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ARAB FINANCIAL FORUM NEWSLETTER FEBRUARY 2011.

ISSUE I

Arab Financial Forum Newsletter


Monitoring the latest news

Dear Reader,

Arab financial markets have been troubled by the unrest sweeping the Arab world.
Among the measures being considered are tackling Egypt's budget deficit and
related moves to bring stability back to markets after the days of protest. Some see
opportunity in the uncertainty. Ray Clancy, the editor at Investment International,
argues here that ‘Now is the time to invest."

If you have any news you would like including in future issues please contact me. I
would also like to here from those wishing to offer commentary on current
developments in Arab financial markets. Also, let me know if there are others you
think would like to receive the newsletter.

With warmest regards,


Aynur Hamidova
AFF Project manager

If you would like to learn more about this newsletter or forthcoming events, or would like to suggest
an event, article or include any comment for inclusion in the next edition. We welcome new readers,
if you would like to me to include new interest to our complimentary distribution of the newsletter,
please do not hesitate to contact me at projects@meconsult.co.uk.

MEC International Ltd. Granville House. 132-135 Sloane Street London SW1X 9AX
Tel: 020 7591 4816 Fax: 020 7591 4801 E-mail: projects@meconsult.co.uk
ARAB FINANCIAL FORUM NEWSLETTER FEBRUARY 2011. ISSUE I

IN BRIEF
Bahrain bonds to rise as Egypt
contagion fades, says Al Khalifa
Egypt: economic growth to drop to 3.5 February 12, 2011
%
Abu Dhabi-based Islamic bank Al Hilal on
February 14, 2011
Sunday launched the Al Hilal GCC Equity
Fund, a Sharia-compliant investment fund that
will provide retail investors with access to the
Gulf's equities markets.
Read more

Abu Dhabi’s Sorouh sees fourth


quarter loss as provisions rise
February 14, 2011
Affected by the recent political unrest, the
Egyptian economy growth rate is expected to.

Read more

Egypt Taking Extraordinary


Measures to Stabilize Stock Market
February 10, 2011

Egypt said it will take 12 extraordinary Sorouh Real Estate booked a net loss of
measures to stabilize the market when the stock AED199m ($54m) in the fourth quarter after
exchange reopens next week. setting aside money to cover impairments and
provisions.
Read more
Read more
Middle East shares rise after Egypt's
president Mubarak resigns Qatar: Al Khaliji Bank Announces
February 13, 2011 155 % Profit
February 8, 2011
Middle East shares gained, sending Abu
Dhabi’s stock index to the highest in a month, Al Khalij Commercial Bank (al khaliji) Q.S.C.
as Egyptian President Hosni Mubarak’s released its 2010 end-of-year financial results
resignation bolstered investor optimism. on Tuesday, showing an impressive increase in
net profit, which reached QR 427 million, up
Read more 155% from QR 167 million in 2009

Read more
ARAB FINANCIAL FORUM NEWSLETTER FEBRUARY 2011. ISSUE I

Kuwait stocks may be surprise


winners for year ahead COMMENTARY
February 13, 2011 AND ANALYSIS
‘Now is the time to invest, say MENA region fund
manager’ by Ray Clancy

Fund managers in the Middle East and North


Africa (MENA) region believe the worst is
over and now is the time to buy in, according
to Standard & Poor's Fund Services in its
latest review of the region.

Fund managers point to the high oil price, a


fiscal surplus in most countries in the region
Increased infrastructure spending fuelled by and attractive valuations as evidence for this
high oil prices, regulatory reforms and large- optimistic point of view.
scale restructuring may provide a catalyst for
beaten down Kuwaiti stocks to outperform Gulf ‘Most managers have moved on from
markets in 2011, a fund manager said. highlighting the low historic correlation
between this region and the rest of the world
and have shifted their emphasis to valuations
Read more and growth potential at a time when the
fundamentals offered by the Western world
Germany to support economic are far from compelling,’ said S&P fund
analyst, Roberto Demartini.
reforms in Morocco
Fund managers believe that the rescheduling
February 9, 2011
of the Dubai World debt in September 2010
was the catalyst for future growth. The
Germany will support the model of reforms in teams at ING and Vision, for example, are
Morocco, said visiting German Secretary of becoming more positive on Dubai although
State for Economics and Technology Ministry they put it down primarily to bottom-up stock
Bernd Pfaffenbach. selection.

‘Managers agree it is no longer a top-down


Read more
call and the view surrounding Dubai
companies is increasingly driven by
fundamentals. Even some of the real estate
Arqaam acts as adviser to Indonesia's plays, such as Emaar Properties, are coming
Bank Kesawan back into fashion, although for very different
reasons from the past, as managers point to
February 14,2011 the company's potential to pay an attractive
dividend yield now that its growth spurt is
over,’ explained Demartini.
a Dubai-based firm, played a crucial role in
facilitating what is a unique transaction, ‘All managers we interviewed for our review
drawing upon its expertise in cross-border like Saudi Arabia, the only country in the
M&A for mid-cap financial institutions. region with a sizeable population, strong
resources and sufficient choice in terms of
Read more companies available to buy,’ he added.

Qatar also continues to feature highly,


although most managers have taken some
profits this year. ‘Good fundamentals and
strong reserves are enough, in most
managers’ eyes, to offset the fact that Qatar
is actually a very small country with an
ARAB FINANCIAL FORUM NEWSLETTER FEBRUARY 2011. ISSUE I

extremely limited population and a stock


market that counts only a handful of liquid
companies,’ said Demartini.

Fund managers also pointed out that the


upcoming World Cup in Qatar would support
infrastructure spending.

Oman is also a fairly small market, but


managers highlight how its fundamentals are
becoming more favourable, as the country
has managed to lower its marginal cost of oil
production. This should support further
investment.

Elsewhere, expectations on Bahrain remain


fairly subdued, and Kuwait remains the
subject of debate. ‘On balance, most fund
managers are willing to give it the benefit of
the doubt,’ concluded Demartini.

For the latest updates please access our


website:

http://www.arabfinancialforum.org/

If you would like to learn more about this


newsletter or our forthcoming events, or would
like to suggest an event or article for inclusion in
the next edition, please do not hesitate to contact
me at projects@meconsult.co.uk.

MEC International Ltd.


Granville House
132-135 Sloane Street
London SW1X 9AX
Tel: 020 7591 4816
Fax: 020 7591 4801
E-mail: projects@meconsult.com