GIH - Equity Research

Global Research Monthly Update Equity - GCC June, 2012

GCC Equity Monitor
GCC ROE & P/BV
24%

GCC Country Performance Country
Qatar

1M -1.7% -5.0% -2.4% -3.9% -10.6% -3.0% -8.9%

3M -0.8% -3.1% -2.2% -4.7% -8.2% -8.1% -17.8%

12M -15.0% -8.7% -5.9% 1.1% 1.8% -9.2% -8.0%

P/E* 9.3 13.1 8.4 9.5 9.5 7.5 10.2

P/BV* 0.9 1.6 1.4 1.9 1.6 1.1 0.6

DY (%) 5.4% 3.9% 6.9% 4.9% 4.5% 5.9% 4.3%

22%
20%
2012e ROE

Bahrain Kuwait Oman Qatar KSA
2.5 3.0

18%

KSA Oman

16% 14%
12% 10% 0.5 1.0

GCC

UAE

Kuwait

1.5

2.0

2012e P/BV

UAE-Abu Dhabi UAE-Dubai

GCC PE & Earnings Grow th
19% Kuwait 17%
Earnings Grwoth

Source: Global Research, Bloomberg, Zawya * 2012e

Top Fundamental Picks
Arabian Cement Co. (KSA), CMP: SAR56.00, Target Price: SAR66.90
Arabian Cement is trading at a low P/E estimate of 8.4x for 2012. The company exhibited a stellar growth of 90.6% in profits for 1Q12 attributed to the huge construction activity witnessed in the western region of KSA. ACC managed to increase production by 300,000tons which will help it meet continuously rising demand in the western region and the Kingdom as a whole. However Arabian Cement is incurring losses from it Jordanian subsidiary, but with the current restructuring plan, cost rationalization and improving efficiency, the Jordanian subsidiary will be of great importance in the future for the company.

UAE 15%

Qatar GCC
KSA

13%
11% 9% 7% 5%

Oman

5.0

7.0

9.0

11.0

13.0

15.0

2012e P/E

World & GCC Indices YTD

Emirates NBD (UAE), CMP: AED2.70, Target Price: AED3.42
27.7%

6.5% 5.7% 0.3%

7.9% 1.0% -1.2% -6.8%
UAE-Abu Dhabi Kuwait Egypt India China Jordan US

3.3%

1.6%

-0.5% -5.1%
UAE -Dubai

Emirates NBD has an immense sovereign exposure to Dubai and has been under pressure lately following new regulations by the CBUAE capping lending and asking banks to comply by September 2012. There has been news in the market about possible postponement of the compliance date for the said regulations on a case to case basis for heavily exposed banks. We see this as a positive development, whereby the bank will be allowed to reach compliant levels amicably, minimizing the adverse impact on its books and profitability. ENBD is trading at the lowest P/BV within the sector, coupled with a hard-to-ignore upside potential.

Bahrain

Qatar

Oman

KSA

Commercial Bank of Qatar (Qatar), CMP: QAR69.30, Target Price: QAR95.12
CBQ continues to be our top pick given its relatively strong balance sheet and solid long-term funding and capitalization base. The stock has come under pressure in recent times largely due to concerns on foreign funding which we believe is overdone. The stock offers a combination of both value and growth and is expected to do well in the near term.

So urce: Glo bal Research, B lo o mberg A s o f 03 June 201 2

Top Technical Picks
KFH's stock price closed at KWD0.750. A temporarily double bottom has been formed on the weekly chart at KWD0.680, while the long bullish candle seen recently could suggest the start of a new bullish trend. However, it is important to know that overhead resistance levels are intense as we have KWD0.760, KWD0.820 and KWD0.880 but for an aggressive bullish tone to take place, the stock should show strong buying potential above the critical resistance line at KWD1.120. On the counter side, losing KWD0.680 would trigger KWD0.610. The weekly and daily "RSI" indicators are looking neutral at present. Strategy: Medium-term (11 weeks) investors should be aware as the price is near the moving average for this period at KWD0.740, while long-term (50 weeks) investors can only buy above KWD0.820.

Global Research fhasan@global.com.kw Tel.: (965) 22951270

Global Investment House www.globalinv.net

Global Research - GCC

GCC Equity Monitor

GCC Universe by Country

Global Research - GCC Universe UAE Abu Dhabi Commercial Bank Dana Gas Emirates Telecommunications Corp First Gulf Bank National Bank of Abu Dhabi Ras Al Khaimah Cement Co Ras Al Khaimah Ceramics Co Abu Dhabi National Energy Union National Bank Air Arabia Arabtec Holding PJSC Dubai Financial Market Drake & Scull International Emirates NBD Aramex Emaar Properties Aldar Properties Sorouh Real Estate Total

Bloomberg Ticker

Mkt. Cap USD mn 4,433.2 700.8 18,877.4 6,967.1 8,987.5 93.6 269.3 1,982.9 1,929.6 711.5 1,205.2 1,988.6 461.3 4,085.5 713.5 4,626.9 1,123.3 678.9

Stock Performance 1M 3M 12M -7.9% -11.4% 1.4% -5.1% -3.5% -4.1% -11.3% 0.0% -5.0% -7.7% -13.9% -17.0% -14.6% -5.3% -1.1% -10.3% -10.6% -15.2% -12.3% -25.0% -6.1% -20.7% -0.8% -11.3% -21.8% -9.3% -10.4% -25.8% -17.1% -23.3% -24.5% -18.2% -7.7% -10.6% -19.8% -26.4% -0.7% -40.0% -15.3% -5.2% 2.2% -21.1% -32.8% -4.9% -25.7% -20.3% 121.0% -25.2% -23.7% -32.2% -3.2% -12.8% -26.3% -28.6%

P/E 2012e 7.9 4.7 9.4 6.5 8.2 nm 5.0 4.0 4.5 9.6 30.1 77.0 7.9 6.6 11.3 10.0 10.1 5.4 8.05

P/BV 2012e 0.9 0.3 1.7 1.1 1.3 0.5 0.4 0.7 0.6 0.5 1.5 1.0 0.6 0.5 1.3 0.5 0.6 0.4 0.90

ROE 2012e 11.8% 6.0% 18.2% 17.8% 16.6% 0.0% 7.5% 17.9% 13.7% 5.2% 5.0% 1.3% 8.0% 7.2% 11.9% 5.3% 5.7% 6.9% 11.6%

ROA 2012e 1.1% 4.2% 9.6% 2.4% 1.5% 0.0% 3.3% 1.6% 1.9% 3.7% 1.7% 1.2% 3.6% 0.8% 9.0% 2.9% 1.1% 3.4% 2.0%

EPS 2012e 0.37 0.08 0.93 1.31 1.04 0.00 0.26 0.30 0.63 0.06 0.09 0.01 0.09 0.41 0.16 0.28 0.10 0.16

Current Price 2.91 0.39 8.77 8.53 8.52 0.71 1.33 1.17 2.84 0.56 2.82 0.91 0.74 2.70 1.79 2.79 1.01 0.95

Target Price 3.73 U/R 11.10 12.40 9.92 U/R U/R 1.79 4.64 0.76 1.21 0.90 0.95 3.42 2.00 4.00 1.30 1.05

Upside / (Downside) 28.2% U/R 26.6% 45.4% 16.4% U/R U/R 53.1% 63.4% 36.6% -57.1% -1.4% 28.2% 26.7% 11.7% 43.4% 28.7% 10.5%

Rating

ADCB UH DANA UH ETISALAT UH FGB UH NBAD UH RAKCC UH RAKCEC UH TAQA UH UNB UH AIRARABI UH ARTC UH DFM UH DSI UH EMIRATES UH ARMX UH EMAAR UH ALDAR UH SOROUH UH

STRONG BUY U/R STRONG BUY STRONG BUY BUY U/R U/R STRONG BUY STRONG BUY STRONG BUY SELL HOLD STRONG BUY STRONG BUY BUY STRONG BUY STRONG BUY BUY

Kuwait Mobile Telecommunications Co ZAIN KK National Bank of Kuwait NBK KK Kuwait Finance House KFIN KK Commercial Bank of Kuwait CBK KK National Mobile Telecommunications Co NMTC KK Jazeera Airways Co JAZEERA KK Burgan Bank BURG KK Mabanee MABANEE KK Salhia Real Estate SRE KK Total Oman Oman Telecommunications Co Bank Muscat Raysut Cement Co Oman Cement Co Total

10,683.7 16,274.8 7,725.0 3,429.2 3,623.5 356.6 2,304.7 2,065.1 479.2

-6.8% -3.7% 0.0% -6.3% -15.3% -3.5% -5.7% -7.8% 4.8%

-19.8% -4.7% -4.9% 5.6% -1.0% -5.1% -6.3% 10.0% 23.8%

-32.4% -3.1% -21.6% -17.6% 2.0% 142.5% -16.2% 18.9% 22.6%

9.0 14.0 27.6 21.2 9.9 5.6 10.8 16.3 19.3 13.07

1.3 2.0 1.8 1.7 1.1 2.2 1.3 3.3 1.0 1.62

14.9% 14.5% 6.6% 8.2% 11.2% 50.4% 12.6% 21.8% 5.2% 12.6%

9.9% 2.3% 0.6% 1.2% 7.4% 9.6% 1.3% 10.8% 2.5% 2.4%

0.08 0.07 0.03 0.04 0.20 0.07 0.04 0.06 0.01

0.69 1.04 0.74 0.75 2.00 0.41 0.42 0.94 0.26

0.86 1.13 U/R 0.73 2.59 0.56 U/R 0.98 0.25

25.0% STRONG BUY 8.8% HOLD U/R U/R -2.9% HOLD 29.6% STRONG BUY 36.1% STRONG BUY U/R U/R 4.3% HOLD -3.8% HOLD

OTEL OM BKMB OM RCCI OM OCOI OM

2,579.2 2,598.0 677.9 582.7

1.5% -10.8% 5.2% -2.2%

-5.7% -13.9% 50.0% 35.3%

20.5% -14.7% 20.8% 20.6%

8.6 6.9 17.8 11.2 8.41

1.8 1.0 2.6 1.5 1.40

22.5% 15.5% 14.3% 13.4% 17.4%

16.0% 2.0% 7.8% 11.5% 3.5%

0.15 0.09 0.07 0.06

1.32 0.55 1.31 0.68

1.45 U/R U/R 0.70

9.9% U/R U/R 2.9%

HOLD U/R U/R HOLD

June - 2012

2

Global Research ­ GCC

GCC Equity Monitor

GCC Universe by Country (cont)
Global Research - GCC Universe Qatar Qatar National Bank Industries Qatar Qatar Telecom Vodafone Qatar Qatar Islamic Bank Commercial Bank of Qatar Qatar Electricity & Water Co Doha Bank Al Rayan Bank Qatar National Cement Co Total Saudi Arabia Saudi Basic Industries Corp Al Rajhi Bank Saudi Telecom Co Samba Financial Group Saudi Electricity Co Riyad Bank Saudi British Bank Banque Saudi Fransi Etihad Etisalat Co Arab National Bank Saudi Arabian Fertilizers Co Yanbu National Petrochemicals Co Saudi Hollandi Bank Saudi International Petrochemical Co Yamama Saudi Cement Co Arabian Cement Co Saudi Cement Co Dar Alarkan Emaar Economic City Saudi Real Estate Co Al Khodari Sons Co Yanbu Cement Co Qassim Cement Co Mohammad Al-Mojil Group Total Bahrain Bahrain Telecommunications Co
* All price in local currency as of 3 June 2012 Source: Bloomberg & Global Research

Bloomberg Ticker

Mkt. Cap USD mn 25,483.8 20,212.0 7,044.6 2,096.7 5,010.3 4,709.8 3,817.7 3,162.1 5,489.7 1,410.6

Stock Performance 1M 3M 12M -0.7% -8.5% -7.4% 1.5% -1.0% -3.7% -1.6% -2.1% -0.2% -1.4% -1.0% -5.4% 1.5% 23.0% -1.2% -9.9% -5.4% -9.4% 0.6% -7.8% 7.1% -2.1% 10.3% 15.2% 0.3% -3.3% -2.9% 9.9% 16.9% -7.1%

P/E 2012e 10.3 7.6 8.7 na 11.7 7.6 8.9 8.2 12.7 11.5 9.47

P/BV 2012e 2.1 2.4 1.1 1.2 1.7 1.3 3.9 1.8 2.3 2.1 1.91

ROE 2012e 21.5% 33.9% 13.4% -4.1% 15.1% 17.3% 47.5% 22.5% 18.9% 19.0% 21.2%

ROA 2012e 2.8% 24.4% 2.8% -3.3% 2.5% 3.0% 7.0% 2.6% 2.6% 16.8% 4.0%

EPS 2012e 14.21 17.53 12.87 (0.32) 6.62 9.08 15.70 6.76 2.10 9.12

Current Price 132.60 133.80 112.10 9.03 77.20 69.30 139.00 55.70 26.65 104.60

Target Price 156.08 170.90 151.67 7.49 81.30 95.12 180.81 64.96 27.51 125.40

Upside / (Downside) 17.7% 27.7% 35.3% -17.0% 5.3% 37.3% 30.1% 16.6% 3.2% 19.9%

Rating

QNBK QD IQCD QD QTEL QD VFQS QD QIBK QD CBQK QD QEWS QD DHBK QD MARK QD QNCD QD

BUY STRONG BUY STRONG BUY SELL HOLD STRONG BUY STRONG BUY BUY HOLD BUY

SABIC AB RJHI AB STC AB SAMBA AB SECO AB RIBL AB SABB AB BSFR AB EEC AB ARNB AB SAFCO AB YANSAB AB AAAL AB SIPCHEM AB YACCO AB ARCCO AB SACCO AB ALARKAN AB EMAAR AB SRECO AB ALKHODAR AB YNCCO AB QACCO AB MMG AB

72,594.2 28,397.7 21,331.6 10,775.1 14,387.5 9,079.3 9,039.1 8,147.5 11,945.7 6,062.2 11,382.4 6,554.5 2,794.0 1,838.1 2,581.0 1,194.6 3,641.1 2,879.8 2,198.5 822.3 480.2 2,155.8 1,883.8 453.3

-12.1% -9.3% -5.2% -11.1% -5.1% -9.0% -5.8% -11.1% -5.9% -13.3% -7.7% -17.2% -7.4% -13.6% -5.3% -5.5% -7.0% -14.9% -27.3% -6.9% -20.0% 2.7% -4.8% -10.8%

-10.8% -12.1% 2.8% -12.8% -10.1% -12.4% -2.4% -8.0% 1.2% -16.3% -8.8% -14.7% -1.3% -16.4% -14.3% 5.7% -4.0% 6.4% -0.5% -7.6% -23.3% 12.0% -9.5% -18.3%

-12.9% -4.4% 7.5% -13.7% -11.3% -8.3% 4.9% -8.0% 27.4% -12.7% -4.1% -6.6% 6.3% -12.6% 15.6% 30.8% 43.4% 15.6% 32.9% 2.4% -37.9% 46.7% 15.9% -42.5%

8.7 11.6 9.2 8.3 18.2 9.6 11.1 8.5 8.1 8.2 9.7 7.1 8.9 10.2 9.5 8.4 12.4 8.8 na 25.3 10.3 11.0 12.7 14.0 9.60 8.3

1.6 3.4 1.5 1.3 1.0 1.1 1.8 1.4 2.1 1.3 4.8 1.8 1.3 1.2 2.7 1.5 3.9 0.7 1.1 1.0 2.4 2.4 3.6 1.0 1.66 1.2

20.6% 28.5% 17.5% 16.3% 5.5% 11.8% 16.9% 17.7% 28.1% 16.2% 51.6% 29.0% 15.4% 12.0% 29.2% 18.2% 32.6% 7.6% -0.5% 3.8% 24.8% 23.9% 28.4% 11.2% 18.2% 15.3%

8.9% 4.0% 7.3% 2.4% 1.3% 1.9% 2.1% 2.5% 14.3% 2.2% 45.6% 13.6% 2.0% 4.9% 26.4% 12.0% 23.0% 5.1% -0.2% 3.6% 7.4% 15.9% 26.1% 3.5% 4.7% 12.1%

10.43 90.75 6.13 71.00 4.35 40.00 5.38 44.90 0.71 12.95 2.37 22.70 3.06 33.90 3.99 33.80 7.93 64.00 3.27 26.70 17.61 170.75 6.18 43.70 2.98 26.40 1.84 18.80 5.02 47.80 6.63 56.00 7.19 89.25 1.13 10.00 (0.04) 9.70 1.02 25.70 3.30 33.90 7.01 77.00 6.19 78.50 0.97 13.60

118.60 U/R 44.00 53.73 13.80 26.20 35.50 U/R 73.00 32.60 220.70 57.80 U/R 23.60 56.40 66.90 86.10 8.90 7.65 28.95 52.08 66.80 77.00 U/R

30.7% U/R 10.0% 19.7% 6.6% 15.4% 4.7% U/R 14.1% 22.1% 29.3% 32.3% U/R 25.5% 18.0% 19.5% -3.5% -11.0% -21.1% 12.6% 53.6% -13.2% -1.9% U/R

STRONG BUY U/R BUY BUY HOLD BUY HOLD U/R BUY STRONG BUY STRONG BUY STRONG BUY U/R STRONG BUY BUY BUY HOLD SELL SELL BUY STRONG BUY SELL HOLD U/R

BATELCO BI

1,802.8

2.2%

21.0%

9.3%

0.06

0.47

0.50

6.8%

HOLD

June - 2012

3

Global Research ­ GCC

GCC Equity Monitor

GCC Universe by Sector
Global Research - GCC Universe Cement & Building Material Ras Al Khaimah Cement Co Ras Al Khaimah Ceramics Co Raysut Cement Co Oman Cement Co Qatar National Cement Co Yamama Saudi Cement Co Arabian Cement Co Yanbu Cement Co Qassim Cement Co Saudi Cement Co Total Bloomberg Ticker Mkt. Cap USD mn RAKCC UH RAKCEC UH RCCI OM OCOI OM QNCD QD YACCO AB ARCCO AB YNCCO AB QACCO AB SACCO AB 93.6 269.3 677.9 582.7 1,410.6 2,581.0 1,194.6 2,155.8 1,883.8 3,641.1 Stock Performance 3M 12M -11.3% -21.8% 50.0% 35.3% -7.8% -14.3% 5.7% 12.0% -9.5% -4.0% -21.1% -32.8% 20.8% 20.6% -7.1% 15.6% 30.8% 46.7% 15.9% 43.4% P/E 2012e nm 5.0 17.8 11.2 11.5 9.5 8.4 11.0 12.7 12.4 11.00 P/BV 2012e 0.5 0.4 2.6 1.5 2.1 2.7 1.5 2.4 3.6 3.9 2.28 ROE 2012e 0.0% 7.5% 14.3% 13.4% 19.0% 29.2% 18.2% 23.9% 28.4% 32.6% 21.4% ROA 2012e 0.0% 3.3% 7.8% 11.5% 16.8% 26.4% 12.0% 15.9% 26.1% 23.0% 15.0% EPS 2012e 0.00 0.26 0.07 0.06 9.12 5.02 6.63 7.01 6.19 7.19 Current Price 0.71 1.33 1.31 0.68 104.60 47.80 56.00 77.00 78.50 89.25 Target Price U/R U/R U/R 0.70 125.40 56.40 66.90 66.80 77.00 86.10 Upside / (Downside) U/R U/R U/R 2.9% 19.9% 18.0% 19.5% -13.2% -1.9% -3.5% Rating

1M

-4.1% -11.3% 5.2% -2.2% -1.4% -5.3% -5.5% 2.7% -4.8% -7.0%

U/R U/R U/R HOLD BUY BUY BUY SELL HOLD HOLD

Telecom Emirates Telecommunications Corp ETISALAT UH Bahrain Telecommunications Co BATELCO BI Mobile Telecommunications Co ZAIN KK National Mobile Telecommunications Co NMTC KK Oman Telecommunications Co OTEL OM Qatar Telecom QTEL QD Vodafone Qatar VFQS QD Saudi Telecom Co STC AB Etihad Etisalat Co EEC AB Total Petrochemicals Dana Gas Industries Qatar Saudi Basic Industries Corp Saudi Arabia Fertilizers Co Yanbu National Petrochemicals Co Saudi International Petrochemichal Co Total Utilities Abu Dhabi National Energy Qatar Electricity & Water Co Saudi Electricity Co Total Transportation and Logistics Aramex Air Arabia Jazeera Airways Co Total

18,877.4 1,802.8 10,683.7 3,623.5 2,579.2 7,044.6 2,096.7 21,331.6 11,945.7

1.4% 2.2% -6.8% -15.3% 1.5% -7.4% 1.5% -5.2% -5.9%

-6.1% 21.0% -19.8% -1.0% -5.7% 1.5% 23.0% 2.8% 1.2%

-15.3% 9.3% 0.0% 2.0% 20.5% 10.3% 15.2% 7.5% 27.4%

9.4 8.3 9.0 9.9 8.6 8.7 na 9.2 8.1 9.31

1.7 1.2 1.3 1.1 1.8 1.1 1.2 1.5 2.1 1.51

18.2% 15.3% 14.9% 11.2% 22.5% 13.4% -4.1% 17.5% 28.1% 5.8%

9.6% 12.1% 9.9% 7.4% 16.0% 2.8% -3.3% 7.3% 14.3% 7.4%

0.93 0.06 0.08 0.20 0.15 12.87 (0.32) 4.35 7.93

8.77 0.47 0.69 2.00 1.32 112.10 9.03 40.00 64.00

11.10 0.50 0.86 2.59 1.45 151.67 7.49 44.00 73.00

26.6% 6.8% 25.0% 29.6% 9.9% 35.3% -17.0% 10.0% 14.1%

STRONG BUY HOLD STRONG BUY STRONG BUY HOLD STRONG BUY SELL BUY BUY

DANA UH IQCD QD SABIC AB SAFCO AB YANSAB AB SIPCHEM AB

700.8 20,212.0 72,594.2 11,382.4 6,554.5 1,838.1

-11.4% -8.5% -12.1% -7.7% -17.2% -13.6%

-25.0% -5.4% -10.8% -8.8% -14.7% -16.4%

-40.0% -2.1% -12.9% -4.1% -6.6% -12.6%

4.7 7.6 8.7 9.7 7.1 10.2 8.44 4.0 8.9 18.2 11.71

0.3 2.4 1.6 4.8 1.8 1.2 1.81 0.7 3.9 1.0 1.08

6.0% 33.9% 20.6% 51.6% 29.0% 12.0% 23.2% 17.9% 47.5% 5.5% 9.6%

4.2% 24.4% 8.9% 45.6% 13.6% 4.9% 11.0% 1.6% 7.0% 1.3% 1.8%

0.08 17.53 10.43 17.61 6.18 1.84

0.39 133.80 90.75 170.75 43.70 18.80

U/R 170.90 118.60 220.70 57.80 23.60

U/R 27.7% 30.7% 29.3% 32.3% 25.5%

U/R STRONG BUY STRONG BUY STRONG BUY STRONG BUY STRONG BUY

TAQA UH QEWS QD SECO AB

1,982.9 3,817.7 14,387.5

0.0% -1.6% -5.1%

-9.3% -5.4% -10.1%

-4.9% -2.9% -11.3%

0.30 15.70 0.71

1.17 139.00 12.95

1.79 180.81 13.80

53.1% STRONG BUY 30.1% STRONG BUY 6.6% HOLD

ARMX UH AIRARABI UH JAZEERA KK

713.5 711.5 356.6

-1.1% -7.7% -3.5%

-7.7% -25.8% -5.1%

-3.2% -20.3% 142.5%

11.3 9.6 5.6 8.85

1.3 0.5 2.2 0.84

11.9% 5.2% 50.4% 9.7%

9.0% 3.7% 9.6% 6.0%

0.16 0.06 0.07

1.79 0.56 0.41

2.00 0.76 0.56

11.7% BUY 36.6% STRONG BUY 36.1% STRONG BUY

June - 2012

4

Global Research ­ GCC

GCC Equity Monitor

GCC Universe by Sector (cont)
Global Research - GCC Universe Banks Abu Dhabi Commercial Bank First Gulf Bank National Bank of Abu Dhabi Union National Bank Emirates NBD National Bank of Kuwait Kuwait Finance House Commercial Bank of Kuwait Burgan Bank Bank Muscat Qatar National Bank Qatar Islamic Bank Commercial Bank of Qatar Doha Bank Al Rayan Bank Al Rajhi Bank Samba Financial Group Riyad Bank Saudi British Bank Banque Saudi Fransi Arab National Bank Saudi Hollandi Bank Total Construction Contractors Arabtec Holding Drake & Scull International Al Khodari Sons Co Mohammad Al-Mojil Group Total Real Estate Dar Alarkan Emaar Economic City Saudi Real Estate Co (Akaria) Emaar Properties Aldar Properties Sorouh Real Estate Mabanee Salhia Real Estate Total Others Dubai Financial Market Total
* All price in local currency as of 3 June 2012 Source: Bloomberg & Global Research

Bloomberg Ticker Mkt. Cap USD mn ADCB UH FGB UH NBAD UH UNB UH EMIRATES UH NBK KK KFIN KK CBK KK BURG KK BKMB OM QNBK QD QIBK QD CBQK QD DHBK QD MARK QD RJHI AB SAMBA AB RIBL AB SABB AB BSFR AB ARNB AB AAAL AB 4,433.2 6,967.1 8,987.5 1,929.6 4,085.5 16,274.8 7,725.0 3,429.2 2,304.7 2,598.0 25,483.8 5,010.3 4,709.8 3,162.1 5,489.7 28,397.7 10,775.1 9,079.3 9,039.1 8,147.5 6,062.2 2,794.0

1M

Stock Performance 3M 12M -12.3% -20.7% -0.8% -10.4% -18.2% -4.7% -4.9% 5.6% -6.3% -13.9% -1.0% -1.2% -9.9% -9.4% 0.6% -12.1% -12.8% -12.4% -2.4% -8.0% -16.3% -1.3% -0.7% -5.2% 2.2% -25.7% -32.2% -3.1% -21.6% -17.6% -16.2% -14.7% 7.1% 0.3% -3.3% 9.9% 16.9% -4.4% -13.7% -8.3% 4.9% -8.0% -12.7% 6.3%

P/E 2012e 7.9 6.5 8.2 4.5 6.6 14.0 27.6 21.2 10.8 6.9 10.3 11.7 7.6 8.2 12.7 11.6 8.3 9.6 11.1 8.5 8.2 8.9 9.93

P/BV 2012e 0.9 1.1 1.3 0.6 0.5 2.0 1.8 1.7 1.3 1.0 2.1 1.7 1.3 1.8 2.3 3.4 1.3 1.1 1.8 1.4 1.3 1.3 1.55

ROE 2012e 11.8% 17.8% 16.6% 13.7% 7.2% 14.5% 6.6% 8.2% 12.6% 15.5% 21.5% 15.1% 17.3% 22.5% 18.9% 28.5% 16.3% 11.8% 16.9% 17.7% 16.2% 15.4% 16.1%

ROA 2012e 1.1% 2.4% 1.5% 1.9% 0.8% 2.3% 0.6% 1.2% 1.3% 2.0% 2.8% 2.5% 3.0% 2.6% 2.6% 4.0% 2.4% 1.9% 2.1% 2.5% 2.2% 2.0% 2.1%

EPS 2012e 0.37 1.31 1.04 0.63 0.41 0.07 0.03 0.04 0.04 0.09 14.21 6.62 9.08 6.76 2.10 6.13 5.38 2.37 3.06 3.99 3.27 2.98

Current Price 2.91 8.53 8.52 2.84 2.70 1.04 0.74 0.75 0.42 0.55 132.60 77.20 69.30 55.70 26.65 71.00 44.90 22.70 33.90 33.80 26.70 26.40

Target Price 3.73 12.40 9.92 4.64 3.42 1.13 U/R 0.73 U/R U/R 156.08 81.30 95.12 64.96 27.51 U/R 53.73 26.20 35.50 U/R 32.60 U/R

Upside / (Downside) 28.2% 45.4% 16.4% 63.4% 26.7% 8.8% U/R -2.9% U/R U/R 17.7% 5.3% 37.3% 16.6% 3.2% U/R 19.7% 15.4% 4.7% U/R 22.1% U/R

Rating

-7.9% -5.1% -3.5% -5.0% -5.3% -3.7% 0.0% -6.3% -5.7% -10.8% -0.7% -1.0% -3.7% -2.1% -0.2% -9.3% -11.1% -9.0% -5.8% -11.1% -13.3% -7.4%

STRONG BUY STRONG BUY BUY STRONG BUY STRONG BUY HOLD U/R HOLD U/R U/R BUY HOLD STRONG BUY BUY HOLD U/R BUY BUY HOLD U/R STRONG BUY U/R

ARTC UH DSI UH ALKHODAR AB MMG AB

1,205.2 461.3 480.2 453.3

-13.9% -14.6% -20.0% -10.8%

-17.1% -24.5% -23.3% -18.3%

121.0% -23.7% -37.9% -42.5%

30.1 7.9 10.3 14.0 14.65

1.5 0.6 2.4 1.0 1.19

5.0% 8.0% 24.8% 11.2% 8.8%

1.7% 3.6% 7.4% 3.5% 2.0%

0.09 0.09 3.30 0.97

2.82 0.74 33.90 13.60

1.21 0.95 52.08 U/R

-57.1% SELL 28.2% STRONG BUY 53.6% STRONG BUY U/R U/R

ALARKAN AB EMAAR AB SRECO AB EMAAR UH ALDAR UH SOROUH UH MABANEE KK SRE KK

2,879.8 2,198.5 822.3 4,626.9 1,123.3 678.9 2,065.1 479.2

-14.9% -27.3% -6.9% -10.3% -10.6% -15.2% -7.8% 4.8%

6.4% -0.5% -7.6% -10.6% -19.8% -26.4% 10.0% na

15.6% 32.9% 2.4% -12.8% -26.3% -28.6% 18.9% 22.6%

8.8 na 25.3 10.0 10.1 5.4 16.3 19.3 12.37

0.7 1.1 1.0 0.5 0.6 0.4 3.3 1.0 0.70

7.6% -0.5% 3.8% 5.3% 5.7% 6.9% 21.8% 5.2% 5.8%

5.1% -0.2% 3.6% 2.9% 1.1% 3.4% 10.8% 2.5% 2.8%

1.13 (0.04) 1.02 0.28 0.10 0.16 0.06 0.01

10.00 9.70 25.70 2.79 1.01 0.95 0.94 0.26

8.90 7.65 28.95 4.00 1.30 1.05 0.98 0.25

-11.0% SELL -21.1% SELL 12.6% BUY 43.4% STRONG BUY 28.7% STRONG BUY 10.5% BUY 4.3% HOLD -3.8% HOLD

DFM UH

1,988.6

-17.0%

-23.3%

-25.2%

77.0 77.04

1.0 0.96

1.3% 1.3%

1.2% 1.2%

0.01

0.91

0.90

-1.4%

HOLD

June - 2012

5

Charts

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

-

10.0%

20.0%

25.0%

30.0%

35.0%

45.0%

50.0%

15.0%

40.0%

0.0%

5.0%

12.0%

15.0%

0.0%

3.0%

6.0%

9.0%

June ­ 2012
Abu Dhabi National Energy
Saudi Arabian Fertilizers Co

Air Arabia

Union National Bank
Yamama Saudi Cement Co

Abu Dhabi National Energy

Dana Gas
Qassim Cement Co

Global Research ­ GCC

Commercial Bank of Qatar

Ras Al Khaimah Ceramics Co

Source: Glob al Research, Bloomb erg
Industries Qatar

Doha Bank Sorouh Real Estate Saudi Cement Co Jazeera Airways Co

Attractive P/E x

Oman Cement Co Qatar National Cement Co

Dividend Yield

Return on Assets (ROA)

Saudi Arabian Fertilizers Co First Gulf Bank
Oman Telecommunications Co

Mobile Telecommunications Co

Emirates NBD Yanbu Cement Co Bank Muscat
Etihad Etisalat Co

Yamama Saudi Cement Co

Bahrain Telecommunications Co Yanbu National Petrochemicals Co

Yanbu National Petrochemicals Co

First Gulf Bank

0.0%

5.0%

10.0%

10.0%

20.0%

40.0%

50.0%

60.0%

30.0%

-5.0% 0.0%
Saudi Arabian Fertilizers Co Jazeera Airways Co Qatar Electricity & Water Co Industries Qatar Saudi Cement Co

0.3

0.4

0.5

0.6

0.7

0.1
-

0.2

Raysut Cement Co

Dana Gas

Salhia Real Estate

Sorouh Real Estate

Yanbu Cement Co

Ras Al Khaimah Ceramics Co

Bahrain Telecommunications Co

Ras Al Khaimah Cement Co

Vodafone Qatar

Emirates NBD

Oman Telecommunications Co

Yamama Saudi Cement Co

Attractive P/BV x

Return on Equity (ROE)

Air Arabia

Top 10 Gainers in 1 month

Emirates Telecommunications Corp

Yanbu National Petrochemicals Co

Emaar Properties

Kuwait Finance House

Al Rajhi Bank

Aldar Properties

Abu Dhabi National Energy

Qassim Cement Co

Union National Bank

GCC Equity Monitor

6

Al Rayan Bank

Etihad Etisalat Co

Drake & Scull International

Global Research ­ GCC

GCC Equity Monitor

Technical Overview: Kuwait Stock Exchange
Kuwait Stock Exchange Price Index <.KWSE> closed at 6,193.82 point. The market remains underpinned by its strong support line at around 6,100 point, knowing that the index should hold a close above there for a near-term upside rebound to be preserved, but a sudden dip below there would trigger the psychological level at 6,000 point and even more towards 5,900 point. On the bullish side, nearby resistance levels are located at 6,300 point and 6,400 point but only a cross over 6,537 point would alleviate the selling pressure and call for another leg up towards 6,770 point. The weekly and daily "RSI" indicators are currently looking negative. Strategy: Medium-term (11 weeks) investors can re-enter the market at levels higher than 6,300 point, while long-term investors who would like to stay should watch out if the index dips below 6,165 point. Index Name Sector Reuters' RIC Last Trade (point) MACD* RSI** Moving Average (11 weeks) Moving Average (50 weeks) Support (1) ^ Support (2) ^ Resistance(1) ^^ Resistance(2) ^^ Trend Status Kuwait Stock Exchange Price Index Index <.KWSE> 6,193.82 89.49 52.086 6,300 6,165 6,000 5,900 6,537 6,770 Neutral May 31, 2012

Name of Index Kuwait Stock Exchange Price Index Saudi All Share Index QE Index Abu Dhabi Price Index Dubai Financial Market Index MSM 30 Index Bahrain All Share Index

Reuter' RIC <.KWSE> <.TASI> <.QSI> <.ADX> <.DFMGI> <.MSI> <.BAX>

Close 6,193.82 6,975.27 8,416.83 2,441.03 1,471.49 5,754.69 1,139.58

Weekly RSI 1 52.086 42.675 38.465 40.550 40.105 47.750 38.800

Support 2 5,900 6,200 8,000 2,292 1,350 5,500 1,100

Resistance 1 6,537 7,200 8,500 2,475 1,500 5,840 1,165 2 6,770

Strategy Medium Neutral Long Neutral

Moving Average 11 6,300 7,150 8,550 2,475 1,540 5,760 1,150 50 6,165 6,800 8,550 2,535 1,540 5,820 1,200

6,000 6,500 8,260 2,350 1,400 5,560 1,126

7,640 Bearish Neutral 9,000 Neutral Neutral

2,535 Bearish Bearish 1,590 Bearish Bearish 6,085 1,200 Neutral Neutral

Neutral Bearish

Definitions: * A trend-following momentum indicator that shows the relationship between two moving averages of prices. When the MACD is above zero, the short-term average is above the long-term average, which signals upward momentum. The opposite is true. ** A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. An asset is deemed to be overbought once the RSI approaches the 70 level, meaning that it may be getting overvalued and is a good candidate for a pullback. Likewise, if the RSI approaches 30, it is an indication that the asset may be getting oversold and therefore likely to become undervalued. × Moving average. Which is an arithmetic way and a tool used purpose of easing the price fluctuations to clarify the trend and differentiate between primary or secondary trend of prices and the normal fluctuations. ^ The price level which, historically, a stock has had difficulty falling below. It is thought of as the level at which a lot of buyers tend to enter the stock. ^^ The price at which a stock or market can trade, but can not exceed, for a certain period of time. The stock or market stops rising because sellers start to outnumber buyers. Disclaimer: This Technical Analysis is not an invitation to buy or sell, as it is "Global's" opinion and speculation of future movement of the stock. Also it is not considered a sufficient material to rely on when taking financial and investment decisions. Investors should study the financial statement before taking any investment decision.

June ­ 2012

7

Global Research ­ GCC

GCC Equity Monitor

Disclosure
The following is a comprehensive list of disclosures which may or may not apply to all our researches. Only the relevant disclosures which apply to this particular research has been mentioned in the table below under the heading of disclosure. Disclosure Checklist Company Abu Dhabi Commercial Bank Abu Dhabi National Energy Air Arabia Aldar Properties Al Rajhi Bank Al Rayan Bank Al Khodari Sons Company Arab National Bank Arabian Cement Co. Arabtec Holding PJSC Aramex Bahrain Telecommunications Company Bank Muscat Banque Saudi Fransi Burgan Bank Commercial Bank of Kuwait Dana Gas Dar Alarkan Doha Bank Drake & Scull International Dubai Financial Market Emaar Economic City Emaar Properties Emirates NBD Emirates Telecommunications Corporation Etihad Etisalat Company First Gulf Bank Industries Qatar Jazeera Airways Company Kuwait Finance House Mabanee Mobile Telecommunications Company Mohammad Al-Mojil Group National Bank of Abu Dhabi National Bank of Kuwait National Mobile Telecommunications Company Oman Cement Company Oman Telecommunications Company Qassim Cement Co Qatar Electricity & Water Company Qatar Islamic Bank Qatar National Bank Qatar National Cement Company Qatar Telecom Recommendation STRONG BUY STRONG BUY STRONG BUY STRONG BUY U/R HOLD STRONG BUY STRONG BUY BUY SELL BUY HOLD U/R U/R U/R HOLD U/R SELL BUY STRONG BUY HOLD SELL STRONG BUY STRONG BUY STRONG BUY BUY STRONG BUY STRONG BUY STRONG BUY U/R HOLD STRONG BUY U/R BUY HOLD STRONG BUY HOLD HOLD HOLD STRONG BUY HOLD BUY BUY STRONG BUY Bloomberg Ticker ADCB UH TAQA UH AIRARABI UH ALDAR UH RJHI AB MARK QD ALKHODAR AB ARNB AB ARCCO AB ARTC UH ARMX UH BATELCO BI BKMB OM BSFR AB BURG KK CBK KK DANA UH ALARKAN AB DHBK QD DSI UH DFM UH EMAAR AB EMAAR UH EMIRATES UH ETISALAT UH EEC AB FGB UH IQCD QD JAZEERA KK KFIN KK MABANEE KK ZAIN KK MMG AB NBAD UH NBK KK NMTC KK OCOI OM OTEL OM QACCO AB QEWS QD QIBK QD QNBK QD QNCD QD QTEL QD Reuters Ticker ADCB.AD TAQA.AD AIRA.DU ALDR.AD 1120.SE MARK.QA 1330.SE 1080.SE 3010.SE ARTC.DU ARMX.DU BTEL.BH BMAO.OM 1050.SE BURG.KW CBKK.KW DANA.AD 4300.SE DOBK.QA DSI.DU DFM.DU 4220.SE EMAR.DU ENBD.DU ETEL.AD 7020.SE FGB.AD IQCD.QA JAZK.KW KFIN.KW MABK.KW ZAIN.KW 1310.SE NBAD.AD NBKK.KW NMTC.KW OCCO.OM OTL.OM 3040.SE QEWC.QA QISB.QA QNBK.QA QANC.QA QTEL.QA Price AED 2.91 AED 1.17 SAR 0.56 AED 1.01 SAR 71 QAR 26.65 SAR 33.9 SAR 26.7 SAR 56 AED 2.82 AED 1.79 BHD 0.472 OMR 0.552 SAR 33.8 KWD 0.415 KWD 0.75 AED 0.39 SAR 10 QAR 55.7 AED 0.741 AED 0.913 SAR 9.7 AED 2.79 AED 2.7 AED 8.77 SAR 64 AED 8.53 QAR 133.8 KWD 0.41 KWD 0.74 KWD 0.94 KWD 0.69 SAR 13.6 AED 8.52 KWD 1.04 KWD 2 OMR 0.678 OMR 1.324 SAR 78.5 QAR 139 QAR 77.2 QAR 132.6 QAR 104.6 QAR 112.1 Disclosure 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10

June ­ 2012

8

Global Research ­ GCC

GCC Equity Monitor

Disclosure Checklist Company Ras Al Khaimah Cement Company Ras Al Khaimah Ceramics Co. Raysut Cement Company Riyad Bank Samba Financial Group Salhia Real Estate Saudi Arabia Fertilizers Company Saudi Basic Industries Corporation Saudi Cement Company Saudi Electricity Company Saudi Hollandi Bank Saudi International Petrochemichal Company Saudi Real Estate Co Saudi Telecom Company Sorouh Real Estate Commercial Bank of Qatar The Saudi British Bank Union National Bank Vodafone Qatar Yamama Saudi Cement Company Yanbu Cement Co Yanbu National Petrochemicals Company Recommendation U/R U/R U/R BUY BUY HOLD STRONG BUY STRONG BUY HOLD HOLD U/R STRONG BUY BUY BUY BUY STRONG BUY HOLD STRONG BUY SELL BUY SELL STRONG BUY Bloomberg Ticker RAKCC UH RAKCEC UH RCCI OM RIBL AB SAMBA AB SRE KK SAFCO AB SABIC AB SACCO AB SECO AB AAAL AB SIPCHEM AB SRECO AB STC AB SOROUH UH CBQK QD SABB AB UNB UH VFQS QD YACCO AB YNCCO AB YANSAB AB Reuters Ticker Price Disclosure 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10 1,10

RAKC.AD AED 0.71 RKCE.AD AED 1.33 RAYC.OM OMR 1.305 1010.SE SAR 22.7 1090.SE SAR 44.9 SREK.KW KWD 0.26 2020.SE SAR 170.75 2010.SE SAR 90.75 3030.SE SAR 89.25 5110.SE SAR 12.95 1040.SE SAR 26.4 2310.SE SAR 18.8 4020.SE SAR 25.7 4110.SE SAR 40 SOR.AD AED 0.95 COMB.QA QAR 69.3 1060.SE SAR 33.9 UNB.AD AED 2.84 VFQS.QA QAR 9.03 3020.SE SAR 47.8 3060.SE SAR 77 2290.SE SAR 43.7

1. Global Investment House did not receive and will not receive any compensation from the company or anyone else for the preparation of this report. 2. The company being researched holds more than 5% stake in Global Investment House. 3. Global Investment House makes a market in securities issued by this company. 4. Global Investment House acts as a corporate broker or sponsor to this company. 5. The author of or an individual who assisted in the preparation of this report (or a member of his/her household) has a direct ownership position in securities issued by this company. 6. An employee of Global Investment House serves on the board of directors of this company. 7. Within the past year , Global Investment House has managed or co-managed a public offering for this company, for which it received fees. 8. Global Investment House has received compensation from this company for the provision of investment banking or financial advisory services within the past year. 9. Global Investment House expects to receive or intends to seek compensation for investment banking services from this company in the next three months. 10. Please see special footnote below for other relevant disclosures. Global Research: Equity Ratings Definitions Global Rating STRONG BUY BUY HOLD SELL U/R

Definition Fair value of the stock is Fair value of the stock is Fair value of the stock is Fair value of the stock is Fair value of the stock is

>20% from the current market price between +10% and +20% from the current market price between +10% and -10% from the current market price < -10% from the current market price Under Review

June ­ 2012

9

Global Research ­ GCC

GCC Equity Monitor

Disclaimer
This material was produced by Global Investment House KSCC (`Global'),a firm regulated by the Central Bank of Kuwait. This document is not to be used or considered as an offer to sell or a solicitation of an offer to buy any securities. Global may, from time to time to the extent permitted by law, participate or invest in other financing transactions with the issuers of the securities (`securities'), perform services for or solicit business from such issuer, and/or have a position or effect transactions in the securities or options thereof. Global may, to the extent permitted by applicable Kuwaiti law or other applicable laws or regulations, effect transactions in the securities before this material is published to recipients. Information and opinions contained herein have been compiled or arrived by Global from sources believed to be reliable, but Global has not independently verified the contents of this document. Accordingly, no representation or warranty, express or implied, is made as to and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this document. Global accepts no liability for any loss arising from the use of this document or its contents or otherwise arising in connection therewith. This document is not to be relied upon or used in substitution for the exercise of independent judgment. Global shall have no responsibility or liability whatsoever in respect of any inaccuracy in or omission from this or any other document prepared by Global for, or sent by Global to any person and any such person shall be responsible for conducting his own investigation and analysis of the information contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this or other such document. Opinions and estimates constitute our judgment and are subject to change without prior notice. Past performance is not indicative of future results. This document does not constitute an offer or invitation to subscribe for or purchase any securities, and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. It is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. Neither this report nor any copy hereof may be distributed in any jurisdiction outside Kuwait where its distribution may be restricted by law. Persons who receive this report should make themselves aware of and adhere to any such restrictions. By accepting this report you agree to be bound by the foregoing limitations.

June ­ 2012

10

Global Research ­ GCC

GCC Equity Monitor

Global Investment House Website: www.globalinv.net Global Tower Sharq, Al-Shuhada Str. Tel. + (965) 2 295 1000 Fax. + (965) 2 295 1005 P.O. Box: 28807 Safat, 13149 Kuwait

Research Faisal Hasan, CFA (965) 2295-1270 fhasan@global.com.kw Wealth Management - International Fahad Al-Ibrahim (965) 2295-1400 fahad@global.com.kw

Brokerage Fouad Fahmi Darwish (965) 2295-1700 fdarwish@global.com.kw

Wealth Management - Kuwait Rasha Al-Qenaei (965) 2295-1380 alqenaei@global.com.kw

Global Kuwait Tel: (965) 2 295 1000 Fax: (965) 2 295 1005 P.O.Box 28807 Safat, 13149 Kuwait Global Egypt Tel: (202) 24189705/06 Fax: (202) 22905972 24 Cleopatra St., Heliopolis, Cairo

Global Bahrain Tel: (973) 17 210011 Fax: (973) 17 210222 P.O.Box 855 Manama, Bahrain Global Saudi Arabia Tel: (966) 1 2994100 Fax: (966) 1 2994199 P.O. Box 66930 Riyadh 11586, Kingdom of Saudi Arabia

Global UAE Tel: (971) 4 4477066 Fax: (971) 4 4477067 P.O.Box 121227 Dubai, UAE Global Jordan Tel: (962) 6 5005060 Fax: (962) 6 5005066 P.O.Box 3268 Amman 11180, Jordan

Global Wealth Manager E-mail: contactus@global.com.kw Tel: (965) 1-804-242

June ­ 2012

11