MENA-1 MONDAY MORNING ROUND-UP

UAE
Tabreeds Saudi JV signs agreement with Jabal Omar Development Dana Gas receives all delayed gas payments from the Egyptian government Fujairah Building Industries Co. reports 2Q2011 net loss of AED4.3 million BILDCO reports 2Q2011 net loss of AED2.5 million Damas reports AED53.3 million profit for full year

Kuwait
Zain Group 2Q2011 headline figures: revenue in line, but earnings miss Kuwait seeking strategic buyer for national airline Boubyan Bank lead arranger on USD130 million Islamic financing agreement

Qatar
QIB launches new banking programme for micro-enterprises QIICs net income rises 11% Y-o-Y to QAR33.4 million in 1H2011 Qatar Oman Investments net profit jumps 49% Y-o-Y to QAR12.8 million in 1H2011 Medicare Groups net profit jumps 42% Y-o-Y to QAR24.2 million in 1H2011 Kahramaa exported 200 MW of surplus power in 2010

EFG Hermes Research

Union National Bank (UNB) - 2Q2011 Results: Earnings Beat on Higher Net Interest Spreads; Maintain Buy - Flash Note - 31 July 2011

Agenda
UAE Wed 3 August >> du 2Q2011 results Thu 4 August >> Arabtec BOD meeting (2Q2011 results expected) Qatar Mon 1 August >> The National Leasing Holding Company 1H2011 press conference Mon 1 August >> Aamal Company 2Q2011 results Tue 2 August >> Masraf Al Rayan 2Q2011 results Wed 3 August >> Qatar National Cement Company 2Q2011 results Wed 3 August >> Aamal Company press conference Tue 9 August >> Masraf Al Rayan press conference Tue 9 August >> Qatar Electricity & Water Company (QEWC) 2Q2011 results Sun 14 August >> Qtel 2Q2011 results Sun 14 August >> Doha Insurance 2Q2011 results

UAE News
Tabreeds Saudi JV signs agreement with Jabal Omar Development Tabreed (TABR.DU) announced that its joint venture in Saudi Arabia with ACWA Power and RUSD International has signed an agreement with Jabal Omar Development to jointly explore the development of a district cooling system near the Holy Mosque in Mecca. The JV will initially design, build, and operate a cooling plant with a 55,000 TR capacity to supply chilled water to the Jabal Omars proposed development in Mecca. Tabreed added that the full capacity under the concession and other contracts are expected to be signed shortly. (Zawya Dow Jones)

Tabreed: AED0.98, Rating: Sell, FV: AED1.01, MCap: USD176.0 million, TABREED UH / TABR.DU Dana Gas receives all delayed gas payments from the Egyptian government Dana Gas (DANA.AD) received all delayed gas payments from the Egyptian government this month after resolving issues of gas volume measurements, Reuters quoted an Egyptian official as saying. Dana Gass receivables from its Egyptian operations stood at USD148 million in 1Q2011. According to the Egyptian official, the main reason for the delayed payments was a minor conflict with Dana Gas over the volumes of gas being produced and sold to the Egyptian government. The conflict was over a difference of 5 million standard cubic feet per day of gas over a five-month period. We believe Dana Gass shares will benefit from this positive news coupled with last weeks news of Vallares interest to potentially acquire a stake in the company. We remain buyers of Dana Gas, and we believe that the company might have also received payments from the Kurdistan Regional Government (KRG) (total receivables in Kurdistan stood at USD156 million at the end of 1Q2011), given recent announcement of first payments released by Iraqs government to the KRG. We reiterate our fair value (FV) of AED1.04/share, which offers considerable upside potential to the current share price. (Company Disclosure, Abid Riaz, Nadine Hassouna) Dana Gas: AED0.62, Rating: Buy, FV: AED1.04, MCap: USD1,115 million, DANA UH / DANA.AD Fujairah Building Industries Co. reports 2Q2011 net loss of AED4.3 million Fujairah Building Industries Co. (FBI.AD) reported 2Q2011 sales of AED51.2 million, down 11% Y-o-Y, and a net loss of AED4.3 million versus a net income of AED7.4 million in the same period last year. Total assets stood at AED421.9 million, with shareholders equity of AED216 million. (Company Disclosure) BILDCO reports 2Q2011 net loss of AED2.5 million The Abu Dhabi National Company for Building Materials (BILDCO) [BILD.AD] reported 2Q2011 sales of AED63.9 million, down 62% Y-o-Y, and a net loss of AED2.5 million versus a net profit of AED7.2 million for the same period last year. Total assets stood at AED888.3 million, with shareholders equity of AED344.3 million. (Company Disclosure) Damas reports AED53.3 million profit for full year Damas International (DAMAS.DI) announced that it has achieved a net profit of AED53.3 million for the year ended 31 March 2011 versus a AED2 billion net loss for the previous year. (Company Disclosure)

Kuwait News
Zain Group 2Q2011 headline figures: revenue in line, but earnings miss Zain Group (ZAIN.KW) reported headline figures for 2Q2011: Total revenue was in line with our estimate, but the EBITDA margin missed by 200 bps and earnings missed by a significant 19%. We reiterate our fair value (FV) of KWD0.92/share and our Sell rating on the stock. We believe the lack of any short-term catalyst or news related to any sort of M&A activity prevents the share price from moving up. Subscribers Beat Estimates: Zain Group added 1.97 million subscribers in 2Q2011, much higher than 1Q2011s quarterly subscriber addition of only 0.39 million, and higher than our expected 0.65 million. All operations exceeded our expectations for quarterly subscriber additions. Iraq is the largest contributor of this quarters net adds, with 38% of the total (and 31% of total subscriber base). Zain is focusing its efforts on expanding in the Northern Kurdish area of Iraq. Revenue in line: Total revenue was in line with our estimate, coming in at KWD335 million (+3% Q-o-Q). No revenue breakdown was provided, but in the companys release, Zain indicated that revenue from Sudan, locally denominated (SDG), increased 14% Y-o-Y. As the SDG depreciated 19% versus the KWD Y-o-Y, this means that revenue from Sudan probably declined 4% Y-o-Y in KWD terms, in line with our expected 3.8% decline. EBITDA margin misses by 200 bps: Margin came in at 43.4%, lower than our forecast of 45.5%. Earnings probably include one-offs: Earnings came in at KWD70.3 million, a significant 19% below our estimate, while EBIT missed our estimate by only 6%. We will follow up with more analysis as soon as full financials and a detailed earnings release with operational breakdowns are published (in two to three weeks). (Company Disclosure, Marise Ananian) Zain Group: KWD0.99, Rating: Sell, FV: KWD0.92, MCap: USD14,134 million, ZAIN KK / ZAIN.KW Kuwait seeking strategic buyer for national airline Kuwait is seeking a bid from a strategic investor for a 35% stake in Kuwait Airways Corp., the countrys national airline. The privatisation committee for the airline said that all identified assets, liabilities, rights and benefits will be transferred to a new company called Kuwait Airways Company. Joint-stock companies listed on the Kuwait Stock Exchange and specialised global

companies can subscribe to 35% of the share capital valued at KWD220 million. Kuwaits parliament decided to privatise the carrier in January 2008. The government plans to retain 20% ownership and sell 35% to a strategic investor, 40% to the general public and 5% to employees. (Bloomberg) Boubyan Bank lead arranger on USD130 million Islamic financing agreement Boubyan Bank (BOUK.KW) acted as a lead arranger for a USD130 million Murabaha agreement for Boubyan Petrochemicals Company. Ahli United Bank (AUBB.BH) and Kuwait International Bank (KIBK.KW) were amongst the other banks, which participated in the deal. (Zawya Dow Jones)

Qatar News
QIB launches new banking programme for micro-enterprises Qatar Islamic Bank (QIB) [QISB.QA] announced that it has launched a new banking programme targeting micro-enterprises, Trade Arabia reported. The programme aims to provide innovative finance solutions that cater to the needs of smaller start-ups and to empower ambitious entrepreneurs to take their business to new levels through funding their fixed assets and working capital. (Trade Arabia) Qatar Islamic Bank: QAR77.70, Rating: Neutral, FV: QAR90.00, MCap: USD4,413 million, QIBK QD / QISB.QA QIICs net income rises 11% Y-o-Y to QAR33.4 million in 1H2011 Qatar Islamic Insurance Company (QIIC) [QIIC.QA] reported a net profit of QAR33.4 million in 1H2011, up 11% Y-o-Y, the company said in a statement to the Qatar Exchange. EPS stood at QAR2.22 as at 30 June 2011 compared to QAR2.01 for the corresponding period last year. (Qatar Exchange) Qatar Oman Investments net profit jumps 49% Y-o-Y to QAR12.8 million in 1H2011 Qatar Oman Investment Company (QOIS.QA) reported a net profit of QAR12.8 million in 1H2011 compared to QAR8.6 million in the corresponding period last year, the company said in a statement to the Qatar Exchange. EPS amounted to QAR0.408 as at 30 June 2011 compared to QAR0.275 as at 30 June 2010. (Qatar Exchange) Medicare Groups net profit jumps 42% Y-o-Y to QAR24.2 million in 1H2011 Medicare Group (MCGS.QA) reported a net profit of QAR24.2 million in 1H2011 compared to QAR17.0 million in the corresponding period last year, the company said in a statement to the Qatar Exchange. EPS amounted to QAR0.86 as at 30 June 2011 compared to QAR0.60 as at 30 June 2010. (Qatar Exchange) Kahramaa exported 200 MW of surplus power in 2010 Qatar General Electricity & Water Corporation, known as Kahramaa, announced that it exported around 200 megawatts (MW) of surplus power to countries across the Gulf region in 2010 through the GCC Interconnection Grid Network, The Gulf Times reported. Power consumption reached around 8,000 MW as at the end of 2Q2011, representing a significant Y-o-Y growth in line with a 4.6% increase in demand for electricity. Water production grew by around 11.2% Y-o-Y during the same period. Demand for electricity reached 5,290 MW in June 2011. (The Gulf Times)

EFG Hermes Research

Union National Bank (UNB) - 2Q2011 Results: Earnings Beat on Higher Net Interest Spreads; Maintain Buy - Flash Note - 31 July 2011 Earnings above Expectations; Maintain FV and Buy: Union National Bank (UNB) reported a 2Q2011 net profit of AED415 million (EPS: AED0.17), up 23.1% Y-o-Y, but down 9.0% Q-o-Q. Earnings were ahead of our AED363 million estimate (Bloomberg consensus: AED389 million), mainly due to stronger net interest income. Revenues of AED753 million were up 16.9% Y-o-Y and up 6.9% Q-o-Q, but the impact on earnings was diluted by higher credit costs, which rose 21% Y-o-Y and nearly doubled Q-o-Q. We maintain our Buy rating on the stock, as the bank continues to deliver steady earnings without negative surprises. Our unchanged fair value (FV) of AED5.10/share offers 45% upside potential. Net Interest Spreads Drive Interest Income; Fee Income Down on Cap: Net interest income rose 11.9% Q-o-Q despite a flat loan book, as net interest spreads improved to an estimated 2.64% in 2Q2011 from 2.27% in 1Q2011. Falling EIBOR rates, in our view, had a beneficial impact on UNBs net interest spreads, as the cost of funds declined sharply Q-o-Q. Loan growth continues to be weak, as the loan book was broadly unchanged Q-o-Q at AED56 billion. UNBs loan growth was in contrast to NBAD and FGB showing solid growth in 2Q2011. Fee income shrunk 18% Y-o-Y and 12% Q-o-Q with a limited impact on earnings, as revised central bank guidelines which became effective on 1 May 2011 introduced cap on fees charged to retail customers. NPL Ratio Relatively Stable; Provisions up on General Provisions Build-up: UNBs NPL ratio (ex-Dubai World) rose by 8 bps to 1.48%, as NPLs rose by AED46 million in 2Q2011 to AED852 million. UNBs credit costs moved up to AED151 million in

2Q2011 (above our estimate of AED125 million) from AED70 million in 1Q2011, as the bank built up its general provisions reserve. UNB built up its general provisions reserve to 0.95% of credit risk-weighted assets, up from 0.65% in 4Q2010. The central banks guidelines require all UAE banks to maintain a 1.5% general reserve by 2014. (Murad Ansari, Shabbir Malik)
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