Equity Weekly 130707

Equity Weekly
Global Equities
The MSCI World index rose +1.1% 5d, as US payrolls data came in higher than expected, and in Europe, both the European Central Bank and Bank of England signaled that interest rates will continue to remain low in the Eurozone for an extended period of time. Risk measures declined in the US and Asia, with the VIX SPX -11.7% 5d to 15 and the VHSI +12.9% 5d to 23, but increased in Europe with the VSTOXX +3.6% 5d to 23. The MSCI G7 index, +1.3% 5d, led gains for the MSCI market indices, followed by the MSCI Frontiers Markets index, +1.1% 5d whilst the MSCI Emerging Market index declined -2.4% 5d. Investors are expected to focus on Q2 2013 earnings releases over the coming weeks, and more importantly management guidance, to help gauge the impact of the expected reduction in US quantitative easing on sales and earnings for H2 2013. For emerging markets higher yields in the US could see an outflow of funds, resulting in weaker emerging markets currencies, which in turn could be positive for exporters. For domestically focused emerging market companies there is a potential risk of inflation to contend with.
Weekly
7 July 2013
MENA Markets
The S&P Pan Arab Composite index rose +1.9% 5d. Egypt had the best performing regional market last week, with the EGX 30 index gaining +14.9% 5d, driven by local buying, as the military removed former President Mursi from power and appointed Adly Mansour (the former head of the constitutional Court) as Interim President. Whilst Egyptian markets have cheered the move, the country economic fundamentals have not changed and the economy remains weak, with foreign exchange reserves under pressure. The appointment of an interim president could see the resumption of talks with the IMF for the USD 4.8bn loan, but any IMF loan would come with conditions attached, relating to the removal/reduction of subsidies for food and fuel. These factors, together with civil unrest, gives ample reason for equity investors to remain cautious. The EGX index is currently trading on 7.6x BEst PE 2014E, with a 9.7% BEst ROE 2014E, a -17 % discount in PE terms and -24% lower ROE relative to the MSCI Emerging markets index. Morocco had the worst performing regional market with the Madex Free Float index -1.3% 5d. Based on Bloomberg data and our MENA coverage universe, the Industrials sector (+7.8% 5d) was the best performing sector, led by Egyptian industrials with Elswedy +17.9% 5d, El Ezz +10.0% 5d and Oriental Weavers +9.3% 5d. The Petrochemicals sector had the smallest gains +1.9% 5d, as APPC (-1.2% 5d) and SAFC) (-0.5% 5d) declined. Our MENA equity coverage universe shows the Financial Services sector (23.5x BEst PE 2014, BEst ROE 2014 of 3.7%) as having the most upside of +25.8%, based on BEst consensus target prices. The Food and Retail sector (14.1x BEst PE 2014 and BEst ROE 2014 of 28.0%) continues to have the least upside of -1.8%.
Developed Markets
The S&P 500 index gained +1.2% 5d, as US payrolls increased by 195,000, above consensus estimates of 165,000 and hourly earnings increased. Financial, industrial and health care companies led the gains in 9 out of 10 of the S&P 500 industry groups. The S&P homebuilders index fell-3.4% on concerns over the impact of higher treasury yields on mortgage costs and hence housing demand. Dell lost -2.1% as Michael Dell and Silver Lake said that they would not increase their offer, as they bid to take the company private. The Euro Stoxx 600 index rose +1.2% 5d, as both the European Central Bank and Bank of England stated that Eurozone interest rates will continue to remain low for an extended period of time, meaning, according to the ECB, more than 6 to 12 months. Nokia gained +9.1% after it agreed to buy Siemens 50% share in their Nokia Siemens Networks joint venture for Euro 1.7bn, lower than expected. However the acquisition resulted in S&P cutting Nokias credit rating to B+, citing the impact the acquisition will have on the companys net cash position. National benchmark indices rose in 15 of the 18 western European markets.
Irfan Ellam Head of MENA Equity Research +971 4 230 7807 mohammedie@emiratesnbd.com Aditya Pugalia Analyst +971 4 230 7802 adityap@emiratesnbd.com
Emerging and Frontier Markets

Frontier markets gains were led by the MSCI FM Africa index +2.3% 5d, whilst the MSCI FM excluding the GCC index rose +1.2% 5d. Emerging markets declines continued to be led by the MSCI EM Latin America index falling -4.3% 5d, followed the MSCI EM Asia -1.7% 5d, whilst the MSCI EM Eastern Europe index was effectively flat -0.5% 5d.
Research from Emirates NBD
Major Equity Markets MENA Sector PE/ROE 2013E

30.0 25.0 BEst ROE 2013 20.0 15.0
Banks Telecom
MENA Sector PB/ROA 2012

16.0
Food & Retail
y = 2.2197x - 10.996 R = 0.6041
y = 4.7166x - 2.7764 R = 0.84

12.0
Telecom
Food & Retail
Petchem & Fert
ROA 2012
Transport & Logistics Energy & Utilities Construction Real Estate
8.0 4.0 0.0
10.0 5.0 0.0 4.0 12.0

Industrials
Petchem & Fert Real Estate Industrials Construction
Transport & Logistics Banks Financial Services Energy & Utilities
0.0
1.0
2.0
PB 2012
3.0
4.0
20.0
-4.0
BEst PE 2013
MENA Equity Indices PE/ROE 2013E

32.0 y = 2.0655x - 5.8027 R = 0.3341
MADEX
MENA Equity Indices PB/ROA 2012

4.00 3.50 3.00 ROA 2012
ADSMI Tadawul DSM
BEst ROE 2013
24.0
MSM ISE 100 Tadawul ADSMI EGX 30 DSM
2.50 2.00 1.50 1.00 0.50 y = 1.1815x + 0.9742 R = 0.4142 0.50 1.00 PB 2012 1.50 2.00
EGX 30 MSM DFMGI XU100
16.0
8.0
DFMGI
0.0 7.0 9.0 BEst PE 2013 11.0 13.0
0.00 0.00
Developed Market Indices PE/ROE 2013E

25.0 20.0 BEst ROE 2013 15.0 10.0 5.0 0.0 8.0 10.0 12.0 14.0 16.0 18.0 BEst PE 2013
Stoxx 600 Cac Dax
Developed Market Indices PB/ROA 2012

12.00 y = 3.637x - 3.926 R = 0.4946
FTSE 100
y = 0.8101x + 3.6977 R = 0.1884

FTSE 100
Dow Jones Nasdaq SMI
10.00 ROA 2012 8.00 6.00
Nasdaq Nikkei S&P 500 SMI AS51 Index
S&P 500
Nikkei
4.00 2.00 0.00 0.50

Dax
Stoxx 600 Cac
Dow Jones
AS51 Index
1.00
1.50
2.00
2.50
3.00
PB 2012
Source: Bloomberg, Emirates NBD Research, BEst Bloomberg Estimates
Major Equity Markets Emerging Market Indices PE/ROE 2013E

25.0 20.0 BEst ROE 2013 15.0 10.0 5.0 0.0 4.0 8.0 BEst PE 2013 12.0 16.0
Shanghai Micex Malaysia Vietnam Jo'burg HSI Mexico Taiwan Karachi Bovespa Nifty Jakarta Sensex
Emerging Market Indices PB/ROA 2012

12.00 y = 2.1125x + 0.5451 R = 0.2463
Karachi Jo'burg Taiwan Jakarta Nifty Sensex
ROA 2012
8.00
4.00
Micex Bovespa
y = 0.3393x + 12.868 R = 0.056 0.00 0.5
Vietnam HSI Shanghai
Malaysia Mexico
1.5 PB 2012
2.5
3.5
Source: Bloomberg, Emirates NBD Research, BEst Bloomberg Estimates
MENA Markets
MENA Equity Indices (5d% chg)

DFM ADX Tadawul DSM KWSE Bahrain Bourse MSM EGX 30 ISE 100 MADEX TUSISE -12% -7% -2% -4.2% -1.4% 0.2% 3% 8% 13% 18% 1.9% 0.6% 2.2% 0.8% 0.6% 0.2% 1.7% 14.9%
Benchmark Equity Indices

BEst Index
MSCI World MSCI G7 MSCI Emerging Markets MSCI Frontier Markets S&P Pan Arab 10.34 12.04 1.49 1.55 4.18 3.74 1.1% 2.1% -5.2% -0.8% 8.8% 8.5% 10.14 1.32 3.06 -2.4% -6.4%
BEst P/B
1.82 1.86
Div Yield
2.72 2.51
5d chg
1.1% 1.3%
1m chg
-1.4% -1.1%
P/E
14.07 14.10
Ytd
8.3% 10.0% 13.0%
MENA Equity Indices

T.Value 5d avg Index Last Price 5d chg (USD mn) BEst P/E BEst P/B Div Yield % above 200d MA
DFM ADX Tadawul ISE 100 EGX 30 KWSE Bahrain MSM Qatar Exchange MADEX TUSISE DUAE INDEX DKUW INDEX DQAT INDEX DKUS INDEX DQAS INDEX
2,264 3,563 7,669 73,112 5,335 7,963 1,191 6,441 9,372 7,044 4,617 2,575 3,820 5,876 2,926 7,280
41.7 22.2 164.2 -3182.7 693.5 49.7 2.5 106.9 73.4 -96.3 8.3 30.1 28.6 82.9 29.6 -21.9
60.4 72.4 1,291.4 1,246.4 41.2 124.9 1.3 11.3 46.7 2.6 1.4 112.7 28.3 39.0 41.7 -
12.8 10.0 12.5 9.7 9.8 10.1 11.0 13.0 -
1.0 1.4 1.8 1.4 0.8 1.5 1.6 2.3 -
3.7 4.9 3.6 2.5 5.8 3.7 4.1 4.3 4.9 4.5 1.9 3.1 3.7 4.5 4.3 -
51.6 32.8 62.5 36.0 33.3 49.5 17.1 93.3 90.0 48.2 16.1 95.0 80.0 90.0 80.0 -
Relative to Benchmark Indices

Index PE PB Dvd Yld Index PE PB Dvd Yld
Relative to S&P Pan Arab DFM ADX Tadawul KWSE Bahrain 6.7% -16.8% 3.8% -35.5% -10.1% 17.4% -1.3% 30.6% -3.0% -1.3% 9.5% Relative to MSCI Emerging Market Index EGX 30 MADEX ISE 100 -3.8% 28.2% -3.8% -41.4% 77.1% 6.6% 91.2% 46.2% -18.9%
Index MSM Qatar
PE -16.2% -8.5%
PB -5.1% 4.7%
Dvd Yld 14.1% 31.6%
Index
PE
PB
Dvd Yld
Exchange TUSISE -49.4% -48.7% Source: Bloomberg, Emirates NBD Research, BEst Bloomberg Estimates
Developed Markets
Developed Market Equity Indices (5d% chg)

DJIA S&P 500 Nasdaq FTSE 100 DAX CAC 40 SMI Stoxx 600 Nikkei S&P / ASX 200 -4% -2% 0% 0.8% 2% 4% 6% -1.9% 0.4% 1.3% 1.2% 4.6% 0.7% 1.2% 2.3% 2.6%
Emerging Market Equity Indices (5d% chg)

MEXBOL KLCI JSE-4.5% Ho Chi Minh FTSE / JSE Africa Micex Bovespa -4.7% TWSE KSE 100 Nifty Sensex KOSPI SHCOMP Hang Seng -6% 0.0% -0.1% 0.9% -1.0% 0.9% -0.8% 5.6% 0.4% 0.5% -1.6% 1.4% 2.0% -4% -2% 0% 2% 4% 6% 8%
Equity Indices
T.Value 5d avg Index Last Price 5d chg (USD mn) BEst P/E BEst P/B Div Yield % above 200d MA
Dow Jones S&P 500 Nasdaq FTSE 100 Dax Cac 40 Swiss Nikkei Australia Stoxx 600
15,136 1,632 3,479 6,376 7,806 3,754 7,782 14,310 4,842 288
111.4 18.7 77.5 160.1 -153.2 14.9 98.9 632.7 39.2 3.3
4,023.3 20,006.7 10,648.0 4,933.8 4,240.0 3,479.1 1,887.5 14,266.6 3,170.7 28,325.6
13.6 14.8 17.9 11.8 11.5 11.9 14.6 18.1 13.7 12.8
2.8 2.3 2.8 1.7 1.4 1.2 2.3 1.6 1.8 1.5
2.5 2.2 1.4 4.0 3.5 4.0 3.3 1.6 4.9 3.8
90.0 83.8 67.9 79.2 56.7 67.5 85.0 96.4 57.2 69.0
Emerging Markets & Frontier Markets Hong Kong Shanghai Korea Sensex Nifty Karachi Taiwan Bovespa Micex Jo'burg Vietnam Jakarta Malaysia 20,855 2,007 1,833 19,496 5,868 22,178 8,002 45,210 1,343 1,343 486 4,603 1,772 414.6 28.0 -30.0 100.0 25.7 1172.7 -60.4 -2246.6 12.3 -408.3 4.5 -216.1 -1.3 2,823.8 12,103.4 3,045.8 78.1 851.2 82.6 2,511.6 2,377.2 634.4 1,348.2 29.0 364.7 301.1 9.9 8.8 10.0 13.6 13.7 8.0 14.7 12.2 5.1 12.7 11.9 14.9 16.6 16.4 1.2 1.2 1.1 2.1 2.1 1.7 1.6 0.8 0.6 1.7 2.0 2.9 2.2 2.6 3.6 3.0 1.3 1.6 1.6 5.5 3.3 4.7 4.0 3.0 3.6 2.1 3.4 1.4 24.0 29.9 48.3 50.0 38.0 90.0 60.5 16.9 40.0 58.7 53.6 29.1 80.0 40.0
Mexico 40,623 -0.2 450.3 Source: Bloomberg, Emirates NBD Research, BEst Bloomberg Estimate
Relative to Benchmark Indices

Index Relative to MSCI G7 Index Dow Jones S&P 500 Nasdaq FTSE 100 Dax Cac 40 Swiss Nikkei Australia Stoxx 600 -3.6% 5.0% 27.1% -16.2% -18.5% -15.9% 3.4% 28.4% -2.6% -9.5% 48.7% 22.8% 50.3% -10.3% -26.7% -36.4% 25.2% -16.3% -4.7% -21.5% 0.1% -14.3% -45.8% 57.9% 38.4% 60.7% 32.8% -35.8% 93.8% 51.1% PE PB Dvd Yld Index PE PB Dvd Yld
Relative to MSCI Emerging Markets Index Hong Kong Shanghai Korea Sensex Nifty Karachi Taiwan Bovespa Micex Jo'burg Vietnam Jakarta Malaysia Mexico -2.3% -13.2% -1.0% 34.2% 34.7% -20.9% 44.9% 20.2% -49.7% 25.1% 17.3% 47.0% 63.3% 62.3% -6.4% -8.9% -20.2% 62.2% 59.8% 26.4% 22.0% -41.1% -53.4% 29.1% 53.3% 116.2% 67.7% 93.3% 17.9% -0.6% -59.1% -46.9% -48.6% 80.0% 6.7% 52.3% 30.5% -0.5% 18.1% -30.1% 9.9% -53.5%
Source: Bloomberg, Emirates NBD Research, BEst Bloomberg Estimate
Telecoms Sector
PE/ROE 2013E
40.0 y = 1.4417x + 3.0494 R = 0.2802
Etihad Etisalat
PB/ROA 2013E
30.0 25.0 20.0
STC Etisalat Qtel du NMTC OT
y = 3.3605x + 0.5032 R = 0.2211

Etihad Etisalat
BEst ROE 2013
30.0 ROA 2013
15.0
Telecom Egypt
20.0
10.0 5.0
NMTC Qtel
STC Etisalat
Du
10.0
Zain Telecom Egypt
0.0 -5.0 15.0 0.0

Vodafone Qatar Zain KSA
0.0 0.0 5.0 BEst PE 2013 10.0
1.0
2.0 PB 2013
3.0
4.0
BEst Market Cap Company Price LLC (USD mn) PE 2012 PE 2013 ROE 2012
BEst ROE 2013 PB 2012 ROA 2012
Dvd Yld 2012
BEst DvdYld 2013 RSI
Avg Value Traded 3m (USD mn)
Orascom Telecom Telecom Egypt NMTC Zain Qtel Etihad Etisalat STC Zain KSA Etisalat Du Average
4.56 12.80 2060.00 680.00 121.10 80.75 40.10 9.90 11.20 5.81
3403.4 3108.9 3630.5 10260.2 10652.7 16578.7 21384.1 2851.1 24323.6 7218.8
9.3 15.5 12.0 10.3 8.8 11.9 10.6 8.1 10.8
7.8 9.0 9.7 11.0 10.4 9.6 8.6 11.5 14.1 10.2
-13.4 9.3 9.3 13.7 12.0 30.6 14.8 -27.5 16.8 28.8 9.5
15.8 9.0 12.3 14.3 12.4 29.0 16.7 -16.4 18.7 27.0 13.9
2.1 0.9 1.4 1.9 1.2 2.5 1.7 1.0 1.8 2.1 1.7
-2.8 8.0 5.2 8.1 3.0 15.8 6.3 -6.4 8.8 15.2 6.1
0.0 9.2 5.3 6.4 4.8 5.5 4.6 0.0 7.7 8.6 5.2
1.4 10.4 4.3 7.6 4.9 5.8 5.6 0.0 6.2 5.2 5.2
65 61 32 48 49 55 46 55 41 56
2.6 1.2 0.1 4.6 2.4 18.0 9.5 57.6 5.8 2.6
News Flow
Etihad Etisalat signed two 90-day MoU with Nokia Siemens Network and Ericsson to arrange long-term financing for acquiring network equipment. In another announcement, the companys unit Bayanat Al Oula for Network Services will seek CMAs approval to acquire controlling interest in Etihad Atheeb. (Bloomberg) Etihad Etisalat has signed a contract with Emaar Economic City to provide a communication network in King Abdullah Economic City. The contract is for 8 year and entails an investment of SAR 600mn. (Bloomberg)
Petrochemicals & Fertilisers Sector
PE/ROE 2013E
55.0 45.0 BEst ROE 2013
Sidi Kerir SAFCO
PB/ROA 2013E
y = -2.0585x + 45.187 R = 0.4072 ROA 2013 50.0 40.0 30.0 20.0 10.0 0.0 -10.0
SIPCHEM Sahara
Chemanol
y = 9.4216x - 7.2918 R = 0.9298

Sidi Kerir APPC IQ Sabic Yansab Tasnee SAFCO
35.0 25.0 15.0 5.0 5.0

Yansab APPC Tasnee SIPCHEM
IQ Sabic Sahara Maaden

Chemanol
Maaden
Saudi Kayan
10.0
15.0 BEst PE 2013
20.0
25.0
0.0
1.0
2.0
3.0 PB 2013
4.0
5.0
6.0
Dvd Yld 2012
IQ Sahara Petchem SABIC SIPCHEM Saudi Kayan Sidi Kerir Petchem Yansab Chemanol APPC Safco Ma'aden Tasnee Average
158.30 14.70 93.50 24.00 11.55 13.71 56.00 12.60 31.80 143.75 29.70 26.30
26300.7 1719.9 74791.0 2346.4 4619.4 1024.1 8399.0 405.2 1390.5 12775.9 7325.1 4690.7
10.1 29.1 10.9 11.6 8.0 10.9 17.6 13.1 13.1 27.5 10.5 14.8
10.1 15.1 10.3 14.8 20.3 7.8 11.6 14.9 12.9 12.3 20.3 9.7 13.3
29.8 3.9 17.3 10.7 -5.2 35.1 20.8 6.0 16.1 45.3 6.2 15.3 16.8
27.2 7.3 17.4 10.7 4.4 34.8 19.4 6.4 20.2 46.3 7.1 13.9 17.9
2.8 1.1 1.8 1.2 1.3 2.8 2.1 1.0 2.1 5.7 1.7 1.5 2.1
21.9 2.4 7.4 4.0 -1.7 26.5 10.8 3.1 9.9 39.9 2.2 4.1 10.9
5.5 3.7 5.6 6.5 0.0 10.2 7.6 7.9 7.2 6.0
5.6 3.9 5.6 5.2 1.8 11.4 4.7 3.8 6.5 7.3 6.7 5.7
35 51 56 76 50 70 51 45 60 37 47 47
11.6 9.1 103.8 3.8 11.9 0.4 7.0 4.1 4.3 7.4 7.1 10.7
News Flow
National Petrochemical Co started an unscheduled shutdown of Saudi Polymer unit for about two weeks. The financial impact of shutdown is expected to be around SAR 70mn and will impact Q2 and Q3 2013 earnings. (Bloomberg) Qatar Gas Transports joint venture Maran Nakilat signed a USD 662.4mn refinancing accord with Qatar Islamic Bank and Barwa Bank. The accord will help the company to expand its fleet to 6 LNG tankers from 4. (Bloomberg)
Banking Sector
PE/ROE 2013E
40.0
QIB
PB/ROA 2013E
y = 0.0997x + 14.455 R = 0.0025
QNB
5.0 4.0 ROA 2013
y = 0.4645x + 1.2457 R = 0.1537

CBQ QNB Al Rajhi NBK QIB DB Burgan Bank FGB
BEst ROE 2013
30.0
FGB CIB Samba NBK Al Rajhi CBQ DB QIB Riyad Bank Burgan Bank
3.0 2.0 1.0 0.0
CIB
20.0
NBAD
NBAD Samba ADCB Riyad Bank DIB Bank Aljazira
10.0
DIB
ADCB
Bank Aljazira
0.0 5.0 7.0 9.0 11.0 13.0 15.0 BEst PE 2013
0.0
1.0
2.0 PB 2013
3.0
4.0
Dvd Yld 2012
CIB Al Rajhi Bank Samba Riyad Bank Bank Aljazira NBK Burgan Bank DIB NBAD FGB ADCB QNB CBQ DB QIB Bank Muscat Average
34.91 76.50 51.50 24.85 27.70 930.00 610.00 3.18 11.45 15.80 5.00 162.50 70.90 47.30 68.50 0.59
2966.4 30596.3 12358.5 9938.8 2215.7 14864.4 3460.0 3444.6 13422.1 12905.2 7617.3 31225.9 4817.9 3356.1 4445.0 3281.5
9.3 12.4 9.3 10.0 15.6 13.5 14.0 6.6 9.2 8.4 6.1 11.0 8.7 8.0 14.3 8.0 10.3
8.5 13.5 9.8 10.2 13.7 13.1 11.5 11.1 10.6 10.7 10.1 11.9 8.7 9.1 11.2 8.2 10.7
22.8 22.8 14.5 11.2 10.3 12.8 11.9 12.3 15.1 14.8 14.3 18.7 13.8 17.8 10.9 14.3 14.9
21.3 23.1 14.2 11.5 11.4 12.5 16.0 12.1 16.0 16.7 13.6 19.4 13.5 16.9 12.9 13.4 15.3
1.9 2.7 1.3 1.1 1.6 1.7 1.6 0.8 1.3 1.2 0.8 1.9 1.2 1.4 1.5 1.1 1.4
2.5 3.2 2.2 1.9 1.1 2.0 1.1 1.2 1.6 2.5 1.5 2.5 2.7 2.4 1.9 1.8 2.0
3.6 5.0 3.7 5.7 3.1 1.9 7.5 3.4 7.2 8.3 4.6 8.5 8.9 5.0 4.3 5.4
3.8 4.7 3.9 5.8 2.3 3.7 1.8 5.1 3.1 5.0 4.9 3.3 7.2 7.6 6.4 4.6 4.6
63 77 64 55 58 30 48 47 43 54 52 75 60 54 47 35
5.2 35.6 5.0 2.9 5.7 7.1 1.9 21.7 2.3 10.1 8.5 8.7 4.6 2.6 1.9 1.9
News Flow
Commercial Bank of Qatar received approval from Turkish regulator to buy Alternatifbank. (Bloomberg) According to data on the Abu Dhabi Exchange, Mubadala raised its stake in First Gulf Bank to 7.12% from 5.12%. (Bloomberg) Saudi Investment Bank reported 2Q 2013 net profit of SAR 320.4mn (+44% y/y), beating analysts estimates of SAR 297mn by 7.9%. Al Rajhi Bank recommended dividend of SAR 1.5 per share for 1H 2013. (Bloomberg)
Real Estate Sector PE/ROE 2013E

7.0 6.0 BEst ROE 2013 5.0 ROA 2013 4.0 3.0 2.0 1.0 0.0 0.0 5.0 10.0 BEst PE 2013 15.0 20.0 y = 0.0726x + 4.0814 R = 0.0346
Barwa RE Deyaar TMG Holding Dar Al Arkan Aldar Emaar
PB/ROA 2013E
16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 -2.0 0.0 0.2 0.4 0.6
Deyaar Emaar Eco City TMG Holding Emaar Dar Al Arkan Aldar
y = -2.6158x + 6.2378 R = 0.0265
Barwa RE
0.8
1.0
1.2
1.4
PB 2013
Dvd Yld 2012
Aldar Barwa Real Estate Dar AL Arkan Deyaar Development Emaar Economic City Emaar Properties TMG Holding Palm Hill Developments Average
2.26 26.60 10.35 0.38 10.00 5.32 4.63 2.01
4859.4 2842.5 2980.4 593.1 2266.4 8905.6 1359.4 299.8
4.2 9.3 9.0 52.5 37.2 10.7 16.8 20.0
10.9 7.8 10.1 15.1 14.6 14.1 9.1 11.7
17.6 9.3 6.2 1.0 2.5 6.6 2.2 -3.9 5.2
5.3 3.0 6.6 3.7 0.0 6.6 3.1 7.1 4.4
0.6 0.8 0.5 0.5 0.9 0.7 0.4 0.8 0.7
3.7 2.0 4.3 0.6 1.4 3.5 1.0 -0.9 1.9
4.7 3.6 2.7 0.0 2.8
2.3 0.0 2.0 0.0 0.0 0.9
57 49 57 44 53 41 76 65
28.4 6.5 72.6 3.6 43.0 25.4 1.8 3.4
News Flow
Emaar Properties and Meraas Holding plan to start an affordable hotel chain Dubai Inn to serve a market driven partly by th e growth of low-cost airlines and planned theme parks in the UAE. (Bloomberg) Aldar informed that the interest margin on an AED 2.1bn loan between Sorouh and a syndicate of banks has been cut to 2.45% from 4.5%. (Bloomberg) According to reports quoting Union Properties Chairman, the company may report Q2 2013 profit of as much as AED 45mn. (Bloomberg) Nakheel sold two plots on Palm Jumeirahs crescent for AED 695mn. A plot to west of Atlantis was sold to a GCC investor for A ED 556mn while an Emirati investor bought a plot on eastern crescent for AED 139mn. (Bloomberg) Moodys raised Aldar Properties rating to B1 from B2 and kept review for upgrade. (Bloomberg) Nakheels unit The World signed two settlement agreements with combined value of about AED 185mn with investors in the World, bringing total settlement value at the project to AED 807mn. (Bloomberg) The Saudi State Fund has approved SAR 5bn in housing loans to citizens for building 12,018 housing units across the country. (Bloomberg)
Food & Retail Sector
PE/ROE 2013E
70.0 60.0 BEst ROE 2013 50.0 40.0 30.0 20.0 10.0 0.0 8.0 10.0 12.0 14.0 BEst PE 2013 16.0 18.0 20.0
Savola Othaim Agithia Almarai Alhokair
PB/ROA 2013E
35.0 30.0
Jarir Mktg
y = 5.3016x - 57.231 R = 0.4189 ROA 2013
y = 2.7644x + 1.3233 R = 0.9052

Alhokair Jarir
25.0 20.0 15.0

Agithia
10.0 5.0 0.0 0.0 2.0 4.0

Savola
Othaim Almarai
6.0 PB 2013
8.0
10.0
12.0
Dvd Yld 2012
Almarai Othaim Alhokair Jarir Marketing Savola Agthia Average
71.75 115.00 171.25 197.00 50.00 3.20
7651.8 689.9 3196.3 3151.6 6665.9 522.7
17.6 10.8 11.8 16.3 14.3 10.5 13.6
18.3 15.1 16.6 18.3 15.2 13.2 16.1
20.2 28.4 35.8 59.0 17.5 11.5 28.7
19.7 24.4 35.4 57.7 18.7 13.2 28.2
3.4 2.7 3.8 9.1 2.4 1.2 3.8
8.2 10.0 18.8 30.8 6.5 7.9 13.7
2.0 3.6 4.8 3.5 2.3 3.2
1.9 2.9 2.3 4.4 3.2 2.3 2.8
65 60 77 68 54 61
9.1 4.1 3.9 1.9 4.4 0.3
News Flow
Majid Al Futtaim said it will invest AED 3bn in projects across Dubai. The company will expand its Mall of the Emirates and build a community mall. It also plans to build two hotels and will upgrade two existing properties. (Bloomberg) According to reports, Dubai Duty Free is seeking to lower the interest on a USD 1.75bn loan by as much as 31% after Duba is default risk plunged since the financing was signed last July. (Bloomberg)
Construction & Building Materials Sector PE/ROE 2013E

25.0 20.0 BEst ROE 2013 15.0
DSI OCIC
PB/ROA 2013E
y = -0.7516x + 18.546 R = 0.1126 9.0 8.0 7.0 ROA 2013 6.0 5.0 4.0 3.0 2.0 1.0 18.0 0.0 0.0 0.5 1.0 PB 2013 1.5 2.0 2.5
Depa DSI Arabtec
y = 4.7374x - 1.7773 R = 0.8554
OCIC
10.0 5.0 0.0 8.0 10.0 12.0 14.0 16.0 BEst PE 2013
Depa Arabtec
Dvd Yld 2012
Arabtec Depa DSI OCIC Average
2.10 0.41 0.94 246.18
1803.5 252.0 590.4 7318.4
25.3 16.8 31.9 24.7
15.6 11.6 14.4 10.7 13.1
4.8 -7.3 3.5 0.3
7.6 1.0 5.4 21.1 8.8
1.2 0.5 0.6 0.8
1.6 -3.9 1.5 -0.2
0.0 0.0
1.4 0.0 2.7 4.8 2.2
52 52 43 65
14.7 0.0 11.2 2.3
News Flow
Orascom Construction was awarded USD 420mn worth of infrastructure contracts in Saudi Arabia. (Bloomberg)
Energy & Utilities Sector
PE/ROE 2013E
40.0 35.0
QEWC
PB/ROA 2013E
8.0 7.0 ROA 2013 y = 0.3787x + 10.198 R = 0.0145 6.0 5.0 4.0 3.0 2.0 1.0 0.0 12.0 14.0 16.0 18.0 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4
Elsewedy GB Auto
BEst ROE 2013
30.0 25.0 20.0 15.0 10.0 5.0 0.0 4.0 6.0 8.0 10.0
Dana Gas Tabreed
y = 8.5918x - 5.5003 R = 0.365

Amiantit KIPCO
Saudi Electricity
BEst PE 2013
PB 2013
Dvd Yld 2012
Dana Gas QEWC Saudi Electricity Tabreed Average
0.55 162.10 12.90 1.85
1006.6 4451.6 14331.4 337.3
4.9 9.2 21.8 15.2 12.8
5.2 11.3 16.4 7.8 10.2
7.1 41.8 4.8 5.8 14.9
8.9 37.0 5.9 5.3 14.3
0.3 3.4 1.0 0.2 1.3
4.9 6.4 1.1 2.7 3.8
5.5 5.2 5.4
5.1 5.4 5.3
43 68 47 53
3.0 1.5 9.0 9.5
News Flow
Dana Gas said it made discovery of fuel at Bengonia-1 well in Egypt. (Bloomberg) Saudi Electricity signed a SAR 6.3bn order to replace old cables and support electricity network in Saudi Arabia. (Bloomberg)
Industrials Sector
PE/ROE 2013E
35.0 30.0 BEst ROE 2013 25.0 y = -0.8711x + 15.147 R = 0.1794
PB/ROA 2013E
8.0 7.0 6.0 ROA 2013 5.0 4.0 3.0 2.0
Amiantit Elsewedy KIPCO Saudi Cable GB Auto GB Auto
20.0 15.0 10.0 5.0 0.0 0.0 1.0 2.0 3.0 4.0
y = 8.5918x - 5.5003 R = 0.365

Amiantit KIPCO
El swedy Oriental Weavers
1.0 0.0 7.0 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4
5.0
6.0
BEst PE 2013
PB 2013
Dvd Yld 2012
El Ezz Steel Rebars Elswedy ElectriC GB Auto Oriental Weavers Saudi Arabian Amiantit Saudi Cable KIPCO Dubai Investments Average
472.99 20.53 28.28 21.85 13.95 13.35 550.00 1.41
919.8 652.6 519.1 279.8 429.6 270.5 2698.9 1390.1
10.5 43.9 16.4 7.6 14.7 16.1 9.5 17.0
10.7 11.3 14.5 7.4 9.9 8.3 16.7 11.3
19.2 2.3 10.6 9.3 7.0 -16.3 5.5 3.8 5.2
7.1 15.1 9.9 8.8 12.1 7.2 10.0
2.1 1.1 1.7 0.7 1.1 1.1 1.0 0.4 1.1
3.8 0.8 3.6 4.4 2.4 -4.0 0.5 2.4 1.8
12.5 0.0 5.1 8.2 6.4
8.7 3.7 4.2 10.3 8.0 6.3 3.6 6.4
74 62 64 59 47 50 72 50
0.0 0.4 0.2 0.2 3.1 3.8 2.4 15.9
News Flow
Transport & Logistics Sector
PE/ROE 2013E
60.0 50.0 BEst ROE 2013 40.0 30.0 20.0
N. Shipping Aramex DPW Agility QGTS
PB/ROA 2013E
12.0 y = -1.4241x + 34.357 R = 0.0719 ROA 2013 10.0 8.0
Air Arabia
y = 4.9412x - 0.0742 R = 0.3011

Aramex
6.0
DPW
4.0 2.0 0.0
10.0
Air Arabia
0.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 BEst PE 2013
0.0
0.5
1.0 PB 2013
1.5
2.0
Dvd Yld 2012
Air Arabia Aramex DPW National Shipping Co Agility QGTS Average
1.09 2.60 15.30 20.00 660.00 18.72
1384.9 1036.4 12699.0 1679.8 2536.6 2878.9
9.3 12.0 13.0 12.0 14.8 11.0 12.0
11.4 13.6 22.7 11.1 13.5 12.4 14.1
7.9 12.6 9.6 9.6 3.8 47.6 15.2
8.5 13.0 6.9 9.7 5.9 56.5 16.7
0.7 1.5 1.2 1.1 0.6 4.8 1.6
5.5 9.4 4.3 4.6 2.4 2.5 4.8
8.4 5.0 1.8 5.2 5.9 6.6 5.5
6.1 4.4 1.6 6.1 4.5 6.0 4.8
49 69 43 58 46 65
6.7 1.2 3.1 5.1 4.9 3.4
News Flow
Financial Services Sector

BEst Market Cap Company Price LLC (USD mn) PE 2012 PE 2013 ROE 2012 BEst ROE 2013 PB 2012 ROA 2012 Dvd Yld 2012 BEst DvdYld 2013 RSI Avg Value Traded 3m (USD mn)
DFM EFG-Hermes Tamweel Average
1.76 8.73 1.09
3855.2 594.1 296.8
231.8 102.1 15.7 116.5
77.0 13.0 12.8 34.3
0.5 0.7 3.2 1.4
2.1 4.5 3.3
1.1 0.6 0.5 0.7
0.5 0.1 0.7 0.4
0.0 4.4 2.2
1.1 5.7 4.6 3.8
51 67 20
18.3 4.3 0.4
News Flow
Foreign Ownership Limits

Allowed Stock (%) (%) Owned 1 wk 1 chg (%)
Insurance House 49.00 49.00 49.00 49.00 49.00 49.00 20.00 15.00 25.00 49.00 100.00 5.00 49.00 20.00 25.00 49.00 49.00 25.00 25.00 40.00 15.00 21.67 2.82 9.14 36.00 14.97 5.08 6.33 4.06 0.06 15.44 0.21 2.01 0.85 4.84 1.03 5.23 17.49 16.29 2.13 3.10 4.26 -0.16 0.00 -0.41 0.04 -0.05 -0.03 0.06 0.09 0.00 0.12 0.00 -0.01 0.00 -0.04 0.00 -0.07 -0.10 0.03 0.06 -0.01 0.07 -0.81 0.09 -0.03 0.03 -0.13 -0.32 -0.42 0.21 0.00 -0.68 -0.01 -0.01 0.00 -0.22 0.00 -0.74 0.49 0.08 -0.31 0.07 -0.09 ASMAK Investbank METHAQ NBAD RAK Bank NMDC Qatar Telecom RAK Properties RAK Poultry & Feeding RAK Cement Co. RAK Ceramics RAK Co for White Cement RAK National Ins. SCIDC Sorouh Real Estate Sudan Telecom UAQ Cement Union Cement UNB United Arab Bank United Insurance Co. Waha Capital 49.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 40.00 30.00 49.00 49.00 49.00 20.00 25.00 0.00 25.00 49.00 49.00 49.00 7.17 7.61 1.97 0.05 2.33 11.09 4.71 2.36 12.34 19.12 43.09 64.56 36.61 10.77 15.08 1.15 8.81 18.05 66.92 8.28 0.03 -0.02 0.30 0.00 0.03 0.02 0.00 0.00 1.20 -0.01 0.00 -0.16 -0.32 0.00 0.00 -0.01 0.00 0.00 0.00 0.00 0.14 0.07 0.39 0.00 0.14 0.17 0.00 0.02 1.12 0.07 0.01 0.03 -1.70 -0.08 0.25 -0.02 -0.03 0.01 0.00 -0.02 Qatar Al Khaliji Al Khalij Holding Barwa Real Estate CBQ Doha Bank Gulf Intl Services Industries Qatar Masraf Al Rayan National Leasing QEWS Qatar Gas Transport Qatar Insurance Co. QIIB Qatar Islamic Bank Qatar National Bank Qatar Navigation Qatar Telecom United Development Vodafone Qatar 24.97 24.86 24.97 20.27 25.00 22.50 12.25 49.00 25.00 25.00 24.47 24.69 19.39 20.59 12.49 25.00 100.00 25.00 100.00 15.90 2.71 5.08 13.03 6.67 10.01 6.60 14.03 11.34 7.08 9.77 6.81 2.63 3.74 5.04 6.62 22.09 12.89 3.97 0.00 0.00 0.02 0.00 0.00 -0.01 -0.08 -0.04 -0.10 0.05 0.11 -0.01 0.05 -0.02 0.02 0.03 0.01 0.08 0.00 -0.08 -0.12 -0.22 0.29 -0.08 -0.11 -0.23 -0.11 -0.78 0.02 -0.06 -0.32 -0.01 -0.08 0.29 -0.28 -0.02 0.23 0.02
m Stock
Allowed (%)
Owned (%)
1 chg (%)
wk
1 chg (%)
chg (%)
Dubai Air Arabia Ajman Bank Arabtec Holdings Aramex Drake & Scull Intl DFM Dubai Investments Dubai Islamic Bank DNIR Emaar Du Emirates NBD GGICO Gulf Navigation National Cement Co. TABREED Shuaa Capital TAKAFUL Takaful House Tamweel Union Properties Abu Dhabi ADCB BILDCO AD National Hotel ADNIC AD Ship Building Agthia Group Al Buhairah Ins. Co. Al Khazna Ins. Co. Aldar Properties Bank of Sharjah Comm. Bank Intl Dana Gas Eshraq Properties Finance House First Gulf Bank Foodco Holding Green Crescent Ins. Gulf Cement Co. Gulf Livestock Co. Gulf Medical Projects
25.00 49.00 20.00 25.00 25.00 20.00 5.00 100.00 49.00 49.00 49.00 49.00 49.00 25.00 15.00 15.00 100.00 49.00 49.00 40.00 49.00 25.00 49.00
0.50 0.01 1.45 17.30 3.09 18.55 1.78 87.22 29.98 15.87 23.92 12.92 16.59 0.05 1.78 14.13 79.83 13.69 3.05 8.18 46.06 0.00 7.54
0.00 0.00 0.55 -0.06 0.02 0.00 0.00 0.00 0.21 1.51 -0.11 0.09 0.00 0.00 0.00 0.00 0.29 0.00 0.02 -0.02 0.33 0.00 -0.08
-0.01 0.00 0.64 -3.59 0.03 -0.01 0.00 0.00 0.25 1.20 -0.96 0.11 0.01 0.00 0.00 -0.22 0.27 -0.51 0.02 0.09 0.35 0.00 -0.05
Source: Bloomberg, Emirates NBD Research
Other Asset Classes Currencies

Close EURUSD GBPUSD USDJPY USDCAD AUDUSD USDCHF EURGBP USDCNY 1.2829 1.4890 101.2000 1.0582 0.9067 0.9640 0.8618 6.1328 %5d chg -1.39 -2.12 -2.04 -0.60 -0.78 -1.97 -0.76 +0.08 1 year fwd 1.2867 1.4868 100.7580 1.0673 0.8843 0.9588 0.8656 6.1344 USDTRY USDEGP USDSAR USDQAR USDKWD USDBHD USDOMR USDMAD Close 1.9675 7.0283 3.7505 3.6415 0.2865 0.3770 0.3850 8.6558 %5d chg -2.00 -0.17 -0.01 -0.01 -0.48 ---1.14 EURAED GBPAED JPYAED CADAED AUDAED CHFAED TRYAED INRAED Close 4.7126 5.4670 0.0363 3.4729 3.3296 3.8110 1.8700 0.0605 %5d chg +1.41 +2.18 +2.07 +0.52 +0.81 +2.00 +1.60 +1.84
Rates
Interbank EIBOR USD LIBOR GBP LIBOR EURIBOR JPY LIBOR CHF LIBOR 1 month 0.5857 0.1948 0.4931 0.0736 0.1171 -0.0040 3 month 0.9114 0.2699 0.5088 0.1414 0.1564 0.0190 6 month 1.1486 0.4099 0.5949 0.2471 0.2307 0.0804 1 year 1.3314 0.6897 0.8894 0.4514 0.4193 0.2434 Swaps USD 2 yr USD 5 yr USD 10 yr EUR 2 yr EUR 5 yr EUR 10 yr Close 0.5850 1.8196 2.9940 0.5225 1.1663 2.0240 5d chg (bps) 7.5 25.4 29.7 -7.7 -6.7 0.8
Commodities & Fixed Income

Commodities CRB CMDT Index Gold Silver Oil (WTI) Oil (Brent) Aluminium Copper Tin (LME) Zinc (LME) Close 1223.20 18.91 103.22 107.72 1723.75 6782.50 18788.00 1808.50 %5d chg 0.47 -0.92 -3.83 +6.36 +5.44 -0.35 +0.77 -4.23 -0.69 Bonds / Sukuk ADGB 5.5 14 DUGB 6.396 14 QATAR 5.15 14 BHRAIN 6.273 18 EGYPT 5.75 20 TURKEY 7.25 15 MOROC 5.375 17 BTUN 4.5 20 US Tsy 2 yr US Tsy 10 yr Source: Bloomberg, Emirates NBD Research YTM 0.6110 2.2190 0.4520 3.7800 9.0550 2.3400 3.0320 5.3920 0.3948 2.7391 5d chg (bps) -37.5 -12.5 -50.0 +150.0 +307.1 +25.5 +161.5 +50.0 +3.9 +25.3 CDS Abu Dhabi Dubai Qatar Saudi Arabia Bahrain Egypt Turkey Morocco Close 74.2 220.0 78.6 71.1 231.0 773.8 200.0 240.0 5d chg (bps) -7.0 -19.1 -6.4 -8.3 -28.4 -107.9 +9.0 -37.4
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Emerging and Frontier Markets

Research from Emirates NBD

Major Equity Markets MENA Sector PE/ROE 2013E

MENA Sector PB/ROA 2012

y = 2.2197x - 10.996 R = 0.6041

y = 4.7166x - 2.7764 R = 0.84

Food & Retail

Petchem & Fert

Transport & Logistics Energy & Utilities Construction Real Estate

8.0 4.0 0.0

10.0 5.0 0.0 4.0 12.0

Petchem & Fert Real Estate Industrials Construction

Transport & Logistics Banks Financial Services Energy & Utilities

MENA Equity Indices PE/ROE 2013E

MENA Equity Indices PB/ROA 2012

BEst ROE 2013

0.0 7.0 9.0 BEst PE 2013 11.0 13.0

Developed Market Indices PE/ROE 2013E

Developed Market Indices PB/ROA 2012

y = 0.8101x + 3.6977 R = 0.1884

Dow Jones Nasdaq SMI

10.00 ROA 2012 8.00 6.00

Nasdaq Nikkei S&P 500 SMI AS51 Index

4.00 2.00 0.00 0.50

Stoxx 600 Cac

Source: Bloomberg, Emirates NBD Research, BEst Bloomberg Estimates

Research from Emirates NBD

Major Equity Markets Emerging Market Indices PE/ROE 2013E

Emerging Market Indices PB/ROA 2012

y = 0.3393x + 12.868 R = 0.056 0.00 0.5

Vietnam HSI Shanghai

Source: Bloomberg, Emirates NBD Research, BEst Bloomberg Estimates

Research from Emirates NBD

MENA Equity Indices (5d% chg)

Benchmark Equity Indices

8.3% 10.0% 13.0%

MENA Equity Indices

12.8 10.0 12.5 9.7 9.8 10.1 11.0 13.0 -

1.0 1.4 1.8 1.4 0.8 1.5 1.6 2.3 -

Relative to Benchmark Indices

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Index MSM Qatar

Dvd Yld 14.1% 31.6%

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Developed Market Equity Indices (5d% chg)

Emerging Market Equity Indices (5d% chg)

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Relative to Benchmark Indices

Source: Bloomberg, Emirates NBD Research, BEst Bloomberg Estimate

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y = 3.3605x + 0.5032 R = 0.2211

BEst ROE 2013

30.0 ROA 2013

Zain Telecom Egypt

0.0 -5.0 15.0 0.0

0.0 0.0 5.0 BEst PE 2013 10.0

BEst ROE 2013 PB 2012 ROA 2012

Dvd Yld 2012

BEst DvdYld 2013 RSI

Avg Value Traded 3m (USD mn)

9.3 15.5 12.0 10.3 8.8 11.9 10.6 8.1 10.8

Source: Bloomberg, Emirates NBD Research, BEst Bloomberg Estimate

Research from Emirates NBD