MENA-­1

 WEDNESDAY  MORNING  ROUND-­UP  

   
EuroMoney  is  currently  conducting  its  Middle  East  Research  and  Best  Managed  Companies  Survey.  The  
EuroMoney  Survey  runs  until  24  June  2011.  To  vote  for  EFG  Hermes,  go  to  
www.euromoney.com/MiddleEast2011  
   
Thank  you  for  your  support.  
   
UAE  
The  UAE  urges  retailers  to  cut  prices  for  Ramadan  
Union  Properties  receives  AED1.1  billion,  repays  AED700  million  in  debt,  and  assesses  two  projects  
Dubai  gets  1.8  million  hotel  guests  in  1Q2011  
   
Kuwait  
Several  OPEC  states  back  crude  oil  output  hike  
Kuwait’s  investment  companies  may  require  only  single  licence  
Sovereign  fund  manages  assets  worth  over  USD290  billion  
Agility  eyes  revenue  of  up  to  USD15  billion  
   
Qatar  
Oil  product  output  at  the  Pearl  GTL  plant  to  start  in  weeks  
Aamal  signs  joint  venture  agreement  with  Johnson  Controls  Inc.  
Qatar  to  offer  the  first  tender  for  its  railway  and  metro  project  soon  
   
Bahrain  
Bahrain  Bourse  plans  to  allow  short-­selling,  DVP  to  boost  trading  volumes  
   
Agenda  
   
Qatar  
Sun  12  June  >>  Vodafone  Qatar  AGM  &  EGM  
Mon  13  June  >>  Zad  Holding  EGM  
   
UAE  News  
   
The  UAE  urges  retailers  to  cut  prices  for  Ramadan  
The  UAE’s  Ministry  of  Economy  called  on  retailers  to  slash  costs  of  basic  commodities  by  20-­‐50%  during  the  
month  of  Ramadan,  Al-­‐Bayan  newspaper  reported  citing  Dr.  Hashim  Al  Nuaimi,  Head  of  Consumer  Protection  at  
the  Ministry  of  Economy.  Last  month,  the  Government  of  the  UAE  said  that  it  planned  to  cap  rising  global  
commodity  prices  by  fixing  the  cost  of  about  400  foodstuffs  and  household  products  at  70  outlets.  (Reuters)  
   
Union  Properties  receives  AED1.1  billion,  repays  AED700  million  in  debt,  and  assesses  two  projects  
Union  Properties  (UP)  [UPRO.DU]  issued  a  statement  to  the  Dubai  bourse  confirming  media  reports  claiming  
that  UP  had  collected  AED1.1  billion  and  repaid  AED700  million  in  debt.  The  developer  also  added  that  it  was  
evaluating  two  projects.  The  collection  of  the  AED1.1  billion,  which  we  believe  relates  to  the  sale  of  the  Ritz  
Carlton,  is  a  positive  development  after  the  hotel  remained  on  UP’s  books  in  1Q2011,  prompting  some  concern  
on  the  sale  from  our  side.  The  bulk  of  the  proceeds  will  be  used  to  decrease  UP’s  debt  pile,  as  expected.  Media  
reports  citing  UP’s  Chairman,  Khalid  Bin  Kalban,  stated  that  the  developer  will  look  to  decrease  its  debt  pile  by  
cAED2  billion  in  2011,  slightly  above  our  cAED1.74  billion  expectation  for  debt  repayments  in  2011.  While  we  
have  no  information  on  which  projects  UP  is  re-­‐assessing,  we  believe  they  likely  relate  to  stalled  projects  within  
the  Motor  City  Development  (i.e.  Control  Tower,  Renaissance  Hotel).  We  maintain  our  Neutral  rating  on  the  
stock,  with  the  current  share  price  providing  7%  downside  potential  to  our  fair  value.  We  expect  share  price  
volatility  to  continue  in  the  short  term  and  maintain  our  view  of  a  potential  stock  re-­‐rating  as  risk  premiums  
decrease  throughout  our  expected  transformation  for  the  developer,  (see  “Union  Properties  (UP)  -­‐  Offers  REIT  
Prospects  Yet  Value  Not  Seen  Before  2014;  Maintain  Neutral,”  published  on  4  May  2011.  (Company  Disclosure,  
Jad  Abbas)  
   
UP:  AED0.43,  Rating:  Neutral,  FV:  AED0.40,  MCap:  USD398  million,  UPP  UH  /  UPRO.DU  
   
Dubai  gets  1.8  million  hotel  guests  in  1Q2011  
The  number  of  guests  in  Dubai  surpassed  1.8  million  in  1Q2011,  a  14%  Y-­‐o-­‐Y  increase,  according  to  the  Dubai  
Statistics  Centre.  “The  average  occupancy  of  Dubai  hotels  was  about  81%  in  1Q2011,  which  tops  the  highest  
ranking  at  the  global  level",  Khalid  bin  Sulayem,  Director  General  of  the  Department  of  Tourism  and  Commerce  
Marketing  (DTCM),  said.  (Emirates  24/7)  
   
Kuwait  News  
   
Several  OPEC  states  back  crude  oil  output  hike  
Several  members  of  OPEC  are  in  favour  of  increasing  the  group’s  crude  oil  output,  Kuwait’s  Oil  Minister  
Mohammad  Al-­‐Busairy  said.  Kuwait  is  yet  to  decide  on  whether  to  back  an  output  increase  at  an  OPEC  meeting  
on  8  June  2011  in  Vienna,  he  said,  according  the  Kuwait  News  Agency.  (Bloomberg)  
   
Kuwait’s  investment  companies  may  require  only  single  licence  
Kuwaiti’s  investment  companies  will  only  need  a  single  licence  to  operate  lending  and  investment  businesses,  
said  Asaad  al-­‐Banwan,  Chairman  of  the  Union  of  Investment  Companies.  The  Central  Bank  of  Kuwait  sent  a  
circular  to  investment  companies  last  month  asking  them  to  “reconsider  their  positions,”  al-­‐Banwan  said  in  an  
emailed  statement  today.  The  circular  “is  not  forcing  the  companies  to  do  anything,”  although  they  can  choose  to  
secure  two  licences  for  each  business,  he  added.  (Bloomberg)  
   
Sovereign  fund  manages  assets  worth  over  USD290  billion  
Kuwait  Investment  Authority  (KIA)  has  assets  in  excess  of  USD290  billion,  Kuwait’s  parliamentarians  said  on  7  
June  2011.  The  parliament  held  a  closed  session  on  7  June  2011  to  discuss  the  country’s  financial  position.  Al-­‐
Saad,  Managing  Director  of  KIA,  attended  the  session.  (Reuters)  
   
Agility  eyes  revenue  of  up  to  USD15  billion  
Agility  (AGLT.KW)  plans  to  boost  its  revenue  up  to  USD15  billion  compared  to  more  than  USD5  billion  in  2010,  
Al  Seyassah  reported  on  7  June  2011  citing  an  executive.  The  company  has  exited  contracts  in  the  public  sector  
at  the  rate  of  25-­‐30%  and  is  focusing  more  on  the  commercial  sector.  Activities  in  the  commercial  sector  grew  
17%  Y-­‐o-­‐Y  in  2010.  (Zawya  Dow  Jones)  
   
Qatar  News  
   
Oil  product  output  at  the  Pearl  GTL  plant  to  start  in  weeks  
Royal  Dutch  Shell  announced  that  it  expects  oil  product  output  at  its  joint  venture  gas-­‐to-­‐liquids  (GTL)  project  in  
Qatar  to  commence  in  weeks,  bringing  online  the  world’s  largest  facility  built  at  a  cost  of  about  USD18-­‐19  billion,  
The  Gulf  Times  reported.  The  Pearl  GTL  plant,  a  joint  project  by  Qatar  Petroleum  (QP)  and  Shell,  will  process  3  
billion  barrels-­‐of-­‐oil-­‐equivalent  over  its  lifetime  from  the  North  Field  stretching  from  Qatar’s  coast  into  the  Gulf.  
The  plant  will  produce  140,000  barrels  per  day  (bpd)  of  oil  products  such  as  diesel,  kerosene,  lubricant  oils,  
naphtha  and  paraffin.  The  Pearl  GTL  plant  is  projected  to  come  online  by  the  end  of  2011  and  reach  full  capacity  
in  1Q2012,  Tasweeq’s  CEO  was  quoted  as  saying.  (The  Gulf  Times)  
   
Aamal  signs  joint  venture  agreement  with  Johnson  Controls  Inc.  
Aamal  Company  (AHCS.QA)  announced  that  it  has  signed  a  joint  venture  agreement  with  Johnson  Controls  Inc.  
to  establish  a  sustainable  energy  firm  in  Qatar,  the  company  said  in  a  statement  to  the  Qatar  Exchange.  The  new  
joint  venture,  owned  51%  by  Aamal  and  49%  by  Johnson  Controls  Inc.,  “will  provide  facility  improvement  and  
energy  solutions”  in  Qatar,  the  statement  added.  Aamal  has  increased  its  free  float  last  month  to  around  24%  by  
offering  global  depositary  receipts  (GDRs)  in  London.  Johnson  is  involved  with  over  500  renewable  energy  
projects  worldwide  and  part  of  its  business  aims  at  improving  the  energy  efficiency  of  buildings.  (Qatar  
Exchange,  Zawya  Dow  Jones)  
   
Qatar  to  offer  the  first  tender  for  its  railway  and  metro  project  soon  
Qatar  announced  that  it  plans  to  offer  the  first  tender  for  its  railway  and  metro  project  in  the  next  three  months,  
Managing  Director  of  the  Qatar  Railways  Company,  Abdullah  Al-­‐Subaie,  was  quoted  as  saying.  The  total  cost  of  
Qatar’s  railway  project  will  reach  QAR130  billion  (USD35.7  billion).  While  Al-­‐Subaie  did  not  provide  details  
about  the  size  of  the  contracts,  he  said  that  they  would  include  a  tender  for  digging  tunnels  and  setting  up  
stations  for  the  network.  (The  Gulf  Times)  
   
Bahrain  News  
   
Bahrain  Bourse  plans  to  allow  short-­selling,  DVP  to  boost  trading  volumes  
Bahrain’s  exchange  plans  to  allow  short-­‐selling  and  to  implement  a  delivery-­‐versus-­‐payment  (DVP)  system  in  
2012,  as  it  seeks  to  boost  trading  volumes.  “The  changes  will  lead  us  eventually  to  meet  the  criteria”  at  MSCI,  
Khalifa  Bin  Ebrahim  Al  Khalifa,  Deputy  Director  at  Bahrain  Bourse,  said  in  an  interview  with  Bloomberg  on  7  
June  2011.  (Bloomberg)  
   
[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  company’s  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.  
   
EFG  Hermes  (main  office),  Building  No.  B129,  Phase  3,  Smart  Village  –  km  28  Cairo  Alexandria  Road,  Egypt  
tel.:  +20  2  3535  6140  |  Fax:  +20  2  3537  0939  
   
EFG  Hermes  (UAE  office),  Level  6,  The  Gate,  West  Wing,  DIFC  Dubai  -­‐  UAE  
tel  +971  4  363  4000  |  fax  +971  4  362  1170  
   
EFG  Hermes  (Saudi  office),  Kingdom  Tower,  54th  floor,  Riyadh  -­‐  Saudi  Arabia  
tel  +9661  211  0046  |  fax  +9661  211  0049  
   
EFG  Hermes  (Qatar  office)  Al-­‐Fardan  Towers,  Office  Tower,  7th  floor,  West  Bay,  Doha  -­‐  Qatar  
 
tel  +974  409  3888  |  fax  +974  421  3499
   
Website:  www.efg-­‐hermes.com  
Bloomberg:  EFGH  |  Reuters  pages:  EFGS  .HRMS  .EFGI  .HFISMCAP  .HFIDOM