MENA-2 MONDAY MORNING ROUND-UP

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Egypt

Prime Minister: vote delay could help post-Mubarak order Central Bank reduces size of T-bill sale as yields rise Egypt expects USD15 billion in Qatari investments Egypt appoints Mohammed el-Orabi as new foreign minister NUCA to issue bonds for a total of EGP5 billion Sinai Cement 1Q2011 net income misses estimates on higher costs Maridive to receive 5 new OSV vessels in 2011, says CFO Electrolux extends due diligence period by 15 days Prosecutor lifts travel ban on Citadel Capital Chairman Kingdom Holding eyes USD350 million Egypt investment

Saudi Arabia

KEC, Al Akaria to start sales in co-developed project during Ramadan NATPET resumes operations 11 days ahead of schedule

Morocco

Thousands protest in Morocco for more reform

Agenda
Egypt Tue 21 June >> Housing and Development Bank ex-div date EGP 1 per share Thu 23 June >> Talaat Moustafa Group (TMG) ex-div date for 50.3 million bonus shares Saudi Arabia Sat 25 June >> Zain Saudi Arabia AGM Wed 29 June >> Dar Al Arkan AGM and EGM Sat 2 July >> Advanced Petrochemicals ex-div date for SAR1/share dividend

Egypt News
Prime Minister: vote delay could help post-Mubarak order Prime Minister Essam Sharaf has said that he backs delaying Septembers planned parliamentary elections, which well-organised Islamists are widely expected to dominate. Sharaf argued that delaying the vote would help efforts to reorder the country. "It could give more opportunity for political life to crystallise," Sharaf said in an interview aired on Nile television on 19 June 2011. "All efforts will be exerted to ensure successful elections no matter when they are held, said Sharaf, who added that his comments on the vote were his personal views and do not necessarily reflect those of the government. A March referendum found that 77% of Egyptians backed constitutional amendments that would allow the military to hold parliamentary elections in September and a presidential election before the years end. The Muslim Brotherhood, long in opposition under Mubarak and now widely seen as the party best-placed to make electoral gains, wants the September election date kept. (Reuters)

Central Bank reduces size of T-bill sale as yields rise The Central Bank of Egypt (CBE) has said that it sold EGP5.79 billion (USD974 million) in domestic treasury bills (T-bills) on 19 June 2011, less than the EGP6.5 billion it was seeking. The CBE sold EGP3 billion of 91day T-bills, the same amount that it had asked for, at an average yield of 11.761%, up from 11.602% during last week's auction. The bank also sold EGP2.79 billion of 273-day T-bills at an average yield of 12.944%, up from 12.865% during the last issue on 31 May 2011. It had sought bills worth EGP3.5 billion. The Ministry of Finance (MoF) has been cancelling auctions to prevent further spikes in interest that it pays on local T-bills, especially preventing the 9- and 12-month maturities from reaching the 13% mark. We highlight that the auction cancellations do not signify difficulties in financing Egypts deficit domestically as much as an effort by the government to minimise its cost of borrowing. We expect that external support that is planned to finance nearly a third of the EGP170 billion budget deficit in FY20112012 (starting on 1 July 2011) will help to ease the squeeze in local liquidity and diversify the countrys deficit financing. (Reuters, Mohamed Abu Basha) Egypt expects USD15 billion in Qatari investments Officials of the Egyptian Public Investment Authority expect Qatari investments in tourism, properties, food security, transport, education, agriculture and transport projects in Egypt to increase to USD15 billion from USD10 billion, Zawya Dow Jones reported. The Ministry of International Planning & Cooperation in Egypt has established a team to facilitate the procedures related to the introduction of Qatari investments in the country. Investment opportunities in the education field will be followed up with Qatari officials in July, while investments in infrastructure will be discussed over the coming two months, Egyptian newspaper Al Masri Al Youm quoted an official in the Egyptian Public Investment Authority as saying. (Zawya Dow Jones) Egypt appoints Mohammed el-Orabi as new foreign minister Egypt appointed a new foreign minister on 19 June to replace Nabil Elaraby, who was picked as the new Arab League Chief last month, a cabinet official has said. "We have named our former ambassador in Berlin, Mohammed el-Orabi, as the new foreign minister," the official told Reuters. The government has confirmed the appointment in a statement. (Reuters) NUCA to issue bonds for a total of EGP5 billion The New Urban Communities Authority (NUCA) is preparing to issue bonds for a total of EGP5 billion over two tranches. The first tranche of EGP3.5 billion will be issued by the end of June and will have a maturity of 13-months, Mist News reported, citing unnamed sources close to one of the banks managing the issue. The authority plans to issue the second tranche once the first issue is covered. (Mist News) Sinai Cement 1Q2011 net income misses estimates on higher costs Sinai Cement Company (SC) [SCEM.CA] has reported 1Q2011 net income of EGP117 million, down 25% Y-oY and 68% Q-o-Q, and 19% below our estimate of EGP145 million. This was mainly driven by higher-thanestimated costs; average production cost/tonne reached EGP207/tonne, 12% higher than last years average of EGP190/tonne. We highlight that historically, SC used 50% natural gas and 50% mazote in cement production (mazote costs are cEGP30-35/tonne higher that natural gas costs). The pipeline supplying gas to the company, which also supplies fuel to Jordan and Israel, exploded twice this year (in February and April). Although the company has indicated that it started using 100% mazote only after the second explosion, we estimate that 1Q2011 costs indicated higher mazote use since the first explosion. Revenue came in at EGP334 million, down 10% Y-o-Y and 21% Q-o-Q, versus our estimate of EGP340 million. EBITDA margin in 1Q2011 reached 41% versus our estimate of 48%, 1Q2010s 48% and 4Q2010s 57%. We remain concerned regarding: i) local cement demand in the short- and medium terms, due mainly to projects that are currently under construction and nearing completion and no signs of new projects in the near term; and ii) higher competition from the earlier-than-expected entry of new producers, especially Al Sewedy plant in Suez, and the planned startup of the armed forces plant in Arish this year. (Company Disclosure, Malak Youssef) Sinai Cement: EGP48.3, Rating: Neutral, FV: EGP45, MCap: USD569 million, SCEM. EY / SCEM.CA Maridive to receive 5 new OSV vessels in 2011, says CFO Maridive & Oil Services Company (Maridive) [MOIL.CA] will take delivery of five new offshore support vessels (OSV) starting this month through to the end of 2011, the companys Chief Financial Officer (CFO), Emad Fawzy, was quoted as saying. This will increase the companys fleet size to 75 marine units by the end of the year. The total investment cost of the new vessels is estimated at USD100 million. The

company will receive one vessel in June, with a total value of USD10 million and total capacity of 6,000 horse power, in addition to a second vessel in July, with a total investment cost of USD25 million and a capacity of 11,000 horse power. The company has recently taken delivery of three vessels, with a capacity of 11,000 horse power each, which are currently being marketed to undertake work in the Middle East, Latin America and West Africa. Maridives total contract backlog for 2011 and 2012 stands at USD443 million, Fawzy added. (Mist News) Maridive: USD3.53, Rating: Buy, FV: USD3.81, MCap: USD1,084 million, MAPS EY / MOIL.CA Electrolux to extend due diligence period by 15 days Olympic Group Financial Investments (Olympic Group) [OLGR.CA] announced that Electrolux has extended its due diligence period on its 52% stake acquisition in the former by 15 days as at 16 June 2011. This is the third such extension following unrest in Egypt. No further details were provided outlining the reason for the latest extension. We are suspending our coverage on the stock as EFG Hermes Investment Banking is advising Olympic Group on a transaction with Electrolux. (Investmentauth, Khaled Sadek) Olympic Group: EGP36.01, MCap: USD364 million, OLGR EY / OLGR.CA Prosecutor lifts travel ban on Citadel Capital Chairman Citadel Capital (CCAP.CA) has announced in a statement that Egypts Prosecutor General approved on 19 June 2011 the removal of Citadel Capitals Chairman and Founder, Ahmed Heikal, from the list of persons who are subject to a travel ban. On a separate note, the company said that its main shareholder, Citadel Capital Partners, has not received a direct offer to sell a stake in Citadel Capital SAE. Citadel Capital Partners may hire an international investment bank to examine its strategic alternatives, the company said in a regulatory filing. (Company Disclosure, Bloomberg) Kingdom Holding eyes USD350 million Egypt investment Saudi firm, Kingdom Holding, is considering investing USD350 million in an agro-industrial project in Egypt, the financial daily, al-Mal, quoted a senior company executive as saying. "I think we will reach the stage of negotiations and due diligence in a month and a half from now," al-Mal cited board member, Ahmed Halawani, as saying. An Egyptian agriculture investment deal signed by Kingdom's billionaire owner Prince Alwaleed bin Talal in 1998 was annulled by a court in April as prosecutors investigated the terms of several state land sales under former President Hosni Mubarak. That dispute was settled this month when Alwaleed signed a revised deal for the farmland at Toshka in southern Egypt. (Reuters)

Saudi Arabia News

KEC, Al Akaria to start sales in co-developed project during Ramadan Saudi Real Estate Company (Al Akaria) [4020.SE] and Knowledge Economic City (KEC) [4310.SE] will start sales in their co-developed project in KECs Medina project during Ramadan (August 2011), Al Okaz Daily reported, citing KECs Vice President of Sales and Marketing, who added that villa prices in phase I (planned to host 206 villas) will start at SAR1.6 million. (Al Okaz Daily) Al Akaria: SAR23.9, Rating: Neutral, FV: SAR27.4, Mcap: USD765 million, SRECO / 4020.SE NATPET resumes operations 11 days ahead of schedule The National Petrochemical Industries Company (NATPET), a 57.4%-owned subsidiary of Alujain Corporation (2170.SE), has restarted its propylene and polypropylene (PP) units 11 days ahead of schedule. The company shutdown its plants on 1 May 2011. According to the announcement by the company, the early startup is expected to contribute an additional SAR20 million to NATPETs bottom-line for 2Q2011. (Tadawul)

Morocco News
Thousands protest in Morocco for more reform Several thousand people marched through Casablanca, Morocco's biggest city, on 19 June 2011 to protest constitutional reforms unveiled this week by King Mohammed as not having gone far enough. The monarch announced on 17 June 2011that he would devolve some of his powers to parliament and the government, as well as put the reforms to a referendum on 1 July 2011. Under the changes, King Mohammed would retain his hold on security, the army and religion. That disappointed some opponents who had wanted to

see the monarch hand over all his executive powers to elected officials. "We are here to reject the proposed constitution," said Aziz Yaakoubi, one of the organisers of the protest in Casablanca. "It keeps all the powers in the hands of the king. He refused to listen to the street." (Reuters)
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