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Kuwait Financial Centre “Markaz” MENA Daily Fixed Income Report –23 October 2012 News Update Saudi Savola Seeks Shareholder approval for Sukuk Issue- Savola Group, the Saudi retailer that boosted its stake in PepsiCo Inc. partner Almarai Co. last week, may seek to tap the debt market for the first time as it expands in the Middle East. The company will seek shareholders’ approval to amend its article of association to sell Islamic bonds or other securities, the Jeddah, Saudi Arabia-based company said in a statement to the stock market. It didn’t set a date for the meeting or a size for the debt program. Savola is expanding its retail business in the Arab world’s largest economy and its sugar refining operations in Egypt as it seeks to boost revenue. The company said on Oct. 17 it paid 2 billion riyals ($533 million) to boost its stake in PepsiCo partner Almarai Co. to 36.52 percent from 29.95 percent. The deal was financed by a combination of cash and Islamic banking facilities from the local banks.

GCC Bond & Sukuk: Best and worst Performers (22 October 2012) Daily change 0.34% 0.31% 0.18% 0.15% 0.15% Monthly change 6.43% 5.34% 4.56% 4.11% 3.41% YTD change 38.89% 34.53% 34.30% 33.03% 31.51%

Best daily Performers BCOABC 7 7/8 04/08/20 EMAAR 7 1/2 12/20/15 DUBAIH 6 02/01/17 NBADUH 0 02/28/18 EIBUH 4.147 01/11/18 Best monthly Performers RASGAS 6.332 09/30/27 MBPSFN 11 1/4 11/15/15 DUBAIH 6 02/01/17 RASGAS 5.838 09/30/27 BHRAIN 6 1/8 07/05/22 Best YTD Performers

INTPET 6 7/8 11/01/41 DUGB 6.45 05/02/22 QTELQD 5 10/19/25 DUGB 4.9 05/02/17 SECO 4.211 04/03/22 Worst monthly Performers GOBLT 0 05/15/12 NBADUH 5.01 05/22/42 NBADUH 4.8 09/15/36 NBADUH 4.365 08/09/32 FGBUH 3 02/16/16 Worst YTD Performers

CBB Sukuk Al-Salam Securities Oversubscribed- The Central Bank of MBPSFN 11 1/4 11/15/15 TAQAUH 5.62 10/25/12 DUGB 4 02/22/14 Bahrain (CBB) announces that the monthly issue of the Sukuk Al-Salam NBADUH 4.8 09/15/36 DAEAVI 11 1/4 08/01/15 Islamic securities for the BD 18 million issue, which carries a maturity of 91 INTPET 6 7/8 11/01/41 TAQAUH 6.6 08/01/13 days, has been oversubscribed by 243%. The expected return on the issue, DUBAIH 6 02/01/17 NAKHL 10 08/25/16 RAKS 8 07/22/14 which begins on 24 October 2012 and matures on 23 January 2013, is Source: Bloomberg, Markaz Analysis 1.02%. The securities are issued by the CBB on behalf of the Government HSBC/NASDAQ Dubai Middle East US Dollar Sukuk /Bond Index of the Kingdom of Bahrain. Total Clean Sukuk

Dubai Emirates NBD still in talks with central bank on loan curbsDubai lender Emirates NBD is in discussions with the United Arab Emirates central bank over new lending limits on banks, its chief executive said on Monday, after the deadline to meet the requirements passed on Sept. 30."We are talking on a continued basis with the central bank to get to a satisfactory situation. The deadline has passed and the discussions are still ongoing and we hope to conclude them in the near future," chief executive Rick Pudner told reporters in a conference call after the bank's thirdquarter earnings.

19-Oct-12 31-Dec-11

Return 164.736 148.84

Duration Yield 5.044 4.99

Spread

223.709 326.79

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

3-Month 23/10/12 31/12/11 0.9675 0.5188 0.8125 0.5625 1.2060 0.8500 1.2285 0.4300 1.3000 0.9750 0.3158 0.2953 0.2040 0.9643 5.0130 3.8410 6.5665 11.2750

DP World Agrees to Divest 25% Stake in Vostochnaya Stevedo- DP World reaches agreement to divest 25% shareholding in stochnaya Stevedoring Co., Russia. Purchaser is existing 75% majority shareholder Global Ports Investments. Total consideration for 25% shareholding is U.S. Treasuries 23 October 2012 $230m.Transaction is expected to close later this week. Abu Dhabi May Beat 2012 GDP Growth Forecast, Government Says- Abu Dhabi’s economic growth this year will probably beat the government’s estimates as non-oil industries in the richest sheikhdom of the United Arab Emirates expand, the Department for Economic Development said. “I expect it will be better than 3.9 percent,” Undersecretary Mohamed Omar Abdulla said in an interview.

3.626 5.07

3-Month 2-Year 3-Year 5-Year 7-Year 10-Year 30-Year

Current Yield (%) 0.10 0.31 0.42 0.78 1.23 1.80 2.96

1-Day ∆ (%) 0.005 0.000 0.016 0.031 0.043 -0.012 0.026

Daily change -0.59% -0.40% -0.36% -0.32% -0.31% Monthly change -29.34% -3.63% -2.41% -2.04% -0.98% YTD change -3.02% -2.14% -1.95% -1.87% -1.72%

Worst daily Performers

23/10/12 1.0088 1.0625 1.5180 1.3857 1.4713 0.5559 0.4050 5.4280 7.1200

Life

Price 6.390 105.635 6.80 99.35

6-Month 31/12/11 0.7800 0.8125 1.2583 1.1000 1.5200 0.5810 1.2921 4.2380 11.316 Currency KWD SAR BHD QAR OMR AED EGP JOD EUR/USD

Coupon Total Market Cap 5.395 5.81

1514.330 1157.44 1-Year

23/10/12 1.1350 1.3125 1.8860 1.7357 1.6313 0.8905 0.6400 5.9500 7.4604 USD

0.2811 3.7502 0.3770 3.6407 0.3850 3.6731 6.1027 0.7078 1.3056

1-Day ∆ 0.0003 0.0000 0.0000 0.0001 0.0000 0.0001 (0.0036) 0.0000 (0.0004)

31/12/11 1.0400 1.3125 1.9583 2.1500 1.9725 1.1281 1.9134 5.2000 11.3743 1 Year (%) -2.237% -0.003% 0.003% 0.017% 0.005% -0.005% -2.215% 0.170% -6.268%

MENA Sovereign Ratings Moody’s S&P Fitch Abu Aa2 AA AA Dhabi Bahrain Baa1 BBB

BBB

Kuwait

Aa2 AA

AA

Oman

A1

NR

Qatar

Aa2 AA

NR

KSA

Aa3 AA-

AA-

UAE

Aa2 NR

NR

Egypt

B2

B

B+

Lebanon B1

B

B

Turkey

BB

BB+

Tunisia Baa3 BB

BBB-

Ba1

A

Morocco Ba1 BBB- BBBJordan

Ba2

BB

NR

China

Aa3 AA-

A+

UK

Aaa AAA

AAA

US

Aaa AA+

AAA

USD 5-Year YTD CDS Change Abu 102.400 -19.7% Dhabi Dubai 256.420 -41.1% Bahrain 218.605 -42.9% Qatar

104.175 -17.9%

Saudi

83.065 -35.3%

Egypt

409.480 -35.9%

Lebanon 500.952 Turkey

Iran

5.4%

160.127 -44.2%

35.724

-9.3%

Morocco 235.415 -11.9% China

82.987 -41.6%

France

67.262 -69.7%

Germany 30.784 -70.3% Japan

76.630 -46.4%

UK

32.272 -66.9%

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.

DFIU23102012  

DFIU23102012

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