by facilitating the exchange of electricity between regions. (Tadawul)

EIB re-launches low-rate personal finance sale – Emirates

Islamic Bank (EIB) has re-launched its personal finance sale for its customers in the UAE. The offer is part of the bank’s commitment to provide customers with a range of attractive Shari’ah-compliant personal finance products. Valid until September 10, 2014, the campaign will enable customers to benefit from the UAE’s lowest profit rates on personal finance facilities, starting at 2.49% per annum (flat rates). (GulfBase.com)

WEF: UAE ranks 12th in Global Competitiveness Index –

According to World Economic Forum (WEF), the UAE is ranked 12th in the ‘Global Competitiveness Report’ for 2014-15, up from 19th place a year ago. The UAE stood first globally for having the lowest rate of inflation and the absence of organized crime; third rank for infrastructure, efficient goods market, and public trust in politicians; fifth for its strong macroeconomic environment and government efficiency; and sixth for higher education. (GulfBase.com)

WTTC: Tourism is set to catapult UAE’s GDP growth –

According to research by the World Travel & Tourism Council (WTTC), tourism is set to become big business in the UAE – thanks to a myriad of factors ranging from mega entertainment and tourism attractions being planned, unbelievable shopping avenues on offer, world-class infrastructure in place and proactive government support to boost tourists’ inflow into the country. The total contribution of the travel & tourism sector to the UAE’s GDP is expected to touch 8.5% or AED122bn in 2014, a 4.5% YoY increase as compared to 2013. The overall contribution of the sector is expected to grow by 3.2% to AED167.4bn by 2024, to reach 8.5% of GDP. (GulfBase.com)

Tecom Investments to raise up to AED4bn loan – Tecom

Investments, the investment vehicle of Dubai Holding, has confirmed that it is in talks with lenders to raise a syndicated loan. Banking sources indicated that the facility could be worth up to AED4bn. The company intends to use the proceeds for its growth plans, while some of the cash would also be diverted to its parent company. (GulfBase.com)

Mulk to build new hospitals in UAE – UAE-based

conglomerate Mulk Holdings is set to invest $68mn in its healthcare division as part of its regional expansion strategy. The expansion will see the company establish two new hospitals in the UAE, including a 75-bed facility in Dubai and another 75-bed hospital in the Northern Emirates. Mulk had recently opened its premium branch of Global Hawk Imaging & Diagnostics center with 7-star luxury ambience in Jumeirah, Dubai. (Bloomberg)

Emirates NBD confirms bonds issue plan – Emirates NBD

has confirmed reports that it is considering issuing a benchmark-sized US dollar bond, and is holding investors’ meetings in the Middle East, Asia and Europe. Morgan Stanley and Standard Chartered have been mandated as joint global coordinators; Citigroup, Commerzbank, Deutsche Bank, Emirates NBD Capital, Morgan Stanley and Standard Chartered are acting as joint lead managers. (DFM, GulfBase.com)

Suba Group’s first Mideast hotel opens in Dubai – India-

based Suba Group of Hotels has inaugurated its first hotel in Dubai. Inaugurated on September 1, 2014, the four-star hotel, houses 92 rooms and suites, equipped with modern leisure facilities and multi-cuisine dining options. The company is also planning to launch three more hotels in the region by the end of 2017. (GulfBase.com)

Deyaar Development plans to develop Shari’ah-compliant hotel – Deyaar Development has confirmed that the company is

planning to develop a Shari’ah-compliant hotel and furnished apartments tower. The project is in the preliminary design stage, and the estimated value of the project is AED450mn. Deyaar owns two adjacent plots of land in Al-Barsha, spanning 71,000 square feet in area. (DFM)

CIMB Bank to sell APH rights to ENOC – Malaysia-based

CIMB Bank is selling its rights in the stalled Asia Petroleum Hub (APH) to a consortium led by the Dubai government’s Emirates National Oil Company (ENOC). Under the agreement, parties would negotiate exclusively with each other and finalize the terms of a sale & purchase agreement, which is subject to regulatory approval. APH was set up in 2005 as a special purpose vehicle to build, manage and operate an integrated oil terminal facility. The hub would have a multi-product petroleum storage, blending and distribution facilities on a 100-acre reclaimed island at Tanjung Bin, off the Port of Tanjung Pelepas, Johor. (Bloomberg)

Borse Dubai launches sale of 8.5mn LSE shares – Borse

Dubai has launched an accelerated sale of its 8.5mn shares in the London Stock Exchange (LSE), representing around 3.1% of the company's issued capital. The company intends to use the sale proceeds to fully subscribe to the LSE's upcoming rights issue. Bourse Dubai will remain the LSE's largest shareholder with a 17.4% stake. (Reuters)

Hazel International to open $126.45mn terminal at HFZA –

Hazel International, owned by Veritas (India) Ltd, will invest $126.45mn to build a terminal that will facilitate the storage of chemicals, petrochemicals, bitumen, gases, and edible oils. Besides storage, the terminal will provide facilities like distillation, extraction, hydrogenation and fractionation. The terminal will construct 30 tanks, with a total capacity of 180,000 cubic meters. (Bloomberg)

ADA: Abu Dhabi Duty Free reports AED487.9mn sales in 1H2014 – According to Abu Dhabi Airports (ADA), Abu Dhabi

Duty Free sales increased 11.5% to AED487.9mn in 1H2014 from AED437.6m in 1H2013. The growth comes as new duty-free outlets selling goods including alcohol, cigarettes, perfumes, fashion and souvenirs opened, and as passenger traffic through Abu Dhabi International Airport likewise grew at a double-digit rate. The number of duty free transactions in 1H2014 rose 12.8% to just over 2mn. (GulfBase.com)

Alitalia BoD designates Silvano Cassano as CEO of new Alitalia – Italian airline Alitalia has designated Silvano Cassano

as CEO of the new company that will be formed when its tie-up with Etihad Airways is completed. Earlier, in August 2014, Etihad agreed to buy 49% of loss-making Alitalia in a $2.28bn rescue plan, giving it access to Europe's fourth-largest travel market and 25mn passengers. (Reuters)

TAQA mulls assets sale in 2014 – According to sources, Abu

Dhabi National Energy Company (TAQA) may sell assets in 2014 and has hired Australian investment bank Macquarie Group and McKinsey & Company as advisers for a possible sale. Reportedly, Some of TAQA's assets no longer fit into its strategy after the company's growth plans were rebalanced. The

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sales would reduce debt leverage and improve cash flow. (Reuters)

KIPCO receives approval for stake increase in Burgan Bank – Kuwait Projects Company (KIPCO) announced that it received

approval from the country's central bank to increase its stake in Burgan Bank by 5%. KIPCO’s direct and indirect stake in the bank by assets currently stands at 57.94%. (Reuters)

KPC eyes stake in Indian refinery, offers crude supply –

According to sources, Kuwait Petroleum Company (KPC) is aiming to acquire a significant stake in Indian Oil Corporation’s Paradip refinery and supply about 60% of the oil needs of the plant, set to start up later this year. KPC has sought a 50% stake in the refinery and the proposed petrochemical plant, along with marketing rights for fuels. Reportedly, KPC wanted to reserve the right to later sell a part of its stake in the Indian project to any international oil company. Kuwait wants to strengthen its role in India's oil gas sector and wants to lease a part of its strategic storage, being built to hedge against energy security risks. Kuwait was India's fourth biggest oil supplier in fiscal 2013-14, supplying about 409,000 barrels per day. (Reuters)

Kuwait’s MoH awards KD265mn hospital expansion contract – According to Kuwait News Agency, Kuwait’s Ministry

of Health (MoH) has signed a contract worth an estimated KD265mn with Sayed Hamid Behbehani & Sons Company (SHBC) for the expansion of the Farwaniya Hospital. The scope of work includes designing, equipping and maintaining of the hospital. The project is expected to be completed within four years. (Bloomberg)

WEF: Oman ranks 46th in Global Competitiveness Report –

According to a report released by the World Economic Forum (WEF), Oman is ranked 46th in the ‘Global Competitiveness Report’ for 2014-15, dropping 13 places from 2013. Although still classified as one of 24 economies in transition from efficiency-driven to innovation driven, Oman witnessed an overall decline in key competitiveness indices. The report examined Oman's economy based on efficiency enhancers, innovation and sophistication factors as well as the basic requirements of doing business, which includes infrastructure, health, education and economic factors. Oman scored well in the macroeconomic environment covering the government's budget balance, national savings and control of inflation. (GulfBase.com)

SBJ awards Zaha construction contract to TCC – Saraya

Bandar Jissah (SBJ), the developer of Oman's newest Integrated Tourism Complex, has awarded construction contract of the first residential zone package Zaha, to Towell Construction & Company (TCC). The Zaha Zone package awarded contains the construction of 14 units of three-bedroom detached villas, 29 units of three-bedroom semi-detached villas and 21 blocks, each block having 4 two-bedroom apartments and 2 three-bedroom duplexes. A total of 169 properties are planned to be ready for occupation by 2016. The value of the Zaha contract is OMR21.5mn. (Zawya.com)

Investcorp hedge funds group appoints cross asset strategist – Investcorp announced that Rebecca Hellerstein has

joined the firm’s hedge fund business as a managing director in a newly created role as a cross asset strategist. Hellerstein will have primary responsibility for fundamental cross asset and alternative risk factors research. She will also focus on enhancing Investcorp’s capabilities in liquid alternative strategies. (Bahrain Bourse)

Contacts

Saugata Sarkar Abdullah Amin, CFA Shahan Keushgerian

Head of Research Senior Research Analyst Senior Research Analyst

Tel: (+974) 4476 6534 Tel: (+974) 4476 6569 Tel: (+974) 4476 6509

[email protected] [email protected] [email protected]

Sahbi Kasraoui Ahmed Al-Khoudary QNB Financial Services SPC

Manager – HNWI Head of Sales Trading – Institutional Contact Center: (+974) 4476 6666

Tel: (+974) 4476 6544 Tel: (+974) 4476 6548 PO Box 24025 [email protected] [email protected] Doha, Qatar

DISCLAIMER: This publication has been prepared by QNB Financial Services SPC (“QNBFS”) a wholly-owned subsidiary of Qatar National Bank (“QNB”). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange; QNB is regulated by the Qatar Central Bank. This publication expresses the views and opinions of QNBFS at a given time only. It is not an offer, promotion or recommendation to buy or sell securities or other investments, nor is it intended to constitute legal, tax, accounting, or financial advice. We therefore strongly advise potential investors to seek independent professional advice before making any investment decision. Although the information in this report has been obtained from sources that QNBFS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. While this publication has been prepared with the utmost degree of care by our analysts, QNBFS does not make any representations or warranties as to the accuracy and completeness of the information it may contain, and declines any liability in that respect. QNBFS reserves the right to amend the views and opinions expressed in this publication at any time. It may also express viewpoints or make investment decisions that differ significantly from, or even contradict, the views and opinions included in this report.

COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNBFS. of 7

Rebased Performance Daily Index Performance

Source: Bloomberg Source: Bloomberg

Source: Bloomberg Source: Bloomberg

80.090.0

100.0110.0120.0130.0140.0150.0160.0170.0180.0190.0200.0210.0

Aug-10 Aug-11 Aug-12 Aug-13 Aug-14

QE Index S&P Pan Arab S&P GCC

0.1%

1.1%

(0.1%)

0.1%

0.5%

(0.8%)(1.0%)(1.4%)

(0.7%)

0.0%

0.7%

1.4%

Saud

i Ara

bia

Qata

r

Kuw

ait

Bah

rain

Om

an

Abu D

habi

Dubai

Asset/Currency Performance Close ($) 1D% WTD% YTD%

Global Indices Performance Close 1D% WTD% YTD%

Gold/Ounce 1,268.92 0.6 (1.5) 5.2 DJ Industrial 17,137.36 0.4 0.2 3.4

Silver/Ounce 19.20 0.8 (1.4) (1.4) S&P 500 2,007.71 0.5 0.2 8.6

Crude Oil (Brent)/Barrel (FM Future)

100.82 (1.0) (2.3) (9.0) NASDAQ 100 4,582.90 0.5 0.1 9.7

Natural Gas (Henry Hub)/MMBtu

3.84 (1.4) (4.6) (11.6) STOXX 600 347.57 (0.4) 1.6 5.9

LPG Propane (Arab Gulf)/Ton 105.00 0.6 2.1 (16.8) DAX 9,747.02 0.2 2.9 2.0

LPG Butane (Arab Gulf)/Ton 122.00 0.2 1.7 (10.6) FTSE 100 6,855.10 (0.3) 0.5 1.6

Euro 1.30 0.1 (1.4) (5.8) CAC 40 4,486.49 (0.2) 2.4 4.4

Yen 105.09 (0.2) 1.0 (0.2) Nikkei 15,668.68 (0.0) 1.6 (3.8)

GBP 1.63 (0.0) (1.6) (1.4) MSCI EM 1,096.83 (0.3) 0.8 9.4

CHF 1.07 0.1 (1.4) (4.1) SHANGHAI SE Composite 2,326.43 0.8 4.9 9.9

AUD 0.94 0.3 0.4 5.2 HANG SENG 25,240.15 (0.2) 2.0 8.3

USD Index 83.74 (0.1) 1.2 4.6 BSE SENSEX 27,026.70 (0.2) 1.5 27.7

RUB 37.05 0.1 (0.2) 12.7 Bovespa 60,681.98 (0.2) (1.0) 17.8

BRL 0.45 (0.1) (0.2) 5.3 RTS 1,257.26 1.3 5.6 (12.9)

201.0

169.5

151.8

4 september daily market report

Economy & Finance