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Kuwait Financial Centre “Markaz” MENA Daily Fixed Income Report –30 September 2012 News Update Zain Saudi extends $2.6 bln loan maturity - Indebted telecom operator Zain Saudi has for a second time extended the maturity of a 9.75 billion riyal ($2.6 billion) loan by two months, it said in a bourse statement on Saturday. “The firm announces that on September 26 it has received approval from lenders to extend the maturity date for the joint Murabaha by two additional months, changing the maturity date to November 28,” the statement said. The loan was initially due in July but was extended to September 27. The firm said it had already paid back part of the loan, 750 million riyals, on August 27 and is in the process of finalizing a long-term finance agreement to replace its current loan. Tunisia plans to issue Islamic bonds early 2013- Tunisia plans to issue Islamic bonds early next year as the North African country seeks to reform its banking sector and diversify sources of funding, the central bank governor said on Saturday. "Tunisia will begin issuing Islamic bonds early next year ... This is part of the draft budget for 2013," Tunisian central bank governor Chadli Ayari told Reuters. KFH issues sukuks for Turkey worth USD 1.5 billion- Kuwait Finance House has issued ijara sukuks (Islamic lease bonds) for the Turkish treasury, worth USD 1.5 billion, valid for five and a half years. The issue, the first on record for interest of the Turkish Government, was made in collaboration with Citigroup and HSBC banks. Coupons of the sukuks amount to 2.8 percent per annum, distributed over six months. Fitch Rates QIB's Trust Certificate Issuance Programme 'A(EXP)Fitch Ratings has assigned Qatar Islamic Bank ‘s USD1.5bn trust certificate issuance programme an expected rating of 'A(EXP)'. The issuing entity under the programme is QIB Sukuk Ltd. The programme rating is based on the Long-term Issuer Default Rating ('A'/Stable) of Qatar Islamic Bank. QIB is the third-largest bank in Qatar by assets and the leading Islamic bank, accounting 36% of total Islamic banking assets at end-H112. Qatar Q2 real GDP rises 5 pct on an annual basis- Qatar's secondquarter real gross domestic product (GDP) grew by 5.0 percent over the same period in 2011 and by 2.5 percent over the first quarter of 2012, the country's statistics authority said in a press release on Saturday, citing preliminary data. Nominal second-quarter GDP grew by 11.9 percent on the year, but dipped 1.1 percent on the quarter, Qatar Statistics Authority said.

Select MENA Bond and Sukuk Prices (29 September 12) Type Name Sovereign Bond State of Qatar Bond Emirate of Abu Dhabi Sukuk Dubai DOF Sukuk Ltd Bond Kingdom of Bahrain Bond Lebanese Republic Bond Republic of Turkey Bond Arab Republic of Egypt Bond Kindgom of Jordan Bond Republic of Iraq Corporates Bond Tamweel Funding Ltd Bond Qatar Telecom Sukuk Aldar Properties Bond Rasgas LNG 3 Sukuk DP World Ltd Bond Kuwait Projects Co. Bond Burgan Bank Bond Saudi Electricity Co.

Bid Price Ask Price Bid Yield Ask Yield

MENA Sovereign Ratings

Maturity Size (Mn)

Rating

20-Jan-17 8-Apr-19 2-May-17 5-Jul-20 12-Oct-17 14-Jul-17 29-Apr-20 12-Nov-15 15-Jan-28

2,000 1,500 600 1,500 600 2,250 1,000 750 2,700

AA/Aa2 AA/Aa2 -/-/BBB/-/BB/Ba1 -/Ba2/BB -/-

105.188 126.698 105.738 102.938 98.885 120.740 98.885 97.635 91.198

105.688 127.375 106.406 103.678 100.625 121.240 101.125 98.740 92.365

1.863% 2.311% 3.532% 5.025% 5.255% 2.830% 5.934% 4.700% 6.931%

Moody’s S&P Fitch Abu 1.745% Aa2 AA AA Dhabi 2.214% 3.378% Bahrain Baa1 BBB BBB 4.907% Kuwait Aa2 AA AA 4.858% Oman A1 A NR 2.729% Aa2 AA NR 5.565% Qatar 4.311% KSA Aa3 AA- AA6.773% UAE Aa2 NR NR

18-Jan-17 10-Jun-19 27-May-14 30-Sep-20 2-Jul-17 15-Jul-20 29-Sep-20 3-Apr-17

300 600 1,500 1,400 1,500 500 400 500

Baa1/A/A2 BB-/B1 A/Aa3 BBB-/Baa3 BBB-/Baa3 BBB/Baa1 A1/AA-

104.235 128.778 109.958 112.394 109.221 117.939 110.182 102.927

104.942 129.712 110.563 113.402 109.749 118.807 110.828 103.469

4.067% 3.079% 4.418% 2.300% 4.091% 6.409% 6.237% 1.982%

3.891% 2.945% 4.059% 2.080% 3.975% 6.280% 6.140% 1.858%

Egypt

B2

B

B+

Lebanon B1

B

B

Turkey

BB

BB+

Tunisia Baa3 BB

BBB-

Ba1

Morocco Ba1 BBB- BBBJordan

Ba2

BB

NR

HSBC/NASDAQ Dubai Middle East US Dollar Sukuk /Bond Index

China

Aa3 AA-

A+

Sukuk

UK

Aaa AAA

AAA

US

Aaa AA+

AAA

28-Sep-12 31-Dec-11

Total Return 162.660 148.84

Duration Yield 5.04 4.99

3.84 5.07

Interbank Rates (%) SAIBOR KIBOR BHIBOR QATAR AEIBOR LIBOR EURIBOR JDIBOR TRLIBOR

3-Month 30/09/12 31/12/11 0.9569 0.5188 0.8750 0.5625 1.2467 0.8500 1.2285 0.4300 1.3025 0.9750 0.3585 0.2953 0.2200 0.9643 4.9940 3.8410 6.4884 11.2750

U.S. Treasuries 28 September 2012 3-Month 2-Year 3-Year 5-Year 7-Year 10-Year 30-Year

Current Yield (%) 0.09 0.23 0.31 0.63 1.05 1.63 2.82

1-Day ∆ (%) 0.005 -0.020 -0.024 -0.019 -0.016 -0.021 -0.016

Spread 259.17 326.79

Clean Coupon Total Market Cap Price 6.45 104.58 5.42 1487.09 6.80 99.35 5.81 1157.44

Life

6-Month 1-Year 30/09/12 31/12/11 30/09/12 31/12/11 1.0056 0.7800 1.1431 1.0400 1.1250 0.8125 1.3750 1.3125 1.5450 1.2583 1.9033 1.9583 1.3857 1.1000 1.7357 2.1500 1.4713 1.5200 1.6113 1.9725 0.6359 0.5810 0.9730 1.1281 0.4370 1.2921 0.6840 1.9134 5.4220 4.2380 5.9130 5.2000 Currencies 7.0703 11.316 7.4770 11.3743 Currency USD 1-Day ∆ KWD 0.2819 0.0003 1 Year (%) Currency USD 1-Day ∆ SAR KWD 0.28083.7502 (0.0001) (0.0004) -1.578% SAR (0.0001) 0.008% BHD 3.75020.3770 0.0000 BHD 0.3770 0.0002 -0.005% QAR 3.6413 0.0004 QAR 3.6411 0.0010 0.006% OMR OMR 0.38500.3850 0.0003 0.0003 -0.003% AED 3.6730 0.0000 -0.003% AED 3.6730 0.0001 EGP 6.0989 0.0031 -2.187% EUR/USD (0.0027) JOD 0.70661.2265 (0.0012) 0.184% EUR/USD 1.2860 (0.0053) -5.043%

USD 5-Year YTD CDS Change Abu 106.720 -16.3% Dhabi Dubai 285.614 -34.4% Bahrain 270.660 -29.3% Qatar

107.129 -15.6%

Saudi

94.000 -26.8%

Egypt

446.000 -30.2%

Lebanon 493.543 Turkey

Iran

3.8%

160.667 -44.0%

41.518

5.5%

Morocco 234.520 -12.3% China

79.340 -44.1%

France

114.010 -48.7%

Germany 54.061 -47.9% Japan

84.567 -40.9%

UK

51.516 -47.2%

US

47.500

-3.0%

This report has been prepared and issued by Kuwait Financial Centre S.A.K (Markaz) , which is regulated by the Capital Markets Authority and the Central Bank of Kuwait. The report is owned by Markaz and is privileged and proprietary and is subject to copyrights. Sale of any copies of this report is strictly prohibited. This report cannot be quoted without the prior written consent of Markaz. Any user after obtaining Markaz permission to use this report must clearly mention the source as “Markaz “ .This Report is intended to be circulated for general information only and should not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction. The information and statistical data herein have been obtained from sources we believe to be reliable but in no way are warranted by us as to its accuracy or completeness. Markaz has no obligation to update, modify or amend this report.For further information, please contact ‘Markaz’ at P.O. Box 23444, Safat 13095, Kuwait. Tel: 00965 1804 800 Fax: 00965 2245 0647 Email: research@markaz.com

A number of sources which include Bloomberg, Zawya, and daily newspapers were utilized in the creation of this report.


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