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Kuwait Financial Centre “Markaz” GCC Daily Fixed Income Report – 19 March 2012 News Update Kuwait FY2012-13 Draft Budget Deficit Wider At $28.7 BnKuwait's draft budget proposal for the financial year 2012-2013 forecasts a deficit of KWD8bn ($28.7bn), wider than the year earlier, the country's official news agency reports Sunday. Kuwait had estimated its deficit at KWD6bn for the current fiscal year. Kuwait expects public expenditure in FY2012-13 to rise 13% on the year to KWD22bn. The draft budget was discussed Sunday, and the final budget is expected to be approved by the Kuwaiti parliament before the end of March. Revenues are expected to reach KWD14bn in the coming financial year, of which KWD8.1bn is from oil sales based on crude prices of $65 per barrel. Kuwait‟s Finance Minister had warned in November that big increases in Kuwait's budget deficit could force the government to take drastic steps including "devaluing of the dinar to lower the real cost of the wages, in addition to liquidation public assets, withdrawals from the national reserves, and so on."

Select GCC Bond and Sukuk Prices (16 March 2012) Type Bond Bond Bond Bond Bond Bond Bond Bond Sukuk Sukuk

Name State of Qatar State of Qatar Emirate of Abu Dhabi Emirate of Abu Dhabi Mubadala Development Co. Mubadala Development Co. Qatar Telecom Qatar Telecom Aldar Properties DP World Ltd

Maturity Size (Mn) Rating 9-Apr-14 2,000 AA/Aa2 9-Apr-19 1,000 AA/Aa2 8-Apr-14 1,500 AA/Aa2 8-Apr-19 1,500 AA/Aa2 6-May-14 1,250 Aa3/Aa2 6-May-19 500 Aa3/Aa2 10-Jun-14 900 A/A2 10-Jun-19 600 A/A2 27-May-14 1,500 BB-/B1 2-Jul-17 1,500 BBB-/Baa3

Sukuk 16-March-12 31-December-11 Conventional 16-March-12 30-December-11

BHIBOR QATAR AEIBOR LIBOR EURIBOR

Total Return 135.99 133.00

Duration Yield 3.50 3.59

3.99 4.31

0.8300 0.8100 0.9750 0.2418 0.3893

0.8500 0.4300 0.9750 0.2953 0.9643

UAE Economy Moving In Right Direction- The UAE economy is moving in right direction and Dubai looks confident to repay about $10BN debt due this year, according to senior executives of Standard Chartered. “…. We are comfortable that the government is doing all the right things and broadly we are pretty optimistic about this year,” Jonathan Morris, U.S. Treasuries (16 March 2012) CEO, Standard Chartered UAE, said.

HSBC Solely Arranges And Issues Almarai’s Sukuk For SAR 1 BnHSBC announced that it has helped arrange the first ever Sukuk program in Saudi Arabia. The program was set up for Almarai Company for an amount up to the size of its paid up capital. HSBC also assisted Almarai in the debut issuance under this newly established program, in an amount of SAR1bn ($267mn), with further issuance expected in the future.

Ask Price 107.915 119.392 109.625 122.250 108.081 121.550 110.069 123.565 110.154 104.837

Bid Yield 1.475% 3.523% 1.098% 3.339% 2.097% 4.227% 2.129% 4.178% 6.006% 5.293%

Ask Yield 1.223% 3.429% 0.747% 3.197% 1.848% 4.104% 1.842% 4.072% 5.722% 5.188%

HSBC/NASDAQ Dubai GCC Sukuk & Bonds US Dollar Index

DIFC Investments To Seek Loan As Bonds Shunned- DIFC Investments LLC‟s plan to seek a loan of as much as $1bn to help pay 144.99 5.34 5.05 Islamic bonds may be a sign that overseas investors are reluctant to buy 141.59 5.26 5.07 the company‟s debt. The owner of properties in Dubai‟s tax-free financial center plans to raise the funds through a five-year syndicated loan to pay a Interbank Rates (%) 1-Month $1.25bn sukuk due in June. It will make up the rest with its own cash. The 19/03/12 31/12/11 yield on DIFC Investments‟ $1.25bn floating-rate sukuk due in June rose SAIBOR 0.5656 0.5188 76bps last week to 13.71% March 16. KIBOR 0.5625 0.5625

CI Affirms NBK's Ratings With 'Stable' Outlook- Capital Intelligence affirmed NBK‟s long and short-term Foreign Currency Ratings at 'aa-' and 'a1+', respectively, and its Financial Strength Rating at 'a+'. The outlook for all ratings remains 'Stable'. CI said that NBK's rating "is supported by the excellent asset quality and a strong capital position, as well as by the solid returns that NBK has been able to achieve, even in what have been some difficult years for the Kuwaiti banking system."

Bid Price 107.384 118.742 108.875 121.250 107.541 120.701 109.412 122.820 109.543 104.345

3-Month 2-Year 3-Year 5-Year 10-Year 30-Year

Coupon 0.000 0.250 0.375 0.875 2.000 3.125

Equity Market Snapshot Abu Dhabi SE Bahrain SE Dubai SE Kuwait SE Muscat SE Qatar SE Saudi SE

Last Close 2,625.85 1,152.07 1,683.41 6,200.40 5,951.00 8,659.87 7,600.57

Price 0.075 99.785 99.445 98.836 97.328 94.578

1 Day Change -0.7% 0.1% -1.4% 0.5% -0.4% 0.1% 0.2%

281.75 312.20

Clean Price 3.87 96.91 3.99 95.79

367.97 322.59

7.41 7.31

Spread

Life

Coupon Total Market Cap

99.85 98.53

3-Month 19/03/12 31/12/11 0.8681 0.7800 0.8125 0.8125 1.2700 1.2583 1.0000 1.1000 1.5363 1.5200 0.4737 0.5810 0.7529 1.2921 Price Change -0.008 0.000 0.004 -0.012 -0.070 -0.164 YTD Change 8.5% 0.8% 22.7% 7.2% 4.1% -1.2% 18.7%

5.02 5.06

157.27 142.39

5.51 5.63

908.23 808.83

19/03/12 1.0758 1.3125 1.9700 2.3300 1.9863 1.0531 1.4721

1-Year

31/12/11 1.0400 1.3125 1.9583 2.1500 1.9725 1.1281 1.9134

Current Yield (%) Yield Change (%) 0.079 -6.062 0.363 0.602 0.564 0.030 1.118 0.305 2.304 0.395 3.417 0.294

Crude Oil Brent WTI OPEC

Price 125.91 107.36 123.03

1 Day ∆ 0.08% 0.28% -1.01%

Gold Spot $/OZ

Price 1,662.65

1 Day ∆ 0.18%

GCC Sovereign Ratings Moody’s S&P Abu Aa2 AA Dhabi

Fitch

Bahrain Baa1 BBB

BBB

Kuwait Aa2

AA

AA NR

AA

Oman

A1

A

Qatar

Aa2

AA

NR

KSA

Aa3 AA-

AA-

UAE

Aa2

NR

NR

GCC Currencies Currency

USD 1-Day ∆

KWD

0.2792

0.0001

SAR

3.7505

0.0002

BHD

0.3770

0.0000

QAR

3.6410

0.0002

OMR

0.3850

0.0000

AED

3.6730

0.0001

EUR/USD 1.3169 (0.0006) JPY

83.4100 (0.0300)

USD 5-Year CDS Abu Dhabi Dubai

YTD Change

117.500

-7.8%

345.000

-22.5%

Bahrain 366.660

-4.3%

Qatar

118.280

-7.2%

Saudi

120.500

-6.3%

Egypt

550.000

-14.0%

Lebanon 470.990

0.2%

Turkey

213.500

-26.7%

China

99.695

-32.3%

France

165.000

-24.9%

Germany 68.500

-33.0%

Japan

106.000

-26.0%

UK

59.160

-39.3%

US

32.660

-33.3%

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.

DFIU 19032012  

DFIU 19032012

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