MENA-1 WEDNESDAY MORNING ROUND-UP

UAE
Dubais direct trade grows 27% Y-o-Y in 5M2011 Nakheel to issue USD1.3 billion sukuk on 25 August 2011

Kuwait
Economic panel advises levying additional fees to diversify revenue sources Internet service providers to cut subscription fees

Qatar
Qatars CPI edges up 1.9% Y-o-Y in July 2011 Qatars FY2010-2011 budget surplus shrinks to 2.9% of GDP Fitch affirms QIB rating at A

Oman
Oman to raise government spending by 9% in 2012

Agenda
Qatar Wed 24 August >> The National Leasing Holding Company BOD meeting Sun 28 August >> Salam International press conference

UAE News
Dubais direct trade grows 27% Y-o-Y in 5M2011 Dubais direct trade grew 27% Y-o-Y in 5M2011, reaching AED289 billion, compared with AED228 billion in 5M2010, according to statistics released by Dubai Customs. Free zones trade increased by 25% Y-o-Y, with the value of transactions touching AED160 billion in 5M2011, compared with AED128 billion in 5M2010. The customs warehouse business grew 58% Y-o-Y, generating a turnover of AED1.9 billion. Overall this puts Dubai trade exchanges at AED452 billion in 5M2011, an increase of 26% Y-o-Y. (Emirates 24/7) Nakheel to issue USD1.3 billion sukuk on 25 August 2011 Nakheel will issue its delayed AED4.8 billion (USD1.3 billion) Islamic bond (sukuk) this week, as it launches a five-year restructuring plan today, according to the developers Chairman Ali Rashid Lootah. Lootah indicated that the delay in issuing the sukuk was due to administrative reasons. Lootah said that the sukuk will be issued to trade creditors who have signed the restructuring agreements. He added that 100% approval has been obtained from creditors for the final restructuring plan. The sukuk will not be listed initially to ensure all options for creditors to benefit from these sukuk. Deutsche Bank will manage the sukuk process, which could last 2-3 months. (Reuters, Zawya Dow Jones)

Kuwait News
Economic panel advises levying additional fees to diversify revenue sources A special economic advisory panel, which was formed to assess the impact of the global economic situation on Kuwaits economy, has recommended that additional fees be levied on certain services instead of imposing taxes to diversify sources of income. Furthermore, the panel agreed to form two sub-committees: the first to handle matters concerning infrastructure development and the second to delve into matters concerning state budgets and expenditures. The two sub-committees will be chaired by the Central Bank of Kuwaits Governor Sheikh Salem Al-Sabah and Gulf Banks (GBKK.KW) CEO Ali Al-Badr. (Kuwait Times)

Internet service providers to cut subscription fees Internet service providers (ISPs) and the Ministry of Communications have reached an agreement to cut subscription fees to consumers by 42% after the Ministry of Communications agreed to reduce the tax that ISPs pay by 42%. The Ministry of Communications added that any ISP that fails to cut subscription fees by 42% could have their licence revoked. (Kuwait Times)

Qatar News
Qatars CPI edges up 1.9% Y-o-Y in July 2011 Qatars Consumer Price Index (CPI) inched up 1.9% Y-o-Y in July 2011, which marks its highest level in at least 19 months, Reuters reported, according to data released by the Qatar Statistics Authority. Consumer prices fell 0.3% M-o-M in July, after a 0.1% M-o-M rise in June, owing to a decline in food and energy costs. We forecast an annual average inflation of 2.0% in 2011. (Reuters, Monica Malik) Qatars FY2010-2011 budget surplus shrinks to 2.9% of GDP Qatars government budget surplus shrank to QAR13.5 billion (USD3.7 billion), or 2.9% of economic output, in FY2010-2011, which ended in March 2011, according to data released by the Qatar Central Bank (QCB). Qatars budget surplus reached QAR54.1 billion, or 15.2% of gross domestic product, in FY2009-2010. Expenditures rose 24% to QAR142.4 billion in FY20102011, while revenues declined by 8% to QAR155.9 billion, according to the QCB report. (Reuters, Trade Arabia) Fitch affirms QIB rating at A Fitch Ratings announced that it has affirmed Qatar Islamic Banks (QIB) [QISB.QA] long-term Issuer Default Rating (IDR) at A, with a stable outlook, and Viability Rating at bbb, The Peninsula Qatar reported. (The Peninsula Qatar) Qatar Islamic Bank: QAR78.50, Rating: Neutral, FV: QAR90.00, MCap: USD4,459 million, QIBK QD / QISB.QA

Oman News
Oman to raise government spending by 9% in 2012 Oman plans to raise government spending by 9% to OMR8.9 billion in 2012 in order to finance construction projects and create more jobs for nationals, a senior finance ministry official said on 23 August 2011. (Reuters)
[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.