MENA-1 TUESDAY MORNING ROUND-UP

UAE
Air Arabia to commence flights to Gassim, Saudi Arabia UAE bourses set for possible S&P upgrade UAE says voter pool expands for FNC election

Kuwait
Agility wins Nandos contract

Qatar
Qatar books significant surplus in the first three months of the current fiscal year

EFG Hermes Research

MENA Strategy - Go With The Flow: MENA Flows Remain Weak; Global Rotation into Bonds from Equities Continues - June Issue - 11 July 2011

Agenda
Qatar Thu 14 July >> Vodafone Qatar (VFQ) 2Q2011 results Sun 17 July >> Qatar Insurance Company 2Q2011 results Mon 18 July >> Al Khalij Commercial Bank (Al Khaliji) 2Q2011 results Mon 18 July >> Ahli Bank 2Q2011 results Tue 19 July >> Nakilat 2Q2011 results Tue 19 July >> Doha Bank 2Q2011 results Wed 20 July >> Qatar Islamic Bank (QIB) 2Q2011 results Wed 20 July >> Mazaya Qatar Real Estate Development Company 2Q2011 results Thu 21 July >> Gulf Warehousing 2Q2011 results Thu 21 July >> UDC 2Q2011 results Sun 24 July >> Ahli Bank press conference Sun 24 July >> Qatar Navigation 2Q2011 results Sun 24 July >> Qatar General Insurance & Reinsurance Company 2Q2011 results Sun 24 July >> Qatar International Islamic Bank (QIIB) 2Q2011 results Sun 24 July >> Islamic Holding Company BOD meeting Mon 25 July >> Nakilat press conference Tue 26 July >> Al Khalij Commercial Bank (Al Khaliji) press conference Wed 27 July >> Dlala Holding Company 2Q2011 results Wed 27 July >> Commercial Bank of Qatar (CBQ) 2Q2011 results Thu 28 July >> Qatar National Bank 1H2011 press conference Sun 31 July >> Qatar Oman Investment Company 2Q2011 results Sun 31 July >> Medicare Group 2Q2011 results Mon 1 August >> The National Leasing Holding Company 1H2011 press conference Tue 2 August >> Masraf Al Rayan 2Q2011 results Tue 9 August >> Masraf Al Rayan press conference Sun 14 August >> Qtel 2Q2011 results Sun 14 August >> Doha Insurance 2Q2011 results

UAE News
Air Arabia to commence flights to Gassim, Saudi Arabia

Air Arabia (AIRA.DU) announced that it will commence scheduled flights to the Saudi Arabian city of Gassim on 15 July 2011. From its base in Sharjah, Air Arabia will operate four weekly flights to Gassim. The destination marks Air Arabias fifth in the Kingdom. (Arabian Business) Air Arabia: AED0.69, Rating: Neutral, FV: AED0.76, MCap: USD877 million, AIRARABI UH / AIRA.DU UAE bourses set for possible S&P upgrade The UAE is under review for a possible upgrade to emerging market status in the country classification of the Standard & Poors (S&P) Global Equity Index Series in 2012, according to Gulf News, citing a S&P document on 11 July 2011. By 26 August 2011, we will conclude the consultation process. Then we will review it with our index committee in New York. In 1Q2012, the announcement will be made, if theres an upgrade, Charbel S. Azzi, S&P Indices Head of Client Coverage (Middle East and Africa) told Gulf News in a telephone interview. (Gulf News) UAE says voter pool expands for FNC election The number of nationals allowed to vote for members of the UAEs Federal National Council (FNC) this year has increased to 129,274, almost 20x more than the number of eligible voters in the 2006 election, the National Election Committee said on its website. The election for the FNC will be held on 24 September 2011; winners will be announced on 28 September 2011, according to the website. Half of the FNCs 40 members are elected by a government committee and the rest are appointed by the rulers of the UAE. (Bloomberg)

Kuwait News
Agility wins Nandos contract Agility (AGLT.KW) has been appointed by Nandos, an international restaurant chain, as its provider of complete endto-end supply chain solutions for the UAE, Kuwait, and Oman. As part of the contract, Agility will provide Nandos with a range of integrated logistics solutions, which include sourcing goods from multiple suppliers, consolidating shipments from the Netherlands and South Africa, freight forwarding and warehousing. Agility will also distribute Nandos frozen goods and dry food items to franchise partners, covering the needs of the companys growing portfolio of restaurants. (Trade Arabia)

Qatar News
Qatar books significant surplus in the first three months of the current fiscal year Qatar announced that it has booked a significant surplus in the first three months of the current fiscal year, as the Gulfstates oil prices averaged USD113.10 per barrel up to June, up 106% on the estimated budget price of USD55.00 per barrel, The Gulf Times reported. Qatar expects to report a surplus of QAR22.3 billion in FY2011-2012, according to the budget details. Qatars budget spending is expected to reach QAR139.9 billion in the fiscal year 2011-2012, with a significant allocation towards major infrastructure projects and the education and healthcare sectors. We forecast a fiscal surplus of USD19.1 billion. (Gulf Times, Monica Malik)

EFG Hermes Research

MENA Strategy - Go With The Flow: MENA Flows Remain Weak; Global Rotation into Bonds from Equities Continues - June Issue - 11 July 2011 Middle East & Africa (MEA) Flows Continue to be Pressured: Outflows from MENA country funds eased M-o-M to USD30.5 million. The vast bulk of outflows came from Gulf country funds, led by Saudi Arabia (and followed closely by Qatar, Kuwait and the UAE). Outflows from Egypt stabilised at modest levels, while Morocco, in a break from the usual trend, saw sharp net redemptions. MEA-dedicated funds fared worse, with outflows continuing at a brisk pace. Net redemptions totalled USD112 million and were spread more or less evenly across all regions. GEM Funds Jump Back into Egypt in May: GEM funds markedly increased their exposure to the MEA in May to 0.82% of their portfolio (from historic lows in April). The increase was led entirely by a higher allocation to Egypt, while off-benchmark exposure remained unchanged. As a result, most GEM funds raised their overweight position in Egypt (relative to the MSCI Emerging Market Index) to 0.11%. Meanwhile, cash allocations resumed their downward trend, falling to 2.30% from 2.62% in April. Asia ex-Japan and GEM Funds Support Revival in Emerging Equity Inflows: Emerging equity funds saw improved inflows in June, led by a revival of interest in Asia ex-Japan funds, and continued robust inflows into diversified GEM funds. The improvement was selective, however, with Latin America and EMEA funds continuing to see brisk net redemptions. Inflows into frontier market funds improved substantially M-o-M, but remain low in absolute terms.

Rotation into Bond Funds from Equity Funds Continues: Last months rotation into bond funds from equity funds continued in June, although at a much slower pace. Equity fund outflows fell by a third M-o-M as Asia ex-Japan funds enjoyed a sharp turnaround in inflows and developed market funds (particularly North America) saw weaker net redemptions. Developed Europe equity funds saw outflows increase substantially on increasing Eurozone debt fears. Bond fund inflows halved M-o-M as North America funds attracted substantially lower inflows relative to May; the region recorded two consecutive weeks of outflows for the first time this year. Emerging bond fund inflows were unchanged in June across all regions. (Fahd Iqbal, Simon Kitchen, Ahmed Difrawy, Ahmed Hesham Hassan)
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