MENA-1 WEDNESDAY MORNING ROUND-UP UAE Dubai inflations slows to 0.

6% Y-o-Y in July; Abu Dhabi consumer prices rise 2.3% Y-o-Y in July Amlak reports 2Q2011 net loss of AED52.2 million Kuwait Global Investment Houses 2Q2011 loss narrows Y-o-Y Agility pleads not guilty to fraud charges Qatar Zad Holding reports a net profit of QAR51.1 million in 1H2011 Mawashi reports net profit of QAR9.2 million in 2Q2011 Salam Internationals net income rises 25% Y-o-Y to QAR36.8 million in 2Q2011 Oman Omans budget surplus at OMR386.6 million in 1H2011 Bahrain Al Salam Bank appoints KPMG to advise on merger with Bahrain Islamic Bank EFG Hermes Research MENA Strategy Note - Add Al Babtain and Remove Renaissance from the MENA Top 20 List - 16 August 2011 Emaar Properties - 2Q2011 Operationally Ahead, Greater Associate Losses Result in Bottom Line Miss; Maintain Buy - Flash Note - 16 August 2011 Agenda Qatar Wed 24 August >> The National Leasing Holding Company BOD meeting

UAE News Dubai inflations slows to 0.6% Y-o-Y in July; Abu Dhabi consumer prices rise 2.3% Y-o-Y in July Dubai consumer prices rose at a slower pace in July, increasing to 0.6% Y-o-Y, compared with 0.75% Y-o-Y in June, according to the Dubai Statistics Centre. Housing, water, and electricity prices fell 3.5% Y-o-Y. Food and non-alcohol prices rose 6.1% Y-o-Y in June. Abu Dhabi inflation rose 2.3% Y-o-Y in July, according to the Abu Dhabi Statistics Centre. Food and non-alcoholic beverage costs climbed 9.1% Y-o-Y. We expect an average annual inflation of 1.6% for the UAE in 2011. (Bloomberg, Monica Malik) Amlak reports 2Q2011 net loss of AED52.2 million Amlak Finance (AMLK.DU) reported AED148 million in total income, down 12% Y-o-Y, and booked AED61.2 million in impairments, up 106% Y-o-Y, on financing assets in 2Q2011. Profit before distribution to depositors amounted to AED54.7 million, down 50% Y-o-Y. The resulting net loss in 2Q2011 amounted to AED52.2 million, compared with a net loss of AED0.6 million in the same period last year. Total assets stood at AED12,854 million, with shareholders equity of AED1,490 million. (Company Disclosure) Kuwait News Global Investment Houses 2Q2011 loss narrows Y-o-Y Global Investment House (GLOB.KW) said that it made a net loss of KWD16.7 million in 2Q2011, compared with a loss of KWD20.2 million in 2Q2010. As a result, its 1H2011 loss amounted to KWD38.7 million, compared with a net loss of KWD34.7 million in 1H2010. (Zawya Dow Jones) Agility pleads not guilty to fraud charges Agility (AGLTY.KW) pleaded not guilty to charges it defrauded the US government on a multibillion-dollar contract to feed US troops overseas. The company denied charges filed in federal court in Atlanta that it submitted false invoices or conspired to pay premium prices to inflate its profit. The estimated size of the contract at the time of signing was USD4.7 billion, but the final bill came to USD8.6 billion, according to the US government. (Bloomberg)

Qatar News Zad Holding reports a net profit of QAR51.1 million in 1H2011 Zad Holding (ZHCD.QA) reported a net profit of QAR51.1 million in 1H2011, compared with a net profit of QAR50.8 million in the corresponding period last year, the company said in a statement to Qatar Exchange. EPS stood at QAR4.35 as at 30 June 2011, compared with EPS of QAR4.69 as at 30 June 2010. (Qatar Exchange) Mawashi reports net profit of QAR9.2 million in 2Q2011 Qatar Company for Meat and Livestock (Mawashi) [QMLS.QA] reported a net profit of QAR9.2 million in 2Q2011, compared with a net profit of QAR4.6 million in the corresponding period last year, the company said in a statement to Qatar Exchange. The companys 1H2011 net profit stood at QAR18.5 million, compared with a net profit of QAR7.4 million in 1H2010. (Qatar Exchange) Salam Internationals net income rises 25% Y-o-Y to QAR36.8 million in 2Q2011 Salam International Investment (SALM.QA) reported a net profit of QAR36.8 million in 2Q2011, up from QAR29.4 million in the corresponding period last year, the company said in a statement to Qatar Exchange. The companys 1H2011 net profit stood at QAR81.2 million, compared with a net profit of QAR68.8 million in 1H2010. (Qatar Exchange) Oman News Omans budget surplus at OMR386.6 million in 1H2011 Omans budget surplus widened to OMR386.6 million as at 30 June 2011, up from OMR185.1 million as at 31 May 2011, according to the Ministry of Finance. We expect a budget surplus of OMR3.7 billion in 2011, or 13.7% of GDP. Official data indicate a lower surplus, as it is calculated using net oil revenue, which does not include all oil revenue, but rather shows revenue after the transfers made to the government reserve funds. (Reuters, Monica Malik, Mohamad Al Hajj) Bahrain News Al Salam Bank appoints KPMG to advise on merger with Bahrain Islamic Bank Al Salam Bank (SALAM.BH) appointed KPMG as adviser to study its merger with Bahrain Islamic Bank (BISB.BH), according to a statement to the Bahrain

bourse. Bahrain Islamic Bank faced a dramatic rise in problem loans last year, Moodys said on 16 August 2011, adding that a merger with Al Salam is credit positive for Bahrain Islamic Bank. (Bloomberg) EFG Hermes Research MENA Strategy Note - Add Al Babtain and Remove Renaissance from the MENA Top 20 List - 16 August 2011 Al Babtain Oversold, Add to MENA Top 20 List: We add Al Babtain to our MENA Top 20 List. The shares have corrected 12% in the last few weeks the largest fall amongst our Saudi industrial coverage on the back of weak 2Q2011 results and a sell-off across Saudi Arabias market after the US credit rating downgrade and renewed global growth concerns. The shares now trade at trough levels last seen during the Arab Spring; at 10.2x 2011 estimated earnings we believe current levels offer an attractive entry point. We believe further downside risks are mitigated by a dividend yield of 6.7%. Al Babtain was one of the stocks highlighted in our dividend yield screen. (Please see MENA Still Pays More; High Yields Supportive During Current Sell-Off published on 9 August 2011.) Renaissance Outlook Difficult, Remove from MENA Top 20 List: In its 2Q2011 earnings release, Renaissance announced weaker-than-expected results and highlighted higher-than-expected potential write-downs to come in 2H2011. Renaissance also highlighted financial irregularities at one of Topazs overseas subsidiaries. As a result, our analysts cut their 2011 earnings expectations by 49% to OMR14.1 million and incorporated a higher equity risk premium assumption for the Topaz-related divisions. These factors will create an overhang, in our view, and we therefore remove Renaissance from the MENA Top 20 List. MENA Top 20 Performance Hit by Sharp Sell-Off: Since the US credit rating downgrade, the MENA Top 20 List lost 6.2% on a free float-weighted basis (and 6.0% for the full market cap-weighted index) versus -3.9% for the benchmark S&P Pan Arab Composite Mid & Large TR Index. This underperformance occurred despite our more defensive approach since June. In our view, this performance is explained by the indiscriminate nature behind much of the sell-off. As we highlighted earlier (Sharp Sell-Off to be Short-Lived, but Remain Defensive, published on 8 August 2011), we believe the sharp sell-off has created opportunities for investors to accumulate positions in the MENA region. We would expect to see volumes recover once Ramadan is over and the 3Q2011 earnings season approaches. (Fahd Iqbal, Simon Kitchen)

Emaar Properties - 2Q2011 Operationally Ahead, Greater Associate Losses Result in Bottom Line Miss; Maintain Buy - Flash Note - 16 August 2011 Net Income 13% Below Expectations, Operations Robust; Maintain Buy: Revenue for 2Q2011 came in at AED2,032 million, 8% above expectations and 6% above consensus, while net income stood at AED250 million, 13% below our estimate and 16% below consensus. The bottom line miss was driven by greater-thanexpected associate losses and a higher tax expense. Emaars recurring income streams continued to perform well, posting 24% Y-o-Y growth. This helped drive operating income to AED585 million, up 2% Q-o-Q and 20% above our estimate. While we remain cautious on potential delays in deliveries in international markets, we remain long-term Buyers of the stock, as our fair value (FV) of AED5.15/share implies significant upside potential. Revenue Higher on Stronger Rental Income, Property Sales; Margins In Line: Emaars revenue figure included AED1,199 million in property sales and AED833 million in recurring revenues. As expected, commercial properties and villas contributed strongly in 2Q2011, with ongoing commercial space deliveries in Downtown Dubai, in addition to the commencement of villa deliveries in the Umm Al Quwain Marina development. Rental revenue increased 26% Y-o-Y and 8% Qo-Q to AED549 million, while hospitality revenue rose 20% Y-o-Y, but dropped 15% Q-o-Q following an exceptional 1Q2011, in line with our expectations. Overall margins were broadly in line. Balance Sheet Shows Some Relief from Short-Term Debt Refinancing: Emaars cash balance stood at AED5,222 million as at end-2Q2011. Short-term borrowings decreased to AED5,152 million in 2Q2011 from AED7,503 million in 1Q2011. We note that this figure still includes cAED1.5 billion in debt sourced in Turkey, which we expect to be converted into project financing upon the announcement of Emaars development plan in Istanbul (expected by year-end). Total borrowings remained stable Q-o-Q at cAED12.3 billion (including the convertible bond). (Jad Abbas) [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.