Equity Weekly...expected to post better Q4 2013 results. Equity Weekly Global Equities The MSCI world index had a marginally more positive week gaining +0.6% 5d, as Ireland and Portugal

Weekly 12 January 2014

Irfan Ellam Head of MENA Equity Research +971 4 230 7807 [email protected] Aditya Pugalia Analyst +971 4 230 7802 [email protected]

Equity Weekly Global Equities The MSCI world index had a marginally more positive week gaining +0.6% 5d, as Ireland and Portugal returned to the bond markets, driving a rally in Eurozone periphery markets, and weaker than expected jobs data led US investors to believe that the Fed would not increase the pace of tapering in the near term. Risk measures decreased globally, led by the US, with the VIX SPX declining -11.8% 5d to 12, the VSTOXX -8.0% 5d to 17, whilst in Asia the VHSI eased -0.8% 5d to 15. Frontier markets led the gains for the MSCI sub indices, with the MSCI Frontier markets index +0.7% 5d, whilst the MSCI G7 markets index was marginally ahead, +0.4% 5d, and the MSCI Emerging markets index declined for the second consecutive week -1.0% 5d. With investors pricing in a blue sky scenario for US equity markets, payroll data and early Q4 2013 results have shown that this maybe somewhat over optimistic, and so US markets could be expected to see greater volatility in the coming months, with economic and financial data being scrutinized by investors, as they try to judge the pace of tapering. Emerging markets could add to the gains seen at the end of last week on the back of USD weakness, but these gains may prove to be temporary. MENA Markets The S&P Pan Arab Composite index gained +1.5% 5d for the week, with a majority of regional markets ending the week in positive territory, with the main exception being Morocco and Tunisia, whose bench mark indices declined by -0.9% 5d and -0.6% 5d respectively. The QE index, +3.1% 5d, was the best performing major regional index led by the banking sector, with QIB +5.7% 5d, CBQ +3.8% 5d and Doha Bank +3.5% 5d. Qtel also rallied strongly rising +4.1% 5d. According to Bloomberg, Qatari CDS rates have declined by -14% since the beginning of December 2013, which should allow Qatari banks to access external funds at cheaper rates, and hence boost net interest margins. Based on Bloomberg data and our MENA coverage universe, the Financial Services sector (+5.0% 5d) was the best performing sector, as EFG Hermes jumped +12.4% 5d, following its board approving an EGP 1bn share buyback program on 9 January 2013. Under the plan EFG Hermes plans to buy back EGP 425mn of shares “immediately” at EGP 11.25/share, with the second phase to be implemented in Q2 or Q3 2014. All trades for 8 January 2013 in EFG Hermes were cancelled, as well as 9 trades for 9 January, (as the stock closed 10% limit up, on 2.5x the 3m daily average volume,) on concerns that the news had been leaked. EFG Hermes shares were suspended at EGP 9.79. The Petrochemicals sector was the worst relative performing sector, ending flat for the week. Our MENA equity coverage universe shows the Food & Retail sector (16.2x BEst PE 2014, BEst net income growth 2014E of 17%,) as having the most upside of +6.9% based on BEst consensus target prices. The Construction sector (18.1x BEst PE 2013 and BEst net income growth 2014E of 9%) has the least upside of -9.5%. Developed Markets The S&P 500 gained +0.6% 5d, as a below consensus jobs report calmed fears that the US fed may accelerate tapering, with utility and telecoms companies leading gains for 9 out of the 10 industry groups. Alco lost -5.4% as it reported below consensus earnings, due to surplus rolled aluminium used in the aerospace industry. Sears dropped -14% after forecasting a Q4 2013 loss, despite ongoing cost cutting and asset sales. In contrast Abercrombie and Fitch gained +12% as it increased its full year earnings estimate. Overall retailers who saw strong online sales over the festive period are expected to post better Q4 2013 results. The Euro Stoxx 600 index gained +0.7% 5d, as Ireland and Portugal returned to the bond markets, unemployment in Germany fell, and ECB President reiterated his pledge to keep interest rates low “ for as long as is necessary”. The Athens Composite rallied +7.6% as Greek borrowing costs declined to their lowest level since 2010. The Stoxx 600 Bank index gained +4.7%, driven by a strong rally in Portuguese and Irish banks. Imperial Tobacco and BAT fell -5.2% and -3.6% respectively as China’s National Health and Planning Commission began work on new rules to ban smoking in public places. National benchmark indices rose in 17 of the 18 western European markets, with the exception of Iceland. Emerging and Frontier Markets Emerging markets declines were led by the MSCI EM Eastern European index -2.0% 5d, followed by the MSCI EM Latin America index -1.1% 5d, and the MSCI EM Asia index -0.8% 5d. Frontier markets gains were led by GCC markets, whilst the MSCI FM Africa index declined -1.0% 5d.

Major Equity Markets

MENA Sector PE/EPS Growth 2014E

MENA Equity Indices PE/EPS Growth 2014E

Developed Market Indices PE/EPS Gr. 2014E

Source: Bloomberg, Emirates NBD Research, BEst – Bloomberg Estimates

MENA Sector PB/ROA 2014

MENA Equity Indices PB/ROA 2014

Developed Market Indices PB/ROA 2014

Real Estate

Construction & building

materials

Food & retail

Petrochemicals & fert

Energy & utilities

Industrial

Transport & logistics Banks

Telecom

y = 0.0325x - 0.232 R² = 0.3494

-20%

0%

20%

40%

60%

4.0 12.0 20.0

BE

st E

PS

Gro

wth

201

4E

BEst PE 2014

DFM

ADX

Tadawul

ISE 100

MSM

DSM

MADEX

y = 0.0042x + 0.0761 R² = 0.0145

0%

10%

20%

8.0 9.0 10.0 11.0 12.0 13.0 14.0

BE

st E

PS

Gro

wth

201

4E

BEst PE 2014

Dow Jones

S&P 500

Nasdaq

FTSE 100 Dax

Cac 40

SMI

Nikkei

AS51 Index

Stoxx 600

y = 0.0075x + 0.0051 R² = 0.318

6%

9%

12%

15%

18%

10.0 15.0 20.0

BE

st E

PS

Gro

wth

201

4E

BEst PE 2014

Real Estate Construction & building

materials

Food & retail

Petrochemicals & fert

Energy & utilities

Industrial

Transport & logistics

Banks

Telecom

y = 3.4986x - 1.1503 R² = 0.6487

0.0

5.0

10.0

15.0

0.0 1.0 2.0 3.0 4.0 5.0

BE

st R

OA

201

4

BEst PB 2014

DFM

ADX

Tadawul

ISE 100

EGX 30

MSM

DSM

y = 1.6919x + 0.0171 R² = 0.6117

1.0

2.0

3.0

4.0

1.0 1.5 2.0

BE

st R

OA

201

4

BEst PB 2014

Dow Jones

S&P 500

Nasdaq

FTSE 100

Dax Cac 40 SMI

Nikkei

AS51 Index

Stoxx 600

y = 3.3866x - 3.7164 R² = 0.6557

0.0

3.0

6.0

9.0

1.0 2.0 3.0

BE

st R

OA

201

4

BEst PB 2014

Major Equity Markets

Emerging Market Indices PE/EPS Gr. 2014E

Source: Bloomberg, Emirates NBD Research, BEst – Bloomberg Estimates

Emerging Market Indices PB/ROA 2014

Hong Kong

Shanghai

Korea

Sensex Nifty

Karachi Taiwan

Bovespa

Micex Jo'burg

Vietnam

Jakarta

Malaysia Mexico

y = -0.0018x + 0.1639 R² = 0.0057

0%

7%

14%

21%

28%

35%

0.0 6.0 12.0 18.0

BE

st E

PS

Gro

wth

201

4E

BEst PE 2014

Hong Kong Shanghai

Korea

Sensex

Nifty

Karachi

Taiwan

Bovespa

Micex

Jo'burg

Vietnam

Jakarta

Malaysia

Mexico y = 2.9527x - 0.9404

R² = 0.526

0.0

3.0

6.0

9.0

0.0 1.0 2.0 3.0B

Est

RO

A 2

014

BEst PB 2014

MENA Markets

MENA Equity Indices (5d% chg)

Benchmark Equity Indices

Index BEst P/E

BEst P/B

Div Yield

5d chg

1m chg

Ytd

MSCI World 15.04 1.98 2.57 0.6% 4.2% -0.4%

MSCI G7 15.05 2.00 2.38 0.4% 4.0% -0.5%

MSCI Emerging

Markets 10.36 1.34 3.29 -1.0% -2.1% -3.2%

MSCI Frontier

Markets 11.30 0.95 6.31 0.7% 3.0% 1.4%

S&P Pan Arab 12.71 1.73 3.57 0.9% 3.7% 1.9%

MENA Equity Indices

Index Last Price 5d chg

T.Value 5d avg

(USD mn) BEst P/E BEst P/B Div Yield % above 200d

MA

DFM 3,505 32.4 255.0 15.2 1.5 2.5 74.2

ADX 4,418 58.6 259.1 11.4 1.6 4.1 57.4

Tadawul 8,678 59.8 1,710.5 13.0 2.0 3.4 66.9

ISE 100 67,912 1945.0 1,432.8 8.8 1.2 2.7 19.0

EGX 30 6,975 192.2 63.4 10.2 1.3 2.8 90.0

KWSE 7,669 119.3 112.2 - - 3.7 39.3

Bahrain 1,263 15.4 3.1 - - 3.8 17.1

MSM 7,156 266.8 36.1 11.6 1.5 3.6 83.3

Qatar Exchange 10,873 327.8 140.0 11.3 2.0 4.2 90.0

MADEX 7,382 -65.8 6.9 13.1 1.9 4.5 57.9

TUSISE 4,360 -24.9 1.7 - - 2.0 14.3

DUAE INDEX 3,504 25.5 288.6 - - 2.2 100.0

DKUW INDEX 3,954 13.4 - - - - -

DQAT INDEX 6,503 193.5 86.3 - - 4.0 100.0

DKUS INDEX 3,134 3.6 21.3 - - 4.1 60.0

DQAS INDEX 8,408 382.9 82.2 - - 3.8 100.0

Relative to Benchmark Indices

Index PE PB Dvd Yld Index PE PB Dvd Yld

Relative to S&P Pan Arab Relative to MSCI Emerging Market Index

DFM 19.6% -13.5% -28.7% EGX 30 -2.0% -3.2% -16.4%

ADX -10.1% -9.4% 14.4% MADEX 26.7% 41.0% 36.8%

Tadawul 2.6% 13.3% -4.7% ISE 100 -15.5% -11.4% -17.2%

KWSE - - 3.2%

Bahrain -48.2% - 6.8%

-0.6%

-0.9%

3.0%

2.8%

3.9%

1.2%

1.6%

3.1%

0.7%

1.3%

0.9%

-4% -2% 0% 2% 4% 6%

TUSISE

MADEX

ISE 100

EGX 30

MSM

Bahrain Bourse

KWSE

DSM

Tadawul

ADX

DFM


MSM -8.8% -11.5% 1.5%

Qatar

-10.7% 13.1% 18.1%

TUSISE - - -45.1% Source: Bloomberg, Emirates NBD Research, BEst – Bloomberg Estimates

Developed Markets

Developed Market Equity Indices (5d% chg)

Emerging Market Equity Indices (5d% chg)

Equity Indices

Index Last Price 5d chg

T.Value 5d avg

(USD mn) BEst P/E BEst P/B Div Yield % above 200d

MA

Dow Jones 16,437 -32.9 4,772.9 14.8 2.8 2.3 83.3

S&P 500 1,842 11.0 28,086.0 15.6 2.4 2.1 82.2

Nasdaq 4,175 42.8 18,334.1 20.2 3.2 1.2 69.8

FTSE 100 6,740 9.3 5,807.6 12.9 1.8 3.8 70.3

Dax 9,473 38.1 4,079.6 13.0 1.6 2.9 90.0

Cac 40 4,251 3.0 4,055.2 12.8 1.3 3.7 72.5

Swiss 8,365 94.7 2,556.7 15.1 2.4 3.3 75.0

Nikkei 15,912 -379.3 17,059.7 20.3 1.7 1.5 82.2

Australia 5,312 -37.7 2,232.9 14.9 1.9 4.5 66.5

Stoxx 600 330 2.3 31,014.1 13.8 1.7 3.5 78.8

Emerging Markets & Frontier Markets

Hong Kong 22,846 29.0 2,990.8 10.1 1.3 3.4 40.0

Shanghai 2,013 -69.8 10,544.3 7.8 1.1 3.1 31.1

Korea 1,939 -7.6 3,831.0 - - 1.2 41.3

Sensex 20,758 -92.8 80.7 15.1 2.4 1.5 63.3

Nifty 6,171 -39.7 951.3 14.6 2.3 1.5 54.0

Karachi 26,488 441.6 79.0 7.9 1.7 5.4 94.0

Taiwan 8,529 -17.2 3,494.9 14.7 1.6 2.8 77.8

Bovespa 49,696 -1284.6 2,214.9 9.8 1.1 3.9 37.5

Micex 1,469 -25.6 619.6 4.4 0.6 3.9 62.0

Jo'burg 1,469 -657.9 907.7 13.8 2.0 2.8 65.5

Vietnam 519 13.6 53.2 10.6 1.9 3.9 75.8

Jakarta 4,389 -34.4 274.8 12.8 2.3 2.2 20.6

Malaysia 1,827 -8.1 231.3 16.0 2.2 3.4 74.2

Mexico 42,459 393.5 513.6 18.2 2.5 1.8 54.3 Source: Bloomberg, Emirates NBD Research, BEst – Bloomberg Estimate

-0.7%

-2.3%

0.7%

1.1%

0.1%

0.4%

0.1%

1.0%

0.6%

-0.2%

-3% -2% -1% 0% 1% 2%

S&P / ASX 200

Nikkei

Stoxx 600

SMI

CAC 40

DAX

FTSE 100

Nasdaq

S&P 500

DJIA

0.1% -3.4%

-0.4% -0.5%

-0.6% 1.7%

-0.2% -2.5%

-1.7% -1.4%

2.7% -0.8%

-0.4% 0.9%

-4% -3% -2% -1% 0% 1% 2% 3%

Hang SengSHCOMP

KOSPISensex

NiftyKSE 100

TWSEBovespa

MicexFTSE / JSE Africa

Ho Chi MinhJSE

KLCIMEXBOL

Research from Emirates NBD

Relative to Benchmark Indices


Relative to MSCI G7 Index Relative to MSCI Emerging Markets Index

Dow Jones -1.8% 37.7% -4.6% Hong Kong -2.7% -6.3% 3.1%

S&P 500 3.6% 21.0% -13.4% Shanghai -24.3% -18.8% -4.9%

Nasdaq 34.3% 58.2% -49.6% Korea - - -63.2%

FTSE 100 -14.0% -11.2% 60.5% Sensex 45.4% 77.7% -54.5%

Dax -13.4% -20.9% 23.5% Nifty 40.8% 70.3% -53.6%

Cac 40 -14.9% -34.4% 55.5% Karachi -23.7% 29.1% 64.6%

Swiss 0.3% 22.2% 40.3% Taiwan 41.8% 20.7% -14.4%

Nikkei 35.0% -15.4% -37.4% Bovespa -5.0% -20.5% 18.4%

Australia -0.7% -4.5% 90.8% Micex -57.9% -58.1% 19.8%

Stoxx 600 -8.1% -16.6% 47.5% Jo'burg 32.9% 47.1% -13.4%

Vietnam 2.6% 44.1% 18.4%

Jakarta 23.2% 75.3% -31.8%

Malaysia 54.5% 62.4% 1.9%

Mexico 76.0% 90.0% -45.9% Source: Bloomberg, Emirates NBD Research, BEst – Bloomberg Estimate


Telecoms Sector

PE/EPS Growth 2014E

PB/ROA 2014E

Company Price LLC Market Cap (USD mn)

PE 2012

BEst PE 2013

ROE 2012

BEst ROE 2013

PB 2012

ROA 2012

Dvd Yld 2012

BEst DvdYld 2013 RSI

Avg Value Traded 3m (USD mn)

Global Telecom 4.81 3626.4 - 17.2 -13.4 0.7 2.1 -2.8 0.0 0.0 58 2.2

Telecom Egypt 14.70 3606.6 9.3 9.5 9.3 9.7 0.9 8.0 9.2 8.8 67 1.9

NMTC 1800.00 3212.1 15.5 9.2 9.3 11.2 1.4 5.2 5.3 6.0 54 0.0

Zain 680.00 10389.0 12.0 11.7 13.7 13.9 1.9 8.1 6.4 7.6 43 2.3

Oredoo 144.00 12668.5 10.3 13.9 12.0 12.1 1.2 3.0 4.8 3.4 72 2.4

Etihad Etisalat 86.75 17809.8 8.8 10.2 30.6 28.6 2.5 15.8 5.5 5.5 62 18.9

STC 57.75 30795.1 11.9 13.3 14.8 16.4 1.7 6.3 4.6 3.5 69 29.1

Zain KSA 9.40 2707.0 - - -27.5 -19.1 1.0 -6.4 0.0 0.0 57 23.4

Etisalat 11.90 25614.8 10.6 12.3 16.8 18.7 1.8 8.8 7.7 5.9 63 5.3

Du 6.60 8214.4 8.1 15.5 28.8 27.9 2.1 15.2 8.6 5.3 55 2.1

Average 10.8 12.5 9.5 12.0 1.7 6.1 5.2 4.6

Source: Bloomberg, Emirates NBD Research, BEst – Bloomberg Estimate

News flow • The UAE TRA announced that 5,000 mobile subscribers had transferred their mobile numbers since the introduction of Mobile

Number Portability at the end of December 2013. (Zawya)

Zain Etihad Etisalat

STC Zain KSA

Du

y = 0.0675x - 0.6487 R² = 0.6619

-10%

0%

10%

20%

8.0 9.0 10.0 11.0 12.0

BE

st E

PS

Gro

wth

201

4E

BEst PE 2014

Zain

Etihad Etisalat

STC

Zain KSA Etisalat

Du y = 3.5394x + 1.3685

R² = 0.1311

-5.0

0.0

5.0

10.0

15.0

20.0

0.0 1.0 2.0 3.0B

Est

RO

A 2

014

BEst PB 2014


Petrochemicals & Fertilisers Sector

PE/EPS Growth 2014E

PB/ROA 2014E


PE 2012

BEst PE 2013

ROE 2012

BEst ROE 2013

PB 2012

ROA 2012

Dvd Yld 2012



IQ 173.90 28895.8 10.1 12.2 29.8 26.0 2.8 24.2 5.5 5.1 70 11.1

Sahara Petchem 21.05 2462.7 29.1 16.9 3.9 9.3 1.1 2.4 3.7 3.0 79 15.6

Sabic 117.25 93785.0 10.9 13.5 17.3 16.8 1.8 7.4 5.6 4.3 78 115.0

SIPCHEM 31.80 3108.8 11.6 19.7 10.7 10.3 1.2 4.0 6.5 4.0 64 5.4

Saudi Kayan 15.70 6279.0 - 114.6 -5.2 1.5 1.3 -1.7 0.0 0.0 61 51.8

Sidi Kerir Petchem 17.65 1331.8 8.0 8.8 35.1 40.9 2.8 26.5 10.2 10.1 68 0.6

Yansab 73.25 10985.7 10.9 14.6 20.8 19.8 2.1 10.8 - 3.7 58 8.8

Chemanol 15.70 504.8 17.6 36.9 6.0 3.3 1.0 3.1 - 2.9 66 10.1

APPC 41.50 1814.6 13.1 14.3 16.1 23.0 2.1 9.9 7.6 5.2 58 8.2

Safco 158.00 14041.8 13.1 15.0 45.3 39.7 5.7 39.9 7.9 7.2 65 7.6

Ma'aden 33.50 8262.0 27.5 23.2 6.2 6.7 1.7 2.2 - - 69 12.2

Tasnee 33.30 5939.0 10.5 15.7 15.3 9.9 1.5 4.1 7.2 4.9 60 13.6

Average 14.8 25.5 16.8 17.3 2.1 11.1 6.0 4.6


News flow • Sahara Petrochemical and Saudi International Petrochemical Company (Sipchem) plan to complete a share-swap merger in the first

half of 2014. This would lead to the creation of a firm valued at around USD 5bn. (Zawya)

IQ

Sahara Petchem

Sabic

SIPCHEM

Sidi Kerir Petchem

Yansab

Chemanol

APPC Safco

Ma'Aden Tasnee

y = -0.011x + 0.2875 R² = 0.5302

-50%

0%

50%

5.0 25.0 45.0 65.0 85.0

BE

st E

PS

Gro

wth

201

4E

BEst PE 2014

IQ

Sahara Petchem Sabic

SIPCHEM Saudi Kayan

Sidi Kerir Petchem

Yansab

Chemanol

APPC

Safco

Ma'Aden Tasnee

y = 8.9576x - 8.5783 R² = 0.9017

-10.0

0.0

10.0

20.0

30.0

40.0

0.0 3.0 6.0

BE

st R

OA

201

4 BEst PB 2014


Banking Sector

PE/EPS Growth 2014E

PB/ROA 2014E


PE 2012

BEst PE 2013

ROE 2012

BEst ROE 2013

PB 2012

ROA 2012

Dvd Yld 2012



CIB 33.09 4281.4 9.3 11.3 22.8 24.6 1.9 2.5 3.6 3.2 68 4.5

Al Rajhi Bank 71.00 28395.5 12.4 13.3 22.8 21.9 2.7 3.2 5.0 4.8 26 47.8

Samba 50.75 12178.1 9.3 10.0 14.5 13.9 1.3 2.2 3.7 3.6 52 6.8

Riyad Bank 31.00 12398.0 10.0 11.2 11.2 12.1 1.1 1.9 5.7 4.8 78 4.8

Bank Aljazira 38.10 3047.5 15.6 18.1 10.3 11.7 1.6 1.1 - 0.6 57 6.1

NBK 900.00 14565.6 13.5 13.6 12.8 11.7 1.7 2.0 3.1 3.3 53 3.5

Burgan Bank 560.00 3216.3 14.0 14.7 11.9 8.0 1.6 1.1 1.9 2.1 47 1.3

DIB 6.10 6566.3 6.6 18.6 12.3 13.8 0.8 1.2 7.5 2.9 80 12.3

NBAD 15.00 17583.3 9.2 13.9 15.1 16.1 1.3 1.6 3.4 2.5 75 1.6

FGB 19.05 15559.5 8.4 12.8 14.8 17.1 1.2 2.5 7.2 5.0 61 6.8

ADCB 6.80 10359.4 6.1 11.8 14.3 15.6 0.8 1.5 8.3 4.2 71 4.7

QNB 174.50 33535.5 11.0 12.7 18.7 19.3 1.9 2.5 4.6 3.1 60 7.7

CBQ 73.70 5008.7 8.7 10.0 13.8 12.4 1.2 2.7 8.5 6.8 76 4.7

DB 63.00 4470.6 8.0 11.8 17.8 16.5 1.4 2.4 8.9 5.8 76 3.2

QIB 74.90 4860.9 14.3 13.3 10.9 12.2 1.5 1.9 5.0 5.4 82 2.4

Bank Muscat 0.66 3689.7 8.0 9.6 14.3 12.8 1.1 1.8 4.3 4.1 85 2.4

Average 10.3 12.9 14.9 15.0 1.4 2.0 5.4 3.9


CIB

Al Rajhi Bank

Samba Riyad Bank

Bank Aljazira

NBK

Burgan Bank DIB

NBAD

FGB ADCB

QNB

CBQ

DB

QIB Bank Muscat

y = 0.005x + 0.0949 R² = 0.0195

0%

10%

20%

30%

40%

6.0 12.0 18.0

BE

st E

PS

Gro

wth

201

4E

BEst PE 2014

CIB Al Rajhi Bank

Samba

Riyad Bank

Bank Aljazira

NBK

Burgan Bank

DIB NBAD

FGB

ADCB

QNB

CBQ

DB

QIB

y = 0.5645x + 1.0826 R² = 0.2349

1.0

2.0

3.0

1.0 2.0 3.0B

Est

RO

A 2

014

BEst PB 2014


News flow • Doha Insurance got in-principle approval for its rights issue. (Bloomberg) • Doha Insurance plans to raise QAR 437mn through a rights issue for shoring up its capital base and improving credit ratings. (Zawya)


Real Estate Sector

PE/EPS Growth 2014E

PB/ROA 2014E


PE 2012

BEst PE 2013

ROE 2012

BEst ROE 2013

PB 2012

ROA 2012

Dvd Yld 2012



Aldar 2.80 5993.8 4.2 11.4 17.6 15.5 0.6 3.7 4.7 1.9 65 29.3

Barwa Real Estate 30.95 3307.7 9.0 9.1 9.3 - 0.8 2.0 5.5 - 59 10.5

Dar AL Arkan 10.15 2922.7 9.0 13.8 6.2 5.4 0.5 4.3 - 0.0 72 30.2

Deyaar Development 1.09 1714.7 52.5 77.9 1.0 2.3 0.5 0.6 - - 82 17.5

Emaar Economic City 13.60 3082.2 37.2 85.0 2.5 2.5 0.9 1.4 - - 68 31.3

Emaar Properties 7.82 13008.4 10.7 20.5 6.6 6.9 0.7 3.5 2.7 1.3 67 35.1

TMG Holding 6.49 1924.8 16.8 22.7 2.2 2.4 0.4 1.0 - 0.0 71 2.3

Palm Hill Developments 2.75 532.9 - 18.3 -3.9 4.3 0.8 -0.9 0.0 0.0 63 5.4

Average 19.9 32.3 5.2 5.6 0.7 1.9 3.2 0.6


News flow • Nakheel said it will prepay AED 4bn in debt this year (AED 2.35bn in February, 15 months early, and AED 1.65bn in August), adding

that it has used AED 1.4bn of available on AED 16.5bn of government funding. (Bloomberg) • Emaar Properties plans to build 219 houses in Lila Project in Arabian Ranches for which sales will open on 11 January, 2014. In a

separate announcement the company said it will redeem all outstanding convertible bonds on 6 February and that conversion rights may be exercised by 22 January 2014. (Bloomberg)

Aldar

Barwa Real Estate

Dar AL Arkan

Deyaar Development

Emaar Economic City

Emaar Properties

Palm Hill Developments

y = 0.0169x + 0.16 R² = 0.141

-35%

0%

35%

70%

105%

140%

0.0 10.0 20.0 30.0 40.0BE

st E

PS

Gro

wth

201

4E

BEst PE 2014

Aldar Dar AL Arkan

Deyaar Development

Emaar Economic City

Emaar Properties

Palm Hill Developments y = 0.5387x + 2.4049

R² = 0.0249

0.0

1.0

2.0

3.0

4.0

0.2 1.0 1.8

BE

st R

OA

201

4

BEst PB 2014


Food & Retail Sector

PE/EPS Growth 2014E

PB/ROA 2014E


PE 2012

BEst PE 2013

ROE 2012

BEst ROE 2013

PB 2012

ROA 2012

Dvd Yld 2012



Almarai 53.50 8558.0 17.6 21.4 20.2 17.9 3.4 8.2 2.0 1.8 52 6.5

Othaim 124.75 748.4 10.8 15.6 28.4 24.0 2.7 10.0 3.6 2.5 54 4.0

Alhokair 135.50 3793.4 11.8 19.6 35.8 32.2 3.8 18.8 - 2.1 63 6.0

Jarir Marketing 166.50 3995.4 16.3 22.8 59.0 59.9 9.1 30.8 4.8 3.5 68 7.0

Savola 62.50 8898.3 14.3 19.4 17.5 18.0 2.4 6.5 3.5 3.1 56 5.4

Agthia 4.24 692.6 10.5 15.8 11.5 13.7 1.2 7.9 2.3 1.3 51 0.2

Average 13.6 19.1 28.7 27.6 3.8 13.7 3.2 2.4


News flow • Al Ghurair Group is said to close a AED 1.3bn loan by end of the month. The loan will have a tenor of 8 years and will be priced at

300bps above EIBOR. (Bloomberg) • According to Euromonitor International, in-store retailers are expected to register 5% growth in retail value during 2014, mainly driven

by malls such as Dubai Mall, Mall of the Emirates as well as other mega malls (Euromonitor estimates). (Zawya) • Investcorp, announced the acquisition of a minority stake in Namet, a Turkish producer of packaged, processed and freshly cut red

meat. (Zawya)

Almarai

Othaim

Alhokair

Jarir Marketing

Savola

Agithia

y = 0.0029x + 0.1237 R² = 0.0547

10%

12%

14%

16%

18%

20%

22%

12.0 13.0 14.0 15.0 16.0 17.0 18.0 19.0

BE

st E

PS

Gro

wth

201

4E

BEst PE 2014

Almarai

Othaim

Alhokair

Jarir Marketing

Savola

Agithia

y = 2.7243x + 2.0262 R² = 0.8968

0.0

10.0

20.0

30.0

40.0

0.0 5.0 10.0 15.0

BE

st R

OA

201

4 BEst PB 2014


Construction & Building Materials Sector

PE/EPS Growth 2014E

PB/ROA 2014E


PE 2012

BEst PE 2013

ROE 2012

BEst ROE 2013

PB 2012

ROA 2012

Dvd Yld 2012



Arabtec 2.91 2487.3 25.3 28.8 4.8 7.0 1.2 1.6 - 1.3 63 23.4

Depa 0.73 448.8 - 14.1 -7.3 0.4 0.5 -3.9 0.0 - 66 1.1

DSI 1.63 1014.1 16.8 21.7 3.5 6.3 0.6 1.5 - 0.9 81 16.1

OCIC 293.59 8816.3 - 12.8 -42.4 11.2 4.3 -10.2 0.0 - 62 0.1

Average 21.0 19.4 -10.4 6.2 1.6 -2.7 0.0 1.1


News flow • Yanbu Cement reported Q4 2013 net income of SAR 162mn (-20.0 y/y). The decline was attributed to lower sales. (Bloomberg) • Egypt has invited around 14 consortiums to bid for the development of the Suez Canal area. (Zawya)

y = 0.0061x + 0.0157 R² = 0.0737

-20%

-10%

0%

10%

20%

30%

8.0 13.0 18.0 23.0 28.0

BE

st E

PS

Gro

wth

201

4E

BEst PE 2014

OCIC

Depa

DSI

Arabtec Arabtec

DSI

y = -0.1069x + 3.4894 R² = 1

3.0

3.1

3.2

3.3

3.4

3.5

0.5 1.0 1.5 2.0

BE

st R

OA

201

4 BEst PB 2014


Energy & Utilities Sector

PE/EPS Growth 2014E

PB/ROA 2014E


PE 2012

BEst PE 2013

ROE 2012

BEst ROE 2013

PB 2012

ROA 2012

Dvd Yld 2012



Dana Gas 0.93 1671.6 4.9 9.6 7.1 6.9 0.3 4.9 - - 74 11.0

QEWC 177.80 4883.3 9.2 12.5 35.1 32.1 2.6 8.4 5.5 4.1 58 2.1

Saudi Electricity 14.70 16330.4 21.8 18.4 4.8 5.6 1.0 1.1 5.2 4.8 63 9.2

Tabreed 2.45 439.6 15.2 6.0 5.8 6.3 0.2 2.7 - - 54 5.3

Average 12.8 11.6 13.2 12.8 1.0 4.3 5.4 4.4


News flow

Dana Gas

QEWC

Saudi Electricity

Tabreed y = -0.0175x + 0.2699 R² = 0.4045

-10%

0%

10%

20%

30%

40%

4.0 9.0 14.0 19.0

BE

st E

PS

Gro

wth

201

4E

BEst PE 2014

Dana Gas

QEWC

Saudi Electricity

y = 1.2884x + 2.0507 R² = 0.4196

0.0

5.0

10.0

0.0 1.0 2.0 3.0 4.0

BE

st R

OA

201

4 BEst PB 2014


Industrials Sector

PE/EPS Growth 2014E

PB/ROA 2014E


PE 2012

BEst PE 2013

ROE 2012

BEst ROE 2013

PB 2012

ROA 2012

Dvd Yld 2012



El Ezz Steel Rebars 694.06 1333.1 10.5 9.7 19.2 - 2.1 3.8 12.5 8.8 81 0.1

Elswedy ElectriC 32.87 1055.5 43.9 19.3 2.3 6.7 1.1 0.8 - 2.4 69 0.8

GB Auto 33.93 629.1 16.4 22.4 10.6 9.0 1.7 3.6 - 2.6 50 0.1

Oriental Weavers 35.00 452.7 7.6 9.4 9.3 12.0 0.7 4.4 - 5.7 72 0.2

Saudi Arabian Amiantit 15.45 475.8 14.7 17.6 7.0 6.5 1.1 2.4 6.9 6.3 63 5.8

Saudi Cable 13.00 263.4 - - -16.3 -15.1 1.1 -4.0 0.0 - 71 4.7

KIPCO 630.00 3130.3 16.1 23.3 5.5 - 1.0 0.5 5.1 3.2 58 3.3

Dubai Investments 2.55 2478.8 9.5 - 3.8 - 0.4 2.5 8.2 - 66 19.3

Average 17.0 16.9 5.2 3.8 1.1 1.8 6.5 4.8


News flow

El Ezz Steel Rebars

Elswedy Electric

GB Auto

Oriental weavers

Saudi Arabian Amiantit

KIPCO

y = 0.0192x + 0.2149 R² = 0.1553

0%

35%

70%

5.0 10.0 15.0 20.0

BE

st E

PS

Gro

wth

201

4E

BEst PE 2014

KIPCO

0.0

0.5

1.0

1.0 1.5 2.0

BE

st R

OA

201

4 BEst PB 2014


Transport & Logistics Sector

PE/EPS Growth 2014E

PB/ROA 2014E


PE 2012

BEst PE 2013

ROE 2012

BEst ROE 2013

PB 2012

ROA 2012

Dvd Yld 2012



Air Arabia 1.55 1969.3 9.3 15.8 7.9 8.4 0.7 5.5 8.4 4.6 65 9.0

Aramex 3.00 1195.8 12.0 15.9 12.6 13.2 1.5 9.4 5.0 3.9 62 0.9

DPW 17.93 14881.9 13.0 25.7 9.6 7.0 1.2 4.3 2.1 1.4 68 2.4

National Shipping Co 29.10 2444.0 12.0 20.6 9.6 - 1.1 4.6 5.2 3.2 70 14.1

Agility 740.00 2879.8 14.8 13.7 3.9 - 0.6 2.4 5.9 5.4 63 2.4

QGTS 20.75 3191.4 11.0 14.9 47.6 - 4.8 2.5 6.6 5.2 53 4.1

Average 12.0 17.8 15.2 9.5 1.7 4.8 5.5 4.0


News flow • Etihad Airways announced it achieved its highest ever cargo and passenger volumes in 2013. Passenger volumes rose 16% to nearly

12mn from 10.3mn in 2012. (Zawya)

Air Arabia

Aramex DPW

National Shipping Co

Agility QGTS

y = -0.004x + 0.2296 R² = 0.0099

0%

10%

20%

30%

40%

50%

5.0 10.0 15.0 20.0 25.0

BE

st E

PS

Gro

wth

201

4E

BEst PE 2014

Air Arabia

Aramex

DPW

y = 5.3371x - 1.2391 R² = 0.4192

3.0

6.0

9.0

12.0

1.0 1.5 2.0

BE

st R

OA

201

4 BEst PB 2014


Financial Services Sector


PE 2012

BEst PE 2013

ROE 2012

BEst ROE 2013

PB 2012

ROA 2012

Dvd Yld 2012



DFM 2.45 5336.2 231.8 76.6 0.5 3.2 1.1 0.5 0.0 1.2 62 17.1

EFG-Hermes 9.79 807.6 102.1 25.9 0.7 3.1 0.6 0.1 - 0.9 79 3.4

Average 166.9 51.2 0.6 3.2 0.8 0.3 0.0 1.1


News flow • EFG Hermes board approved EGP 1bn share buyback plan. The first phase aims at returning EGP 425mn immediately through a

buyback of 37mn shares at EGP 11.5 per share. The second phase is set for Q2-Q3 2014. (Bloomberg)


Foreign Ownership Limits

Stock Allowed

(%)

Owned

(%)

1 wk chg

(%)

1 m chg

(%) Stock

Allowed

(%)

Owned

(%)

1 wk chg

(%)

1 m chg

(%)

Dubai

Air Arabia 49.00 22.40 0.22 0.25 Insurance House 25.00 0.45 0.01 -0.03

Ajman Bank 49.00 2.25 0.01 -0.44 ASMAK 49.00 0.20 0.00 -0.05

Arabtec Holdings 49.00 9.04 0.13 -0.20 Investbank 20.00 2.92 0.00 -0.65

Aramex 49.00 36.16 0.01 0.04 METHAQ 25.00 10.59 -1.25 -11.89

Drake & Scull Intl 49.00 15.25 -0.19 -0.50 NBAD 25.00 3.05 0.00 0.02

DFM 49.00 3.71 0.01 -0.03 RAK Bank 20.00 18.84 0.00 0.12

Dubai Investments 20.00 4.58 -0.01 -0.30 NMDC 5.00 1.21 0.00 0.00

Dubai Islamic Bank 15.00 7.46 -0.32 -0.08 Qatar Telecom 100.00 87.25 0.01 0.01

DNIR 25.00 0.19 0.00 -0.01 RAK Properties 49.00 30.27 -0.11 -3.99

Emaar 49.00 16.68 -0.37 -0.04 RAK Poultry & Feeding 49.00 15.89 0.00 0.00

Du 100.00 0.22 0.00 0.02 RAK Cement Co. 49.00 26.45 -0.01 1.78

Emirates NBD 5.00 2.04 0.01 0.03 RAK Ceramics 49.00 15.12 0.29 1.05

GGICO 49.00 1.78 -0.02 -0.03 RAK Co for White Cement 49.00 19.33 0.01 0.08

Gulf Navigation 20.00 6.40 0.15 0.03 RAK National Ins. 25.00 1.15 0.00 1.10

National Cement Co. 25.00 1.03 0.00 0.00 SCIDC 0.00 0.00 0.00 0.00

TABREED 49.00 5.09 0.07 0.16 Sudan Telecom 15.00 1.41 0.00 -0.08

Shuaa Capital 49.00 16.45 0.00 -0.36 UAQ Cement 100.00 79.94 -0.21 0.39

TAKAFUL 25.00 17.67 0.05 0.51 Union Cement 49.00 8.49 0.08 -1.28

Takaful House 25.00 3.82 0.16 1.97 UNB 49.00 2.90 0.00 -0.09

Tamweel 40.00 1.42 0.00 0.04 United Arab Bank 40.00 8.86 -0.02 0.05

Union Properties 15.00 3.57 -0.05 0.37 United Insurance Co. 49.00 45.91 0.00 0.00

Abu Dhabi Waha Capital 25.00 0.00 0.00 0.00

ADCB 49.00 8.68 0.05 0.35 Qatar

BILDCO 25.00 7.84 0.25 0.39 Al Khaliji 0.00 0.00 0.00 0.00

AD National Hotel 25.00 1.79 0.00 -0.02 Al Khalij Holding 24.97 13.97 0.02 -0.20

ADNIC 25.00 0.09 0.00 0.01 Barwa Real Estate 24.86 1.93 0.00 -0.18

AD Ship Building 25.00 2.38 0.09 -0.40 CBQ 24.97 5.54 0.22 0.29

Agthia Group 25.00 12.51 0.03 0.07 Doha Bank 20.27 13.88 0.24 0.40

Al Buhairah Ins. Co. 25.00 8.52 0.00 0.45 Gulf Intl Services 25.00 10.07 0.21 0.66

Al Khazna Ins. Co. 25.00 2.19 0.00 -0.03 Industries Qatar 22.50 11.75 0.09 0.42

Aldar Properties 40.00 13.73 0.06 1.12 Masraf Al Rayan 12.25 6.51 0.04 0.09

Bank of Sharjah 30.00 19.59 -0.02 0.22 National Leasing 49.00 14.00 0.02 0.20

Comm. Bank Intl 49.00 48.38 0.00 0.03 QEWS 25.00 13.41 0.27 0.77

Dana Gas 49.00 63.33 -0.12 -0.71 Qatar Gas Transport 25.00 7.11 0.02 -0.12

Eshraq Properties 49.00 30.86 -2.57 -6.82 Qatar Insurance Co. 24.47 10.42 0.09 0.32

Finance House 20.00 10.78 0.02 0.02 QIIB 24.69 3.43 0.03 0.00

First Gulf Bank 25.00 15.44 -0.01 0.14 Qatar Islamic Bank 19.39 2.91 0.02 0.11

Foodco Holding 0.00 1.12 0.00 0.00 Qatar National Bank 20.59 3.49 0.02 0.05

Green Crescent Ins. 25.00 8.52 0.00 -0.05 Qatar Navigation 12.49 5.49 0.06 0.16

Gulf Cement Co. 49.00 18.87 0.32 0.90 Qatar Telecom 25.00 6.18 0.11 0.10

Gulf Livestock Co. 49.00 66.92 0.00 0.00 United Development - - - -

Gulf Medical Projects 49.00 8.26 0.00 0.00 Vodafone Qatar 25.00 13.74 0.05 -0.24

Source: Bloomberg, Emirates NBD Research


Other Asset Classes

Currencies

Close %5d chg 1 year fwd Close %5d chg Close %5d chg

EURUSD 1.3670 +0.60 1.3673 USDTRY 2.1645 +0.69 EURAED 5.0212 -0.60

GBPUSD 1.6483 +0.40 1.6431 USDEGP 6.9612 -0.10 GBPAED 6.0539 -0.41

USDJPY 104.1800 +0.65 103.8901 USDSAR 3.7504 +0.01 JPYAED 0.0353 -0.64

USDCAD 1.0892 -2.36 1.0981 USDQAR 3.6408 +0.02 CADAED 3.3711 +2.41

AUDUSD 0.8995 +0.56 0.8779 USDKWD 0.2830 -0.16 AUDAED 3.3044 -0.55

USDCHF 0.9024 +0.31 0.8991 USDBHD 0.3770 -- CHFAED 4.0693 -0.34

EURGBP 0.8294 -0.22 0.8322 USDOMR 0.3850 -0.00 TRYAED 1.7000 -1.18

USDCNY 6.0521 -0.01 12.4921 USDMAD 8.2241 +0.45 INRAED 0.0597 -1.24

Rates

Interbank 1 month 3 month 6 month 1 year Swaps Close 5d chg (bps)

EIBOR 0.4529 0.8129 1.0086 1.1843 USD 2 yr 0.4920 -1.9

USD LIBOR 0.1604 0.2417 0.3444 0.5826 USD 5 yr 1.7120 -8.0

GBP LIBOR 0.4831 0.5206 0.6131 0.8959 USD 10 yr 2.9515 -11.5

EURIBOR 0.1843 0.2593 0.3563 0.5271 EUR 2 yr 0.5040 -1.1

JPY LIBOR 0.1086 0.1450 0.2089 0.3714 EUR 5 yr 1.1940 -5.9

CHF LIBOR -0.0070 0.0230 0.0844 0.2084 EUR 10 yr 2.1150 -5.3

Commodities & Fixed Income

Commodities Close %5d chg Bonds / Sukuk YTM 5d chg (bps) CDS Close 5d chg (bps)

CRB CMDT Index - -0.04 ADGB 5.5 14 -0.4510 -37.5 Abu Dhabi 55.5 +0.3

Gold 1248.45 +0.92 DUGB 6.396 14 1.5010 -75.0 Dubai 205.0 -15.0

Silver 20.16 -- QATAR 5.15 14 -0.2020 -25.0 Qatar 58.1 -3.9

Oil (WTI) 92.72 -1.32 BHRAIN 6.273 18 3.2430 -- Saudi Arabia 56.0 +0.7

Oil (Brent) 107.25 +0.34 EGYPT 5.75 20 6.2680 +171.7 Bahrain 220.0 -16.7

Aluminium 1721.75 -0.32 TURKEY 7.25 15 1.7170 +46.2 Egypt 562.3 -30.2

Copper 7329.75 -0.01 MOROC 5.375 17 2.1970 +47.0 Turkey 234.2 -2.3

Tin (LME) 21895.00 +1.86 BTUN 4.5 20 5.5950 +37.5 Morocco 210.4 +3.2

Zinc (LME) 2026.25 -0.45 US Tsy 2 yr 0.3699 -2.7

US Tsy 10 yr 2.8579 -13.7 Source: Bloomberg, Emirates NBD Research


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Page 23


Emirates NBD Research & Treasury Contact List Emirates NBD Head Office 12th Floor Baniyas Road, Deira P.O Box 777 Dubai Aazar Ali Khwaja Group Treasurer & EVP Global Markets & Treasury +971 4 609 3000 [email protected]

Tim Fox Head of Research & Chief Economist +971 4 230 7800 [email protected]

Research

Khatija Haque Senior Economist +971 4 509 3065 [email protected]

Irfan Ellam Head of MENA Equity Research +971 4 509 3064 [email protected]

Aditya Pugalia Analyst +971 4 230 7802 [email protected]

Jean-Paul Pigat MENA Economist +971 4 230 7807 [email protected] Sales & Structuring

Head of Sales & Structuring Sayed Sajjid Sadiq +971 4 230 7777 [email protected]

Saudi Arabia Sales Numair Attiyah +966 1 282 5625 [email protected]

Singapore Sales Supriyakumar Sakhalkar +65 65785 627 [email protected]

London Sales Lee Sims +44 (0) 20 7838 2240 [email protected]

Egypt Shahinaz Foda +20 22 726 5050 [email protected]

Group Corporate Communications

Ibrahim Sowaidan +971 4 609 4113 [email protected]

Claire Andrea +971 4 609 4143 [email protected]

Documents

Equity Weekly...expected to post better Q4 2013 results. Equity Weekly Global Equities The MSCI world index had a marginally more positive week gaining +0.6% 5d, as Ireland and Portugal