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EuroMoney is currently conducting its Middle East Research and Best Managed Companies Survey. To vote for EFG hermes, go to www.euromoney.com / MiddleEast2011.
Drepturi de autor:
Attribution Non-Commercial (BY-NC)
Formate disponibile
Descărcați ca PDF, TXT sau citiți online pe Scribd
EuroMoney
is
currently
conducting
its
Middle
East
Research
and
Best
Managed
Companies
Survey.
The
EuroMoney
Survey
runs
until
24
June
2011.
To
vote
for
EFG
Hermes,
go
to
www.euromoney.com/MiddleEast2011
Thank
you
for
your
support.
UAE
Government
of
Dubai
asks
entities
to
cut
spending
Tabreed
announces
settlement
of
its
tender
offer
for
AED1.7
billion
of
Trust
Certificates
due
2011
TAQA
appoints
Stephen
Kersley
as
CFO
Free
zones
trade
grew
23%
in
2010
The
Central
Bank
of
the
UAE
to
issue
new
mortgage
rules
Kuwait
Al
Ahli
Bank
of
Kuwait
gets
go-ahead
to
extend
date
for
share
buy-back
or
resale
Qatar
QPI
signs
MOU
with
Maersk
Oil
for
global
oil
exploration
Barwa
Bank
in
talks
with
local
conventional
banks
following
QCB
move
Cosmo
Oil
and
Sojitz
start
output
from
Qatar
oil
field
EFG
Hermes
Research
Union
National
Bank
(UNB)
-
A
Value
Play,
Fundamentals
Not
Yet
Priced
In;
Initiate
with
Buy
-
Initiation
of
Coverage
-
19
May
2011
Qatar
Banking
Sector
Flash
Note
-
April
2011
Sector
Trends:
Public
Sector
Lending
Accelerates;
Deposit
Growth
Strong
-
19
May
2011
DP
World
(DPW)
-
Adjusting
FV
for
Reverse
Stock
Split;
Lowering
Rating
to
Neutral
-
19
May
2011
Raysut
Cement
Company
-
Near-Term
Concerns
Priced
in,
Upgrading
to
Neutral
-
Company
Note
-
19
May
2011
Agenda
Qatar
Wed
25
May
>>
Vodafone
Qatar
FY2010-‐2011
(March
year
end)
results
Wed
1
June
>>
Al
Khaliji
Commercial
Bank
BOD
meeting
UAE
News
Government
of
Dubai
asks
entities
to
cut
spending
The
Government
of
Dubai
asked
its
departments
to
reduce
expenditures
by
20-‐25%
in
order
to
achieve
a
budget
surplus
of
AED3-‐3.5
billion
until
2013,
Gulf
News
reported
citing
Ahmad
Humaid
Al
Tayer,
Member
of
the
Supreme
Fiscal
Committee.
However,
government
entities
were
not
asked
to
increase
their
revenues
by
charging
more
fees
or
indirect
taxes
for
the
services
they
provide,
Al
Tayer
added.
Al
Tayer
also
called
for
setting
up
a
department
to
manage
the
public
debt
in
Dubai.
The
cut
in
spending
is
in
line
with
our
view.
We
expected
to
see
a
retrenchment
in
government
spending
in
Dubai
in
2011
and
into
the
medium
term.
We
believe
that
this
fiscal
retrenchment
will
add
to
the
weak
domestic
demand
environment
in
Dubai.
(Zawya
Dow
Jones,
Monica
Malik)
Tabreed
announces
settlement
of
its
tender
offer
for
AED1.7
billion
of
Trust
Certificates
due
2011
National
Central
Cooling
Company,
known
as
Tabreed
(TABR.DU),
announced
the
AED1.7
billion
settlement
of
an
offer
related
to
the
Trust
Certificates
due
2011
of
the
Tabreed
08
Financing
Corporation
and
the
delivery
of
the
relevant
shares
took
place
on
Thursday,
19
May
2011,
following
the
receipt
of
the
final
required
regulatory
approval.
Following
the
conversion
of
the
AED1.7
billion
sukuk
into
shares,
the
shareholdings
in
the
company
of
the
following
entities
has
increased:
Arabian
Company
for
Water
and
Power
Development
(16.24%
stake),
Mubadala
Development
Company
(14.81%)
and
General
Investments
FZE
(11.29%).
(Company
disclosure)
TAQA
appoints
Stephen
Kersley
as
CFO
The
Abu
Dhabi
National
Energy
Co.
(TAQA)
[TAQA.AD]
said
that
its
Chief
Financial
Officer
(CFO),
Doug
Fraser,
is
leaving
the
firm,
and
will
be
replaced
by
Stephen
Kersley.
Kersley
comes
after
many
years
of
experience
at
Shell,
and
he
will
take
up
his
duties
on
22
May
2011.
Fraser
will
remain
at
TAQA
until
30
June
2011
to
help
with
the
transfer
of
duties.
(Zawya
Dow
Jones)
Free
zones
trade
grew
23%
in
2010
The
total
trade
in
the
UAE’s
free
zones
and
markets
grew
23%
Y-‐o-‐Y
to
AED325.8
billion
in
2010,
of
which
imports
accounted
for
AED201.4
billion,
while
exports
and
re-‐exports
were
AED151.4
billion,
according
to
data
released
by
the
Federal
Customs
Authority
(FCA).
Total
UAE
trade
(non-‐oil
foreign
trade
and
free
zones
trade)
amounted
to
nearly
AED1.1
trillion
in
2010,
of
which
imports
were
AED754.3
billion,
and
exports
and
re-‐exports
were
AED352.8
billion.
(Gulf
News)
The
Central
Bank
of
the
UAE
to
issue
new
mortgage
rules
The
Central
Bank
of
the
UAE
is
planning
to
issue
new
rules
to
regulate
mortgage
lending
by
banks
within
an
overall
banking
reform
process
that
saw
new
a
personal
lending
law
introduced
in
May
2011.
The
central
bank
discussed
the
rules
with
banks
at
a
meeting
on
18
May
2011,
but
gave
no
details
of
the
rules,
Al
Khaleej
reported.
(Zawya
Dow
Jones)
Kuwait
News
Al
Ahli
Bank
of
Kuwait
gets
go-ahead
to
extend
date
for
share
buy-back
or
resale
Al
Ahli
Bank
of
Kuwait
(ABK)
[ABKK.KW]
said
that
the
Central
Bank
of
Kuwait
has
approved
its
request
to
extend
the
buy-‐back
or
resell
programme
of
up
to
10%
of
its
shares
for
another
six
months.
The
new
deadline
will
expire
on
12
December
2011.
(Zawya
Dow
Jones)
Qatar
News
QPI
signs
MOU
with
Maersk
Oil
for
global
oil
exploration
Qatar
Petroleum
International
(QPI),
Qatar
Petroleum’s
(QP)
international
arm,
announced
that
it
has
signed
a
memorandum
of
understanding
(MOU)
with
Maersk
Oil
for
global
oil
exploration,
Qatar
News
agency
reported.
“The
new
MOU
will
allow
the
two
companies
to
explore
new
development
opportunities
in
oil
operations
and
to
enhance
their
oil
investments
portfolios
at
the
international
level”,
QPI’s
CEO,
Nasser
Al-‐Jaidah,
was
quoted
as
saying.
(Qatar
News
Agency)
Barwa
Bank
in
talks
with
local
conventional
banks
following
QCB
move
Barwa
Bank
announced
that
it
is
in
talks
with
local
conventional
banks
following
the
Qatar
Central
Bank’s
(QCB)
decision
to
tighten
Islamic
finance
regulations,
The
Gulf
Times
reported.
“We
have
approached
some
of
the
conventional
banks,
though
(we)
are
talking
about
much
more
than
buying
their
assets.
It
is
more
about
building
our
business
than
an
asset
purchase
opportunity,”
Barwa
Bank’s
CEO
Steve
Troop,
was
quoted
as
saying.
(The
Gulf
Times)
Cosmo
Oil
and
Sojitz
start
output
from
Qatar
oil
field
Cosmo
Oil,
Japan’s
fourth
largest
oil
refiner,
and
Sojitz
announced
that
they
have
started
commercial
output
from
a
new
oil
field
in
A-‐Structure
South
of
the
offshore
Block
1
in
south-‐eastern
Qatar,
Reuters
reported.
The
two
firms
said
that
production
started
on
27
April
2011
and
reached
3,000
barrels
per
day,
increasing
the
venture’s
total
crude
output
in
Qatar
to
around
9,000
barrels
per
day.
Cosmo
Oil’s
75%-‐owned
joint
venture
with
Japanese
trading
house
Sojitz
had
been
developing
the
field
under
a
production-‐sharing
pact
with
Qatar.
(Reuters,
Gulf
Base)
EFG
Hermes
Research
Union
National
Bank
(UNB)
-
A
Value
Play,
Fundamentals
Not
Yet
Priced
In;
Initiate
with
Buy
-
Initiation
of
Coverage
-
19
May
2011
Initiate
with
FV
of
AED5.10/Share,
Implying
44%
Upside
Potential;
Buy:
With
a
well-‐capitalised
balance
sheet,
stable
asset
quality
and
low
net
interest
spread
compression
risk,
UNB
is
a
value
play
at
the
current
price,
in
our
view.
We
initiate
coverage
with
a
Buy
rating,
as
our
fair
value
(FV)
of
AED5.10/share
implies
44%
upside
potential.
The
stock
is
currently
trading
at
an
estimated
2011
P/BV
of
0.8x,
which
does
not
reflect
UNB’s
fundamentals,
we
believe.
Our
FV
implies
an
estimated
2011
P/BV
of
1.2x,
which
is
justified
by
an
estimated
normalised
ROE
level
of
15%,
in
our
view.
We
expect
UNB’s
ROE
to
normalise
to
15%
by
2012
after
building
conservative
provisions
into
our
2011
forecast,
which
keeps
ROE
down
at
14%.
A
pickup
in
government
spending
on
infrastructure
in
Abu
Dhabi
from
2Q2011
and
a
decline
in
funding
costs
on
the
back
of
improved
system
liquidity
are
potential
catalysts
and
pose
upside
risks
to
our
FV.
Strongest
Asset
Quality
in
Our
UAE
Coverage:
With
an
NPL
ratio
(ex-‐Dubai
World)
of
1.4%
and
NPL
coverage
of
130%,
UNB
has
the
best
asset
quality
metrics
within
our
UAE
coverage,
in
our
opinion.
Although
the
trend
in
1Q2011
indicates
that
asset
quality
is
stable,
we
forecast
UNB’s
NPL
ratio
to
scale
up
to
2.3%
in
2011
on
our
concerns
over
UAE’s
real
estate
sector.
Going
forward,
provisions
are
expected
to
lean
more
towards
the
general
provisions
category,
as
the
bank
builds
up
its
general
provisions
reserve,
which
currently
stands
at
0.78%
of
credit
risk-‐weighted
assets.
Liquid
Balance
Sheet;
Nominal
Exposure
to
Egypt:
UNB
maintains
a
very
liquid
balance
sheet,
with
liquid
assets
exceeding
20%
of
total
assets.
However,
this
liquidity
comes
at
a
cost;
we
estimate
the
bank
can
add
AED60
million
to
net
interest
income
by
letting
go
of
this
liquidity
buffer.
UNB
Egypt
remains
a
small
component
of
the
UNB’s
balance
sheet,
with
assets
totalling
AED2.4
billion,
or
2.8%
of
UNB’s
assets.
(Murad
Ansari,
Shabbir
Malik)
Qatar
Banking
Sector
Flash
Note
-
April
2011
Sector
Trends:
Public
Sector
Lending
Accelerates;
Deposit
Growth
Strong
-
19
May
2011
System
Loan
Growth
Accelerates
on
Stronger
Public
Sector
Credit:
Total
lending
grew
12%
Y-‐o-‐Y
and
1.25%
M-‐ o-‐M
in
April
2011,
the
strongest
monthly
growth
this
year.
Lending
to
the
public
sector
was
strong
at
3.6%
M-‐o-‐ M,
reversing
the
trend
of
the
past
two
months,
when
public
lending
contracted.
On
a
Y-‐o-‐Y
basis,
public
credit
grew
4.5%.
These
growth
rates
seem
low
when
seen
in
the
context
of
strong
government
spending,
and,
in
our
view,
is
to
a
large
extent
explained
by
a
strong
comparable
in
2010,
when
public
sector
credit
was
growing
at
average
rates
of
above
100%
Y-‐o-‐Y.
We
expect
an
acceleration
in
public
sector
loan
growth
in
the
coming
months,
with
a
strong
outlook
for
infrastructure
and
construction
projects
awards.
Private
Sector
Credit
Gradually
Picking
Up:
Lending
to
the
private
sector
increased
moderately
in
April
by
0.3%
M-‐o-‐M,
but
this
follows
two
months
of
solid
expansion.
On
a
Y-‐o-‐Y
basis,
private
sector
loan
growth
was
15.5%
Y-‐o-‐Y
in
April
compared
to
an
average
growth
of
6%
Y-‐o-‐Y
in
2010.
We
believe
that
public
spending
should
translate
into
higher
credit
demand
by
the
private
sector
for
the
remainder
of
2011,
despite
an
expected
slowdown
in
retail
lending
following
stricter
regulations
issued
by
the
Qatar
Central
Bank
in
April.
Improvement
in
Balance
Sheet
Liquidity
on
Strong
Deposit
Growth:
Deposits
grew
8.4%
M-‐o-‐M,
driven
by
a
strong
increase
in
corporate
and
in
foreign
currency
deposits.
Balance
sheet
liquidity
therefore
improved
with
the
loans-‐to-‐deposit
ratio
falling
to
95%
in
April
2011
from
102%
in
March
2011.
On
a
Y-‐o-‐Y
basis,
deposits
grew
22%
Y-‐o-‐Y,
despite
a
decline
in
non-‐resident
deposits,
following
the
reduction
in
deposit
rates
since
the
beginning
of
2011,
which
has
resulted
in
deposit
rates
paid
by
Qatari
banks
being
close
to
deposit
rates
in
the
rest
of
the
GCC
region.
QNB
and
CBQ
Remain
Our
Top
Picks
We
believe
QNB
offers
one
of
the
strongest
growth
outlooks
in
the
MENA
region,
and
this
is
reflected,
in
our
view,
in
justified
premium
valuations
versus
other
Qatari
banks.
CBQ’s
shares
have
lost
20%
since
the
beginning
of
2011
and
we
believe
offer
good
value
at
just
1.4x
estimated
2011
P/BV.
A
key
catalyst
for
a
re-‐rating
of
the
stock
will
be,
in
our
view,
the
potential
increase
in
foreign
ownership
limits
in
Qatar
(currently
25%
of
the
free
float),
which
could
lead
to
Qatar’s
classification
as
an
emerging
market
by
MSCI
(announcement
on
21
June
2011).
(Elena
Sanchez-‐Cabezudo)
DP
World
(DPW)
-
Adjusting
FV
for
Reverse
Stock
Split;
Lowering
Rating
to
Neutral
-
19
May
2011
Adjusting
FV
for
Reverse
Stock
Split:
We
adjust
our
fair
value
(FV)
for
DP
World
to
USD15.00/share
from
USD0.75/share
to
reflect
the
1:20
reverse
stock
split
that
was
approved
by
shareholders
at
the
company’s
AGM
held
on
11
May
2011.
Following
the
reverse
stock
split,
DP
World’s
total
number
of
shares
outstanding
decreased
to
830
million
from
16,600
million.
The
ex-‐date
for
the
reverse
stock
split
was
19
May
2011.
Downgrade
to
Neutral
from
Buy:
DP
World’s
shares
have
rallied
by
22%
since
March
and
our
adjusted
FV
now
offers
a
limited
upside
potential
of
only
8%
from
the
current
share
price.
Therefore,
we
downgrade
our
rating
to
Neutral
from
Buy.
(Redwan
Ahmed)
Raysut
Cement
Company
-
Near-Term
Concerns
Priced
in,
Upgrading
to
Neutral
-
Company
Note
-
19
May
2011
Upgrade
to
Neutral
after
Share
Price
Fall;
Lower
FV
on
Risk
Premium:
We
lower
our
fair
value
(FV)
for
Raysut
Cement
(RCC)
to
OMR0.979/share
from
OMR1.018/share,
as
we
increase
our
risk
premium
by
100
bps
to
account
for
RCC’s
increased
capacity
built-‐up
in
a
highly
oversupplied
cement
market
and
increased
debt
burden.
We
also
adjust
our
earnings
model
to
incorporate
newly
acquired
Pioneer
Cement;
however,
this
has
a
limited
impact
on
our
DCF
valuation,
as
increased
operating
profits
are
offset
by
increased
debt.
RCC’s
stock
has
fallen
more
than
13.7%
YTD
and
our
new
FV
implies
7%
downside
potential;
we
upgrade
our
rating
to
Neutral
from
Sell.
We
believe
the
valuation
gap
between
Oman
Cement
(OCC)
[Price:
OMR0.0.563,
FV:
OMR0.614,
Rating:
Neutral]
and
RCC
has
narrowed
with
RCC’s
shares
trading
at
an
estimated
EV/tonne
of
USD193,
slightly
above
OCC’s
EV/tonne
of
USD175.
Raise
our
Operating
Profit
Estimate
on
Higher
Volume
Sales:
We
increase
our
sales
and
operating
profit
estimates
for
RCC
by
41.5%
and
31.4%,
respectively,
(see
Figure:
5)
reflecting
higher
revenues
from
increased
volume
sales.
With
the
acquisition
of
Pioneer
Cement,
RCC’s
volume
sales
are
expected
to
increase
33%
Y-‐o-‐Y,
while
revenues
are
expected
to
increase
22%
Y-‐o-‐Y
in
2011.
However,
higher
production
costs
and
lower
selling
prices
(see
Figure:
3&4)
are
likely
to
result
in
a
lower
gross
margin
for
the
group.
We
expect
gross
and
operating
margins
to
contract
by
900
bps
and
660
bps
Y-‐o-‐Y,
respectively,
in
2011.
Pioneer
Cement
Acquisition
not
Earnings
Accretive;
Lower
Dividends:
Despite
higher
expected
sales,
we
believe
Pioneer
Cement
acquisition
is
not
earnings
accretive
in
2011,
due
to
increased
interest
expenses.
We
estimate
interest
expenses
of
OMR2.8
million
in
2011,
up
from
OMR0.01
million
in
2010.
Our
2011
net
income
estimate
is
now
2%
below
our
previous
OMR18
million
estimate.
RCC’s
net
debt/equity
ratio
increased
to
0.6x
from
0.1x,
while
debt
repayment
commitments
are
estimated
to
be
c50%
of
our
2011-‐2012
free
cash
flow
estimates.
As
a
result,
we
expect
the
dividend
payout
to
be
50%
going
forward
compared
to
97%
in
2010.
(Gigi
Tharian
Varghese,
Ahmed
Gad)
[Note
–
EFG
Hermes
is
not
responsible
for
the
accuracy
of
news
items
taken
from
other
media.]
_________________________________________________________________________________________________________________
Our
investment
recommendations
take
into
account
both
risk
and
expected
return.
We
base
our
fair
value
estimate
on
a
fundamental
analysis
of
the
company’s
future
prospects,
after
having
taken
perceived
risk
into
consideration.
We
have
conducted
extensive
research
to
arrive
at
our
investment
recommendations
and
fair
value
estimates
for
the
company
or
companies
mentioned
in
this
report.
Although
the
information
in
this
report
has
been
obtained
from
sources
that
EFG
Hermes
believes
to
be
reliable,
we
do
not
guarantee
its
accuracy,
and
such
information
may
be
condensed
or
incomplete.
Readers
should
understand
that
financial
projections,
fair
value
estimates
and
statements
regarding
future
prospects
may
not
be
realized.
All
opinions
and
estimates
included
in
this
report
constitute
our
judgment
as
of
this
date
and
are
subject
to
change
without
notice.
This
research
report
is
prepared
for
general
circulation
and
is
intended
for
general
information
purposes
only.
It
is
not
intended
as
an
offer
or
solicitation
with
respect
to
the
purchase
or
sale
of
any
security.
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is
not
tailored
to
the
specific
investment
objectives,
financial
situation
or
needs
of
any
specific
person
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may
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report.
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financial
guidance
when
determining
whether
an
investment
is
appropriate
to
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