Egypt

IMF, World Bank funds not needed, Finance Minister says Court sentences former Trade Minister to 5 years Egyptians injured in clashes over Mubarak's fate TE to impose lower DLD tariff starting in July Transportation Ministry closes OD Holdings Taba marina; OD Holding turning to Military Council for resolution SVC to distribute EGP0.1/share cash dividend KIMA to start rehabilitation of its plants in FY2011-2012

Saudi Arabia

NSCSA inks SAR822.6 million Murabaha facility Bayanat al-Oula signs SAR400 million deal to set up fibre-optic network

Jordan

Protesters call for national salvation government

Tunisia

African Development Bank lends Tunisia EUR137 million for highway

Morocco Kuwait Qatar

Government cancels farmers' debt ahead of vote

Wataniya Telecom shareholders approve Qatar Exchange listing

Indosat launches towers sale, Reuters reports

Agenda
Saudi Arabia Wed 29 June >> Dar Al Arkan AGM and EGM Sat 2 July >> Advanced Petrochemicals ex-div date for SAR1/share dividend

Egypt News
IMF, World Bank funds not needed, Finance Minister says Egypt will not borrow from the World Bank nor the International Monetary Fund (IMF) now that the countrys budget has been revised and the forecasted deficit cut, although a loan had been previously agreed upon, Finance Minister Samir Radwan said. The FY2011-2012 deficit in the first draft budget was forecasted at 11% of GDP, but was revised down to 8.6% because of national dialogue and the ruling army council's concerns about debt levels, Radwan told Reuters. "So we do not need to go at this stage to the Bank and the Fund," Radwan said. Qatar provided USD500 million for budgetary support in the past week, Radwan added. "That is a gift," he said, when asked if there were any conditions attached to the Qatari cash. The minister stated that Saudi Arabia had earlier offered a similar amount. Asked about whether Egypt might return to the international markets with a new Eurobond, Radwan said, "I don't rule out anything. Once the budget is approved, finalised, then I start looking about the details about the financing." Earlier in June Egypt agreed on a USD3 billion, 12-month standby loan facility from the IMF, which the government had said came with more lenient terms than usually associated with such lending. An IMF

spokesman confirmed on 25 June 2011 that Egypt has scrapped plans for the loan programme. "In light of these changes, the authorities see no immediate need for a financial arrangement from the IMF," the spokesman said, adding that "The IMF continues to maintain a close policy dialogue with the authorities." (Reuters) Court sentences former Trade Minister to 5 years An Egyptian court convicted former Trade Minister Rachid Mohamed Rachid in absentia on 25 June 2011 and sentenced him to five years in prison for profiteering and squandering public funds, the state news agency MENA said. The Cairo court ruled that Rachid unlawfully seized public money from a government export development fund, leading to a waste of public funds, MENA said. The court also ordered him to pay EGP9.4 million (USD1.6 million) in fines, MENA added. (Reuters) Egyptians injured in clashes over Mubarak's fate Dozens of people were injured in clashes between two groups of protesters on 24 June 2011. The two groups include those for and against putting former president Hosni Mubarak on trial, Egypt's official news agency MENA reported on 25 June 2011. The agency said that the clashes erupted after anti-Mubarak protesters arrived in an area where hundreds of Mubarak's supporters were staging a rally. "The situation then developed into clashes between the two groups who threw rocks at each other," the agency said, adding that security forces separated the two groups. (Reuters) TE to impose lower DLD tariff starting in July Telecom Egypt (TE) [ETEL.CA] has announced that domestic long distance (DLD) tariff rebalancing will be implemented starting in July 2011, TEs CEO, Mohamed Abdel Rehim, was quoted as saying. The new DLD tariff will be unified to EGP0.03/minute, in line with fixed-line local tariffs. This is the same as the current local tariff (fixed-to-fixed), but much lower than the DLD rates, which range EGP0.08/minute (implying a 63% cut)-EGP0.16/minute (an 81% cut). The promotion announced by TE expires in endSeptember 2011. As we had previously mentioned, we view the reduction as aggressive and coming at a very sensitive time given that we do not believe that the current elasticity equilibrium will act in favour of revenue growth. We do not believe that this tariff cut will generate enough traffic to counter the tariff decline, and we think that the end result will be more pressure on DLD revenue, which constitutes c4% of retail revenue, according to our estimates. The company does not provide the DLD line of revenue separately; it is included in the voice revenue (retail). Based on previous conversations with TE management, we assume that this line has declined aggressively over the past three years. Management has highlighted on several occasions that the EGP0.03/minute rate is lower than the actual per-minute cost and is subsidised by revenue generated from the international calling segment. We believe that if/when the DLD rate is reduced to EGP0.03/minute, there will be a temporary negative impact on the EBITDA margin. The impact on total revenue should not be large since DLD contributes to less than 3% of total revenue. We keep our forecasts and Buy rating unchanged, with our fair value (FV) of EGP19.50/share implying 28% upside potential. (MIST, Omar Maher, Marise Ananian) TE: EGP15.23, Rating: Buy, FV: EGP19.5, MCap: USD4,362 million, TELE EY / ETEL.CA Transportation Ministry closes OD Holdings Taba marina; OD Holding turning to Military Council for resolution The Ministry of Transportation (MoT) closed down a marina owned by Orascom Development Holding (OD Holding) [ODHR.CA] in Taba last week, causing the company to resort to the Military Council to resolve the issue with the MoT. The company has requested that the Minister of Transportation disclose the reasons behind the decision, Al Masry Al Youm reported, quoting the director of Taba Heights Port, Tariq Rehan. Rehan added that the marina employs more than 1,000 employees and that the MoTs decision has resulted in losses of fees from 50 yachts per day. (Al Masry Al Youm) OD Holding: EGP10.3, Rating: Buy, FV: EGP26.2, Mcap: USD963 million, ODHN EY / ODHR.CA SVC to distribute EGP0.1/share cash dividend South Valley Cement Company (SVCE.CA) has announced that it will distribute a EGP0.1/share cash dividend, with the ex-dividend date on 7 July 2011. This implies a 2% dividend yield according to the closing price on 23 June 2011. (Mist)

KIMA to start rehabilitation of its plants in FY2011-2012 Egyptian Chemical Industries (KIMA) [EGCH.CA] is expected to start the rehabilitation of its plants in FY2011-2012, by which it will use natural gas in place of electricity. The company plans to build a 400-450 ktpa ammonia plant at an investment cost of EGP750 million. A gas contract was signed with Gasco for the new plant in October 2010. (Argaam, Al Ahram)

Saudi Arabia News

NSCSA inks SAR822.6 million Murabaha facility The National Shipping Company of Saudi Arabia (NSCSA) [4030.SE] announced that it has signed a SAR822.6 million Murabaha facility with Saudi British Bank (SABB) [1060.SE] and National Commercial Bank, the company said in a statement to the Saudi Stock Exchange. The 12-year Islamic facility will be used to finance 80% of the construction of two cargo vessels that NSCSA contracted with Hyundai MIPO Shipyard in South Korea. The loan will be repaid in equal quarterly installments and a final payment equal to 30% of the value of the loan three months after taking delivery of the vessels. (Tadawul, Bloomberg)

NSCSA: SAR14.0, Rating: Neutral, FV: SAR16.2, MCap: USD1,176 million, NSCSA AB / 4030.SE SABB: SAR41.5, Rating: Neutral, FV: SAR46.0, MCap: USD8,300 million, SABB AB /1060.SE Bayanat al-Oula signs SAR400 million deal to set up fibre-optic network Data service provider Bayanat al-Oula, fully-owned by Saudi Arabias Mobily (7020.SE), has signed a SAR400 million deal to set up advanced intra-city fibre optic networks in Saudi Arabia, Zawya Dow Jones quoted Riyadh-based Al Jazirah daily as saying. The deal was signed with four international companies and the 4,000-kilometres network will be set up initially in Riyadh, Jeddah, Dammam, and Al Khobar. They will serve more than 70,000 residential units, the paper reported. (Zawya Dow Jones, Al-Jazirah) Mobily: SAR50.75, Rating: Buy, FV: SAR65.9, MCap: USD9,473 million, EEC AB / 7020.SE

Jordan News
Protesters call for national salvation government Scores of activists gathered in front of the Prime Ministers office on 24 June 2011 calling for reforms to speed up as well as a national salvation government. An estimated 125 members of the National Coalition of Opposition Parties, including the Hashed, National Unity, Jordan Baath, and Jordan Communist parties, as well as the Islamist movement and independent activists, took part in the demonstration. Protesters held placards accusing Prime Minister Marouf Bakhit of delaying reforms and called for dismissing the current government. Members of the Islamist movement described the government as "expired." Demonstrators said pressure on the government and other authorities must not wane until all demands are met. (The Jordan Times)

Tunisia News
African Development Bank lends Tunisia EUR137 million for highway The African Development Bank (AfDB) has approved a EUR137 million loan to Tunisia to help finance construction of a stretch of new highway in the country, the bank said. The project involves building 195 kilometres (km) (120 miles) of twin-lane roads between Gabes in south-eastern Tunisia and Ras Jdir on the Tunisian-Libyan border, the bank said in a statement. (Reuters)

Morocco News
Government cancels farmers' debt ahead of vote The Moroccan government and state-owned Credit Agricole du Maroc (CAM) will equally shoulder a multimillion-dollar debt amnesty for 80,000 farmers, a senior official said, the first such operation since 2005. The plan was announced a few days before a 1 July referendum on constitutional reforms proposed by King Mohammed following a wave of recent street protests. Jamaleddine Jamali, CAM's Secretary General, dismissed any political motivation for the debt amnesty. Without help with their debts, "the beneficiary farmers would have carried on their normal lives," he said. "There is no social pressure whatsoever." In addition to MAD765 million (USD97 million) in debt amnesty for 80,000 farmers, CAM will reschedule debt for 15,000-20,000 farmers, cut interest rates and cancel unpaid interest on loans previously granted to

farmers. "We will be lowering interest rates to 7-7.5% from 9-10%. Our aim is to align our rates to changes in the local markets," Jamali said. Anxious to avoid the kind of unrest seen in other parts of the Arab world and worried about increases in global commodity prices, Morocco has in recent months raised salaries and almost tripled subsidies for food and energy to MAD45 billion. (Reuters)

Kuwait News
Wataniya Telecom shareholders approve Qatar Exchange listing Qtel (QTEL.QA) announced that shareholders of Wataniya Telecom (NMTC.KW) approved the listing of the company on the Qatar Exchange or on any other foreign exchange if the listing is to the companys benefit during the companys AGM on 21 June 2011. (Company Announcement) Qtel: QAR149.5, Rating: Buy, FV: QAR174.5, Mcap: USD7,229 million, QTEL QD / QTEL.QA Wataniya: KWD1.96, Rating: Neutral, FV: KWD2.25, MCap: USD3,638 million, NMTC KK / NMTC.KW

Qatar News
Indosat launches towers sale, Reuters reports Indosat, Indonesias second largest mobile operator by market share and 65%-owned by Qtel (QTEL.QA), has initiated the sale of 4,000 telecommunications towers that it owns. Indosat is targeting raising more than USD500 million, Reuters reported. The operator has invited a number of companies such as Profesional Telekomunikasi Indonesia, Tower Bersama Infrastructure and Solusi Tunas Pratama to assess information on the towers and submit a bid, Reuters cited unnamed sources as saying. It is understood that Indosat does not intend to offer the towers to competitors Telkomsel and XL Axiata. Bids are due by late June. (Telegeography, Reuters) Qtel: QAR149.5, Rating: Buy, FV: QAR174.5, Mcap: USD7,229 million, QTEL QD / QTEL.QA
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