MENA-1 TUESDAY MORNING ROUND-UP UAE UAE April 2011 non-oil trade up 17% Y-o-Y Green Crescent Insurance

reports 2Q2011 net loss of AED16.7 million Kuwait Kuwaits Ruler Sheikh Sabah warns against misuse of budget surpluses Qatar Doha Insurances net profit declines 20% Y-o-Y to QAR18.3 million in 2Q2011 Al Meeras net profit rises 10% Y-o-Y to QAR21.5 million in 2Q2011 Ezdans net profit declines 12% Y-o-Y to QAR103.7 million in 1H2011 Woqods net profit rises 9.7% Y-o-Y to QAR330.6 million in 2Q2011 Oman Galfar 2Q2011 results better than expected on higher turnover, miscellaneous income Oman June inflation slows to 4.0% Y-0-Y Oman 2011 real GDP growth at 5%, says senior central bank official EFG Hermes Research Drake & Scull International (DSI) - 2Q2011 Bottom Line Slightly Below Expectations; Maintain Buy - Flash Note - 15 August 2011 Qatar Telecom (Qtel) - 2Q2011 Results: Revenue Grows 7% Q-o-Q, EBITDA Margin Slips to 45.8%; Maintain Buy Rating - Flash Note - 15 August 2011 Renaissance Services (RNS) - Downgrade Rating to Neutral on Higher Risk Profile Company Note - 15 August 2011 Agenda Qatar Wed 24 August >> The National Leasing Holding Company BOD meeting UAE News UAE April 2011 non-oil trade up 17% Y-o-Y The UAEs non-oil trade rose 17% Y-o-Y in April 2011 to AED68.9 billion, the Federal Customs Authority said on its website on 15 August 2011. Foreign trade for 4M2011 rose to AED297.3 billion, up 25% Y-o-Y. (Bloomberg)

Green Crescent Insurance reports 2Q2011 net loss of AED16.7 million Green Crescent Insurance (GCIC.AD) reported a net loss of AED16.7 million in 2Q2011, up 38% from a net loss of AED12.1 million in the same period last year. Green Crescents net underwriting loss increased 112% Y-o-Y to AED7.8 million. Total assets stood at AED407.3 million, with shareholders equity of AED103.9 million. (Company Disclosure) Kuwait News Kuwaits Ruler Sheikh Sabah warns against misuse of budget surpluses Sheikh Sabah, the Ruler of Kuwait, warned against excessive misuse of the countrys surpluses. He said that the financial surpluses have led to fundamental distortions in the national economy and is a burden that threatens the future of the country. Kuwait has seen spending going up threefold to USD71 billion over the past six years, mostly on higher wages and subsidies. Emir Sheikh Sabah said that Kuwait needs to adopt measures to rectify the direction of the state budget. (Zawya Dow Jones) Qatar News Doha Insurances net profit declines 20% Y-o-Y to QAR18.3 million in 2Q2011 Doha Insurance (DICO.QA) reported a net profit of QAR18.3 million in 2Q2011, compared to QAR22.7 million in the corresponding period last year, the company said in a statement to Qatar Exchange. Net profit stood at QAR37.5 million in 1H2011, down from QAR41.1 million in 1H2010. (Qatar Exchange) Al Meeras net profit rises 10% Y-o-Y to QAR21.5 million in 2Q2011 Al Meera Consumer Goods Company (MERS.QA) reported a net profit of QAR21.5 million in 2Q2011, compared to QAR19.5 million in the corresponding period last year, the company said in a statement to Qatar Exchange. Net profit came in at QAR34.1 million in 1H2011, up from QAR28.8 million in 1H2010. (Qatar Exchange) Ezdans net profit declines 12% Y-o-Y to QAR103.7 million in 1H2011 Ezdan Real Estate Company (ERES.QA) reported a net profit of QAR103.7 million in 1H2011, compared to QAR117.3 million in the corresponding period last year, the company said in a statement to Qatar Exchange. (Qatar Exchange) Woqods net profit rises 9.7% Y-o-Y to QAR330.6 million in 2Q2011 Qatar Fuel (QFLS.QA), known as Woqod, reported a net income of QAR330.6 million in 2Q2011, compared to QAR301.5 million in the corresponding period last year, the company said in a statement to Qatar Exchange. The companys 1H2011 net income stood at QAR599.5 million, up from QAR548.9 million in 1H2010. (Qatar Exchange) Oman News Galfar 2Q2011 results better than expected on higher turnover, miscellaneous income Galfar Engineering and Contractings (Galfar) [GECS.OM] 2Q2011 earnings came in at OMR1.3 million, 25% above our expectation of OMR1 million. Net margins weakened further in

2Q2011, coming in at 1.5%, in line with our expectations. We attribute the continued weak margins to pending work on the Muscat Express Highway, which we expect should be completed in 2Q2011, coupled with new regulations on wage increases in 2011. The bottom line beat is due to better-than-expected contract execution coupled with OMR230,000 of other income (consisting of gains on asset sales and miscellaneous income) versus our estimate of OMR137,000. Contract execution was 23% above our expectations at OMR86.5 million. Galfar added a OMR37 million contract in 2Q2011, awarded by Petroleum Development Oman (PDO). While Galfars 2Q2011 came in better than expected, we remain cautious on the outlook for Galfar in light of ongoing margin pressures (ex-Muscat Express Highway contract) and a continued increase in completion. We estimate a net margin of 3.5% on an 11% Y-o-Y decrease in contract execution in 2011. We continue to believe that contract awards to prevent further backlog shrinkages will be crucial to Galfar in 2011. Galfars backlog stood at OMR525 million as at 2Q2011. We maintain our Sell rating on the stock. (Company Disclosure, Jad Abbas, Ahmed Gad) Galfar Engineering and Contracting: OMR0.461, Rating: Sell, FV: OMR0.449, MCap: USD400 million, GECS OM / GECS.OM Oman June inflation slows to 4.0% Y-0-Y Omans inflation slowed to 4.0% Y-o-Y in June 2011 from 4.4% Y-o-Y in May 2011. Prices were up 0.14% M-o-M compared to 0.44% M-o-M in May. Clothing, textiles and footwear prices fell 0.2% Y-o-Y. Food price inflation slowed to 5.8% Y-o-Y in June from 6.3% Y-o-Y in May. We expect an annual average inflation of 4.0% in 2011. (Bloomberg, Monica Malik) Oman 2011 real GDP growth at 5%, says senior central bank official Omans economy should expand 5% in 2011, supported by higher oil production and non-oil GDP growth, as the retail sector is picking up, Reuters reported, citing a senior central bank official. The central bank official added that downside risks to the growth rate include the US and European economies entering recession, as well as economic developments in China. We expect real GDP growth of 3.1% in Oman, as we lowered our real non-oil GDP growth forecasts in March due to the protests that hit the country earlier this year. Also, we believe that the restructuring of the Ministry of National Economy and the government reshuffles will likely result in delays in Omans award schedule and some challenges in project implementation. (Reuters, Monica Malik, Mohamad Al Hajj) EFG Hermes Research Drake & Scull International (DSI) - 2Q2011 Bottom Line Slightly Below Expectations; Maintain Buy - Flash Note - 15 August 2011 Backlog Execution Drives Y-o-Y, Q-o-Q Earnings Growth; Reiterate Buy: DSIs 2Q2011 results showed revenue of AED738.7 million, in line with expectations and 11% ahead of the consensus, and net income of AED51.3 million (+18% Y-o-Y, +12% Q-o-Q), slightly below our estimate, but 6% ahead of the consensus on the back of solid backlog growth. DSI booked AED1.5 million in fair value losses, implying a normalised bottom line of AED52.8 million. We reiterate our Buy rating on DSI, as our FV of AED1.27/share implies 41% upside potential. We

highlight continued earnings growth and a 2012 inflection point for FCF generation as key drivers for the stock. Margins Lower on Decreased IWP Revenue; Expect Recovery in 2H2011: Gross margins came in at 14.3%, well below our 16% expectation. The weaker margins were due to a higher contribution from the civil operation, coupled with a decrease in the high-margin IWP operations. Management has indicated that an increase in margins will be seen in 2H2011 in light of a pickup in the execution of IWP contracts. We forecast a FY2011 gross margin of 18%. Management has reiterated its early margin guidance for net margins of 6-7% for civil operations, 7-8% for MEP operations, and 8-9% for IWP operations. Backlog Stands at AED7.5 Billion, up 56% Y-o-Y; Balance Sheet Stable: Contracts worth AED653 million were added in 2Q2011. Saudi Arabia maintained the lions share of the backlog at 47%, while the UAE captured 28% (Abu Dhabi: 15%, Dubai: 13%), with the balance across other markets. Operationally, civil contracting increased to 45%, with MEP and IWP operations at 43% and 12%, respectively. Cash balances declined to AED600.1 million, while receivables increased 24% YTD in tandem with DSIs increasing turnover. Total borrowings decreased 24% YTD to AED599.7 million, although management has indicated plans to finance the recent Saudi acquisitions with cAED129 million in new debt to be raised in 3Q2011. (Jad Abbas) Qatar Telecom (Qtel) - 2Q2011 Results: Revenue Grows 7% Q-o-Q, EBITDA Margin Slips to 45.8%; Maintain Buy Rating - Flash Note - 15 August 2011 Mixed Quarter; Maintain Buy Rating and Fair Value: Qtel reported mixed 2Q2011 results, with revenue 3% ahead of our forecast, while the EBITDA margin and the bottom line missed our forecasts. The Qatari operation (31% of our valuation) was in line with our estimates on all operational levels, Wataniya (25% of valuation) had a particularly strong quarter, and Nawras (8% of valuation) reported weak margins. Qtel consolidated earnings for the quarter missed our estimate by 13%, mostly on the back of higher-than-forecasted depreciation and amortisation expenses, and minority interest. We maintain our fair value (FV) of QAR174.52/share and Buy rating. Qtel currently trades at an estimated 2011 P/E of 9.5x and an estimated 2011 EV/Prop. EBITDA of 5.1x, versus regional averages of 9.2x (excluding Mobinil and du) and 4.8x. 2Q2011 Revenue up 7% Q-o-Q on Wataniya and Indosat Growth: Qtels 2Q2011 revenue came in at QAR8.0 billion, up 19% Y-o-Y and 7% Q-o-Q (EFG Hermes: QAR7.8 billion; Reuters consensus: QAR7.7 billion). Revenue from Wataniya and Indosat were particularly strong, coming in 5% and 7% ahead of our forecasts, respectively. Revenue at the local operation was flat Q-o-Q and in line with our forecast, at QAR1.4 billion, indicating resilience to competitive pressures. Indosat posted robust 10% Q-o-Q revenue growth, reversing the trend of the two previous quarters. EBITDA Margin Slips on Weak Margins in Iraq, Oman and Indonesia: The EBITDA margin for 2Q2011 came in at 45.8%, lower than 1Q2011s 47.5% and our 47.0% estimate. This was on the back of weak margins at the level of Nawras, Asiacell and Indosat. We view the margin deterioration at Nawras as particularly worrying. Nawras margin was affected by the roll-out of the fixed-line network, in addition to new hires. We will watch closely the cost efficiency programme for any margins improvement. Indosats margin was impacted by higher-than-

expected costs from the voluntary retirement scheme (VSS). We estimate that the margin will return to the low fifties level post-2Q2011, as the VSS ended in June. Asiacells margin was pressured by the roll-out of new towers/sites and associated costs (security, fuel, etc.). (Nadine Ghobrial, Marise Ananian) Renaissance Services (RNS) - Downgrade Rating to Neutral on Higher Risk Profile Company Note - 15 August 2011 Downgrade Rating to Neutral on Lower FV of OMR0.678/Share: We lower our fair value (FV) for Renaissance Services (RNS) to OMR0.678/share from OMR1.122/share as a result of cutting our FY2011 forecasts and incorporating higher equity risk premium assumptions for Topazrelated divisions (marine & engineering businesses). While 2Q2011 numbers were weaker than expected, particularly after a poor performance from the companys engineering division, the extent of further potential write-downs is more significant than we had previously expected. Worse still, the company has announced that it has uncovered financial irregularities in one of its overseas subsidiaries within its Topaz business. This will create a significant overhang on the stock, in our view, and thus we reduce our rating to Neutral from Buy. Reduce FY2011 Earnings Forecast by 49% to OMR14.1 million: We cut our FY2011 net income estimate by half to OMR14.1 million to reflect a number of changes to our model: 1) we reduce our revenue and profit estimates for the engineering business following 1H2011 operating losses. We had previously expected the division to achieve an operating profit of OMR3.0 million in FY2011. Now we look for FY2011 break-even; ii) we also adjust our taxation and interest expense estimates in line with 2Q2011s performance; and ii) to be prudent, we fully account for all further potential write-downs from legal cases/one-offs, amounting to OMR11 million (USD30 million). Although the company has also highlighted further costs totalling OMR3 million (USD8 million) related to its postponed IPO, these have already been expensed. 2Q2011 Results Miss Expectations: Renaissance reported 2Q2011 revenues of OMR64.0 million, 14% below our OMR74.1 million forecast. Operating profit of OMR7.2 million contracted 26% Y-o-Y and 24% Q-o-Q, and was 44% below our forecast. The engineering segment reported an operating loss of OMR3.1 million (versus our break-even estimate), while operating profit at the contract services division declined 63% Y-o-Y to OMR1.0 million (versus our OMR3.4 million estimate) on increased employment costs in Oman, which are expected to be reimbursed in 2H2011. The marine business operating profit of OMR10.2million was broadly in line. The weaker operating performance combined with higher finance costs and taxes meant that the OMR1.3 million net income missed our OMR6.3 million estimate and the OMR6.5 million Bloomberg consensus. (Abid Riaz, Nadine Hassouna) [Note EFG Hermes is not responsible for the accuracy of news items taken from other media.] ______________________________________________________________________________ ___________________________________ Our investment recommendations take into account both risk and expected return. We base our fair value estimate on a fundamental analysis of the companys future prospects, after having taken perceived risk into consideration. We have conducted extensive research to arrive at our investment recommendations and fair value estimates for the company or companies mentioned

in this report. Although the information in this report has been obtained from sources that EFG Hermes believes to be reliable, we do not guarantee its accuracy, and such information may be condensed or incomplete. Readers should understand that financial projections, fair value estimates and statements regarding future prospects may not be realized. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice. This research report is prepared for general circulation and is intended for general information purposes only. It is not intended as an offer or solicitation with respect to the purchase or sale of any security. It is not tailored to the specific investment objectives, financial situation or needs of any specific person that may receive this report. We strongly advise potential investors to seek financial guidance when determining whether an investment is appropriate to their needs. No part of this document may be reproduced without the written permission of EFG Hermes.