GCC Equity 022012

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Global Research

Monthly Update

Equity - GCC

February, 2012

GCC Equity Monitor

GCC Country Performance

Country 1M (%) 3M (%) 12M (%) P/E* P/BV* DY (%)

Bahrain -1.0% -0.6% -6.5% 9.9 0.9 3.5%

Kuwait -0.1% -2.6% -18.2% 13.3 1.8 4.2%

Oman -2.6% -0.2% -15.4% 8.8 1.4 6.1%

Qatar 5.5% -5.2% 5.5% 9.7 2.0 5.3%

Saudi Arabia 5.1% 8.4% 6.8% 10.7 1.9 4.0%

UAE-Abu Dhabi 2.5% -0.2% -2.8% 8.0 1.1 5.2%

UAE-Dubai 6.6% 3.7% -5.8% 12.2 0.7 5.2%

Source: Global Research, Bloomberg, Zawya * 20 12E

Global [email protected].: (965) 22951270

Global Investment Housewww.globalinv.net

Top Fundamental PicksUnion National Bank (UAE), CMP: AED3.09, Target Price: AED4.95

We see UNB posting 34%YoY rise in profits in 2011 led primarily by a burgeoning top-line. The

bank offers robust ROE despite one of the lowest multiples in UAE. UNB is expected to

distribute good dividends for 2011; we forecast 20% cash and given historic performance

another 10% as bonus shares cannot be ruled out. At current levels, a 20% cash dividend

offers a yield of 6.5%, which comes along a substantial upside potential.

Doha Bank (QATAR), CMP: QAR63, Target Price: QAR67.3

Doha Bank reported a net profit of QAR230mn in 4Q2011, an increase of 45% YoY but a

decrease of 25% QoQ. The surge in net profit YoY was driven by higher operating income and

lower provisioning while the steep drop in net profit QoQ was strictly driven by higher

provisioning. Full year net profit rose 18% to QAR1.24bn. Given the bank's low capitalization

level and its retail focus, growth is expected to remain sluggish in the near term. Nonetheless

dividend yield historically has been high (~7% for 2011) and expected to remain so.

Oman Cement Company (OMAN), CMP: OMR0.42, Target Price: OMR0.47

Oman Cement recently announced its full year preliminary results which were largely in-line

with our expectations. The company has completed its new clinker line which has doubled its

clinker capacity and is expected to reduce the costlier clinker imports which is expected to

results in increase in margins. Company has witnessed significant drop in price since last

12months which has raised the yield to over 10% for 2012.

Top Technical Picks

SADAFCOs stock price closed at SAR53.75. Although the bullish momentum has decelerated,

the stock remains within a minor ascending trend line along with its hold above both medium-

term (11 weeks) and long-term (50 weeks) moving averages. The next level of resistance to

watch comes at SAR64.25 (high of year 2007), which if broken would call for a more

constructive outlook that should lead to SAR73.25. On the bearish, a dip below the support line

at around SAR49.00 would be an initial negative sign, a case if happens will allow a test of the

lower end of the minor bullish line at around SAR46.50 and maybe to SAR44.00. The weekly

RSI indicator is currently neutral, while the daily one is in favor of the bears.

Strategy: Medium-term and long-term investors can hold their long positions with a stop-loss

below SAR49.00 and SAR44.00, respectively.

GCC ROE & P/BV

GCC PE & Earnings Growth

World & GCC Indices YTD

Source: Global Research, Bloomberg

GCC

Qatar

OmanKSA

UAE

Kuwait

10%

12%

14%

16%

18%

20%

22%

24%

0.5 1.0 1.5 2.0 2.5 3.0

2012eROE

2012e P/BV

GCC

Qatar

Oman

KSA

UAE

Kuwait

-5%

0%

5%

10%

15%

20%

25%

6.0 8.0 10.0 12.0 14.02012eEarningsGrowth

2012e P/E

-1.1%-2.5%

5.5%6.1%

-0.6%

3.1%

-0.2%

1.3%

26.6%

14.1%

6.0%7.1%

Qatar

Oman

KSA

UAE

-Dubai

Bahrain

UAE-AbuDhabi

Kuwait

Jordan

Egypt

India

China

US

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Global Research - GCC GCC Equity Monitor

February - 2012 2

GCC Universe by country

Global Research - GCC Universe Bloomberg Ticker Mkt. Cap P/E P/BV ROE ROA EPS Current Target Upside / Rating

USD mn 1M 3M 12M 2012e 2012e 2012e 2012e 2012e Price Price (Downside)

UAE

Abu Dhabi Commercial Bank ADCB UH 4,433.2 2.1% -1.0% 27.8% 8.6 0.9 9.5% 1.0% 0.34 2.91 3.62 24.3% STRONG BUY

Arkan Building Materials Com pany ARKAN UH 419.3 -6.4% -27.3% -37.1% 18.1 0.9 5.1% 3.1% 0.05 0.88 1.12 27.3% STRONG BUY

Dana Gas DANA UH 754.7 -6.7% -20.8% -35.4% 5.0 0.3 6.0% 4.5% 0.08 0.42 U/R U/R U/R

Em ira te s Tel eco mm uni cati ons Corporati on ETISAL AT U H 20,427 .2 2.2% -4.8% -9.5% 10.2 1.7 17.4% 9.5% 0.93 9.49 11.10 17.0% BUY

First Gulf Bank FGB UH 7,126.3 13.8% 16.4% 4.7% 6.9 1.1 16.8% 3.1% 2.56 17.45 24.55 40.7% STRONG BUY

National Bank of Abu Dhabi NBAD UH 8,478.1 -0.5% 3.3% 9.9% 8.4 1.2 15.6% 1.6% 1.29 10.85 12.63 16.4% BUY

Ras Al Khaimah Cement Company RAKCC UH 83.0 1.6% -17.3% -20.5% na 0.4 0.0% 0.0% 0.00 0.63 0.69 9.5% HOLD

Ras Al Khaimah Ceramics Co. RAKCEC UH 287.3 0.7% -7.1% -40.4% 5.4 0.4 7.5% 3.4% 0.26 1.42 2.32 63.4% STRONG BUY

Abu Dhabi National Energy TAQA UH 2,067.7 4.2% 6.8% -8.8% 4.2 0.7 17.9% 1.6% 0.30 1.22 1.79 46.9% STRONG BUY

Union National Bank UNB UH 2,099.5 11.2% 7.5% 10.0% 4.3 0.6 15.6% 2.3% 0.74 3.09 4.95 60.1% STRONG BUY

Air Arabia AIRARABI UH 838.6 12.4% 4.6% -17.7% 11.3 0.6 5.2% 4.0% 0.06 0.66 0.76 15.9% BUY

Arabtec Holding PJSC ARTC UH 858.8 34.6% 62.7% 59.4% 22.1 1.1 5.1% 1.7% 0.10 2.11 1.27 -39.8% SELL

Dubai Financial Market DFM UH 1,788.2 -4.8% -20.0% -45.2% 720.1 0.8 1.0% 0.9% 0.01 0.82 0.81 -1.3% HOLD

Drake & Scull International DSI UH 524.7 10.0% 6.9% -16.4% 8.9 0.7 8.1% 4.0% 0.10 0.89 1.00 13.0% BUY

Emirates NBD EMIRATES UH 4,569.7 5.6% -7.9% -0.3% 8.8 0.5 6.1% 0.7% 0.34 3.02 3.83 26.8% STRONG BUY

Aramex ARMX UH 717.5 -0.6% 0.0% -8.2% 11.3 na 12.0% 9.0% 0.16 1.80 2.00 11.1% BUY

Emaar Properties EMAAR UH 4,643.5 9.9% 5.3% -14.5% 10.6 0.5 4.9% 2.6% 0.26 2.80 3.25 16.1% BUY

Aldar Properties ALDAR UH 1,023.2 1.1% -10.7% -47.7% 16.5 0.6 3.9% 0.6% 0.06 0.92 1.10 19.6% BUY

Sorouh Real Estate SOROUH UH 593.2 3.7% -14.3% -38.7% 6.7 0.3 4.9% 2.4% 0.11 0.83 1.05 26.5% STRONG BUY

Total 8.63 0.92 10.9% 2.1%

Kuwait

Mobile Telecommunications Company ZAIN KK 13,200.4 -2.3% -9.6% -40.1% 11.0 1.6 15.0% 9.5% 0.08 0.85 0.86 1.5% HOLD

National Bank of Kuwait NBK KK 16,837.1 5.4% 1.7% -9.9% 14.4 2.0 14.5% 2.4% 0.08 1.18 1.13 -4.1% HOLD

Kuwait Finance House KFIN KK 8,337.5 -3.4% -5.5% -25.1% 19.7 1.8 9.4% 0.9% 0.04 0.86 0.92 6.4% HOLD

Commercial Bank of Kuwait CBK KK 3,393.6 -3.9% -3.9% -20.4% 20.3 1.7 8.5% 1.3% 0.04 0.74 0.73 -1.6% HOLD

National Mobile Telecom munications Com pany NMTC KK 3,634.4 3.1% 0.0% 7.5% 9.9 1.6 16.7% 8.9% 0.20 2.00 2.59 29.6% STRONG BUY

Jazeera Airways Company JAZEERA KK 353.0 2.3% 8.5% 270.8% 5.5 2.2 49.2% 10.1% 0.08 0.45 0.61 37.9% STRONG BUY

Burgan Bank BURG KK 2,466.7 0.0% -2.1% -11.2% 10.5 1.4 13.7% 1.5% 0.04 0.47 0.55 17.6% BUY

Mabanee MABANEE KK 1,702.7 0.0% -4.5% 23.0% 14.2 2.6 20.3% 12.1% 0.06 0.85 0.98 15.3% BUY

Salhia Real Estate SRE KK 384.5 2.0% 1.0% -16.7% 15.5 0.8 5.2% 2.8% 0.01 0.21 0.25 20.2% STRONG BUY

Total 13.32 1.77 13.6% 2.6%

Oman

Oman Telecommunications Company OTEL OM 2,567.5 0.1% 10.5% 4.8% 8.5 1.8 22.4% 16.8% 0.15 1.32 1.45 10.4% BUY

Bank Muscat BKMB OM 2,968.0 -3.1% 3.9% -10.8% 7.9 2.1 15.4% 2.2% 0.09 0.74 0.71 -3.7% HOLD

Bank Dhofar BKDB OM 1,236.1 -5.6% -0.2% -19.6% 10.4 0.5 18.2% 2.6% 0.05 0.52 0.35 -33.2% SELL

National Bank of Oman NBOB OM 884.4 -1.6% 1.6% -6.0% 7.9 1.2 14.7% 2.2% 0.04 0.32 0.33 5.7% HOLD

Raysut Cement Company RCCI OM 374.0 -6.7% -20.1% -39.2% 9.7 0.5 14.3% 7.6% 0.07 0.72 0.83 15.3% BUY

Oman International Bank OIBB OM 704.0 -0.7% 0.4% 7.5% 14.1 2.6 10.5% 1.7% 0.02 0.28 0.21 -25.0% SELL

Oman Cement Company OCOI OM 362.7 -2.3% -5.5% -29.5% 10.5 0.8 9.4% 7.9% 0.04 0.42 0.47 11.6% BUY

Ahli Bank ABOB OM 537.1 -2.7% 1.6% -9.6% 8.0 1.4 19.4% 3.0% 0.03 0.26 0.28 7.5% HOLD

Total 8.78 1.38 17.4% 3.4%

Stock Performance

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Global Research GCC GCC Equity Monitor

February - 2012 3

GCC Universe by country (cont)

Global Research - GCC Universe Bloomberg Ticker Mkt. Cap P/E P/BV ROE ROA EPS Current Target Upside / Rating


Qatar

Qatar National Bank QNBK QD 25,364.3 -6.1% 0.2% 7.3% 10.7 2.2 21.3% 3.3% 13.63 132.00 169.04 28.1% STRONG BUY

Industries Qatar IQCD QD 20,027.5 -0.2% 0.7% -7.2% 7.7 2.4 35.1% 28.6% 17.53 132.60 170.90 28.9% STRONG BUY

Qatar Telecom QTEL QD 7,124.1 1.9% 0.3% 1.8% 8.8 1.1 13.4% 2.8% 16.73 147.40 197.17 33.8% STRONG BUY

Vodafone Qatar VFQS QD 1,694.7 -2.9% -2.4% -7.9% na 1.0 -4.1% -3.2% (0.32) 7.30 7.49 2.6% HOLD

Qatar Islamic Bank QIBK QD 5,301.4 -2.9% 1.0% 2.2% 11.8 1.9 16.1% 3.0% 7.02 81.70 82.92 1.5% HOLD

The Commercial Bank of Qatar CBQK QD 5,565.3 -3.9% -1.3% -4.0% 8.8 1.5 17.7% 3.4% 9.28 81.90 98.03 19.7% BUY

Qata r E lectr ic ity & Wate r Company QEWS QD 3,888 .5 -0.2% 1.0% 8.8% 9.0 2.7 32.4% 7.1% 15.70 141.60 180.81 27.7% STRONG BUYDoha Bank DHBK QD 3,564.6 -4.7% -1.1% 4.3% 9.1 2.1 22.9% 2.9% 6.91 62.80 67.27 7.1% HOLD

Al Rayan Bank MARK QD 5,375.5 -2.7% 2.9% 28.6% 13.9 2.4 17.8% 3.2% 1.94 26.10 27.24 4.4% HOLD

Qatar National Cement Company QNCD QD 1,518.3 1.3% 5.1% 6.3% 12.4 2.3 19.2% 16.8% 9.12 112.60 125.40 11.4% BUY

Total 9.69 1.96 21.1% 4.6%

Saudi Arabia

Saudi Basic Industries Corporation SABIC AB 75,791.9 -1.6% -1.3% -9.5% 9.1 1.7 20.6% 9.6% 10.43 94.75 118.60 25.2% STRONG BUY

Al Rajhi Bank RJHI AB 29,596.8 6.5% 6.5% -8.6% 12.1 3.5 30.2% 4.5% 6.13 74.00 73.27 -1.0% HOLD

Saudi Telecom Company STC AB 18,611.3 3.3% 4.5% -12.8% 8.5 1.3 16.1% 7.1% 4.11 34.90 43.50 24.6% STRONG BUY

Samba Financial Group SAMBA AB 11,518.8 4.8% -2.0% -17.6% 8.9 1.4 16.3% 2.5% 5.38 48.00 53.73 11.9% BUY

Saudi Electricity Company SECO AB 15,553.6 2.2% 4.5% 0.0% 19.7 1.1 5.5% 1.5% 0.71 14.00 13.80 -1.4% HOLD

Riyad Bank RIBL AB 9,699.0 3.6% 1.7% -8.8% 10.2 1.2 12.0% 2.3% 2.37 24.25 26.18 8.0% HOLD

The Saudi British Bank SABB AB 8,579.1 5.1% 7.3% 6.2% 10.5 1.7 17.0% 2.4% 4.08 42.90 43.13 0.5% HOLD

Banque Saudi Fransi BSFR AB 8,195.5 0.5% 1.2% -13.6% 8.5 1.5 18.0% 2.7% 4.99 42.50 47.32 11.3% BUY

Etihad Etisalat Company EEC AB 11,058.8 12.3% 15.0% 12.3% 7.9 1.9 26.6% 14.9% 7.53 59.25 71.10 20.0% STRONG BUY

Arab National Bank ARNB AB 6,448.0 3.3% 1.4% -9.5% 8.7 1.4 16.4% 2.4% 3.27 28.40 32.60 14.8% BUY

Saudi Arabia Fertilizers Company SAFCO AB 12,048.7 4.0% -1.6% 1.5% 11.5 5.6 48.2% 44.3% 15.67 180.75 182.70 1.1% HOLD

Yanbu National Petrochemicals Company YANSAB AB 6,779.3 3.2% 2.3% -0.2% 7.3 1.9 28.7% 15.1% 6.18 45.20 57.80 27.9% STRONG BUY

Saudi Hollandi Bank AAAL AB 2,681.0 2.4% 8.6% -4.4% 8.5 1.3 15.7% 2.1% 3.58 30.40 32.00 5.3% HOLD

Sau di In te rn ati on al Pe tro ch em ich al C om pa ny SIPC HEM AB 2 ,0 09.1 6.2% 4.6% -1.7% 11.2 1.4 12.5% 5.1% 1.84 20.55 23.60 14.8% BUY

Yamama Saudi Cement Company YACCO AB 2,699.7 6.0% 23.5% 36.4% 13.6 2.9 21.7% 20.0% 5.52 75.00 71.20 -5.1% HOLD

Arabian Cemen t Co. ARCCO AB 981.2 2.9% 6.0% 50.8% 7.7 1.1 15.8% 11.1% 5.96 46.00 59.20 28.7% STRONG BUY

Saudi Cement Company SACCO AB 3,365.6 11.9% 30.4% 69.8% 14.7 3.3 23.2% 18.6% 5.59 82.50 66.80 -19.0% SELL

Dar Alarkan ALARKAN AB 2,591.7 25.9% 44.0% -2.2% 7.9 0.6 7.6% 5.2% 1.13 9.00 8.90 -1.1% HOLD

Emaar Economic City EMAAR AB 1,971.8 20.0% 38.1% 28.9% na 1.0 -0.5% -0.3% (0.04) 8.70 7.65 -12.1% SELL

Saudi Real Estate Co. (Akaria) SRECO AB 812.7 -2.7% 10.9% 7.2% 25.0 1.0 3.8% 3.5% 1.02 25.40 28.95 14.0% BUY

Al Khodari Sons Com pany ALKHODAR AB 575.1 -2.9% -2.4% -9.8% 12.3 2.9 24.8% 8.4% 4.13 50.75 65.10 28.3% STRONG BUY

Mohammad Al-Mojil Group MMG AB 684.9 -14.6% 7.6% 19.1% 21.1 1.5 7.4% 3.7% 0.97 20.55 24.50 19.2% BUY

Total 10.67 1.87 18.5% 5.0%

Bahrain

Bahrain Telecommunications Company BATELCO BI 1,504.9 0.0% 0.0% -20.6% 6.9 1.0 15.3% 12.3% 0.06 0.39 0.50 27.9% STRONG BUY

* All price in local currency as of 5 February 2011

Source: Bloomberg & Global Research

Stock Performance

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February - 2012 4

GCC Universe by sectorGlobal Research - GCC Universe Bloomberg Ticker Mkt. Cap P/E P/BV ROE ROA EPS Current Target Upside / Rating


Cement & Building Material

Arkan Building Materials Company ARKAN UH 419.3 -6.4% -27.3% -37.1% 18.1 0.9 5.1% 3.1% 0.05 0.88 1.12 27.3% STRONG BUY

Ras Al Khaimah Cement Company RAKCC UH 83.0 1.6% -17.3% -20.5% na 0.4 0.0% 0.0% 0.00 0.63 0.69 9.5% HOLD

Ras Al Khaimah Ceramics Co. RAKCEC UH 287.3 0.7% -7.1% -40.4% 5.4 0.4 7.5% 3.4% 0.26 1.42 2.32 63.4% STRONG BUY

Rays ut Cement Company RCCI OM 374.0 -6.7% -20.1% -39.2% 9.7 0.5 14.3% 7.6% 0.07 0.72 0.83 15.3% BUY

Oman Cement Company OCOI OM 362.7 -2.3% -5.5% -29.5% 10.5 0.8 9.4% 7.9% 0.04 0.42 0.47 11.6% BUY

Qatar National Cement Company QNCD QD 1,518.3 1.3% 5.1% 6.3% 12.4 2.3 19.2% 16.8% 9.12 112.60 125.40 11.4% BUY

Yamama Saudi Cement Company YACCO AB 2,699.7 6.0% 23.5% 36.4% 13.6 2.9 21.7% 20.0% 5.52 75.00 71.20 -5.1% HOLD

Arabian Cement Co. ARCCO AB 981.2 2.9% 6.0% 50.8% 7.7 1.1 15.8% 11.1% 5.96 46.00 59.20 28.7% STRONG BUYSaudi Cement Company SACCO AB 3,365.6 11.9% 30.4% 69.8% 14.7 3.3 23.2% 18.6% 5.59 82.50 66.80 -19.0% SELL

Total 12.32 1.96 15.4% 10.9%

Telecom

Em irates Tel ecom mun icati ons C orporati on ETISALAT UH 20,4 27.2 2.2% -4.8% -9.5% 10.2 1.7 17.4% 9.5% 0.93 9.49 11.10 17.0% BUY

Bahrain Telecommunications Company BATELCO BI 1,504.9 0.0% 0.0% -20.6% 6.9 1.0 15.3% 12.3% 0.06 0.39 0.50 27.9% STRONG BUY

Mobile Telecommunications Company ZAIN KK 13,200.4 -2.3% -9.6% 0.0% 11.0 1.6 15.0% 9.5% 0.08 0.85 0.86 1.5% HOLD

Na ti onal Mob il e Te le co mm uni catio ns Co mpan y NMTC KK 3,6 34.4 3.1% 0.0% 7.5% 9.9 1.6 16.7% 8.9% 0.20 2.00 2.59 29.6% STRONG BUY

Oman Telecommunications Company OTEL OM 2,567.5 0.1% 10.5% 4.8% 8.5 1.8 22.4% 16.8% 0.15 1.32 1.45 10.4% BUY

Qatar Telecom QTEL QD 7,124.1 1.9% 0.3% 1.8% 8.8 1.1 13.4% 2.8% 16.73 147.40 197.17 33.8% STRONG BUY

Vodafone Qatar VFQS QD 1,694.7 -2.9% -2.4% -7.9% na 1.0 -4.1% -3.2% (0.32) 7.30 7.49 2.6% HOLD

Saudi Telecom Company STC AB 18,611.3 3.3% 4.5% -12.8% 8.5 1.3 16.1% 7.1% 4.11 34.90 43.50 24.6% STRONG BUY

Etihad Etisalat Company EEC AB 11,058.8 12.3% 15.0% 12.3% 7.9 1.9 26.6% 14.9% 7.53 59.25 71.10 20.0% STRONG BUY

Total 9.49 1.62 16.5% 7.5%

Petrochemicals

Dana Gas DANA UH 754.7 -6.7% -20.8% -35.4% 5.0 0.3 6.0% 4.5% 0.08 0.42 U/R U/R U/R

Industries Qatar IQCD QD 20,027.5 -0.2% 0.7% -7.2% 7.7 2.4 35.1% 28.6% 17.53 132.60 170.90 28.9% STRONG BUY

Saudi Basic Industries Corporation SABIC AB 75,791.9 -1.6% -1.3% -9.5% 9.1 1.7 20.6% 9.6% 10.43 94.75 118.60 25.2% STRONG BUY

Saudi Arabia Fertilizers Company SAFCO AB 12,048.7 4.0% -1.6% 1.5% 11.5 5.6 48.2% 44.3% 15.67 180.75 182.70 1.1% HOLDYanbu National Petrochemicals Company YANSAB AB 6,779.3 3.2% 2.3% -0.2% 7.3 1.9 28.7% 15.1% 6.18 45.20 57.80 27.9% STRONG BUY

Saud i Interna ti on al Petro ch em ich al C om pa ny SIPCH EM AB 2,0 09.1 6.2% 4.6% -1.7% 11.2 1.4 12.5% 5.1% 1.84 20.55 23.60 14.8% BUY

Total 8.84 2.24 23.2% 11.9%

Utilities

Abu Dhabi National Energy TAQA UH 2,067.7 4.2% 6.8% -8.8% 4.2 0.7 17.9% 1.6% 0.30 1.22 1.79 46.9% STRONG BUY

Qa ta r E le ctri ci ty & Wa te r C om pa ny QEWS QD 3 ,8 88 .5 -0.2% 1.0% 8.8% 9.0 2.7 32.4% 7.1% 15.70 141.60 180.81 27.7% STRONG BUY

Saudi Electricity Company SECO AB 15,553.6 2.2% 4.5% 0.0% 19.7 1.1 5.5% 1.5% 0.71 14.00 13.80 -1.4% HOLD

Total 12.47 1.20 9.3% 1.9%

Transportation and Logistics

Aramex ARMX UH 717.5 -0.6% 0.0% -8.2% 11.3 na 12.0% 9.0% 0.16 1.80 2.00 11.1% BUY

Air Arabia AIRARABI UH 838.6 12.4% 4.6% -17.7% 11.3 0.6 5.2% 4.0% 0.06 0.66 0.76 15.9% BUY

Jazeera Airways Company JAZEERA KK 353.0 2.3% 8.5% 270.8% 5.5 2.2 49.2% 10.1% 0.08 0.45 0.61 37.9% STRONG BUY

Total 9.49 0.94 9.6% 6.3%

Stock Performance

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February - 2012 5

GCC Universe by sector (cont)Global Research - GCC Universe Bloomberg Ticker Mkt. Cap P/E P/BV ROE ROA EPS Current Target Upside / Rating


Banks

Abu Dhabi Comme rcial Bank ADCB UH 4,433.2 2.1% -1.0% 27.8% 8.6 0.9 9.5% 1.0% 0.34 2.91 3.62 24.3% STRONG BUY

First Gulf Bank FGB UH 7,126.3 13.8% 16.4% 4.7% 6.9 1.1 16.8% 3.1% 2.56 17.45 24.55 40.7% STRONG BUY

National Bank of Abu Dhabi NBAD UH 8,478.1 -0.5% 3.3% 9.9% 8.4 1.2 15.6% 1.6% 1.29 10.85 12.63 16.4% BUY

Union National Bank UNB UH 2,099.5 11.2% 7.5% 10.0% 4.3 0.6 15.6% 2.3% 0.74 3.09 4.95 60.1% STRONG BUY

Emirates NBD EMIRATES UH 4,569.7 5.6% -7.9% -0.3% 8.8 0.5 6.1% 0.7% 0.34 3.02 3.83 26.8% STRONG BUY

National Bank of Kuwait NBK KK 16,837.1 5.4% 1.7% -9.9% 14.4 2.0 14.5% 2.4% 0.08 1.18 1.13 -4.1% HOLD

Kuwait Finance House KFIN KK 8,337.5 -3.4% -5.5% -25.1% 19.7 1.8 9.4% 0.9% 0.04 0.86 0.92 6.4% HOLD

Commercial Bank of Kuwait CBK KK 3,393.6 -3.9% -3.9% -20.4% 20.3 1.7 8.5% 1.3% 0.04 0.74 0.73 -1.6% HOLD

Burgan Bank BURG KK 2,466.7 0.0% -2.1% -11.2% 10.5 1.4 13.7% 1.5% 0.04 0.47 0.55 17.6% BUY

Bank Muscat BKMB OM 2,968.0 -3.1% 3.9% -10.8% 7.9 2.1 15.4% 2.2% 0.09 0.74 0.71 -3.7% HOLD

Bank Dhofar BKDB OM 1,236.1 -5.6% -0.2% -19.6% 10.4 0.5 18.2% 2.6% 0.05 0.52 0.35 -33.2% SELL

National Bank of Oman NBOB OM 884.4 -1.6% 1.6% -6.0% 7.9 1.2 14.7% 2.2% 0.04 0.32 0.33 5.7% HOLD

Ahli Bank ABOB OM 537.1 -2.7% 1.6% -9.6% 8.0 1.4 19.4% 3.0% 0.03 0.26 0.28 7.5% HOLD

Qatar National Bank QNBK QD 25,364.3 -6.1% 0.2% 7.3% 10.7 2.2 21.3% 3.3% 13.63 132.00 169.04 28.1% STRONG BUY

Qatar Islamic Bank QIBK QD 5,301.4 -2.9% 1.0% 2.2% 11.8 1.9 16.1% 3.0% 7.02 81.70 82.92 1.5% HOLD

The Commercial Bank of Qatar CBQK QD 5,565.3 -3.9% -1.3% -4.0% 8.8 1.5 17.7% 3.4% 9.28 81.90 98.03 19.7% BUY

Doha Bank DHBK QD 3,564.6 -4.7% -1.1% 4.3% 9.1 2.1 22.9% 2.9% 6.91 62.80 67.27 7.1% HOLD

Al Rayan Bank MARK QD 5,375.5 -2.7% 2.9% 28.6% 13.9 2.4 17.8% 3.2% 1.94 26.10 27.24 4.4% HOLD

Al Rajhi Bank RJHI AB 29,596.8 6.5% 6.5% -8.6% 12.1 3.5 30.2% 4.5% 6.13 74.00 73.27 -1.0% HOLD

Samba Financial Group SAMBA AB 11,518.8 4.8% -2.0% -17.6% 8.9 1.4 16.3% 2.5% 5.38 48.00 53.73 11.9% BUY

Riyad Bank RIBL AB 9,699.0 3.6% 1.7% -8.8% 10.2 1.2 12.0% 2.3% 2.37 24.25 26.18 8.0% HOLD

The Saudi British Bank SABB AB 8,579.1 5.1% 7.3% 6.2% 10.5 1.7 17.0% 2.4% 4.08 42.90 43.13 0.5% HOLD

Banque Saudi Fransi BSFR AB 8,195.5 0.5% 1.2% -13.6% 8.5 1.5 18.0% 2.7% 4.99 42.50 47.32 11.3% BUY

Arab National Bank ARNB AB 6,448.0 3.3% 1.4% -9.5% 8.7 1.4 16.4% 2.4% 3.27 28.40 32.60 14.8% BUY

Saudi Hollandi Bank AAAL AB 2,681.0 2.4% 8.6% -4.4% 8.5 1.3 15.7% 2.1% 3.58 30.40 32.00 5.3% HOLD

Total 10.27 1.70 16.1% 2.3%

Construction Contractors

Arabtec Holding ARTC UH 858.8 34.6% 62.7% 59.4% 22.1 1.1 5.1% 1.7% 0.10 2.11 1.27 -39.8% SELL

Drake & Scull International DSI UH 524.7 10.0% 6.9% -16.4% 8.9 0.7 8.1% 4.0% 0.10 0.89 1.00 13.0% BUY

Al Khodari Sons Compan y ALKHODAR AB 575.1 -2.9% -2.4% -9.8% 12.3 2.9 24.8% 8.4% 4.13 50.75 65.10 28.3% STRONG BUY

Mohammad Al-Mojil Group MMG AB 684.9 -14.6% 7.6% 19.1% 21.1 1.5 7.4% 3.7% 0.97 20.55 24.50 19.2% BUY

Total 14.07 0.94 6.5% 2.6%

Real Estate

Dar Alarkan ALARKAN AB 2,591.7 25.9% 44.0% -2.2% 7.9 0.6 7.6% 5.2% 1.13 9.00 8.90 -1.1% HOLD

Emaar Economic City EMAAR AB 1,971.8 20.0% 38.1% 28.9% na 1.0 -0.5% -0.3% (0.04) 8.70 7.65 -12.1% SELL

Saudi Real Estate Co. (Akaria) SRECO AB 812.7 -2.7% 10.9% 7.2% 25.0 1.0 3.8% 3.5% 1.02 25.40 28.95 14.0% BUY

Emaar Properties EMAAR UH 4,643.5 9.9% 5.3% -14.5% 10.6 0.5 4.9% 2.6% 0.26 2.80 3.25 16.1% BUY

Aldar Properties ALDAR UH 1,023.2 1.1% -10.7% -47.7% 16.5 0.6 3.9% 0.6% 0.06 0.92 1.10 19.6% BUY

Sorouh Real Estate SOROUH UH 593.2 3.7% -14.3% -38.7% 6.7 0.3 4.9% 2.4% 0.11 0.83 1.05 26.5% STRONG BUY

Mabanee MABANEE KK 1,702.7 0.0% -4.5% 23.0% 14.2 2.6 20.3% 12.1% 0.06 0.85 0.98 15.3% BUY

Salhia Real Estate SRE KK 384.5 2.0% na -16.7% 15.5 0.8 5.2% 2.8% 0.01 0.21 0.25 20.2% STRONG BUY

Total 15.38 0.77 4.9% 3.4%

Others

Dubai Financial Market DFM UH 1,788.2 -4.8% -20.0% -45.2% 720.1 0.8 1.0% 0.9% 0.01 0.82 0.81 -1.3% HOLD

Total 503.63 4.53 1.0% 0.9%

* All price in local currency as of 5 February 2011

Source: Bloomberg & Global Research

Stock Performance

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February 2012 6

Charts

Source: Global Research, Bloomberg

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

AbuDhabiNationalEnergy

UnionNationalBank

DanaGas

RasAlKhaimahCeramicsCo.

JazeeraAirwaysCompany

SorouhRealEstate

FirstGulfBank

YanbuNationalPetrochemicals

Company

ArabianCementCo.

EtihadEtisalatCompany

Attractive P/E x

0.0%

3.0%

6.0%

9.0%

12.0%

15.0%

AirArabia

UnionNationalBank

OmanCementCompa

ny

RaysutCementCompa

ny

AbuDhabiNationalEnergy

DohaBank

TheCommercialBankofQa

tar

SaudiArabiaFertilizersCompany

NationalBankofOm

an

OmanTelecommunicationsCompany

Dividend Yield

0%

10%

20%

30%

40%

50%

60%

JazeeraAirwaysCompany

SaudiArabiaFertilizers

Company

IndustriesQatar

Q

atarElectricity&Water

Company

AlRajhiBank

YanbuNationalPetrochemicals

Company

E

tihadEtisalatCompany

SaudiCementCompany

DohaBank

OmanTelecommunications

Company

Return on Equity (ROE)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

S

audiArabiaFertilizers

Company

IndustriesQatar

YamamaSaudiCement

Company

SaudiCementCompany

QatarNationalCement

Company

OmanTelecommunications

Company

YanbuNational

Pet

rochemicalsCompany


Mabanee

ArabianCementCo.

Return on Assets (ROA)

-

0.1

0.2

0.3

0.4

0.5

0.6

0.7

DanaGas

SorouhRealEstate

RasAlKhaimahCeramicsCo.

RasAlKhaimahCement

Company

RaysutCementCompany

BankDhofar

EmaarProperties

EmiratesNBD

AirArabia

UnionNationalBank

Attractive P/BV x

0%

5%

10%

15%

20%

25%

30%

35%

40%

ArabtecHoldingPJSC

FirstGulfB

ank

SaudiDairy&FoodstuffCompany

AirArabia


UnionNationalBank

SavolaGroupCompany

Drake&ScullInternational

EmaarPrope

rties

AlRajhiBank

Top 10 Gainers in 1 month

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February 2012 7

Technical OverviewSaudi All Share Index closed at 6,626.04 point. The index is approaching our projected target at 6,660 point as the

bullish momentum remains in the market along with a healthy trading activity. Focus now has shifted towards the next layer of

resistance at 6,800 point, while the strong level at 6,940 point remains the key turning point for the index to gain more confidence.

Nearby support levels are located at 6,500 point, 6,450 point and 6,315 point. The weekly RSI indicator is still pointing u p at

present, while the daily one is positive but approached the overbought territory, therefore, some attempts to go lower could be

seen on the short-term period but should be short-lived since the overall picture is bullish.

Strategy: Medium-term and long-term investors can stay in the market as long as the index is closing above 6,420 point and

6,350 point, respectively.

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February 2012 8

Disclosure

Disclosure Checklist

Company

Abu Dhabi Commercial Bank STRONG BUY ADCB UH ADCB.AD AED 2.91 1,10

Abu Dhabi National Energy STRONG BUY TAQA UH TAQA.AD AED 1.22 1,10

Ahli Bank HOLD ABOB OM ABOB.OM OMR 0.258 1,10

Air Arabia BUY AIRARABI UH AIRA.DU SAR 0.66 1,10

Aldar Properties BUY ALDAR UH ALDR.AD AED 0.92 1,10

Al Rajhi Bank HOLD RJHI AB 1120.SE SAR 74 1,10

Al Rayan Bank HOLD MARK QD MARK.QA QAR 26.1 1,10

Al Khodari Sons Company STRONG BUY ALKHODAR AB 1330.SE SAR 50.75 1,10

Arab National Bank BUY ARNB AB 1080.SE SAR 28.4 1,10

Arabian Cement Co. STRONG BUY ARCCO AB 3010.SE SAR 46 1,10

Arabtec Holding PJSC SELL ARTC UH ARTC.DU AED 2.11 1,10

Aramex BUY ARMX UH ARMX.DU AED 1.8 1,10

Arkan Building Materials Com pany STRONG BUY ARKAN UH ARKN.AD AED 0.88 1,10

Bahrain Telecommunications Company STRONG BUY BATELCO BI BTEL.BH BHD 0.394 1,10

Bank Dhofar SELL BKDB OM BDOF.OM OMR 0.52 1,10

Bank Muscat HOLD BKMB OM BMAO.OM OMR 0.738 1,10

Banque Saudi Fransi BUY BSFR AB 1050.SE SAR 42.5 1,10

Burgan Bank BUY BURG KK BURG.KW KWD 0.465 1,10

Commercial Bank of Kuwait HOLD CBK KK CBKK.KW KWD 0.74 1,10

Dana Gas U/R DANA UH DANA.AD AED 0.42 1,10

Dar Alarkan HOLD ALARKAN AB 4300.SE SAR 9 1,10

Doha Bank HOLD DHBK QD DOBK.QA QAR 62.8 1,10

Drake & Scull International BUY DSI UH DSI.DU AED 0.885 1,10

Dubai Financial Market HOLD DFM UH DFM.DU AED 0.821 1,10

Emaar Economic City SELL EMAAR AB 4220.SE SAR 8.7 1,10

Emaar Properties BUY EMAAR UH EMAR.DU AED 2.8 1,10

Emirates NBD STRONG BUY EMIRATES UH ENBD.DU AED 3.02 1,10

Emirates Telecommunications Corporation BUY ETISALAT UH ETEL.AD AED 9.49 1,10

Etihad Etisalat Company STRONG BUY EEC AB 7020.SE SAR 59.25 1,10

First Gulf Bank STRONG BUY FGB UH FGB.AD AED 17.45 1,10

Industries Qatar STRONG BUY IQCD QD IQCD.QA QAR 132.6 1,10

Jazeera Airways Company STRONG BUY JAZEERA KK JAZK.KW KWD 0.445 1,10

Kuwait Finance House HOLD KFIN KK KFIN.KW KWD 0.86 1,10

Mabanee BUY MABANEE KK MABK.KW KWD 0.85 1,10

Mobile Telecommunications Company HOLD ZAIN KK ZAIN.KW KWD 0.85 1,10

Mohammad Al-Mojil Group BUY MMG AB 1310.SE SAR 20.55 1,10

National Bank of Abu Dhabi BUY NBAD UH NBAD.AD AED 10.85 1,10

National Bank of Kuwait HOLD NBK KK NBKK.KW KWD 1.18 1,10National Bank of Oman HOLD NBOB OM NBO.OM OMR 0.315 1,10

The following is a com prehensive list of disclos ures which m ay or may not apply to all our researches. Only the relevant disclos ures which

apply to this particular research has been mentioned in the table below under the heading of disclos ure.

Recommendation Bloomberg Ticker Reuters Ticker Price Disclosure

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February 2012 9

National Mobile Telecommunications Company STRONG BUY NMTC KK NMTC.KW KWD 2 1,10

Oman Cement Company BUY OCOI OM OCCO.OM OMR 0.422 1,10

Oman Telecommunications Company BUY OTEL OM OTL.OM OMR 1.318 1,10

Qatar Electricity & Water Company STRONG BUY QEWS QD QEWC.QA QAR 141.6 1,10

Qatar Islamic Bank HOLD QIBK QD QISB.QA QAR 81.7 1,10

Qatar National Bank STRONG BUY QNBK QD QNBK.QA QAR 132 1,10

Qatar National Cement Company BUY QNCD QD QANC.QA QAR 112.6 1,10

Qatar Telecom STRONG BUY QTEL QD QTEL.QA QAR 147.4 1,10

Ras Al Khaimah Cement Company HOLD RAKCC UH RAKC.AD AED 0.63 1,10

Ras Al Khaimah Ceramics Co. STRONG BUY RAKCEC UH RKCE.AD AED 1.42 1,10

Raysut Cement Company BUY RCCI OM RAYC.OM OMR 0.72 1,10

Riyad Bank HOLD RIBL AB 1010.SE SAR 24.25 1,10

Samba Financial Group BUY SAMBA AB 1090.SE SAR 48 1,10

Salhia Real Estate STRONG BUY SRE KK SREK.KW KWD 0.208 1,10

Saudi Arabia Fertilizers Company HOLD SAFCO AB 2020.SE SAR 180.75 1,10

Saudi Basic Industries Corporation STRONG BUY SABIC AB 2010.SE SAR 94.75 1,10

Saudi Cement Company SELL SACCO AB 3030.SE SAR 82.5 1,10

Saudi Electricity Company HOLD SECO AB 5110.SE SAR 14 1,10

Saudi Hollandi Bank HOLD AAAL AB 1040.SE SAR 30.4 1,10

Saudi International Petrochemichal Company BUY SIPCHEM AB 2310.SE SAR 20.55 1,10

Saudi Real Estate Co. (Akaria) BUY SRECO AB 4020.SE SAR 25.4 1,10Saudi Telecom Company STRONG BUY STC AB 4110.SE SAR 34.9 1,10

Sorouh Real Estate STRONG BUY SOROUH UH SOR.AD AED 0.83 1,10

The Commercial Bank of Qatar BUY CBQK QD COMB.QA QAR 81.9 1,10

The Saudi British Bank HOLD SABB AB 1060.SE SAR 42.9 1,10

Union National Bank STRONG BUY UNB UH UNB.AD AED 3.09 1,10

Vodafone Qatar HOLD VFQS QD VFQS.QA QAR 7.3 1,10

Yamama Saudi Cement Company HOLD YACCO AB 3020.SE SAR 75 1,10

Yanbu National Petrochemicals Company STRONG BUY YANSAB AB 2290.SE SAR 45.2 1,10

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 compens ation 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 s eek compensation for investment banking s ervices from this company in the

next three months.

10. Please see special footnote below for other relevant disclosures.

1. Global Investment Hous e did not receive and wi ll not receive any compensation from the company or anyone els e for the preparation of

this report.

2. The company being researched holds more than 5% stake in Global Investment House.

3. Global Investment House m akes a market in securities iss ued 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 as sis ted in the preparation of this report (or a member of his/her household) has a di rect ownership

position in securities issued by this company.

6. An employee of Global Investment House serves on the board of directors of this company.

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February 2012 10

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 inves tigation 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

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bound by the foregoing limitations.

Global Research: Equity Ratings Definitions

Global Rating Defination

STRONG BUY Fair value of the stock is >20% from the current market price

BUY Fair value of the stock is between +10% and +20% from the current market price

HOLD Fair value of the stock is between +10% and -10% from the current market price

SELL Fair value of the stock is < -10% from the current market price

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February 2012 11

Global Investment HouseWebsite: www.globalinv.net

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GCC Equity 022012

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