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22 June 2010


(Regulated by the DFSA)


Hong Kong (Registered Office) Dubai (Head Office) Abu Dhabi (Branch) Thailand

23rd Floor, Office No. 909, 9 Floor, Building No. 163, C/o The Brooker Group Plc.
Tung Hip Commercial Building Liberty House, DIFC, Electra Street, 26th Floor, The Trendy Building
244 Des Voeux Road, Sheikh Zayed Rd, Opp. ADCB Bank, 10/190-193 Soi Sukhumvit
Central, Dubai, U.A.E. Abu Dhabi, 13 Sukhumvit Rd., Klongtoey Nua,,
Hong Kong P.O. Box 122723 U.A.E. Wattana, Bangkok 10110, Thailand

Tel: +852 2545-1518 Tel: +971 4 449 6540 Tel: +66 2 168 7114
Fax: +852 2542-4060 Fax: +971 4 447 4031 Fax: +66 2 168 7111-2

MAC CAPITAL LIMITED MAC Capital - Briefing Notes - June 2010





2.1 Regional Groupings 2
2.2 Regional Map 2
2.3 Ranking in the Regional Markets 3


3.1 The DFM 4
3.2 The ADX 4
3.3 Recent IPO's on the DFM and ADX 5
3.4 Regional listings and listings on the ADX and DFM 6
3.5 Comparison of DFM and ADX 6
3.6 Foreign companies may also have a dual listing on the DFM and ADX 7
3.7 Tax and Trading 7
3.8 What else will boost the DFM and ADX 7


4.1 The DIFC is a new financial centre in Dubai 8
4.2 Legal Structure 8
4.3 The formation of the NASDAQ DUBAI 8
4.4 Advantages 9
4.5 Taxation 10
4.6 Recent listings and activity 10
4.7 The World's largest Sukuk Market 11
4.8 Size of the NASDAQ DUBAI Market Today 11
4.9 Trading volume by counters 12
4.10 NASDAQ DUBAI to become a more retail market 12



6.0 M & A ACTIVITY 14






I Major Islamic Financial Products 20
II Property and Property Ownership in the Region 21
III Who is the MAC Group? 23

MAC CAPITAL LIMITED MAC Capital - Briefing Notes - June 2010



The Region
• “Between the international financial centers of Europe and South East Asia lies a region of 2.1
billion people and a combined economy worth US$ 1.8 trillion in terms of GDP, growing at an
annual rate in excess of 5 per cent. Yet this vast region, stretching from the Northern tip of
North and Eastern Africa, the Levant (East Mediterranean) the Caspian, the Indian
Subcontinent and the GCC States, has not had, to date, a world-class financial centre”---
Brochure, DIFC / Dubai International Financial Centre.
• An oil boom has transformed the once illiquid bourses of the World’s top energy exporters,
taking total market capitalization in Saudi Arabia, Kuwait, Oman, the United Arab Emirates,
Bahrain and Qatar to US$ 695 billion in 2009 (high of over US$ 1,000 billion) from US$ 135
billion in 2001.
• The six Arab Gulf Co-operation Council (GCC) states are planning to invest nearly $109 billion
(Dh400 billion) on rail projects and almost $11 billion on road expansion projects during the
next nine years as a way to combat traffic congestion. It was estimated that the Gulf Arab
railway network alone will cost $20 billion to $25 billion. The 1,940km railway will connect the
six Gulf States each of which would contribute a share of the start-up capital.
• The Middle East healthcare sector is expected to be worth USD 60 billion by 2025.

The U.A.E.
• The surge last year allowed U.A.E. to maintain status as one of the richest nations in terms of
per capital GDP income, which peaked at AED195,000. The real GDP growth rate in 2007 and
2008 was 6 per cent and 7.4 per cent, respectively.
• U.A.E.’s population nearly doubled in the past 20 years as the country recorded one of the
World’s highest growth rates, averaging 5.7 per cent and Dubai being the most populated
emirate in the U.A.E. Despite the high population increase, the U.A.E. has maintained its
position as having one of the lowest unemployment rates in the developing nations, standing
at around four per cent last year.
• U.A.E. has the fourth largest confirmed reserves of crude oil among Arab countries, accounting
for 14.6 per cent of the Arab World’s total --- Unified Arab Economic Report 2009.
• A total of US$ 26.7 billion has been or will soon be spent on air and sea projects in the U.A.E.
• A further US$ 40 billion will be spent on other roads and infrastructure to expand the U.A.E.
• On a scale of zero to 100 U.A.E. was received an Institutional Investor Credit Rating of 76.5 as
on 30th September, 2009 --- Research, Institutional Investor, September 2009 edition.
• U.A.E. was ranked in the Top 20 Emerging markets for 2010 (in terms of real estate
investment) (See Appendix II).
• The U.A.E. is the world’s third largest per capita water consumer after the U.S. and Canada.
• In the U.A.E., the cost of buyer one litre of petrol and one litre of water is almost the same.
• U.A.E. also one of the major consumers of electricity. Air conditioning is one of the main power
consumers. U.A.E.’s electricity is estimated to require around $80 billion in investment over
the next 8 years to meet increasing demand. The government is planning to expand its
installed capacity of 9,500 megawatts by more than 50% over the next 10 years.

Abu Dhabi
• Abu Dhabi – the Federal Cabinet announced in September 2009 that was considering allowing
100% foreign ownership in industries established in the U.A.E. Many free zones in Dubai
already allow this.
• Abu Dhabi’s two leading Sovereign Wealth Funds (ADIA and ADIC) had around USD 425 billion
in December 2009.
• Fitch affirms Abu Dhabi at ‘AA’ with a stable outlook as of 16th September, 2009 --- Zawya
• Both the federal and Abu Dhabi governments are rated Aa2 with a stable outlook by Moody’s.
• Abu Dhabi holds 9 per cent of the World’s proven oil reserves (98.2 billion barrels) and around
5 per cent of the World’s natural gas (5.8 trillion cubic metres).

• Abu Dhabi’s sovereign wealth fund, Abu Dhabi Investment Authority (ADIA), currently
estimated at US$ 875 billion, is the World’s wealthiest sovereign fund in terms of total assets.

• Dubai to become world’s fourth biggest aviation hub--Dubai alone has spent US$ 17.2 billion
upgrading and creating its two airports.
- US$ 7.2 billion on expanding the existing Dubai International Airport (60 million capacity
to be upgraded to 75 million by 2010)
- US$ 10 billion on the Dubai World Central – Al Maktoum International Airport (due to open
in June 2010 with an additional 160 million passengers per annum capacity and cargo
capacity of 12 million tonnes)”. When opened in 2010, it will be the World’s largest airport.
• Dubai to become third busiest air hub by 2011, coming closer to overtaking Frankfurt, Hong
Kong and Amsterdam airports by the end of this year – according to Centre for Asia – Pacific
Aviation (Capa).
• Jebel Ali Port is the World’s largest man-made harbour and the biggest port in the Middle East.
The area is home to 5,500 companies from 120 countries.
• Three years ago, Sheikh Mohammad promised that Dubai’s sky train would be functional by 9th
September, 2009. It was and has carried 1.7 million passengers in the first month of
operations (cost US$ 7.6 billion).
• The DIFC was ranked the World’s 7th most competitive financial hub in December, 2009.
• Despite reports to the contrary, Dubai’s population actually grew by 7.6% in 2009 to reach
1.77 million.
• Dubai’s electricity and power demand will double by 2015.
• The Dubai International Airport saw its year-on-year April passenger numbers rise by 13.9% to
3,745,016, inspite of the volcanic ash cloud that grounded flights around the world for six days
during the month.


2.1 Regional Groupings

The Gulf Co-operation Council (“GCC”) was created on 25th May, 1981 and comprised of
six member states, namely; Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the U.A.E.

Non-GCC Gulf is composed of Iran, Iraq and Yemen. Other material financial markets are
Egypt and Morocco.

2.2 Regional Map



2.3 Ranking in the Regional Markets

The U.A.E. (ADX and DFM combined) ranks 2nd in terms of market capitalization in the GCC;

31st December, 31st December, 31st December, 31st May,

2007 2008 2009 2010
Listed Market Traded Market Traded Market Traded Market Traded
Country Com- Capitali Averag Capitali Averag Capitali Averag Capitaliz Average
panies zation e Daily zation e Daily zation e Daily ation Daily
(US$ Value Value Value Value
(US$ (US$ (US$
bn) (US$ bn) (US$ bn) (US$ bn) (US$
mn) mn) mn) mn)
Bahrain 43 27 4 16 2 20 9 17 2
Kuwait 212 134 513 96 125 121 497 108 226
Oman **61 27 27 17 24 15 36 16 15
Qatar 43 96 118 88 102 77 192 100 80
Saudi Arabia 139 519 2,750 319 1,348 247 2,086 319 933
U.A.E. * 132 264 1,016 140 265 132 592 129 153
Total 630 1,067 4,428 676 1,866 612 3,412 690 1,409
At the end of 2008, the non-GCC borses of Egypt (USD 80.97 billion market cap.), Jordan (USD 36.65 billion market cap.),
Lebanon (USD 14.8 billion market cap.) and Morocco (USD 60 billion market cap.) were also of significance.
(* ADX and DFM combined--- this does not include the NASDAQ DUBAI)
(** Stocks listed on Muscat Securities Market)
Source: Stock Exchange Websites, KAMCO Research and MAC Research.

Trailing Valuations & Growth of GCC Markets

Reported Earnings (times)

Country Performance P/E P/E P/E P/E P/E P/B Dividend
of Index FY 06 FY 07 FY 08 FY 09 31 May 31 May Yield %
YTD (%) 2010* 2010* 31 May
Abu Dhabi 14.8 20.1 16.3 6.0 9.4 8.8 1.09 3.4

Dubai 10.2 18.8 15.6 5.8 8.8 14.3 0.99 2.2

Saudi Arabia 27.5 19.0 18.1 10.2 17.8 18.2 1.93 2.8
Qatar 1.1 26.6 20.4 9.2 13.0 10.8 1.98 3.8
Kuwait (10.0) 19.1 12.0 **7.8 13.3 22.0 1.35 3.8
Oman 17.1 21.9 16.2 7.7 10.4 11.8 1.81 4.2
Bahrain (19.2) 12.0 10.1 5.4 8.9 19.3 1.08 3.6
(*P/E is based on the net profit fot the TTM Q1-10 and month-end market capitalization, P/B is based on 31 March 2010 equity
figures and yield is based on FY 2009 cash dividends and month-end market cap. Excludes financial results for 30 companies that
reported highest losses while calculating P/E for KSE)
(**Excludes financial results of 10 companies that reported highest losses)

Source: Markaz “Daily Morning Brief”; United Securities Yearly Report; Global Research; KAMCO Research; Bloomberg & MAC

GCC Member States

2009 / 2010 Est.

GCC Members Population ('000) GDP per capita (US$) GDP (US$ billions)
(July 2010 estimates) (2009 estimates) (2009 estimates)
Bahrain 738 38,400 27.99
Kuwait 2,789 54,100 145.70
Oman 2,967 23,900 69.48
Qatar 841 121,700 101.40
Saudi Arabia 29,207 20,400 585.80
U.A.E. 4,976 42,000 201.40
Total 41,518 1,131.77
Source: CIA World Fact Book, U.S. Census Bureau




3.1 The DFM

This is Dubai’s local stock market. Formed in March 2000, the Dubai Financial Market
(“DFM”) is one of the two local stock markets in the U.A.E.
Recent DFM statistics include;
2004 2005 2006 2007 2008 2009 Q12010
The DFM General Index (% change) 152 195 -44 44 -72 10 2
Market Capitalisation (US$ Billions) 38 112 88 139 63 58 59
Total Market Capitalisation(% change) 1,177 694 -14 61 -54 -8 2
No. Shares Traded (% change) 1,470 342 75 158 -27 45 *-38
No. of companies listed at period end 29 46 52 56 64 65 66
No. of trading days 294 299 281 **252 246 250 64
Average Daily Market Value ( AED) millions 171 1,354 1,236 1,503 1,252 694 453
Average Daily Market Value (USD) millions 47 371 339 412 341 189 123
(Source: DFM website and MAC Research)
(*Compared to Q1 2009)
(**Trading changed from 6 to 5 days a week)

Review of recent market trends

• DFM is still the most liquid market in the U.A.E. The overall market performance
increased by 2.21% to reach 1843.47 points by the end of March 2010. The total market
capitalization was US$ 59 billion as on 31st March, 2010, YTD increased by 2%.
• However, the average number of shares traded decreased by 38%. In terms of sectoral
contribution to trading volumes and value, the real estate ranked first, followed by the
Investment and financial services sector and thereafter the banking & transport sector.
• During 2009, Dubai market was amongst the best performing markets. This could be due
to better than expected performance of the real estate sector. Still, the emirate suffered
from slumping real estate market, but no worse than what was expected
• The number of GCC companies seeking dual listing on the DFM is also expected to follow
the regional interest seen recently.

3.2 The ADX

The U.A.E.'s Capital and another major financial centre, Abu Dhabi, also has an exchange,
the Abu Dhabi Securities Exchange (the “ADX”).
Recent ADX statistics include;
2004 2005 2006 2007 2008 2009 Q1 2010
The ADX General Index (% change) 75 69 -42 51 -47 15 6
Market Capitalisation (US$ Billions) 56 139 81 124 69 82 84
Total Market Capitalisation (% change) 343 541 -33 50 -44 19 2
No. Shares Traded (% change) 303 773 37 361 -4 -25 *-15
No. of companies listed at period end 35 59 60 64 65 67 66
No. of trading days 294 299 281 252 247 250 64
Average Daily Market Value ( AED) millions 52 345 623 695 932 281 161
Average Daily Market Value ( USD) millions 15 94 170 190 253 76 44
(Source: Abu Dhabi Exchange website and MAC Research)
(*Compared to Q1 2009)

Review of recent market trends:

• ADX serves the domestic cash equity market, had 66 listed companies with a market
capitalisation of USD 84.4 billion as at 31st March, 2010. Generally, its daily market
volumes are lower than the DFM.
• Aldar and Sorouh were the most widely traded stocks in terms of both value and
volume. Abu Dhabi witnessed 6.0% increase in the same period, the index closed at
2,909 points.
• Unlike Dubai market, ADX was less volatile, and ADX general index was the only one
that didn’t decline in any of the quarters ended of 2009. Besides investors were not
concerned about Abu Dhabi government solvency. In fact, rumors were spread that
Abu Dhabi could rescue Dubai from its creditors.



3.3 Recent IPO’s on the DFM and ADX

Historically, IPO’s in Dubai have been exceptionally well received.

• Dana Gas (September 2005), saw US$ 78.5 billion received to subscribe for only US$
561 million targeted IPO funds. Individuals and institutions from 87 countries applied,
demonstrating the demand in the market. This issue was over-subscribed 140 times.
• This trend has continued, despite market falls, with the DFM itself conducting an IPO in
November 2006. This saw AED 201.5 billion (US$ 54.9 billion) raised for a AED 1.6
billion (US$ 435 million) IPO, 132 times oversubscribed.
• In July 2008 an IPO was opened for Drake and Scull which was 55% from its capital
opened for IPO AED 1.19 billion ( USD 328 million). It was oversubscribed 101
• Dar Al Takaful listed on DFM is the best performing IPO in the past 12 months, had seen
a 198 per cent appreciation since flotation (August 4, 2008).
• Obviously, the recent IPO market is far less active due to the recent international
financial crisis.

IPO’s on the DFM include;

Company Sector Date IPO Funds Over Total Funds

raised subscription Actually
US$ Million (Times) Raised
(USD million)
Air Arabia Transport Mar 2007 699 1.5 1,049
Ajman Bank Financial Services June 2008 153 85.0 12,985
Amlak Finance PJSC Financial Services Aug 2004 112 33.0 3,696
Arab Technical Constr Co. Construction Aug 2004 62 40.0 2,480
Dar Al Takaful Financial Services Aug 2008 15.5 89.6 1,389
DFM Financial Services Dec 2006 435 132.0 57,420
Deyaar Development Real Estate May 2007 865 10.0 8,650
Drake and Scull Constructions Mar 2009 332.6 101.5 33,759
Du Telecommunications Mar 2006 660 167.0 110,220
Gulf Navigation Transport Aug 2006 250 3.4 850
Takaful Al Emarat Insurance July 2008 23.1 51.0 1,178
Tamweel Financial Services Apr 2006 150 484.0 72,600
Source: MAC Research, Company Press Releases.

Abu Dhabi has also performed well in the past. IPO’s on the ADX include;

Company Sector Date Funds Over Total Funds

raised subscription Actually
US$ Million (times) Raised
(USD million)
Aabar Petroleum Oil & Gas May 2005 135 800.0 108,000
Aldar Properties Real estate Dec 2005 225 448.0 100,800
Arab International Logistics Logistics 2005 150 80.0 12,000
Arkaan Building Materials Construction May 2006 233 6.0 1,361
Dana Gas Oil & Gas Dec 2005 561 140.0 78,540
Emirates and Sudan Bank Financial Services 2005 29 8.0 232
Emirates Foodstuffs and Food 2005 58 8.0 464
Mineral Water
Green Crescent Insurance Co. Insurance Mar 2008 38.4 76.9 2,954
Islamic Arab Insurance Insurance 2005 54 8.0 432
Methaq Takaful Insurance Insurance May 2008 23.1 43.6 1,003
Surouh Real Estate Real estate Jun 2005 374 176.0 65,824
Source: MAC Research, Company Press Releases.



3.4 Regional Listings and Listings on ADX and DFM

• New regulations state that all GCC citizens and corporates will be treated as “local”
for the purposes of investing and listing on the DFM and ADX (historically, only
U.A.E. Nationals qualified as local investors and only companies where U.A.E.
Nationals held the majority, could list on the DFM and ADX).

• This move should greatly increase the volumes on the local markets, with significant
funds possibly flowing from Bahrain, Kuwait, Oman, Qatar and Saudi Arabia which
will give rise to a total investor base increase of 4.2 million U.A.E. residents (of
which only around 1.5 million who qualify as local) to over 39 million GCC residents.

• In 2006, six Kuwaiti companies, one Bahraini firm and one Qatari Company have
taken advantage of this regulation change, listing their shares on the DFM. The ADX
saw five foreign companies list in 2006.

• In 2008, the DFM listed nine companies while the ADX listed just one company in

• Stock markets of Abu Dhabi, Dubai and Doha are responsible for one listing each
while Bahrain, Oman and Kuwait have not seen any primary listings this year.

• With nine listings, Saudi Arabia, the Arab World's largest economy, has been
responsible for the majority of GCC IPOs issued during the first nine months of 2009.
The Saudi bourse was also responsible for the bulk of listings in 2008, accounting for
16 of the 28 Regional IPOs.

3.5 Comparison of the DFM and ADX

Criteria DFM ADX

Legal shape Public Joint Stock Company Public Corporation
No of board of directors Seven Seven
Main location and No branches, only the main location Four branches, beside the main Location
Capital as of AED 8.0 billion NA
Total assets as of AED 8,671.8 million NA
Shareholders 80% Borse Dubai Limited, 20% Free Wholly owned by Abu Dhabi Government
Total trade value for FY AED 173.5 billion AED 70.17 billion
Market capitalization as AED 213.4 billion AED 252.7 billion
of 31/12/2009
Trading session hours 10 am to 02.00 pm 10 am to 2.00 pm
Licensed brokers of 99 brokers 99 brokers
October 2009
Sectors classification: Nine sectors as follows: Nine – weighted index, market capitalization
1 Banks 1 banks and financial services
2 Investment and financial services 2 Construction
3 Insurance 3 Consumer
4 Real estate and construction 4 Energy
5 Transportation 5 Healthcare
6 Materials 6 Industrial
7 Consumer staples 7. Insurance
8 Telecommunication 8 Real estate
9 Utilities 9 Telecommunication
General index Value – weighted Index, but market Value – weighted index, market capitalization
capitalization of consultants adjusted is calculated as the whole number of
by free float and Rated factor. The outstanding shares without any adjustments.
Index includes active listed The index includes all listed companies except



Criteria DFM ADX

companies and excludes no active foreign companies.
and foreign companies.
Price ceiling 18 companies are trade at a price All listed companies are traded at a price
range of 15% up and 10% down per range 10% up and 10% down per trading
trading sessions, while the other session
companies are trade at a price range
of 5% up or down per trading
Closing price Calculated as the price at the trading Calculated as the price average during the
session trading session
Trading system X-stream system Now, ADX uses the Horizon System, but on
the way to replace it by the X-stream System.
The Clearance, The Equator System The Equator System
settlement, depository
Settlement period T+2 basis T+2 basis
Clearance, settlement A division of DFM DCCC is the clearing house for ADX
Islamic Compliance Yes * No
Related Exchanges Nasdaq Dubai None.

(* All income on trading of non – compliant stocks (e.g. commercial banks) is donated to charity).

3.6 Foreign companies may also have a dual listing on the DFM and ADX.

Recent meetings with the Emirates Securities and Commodities Authorities (“ESCA”) has
confirmed that any company listed any where in the World may qualify to list on the DFM or
ADX. (i.e. Secondary Listings). Primary listings of non-GCC companies are not yet permitted
on the ADX and the DFM. They are permitted to list on the NASDAQ Dubai.

3.7 Tax and trading.

The DFM and ADX operates outside the Dubai International Financial Centre (“DIFC”) but
companies trading on the stock exchanges still enjoy many similar tax advantages and
unrestricted repatriation of funds. Foreign ownership restrictions do however apply to
investments in the ADX and DFM, varying by industry and the respective corporate

3.8 What else will boost the DFM and ADX

There are a number of key drivers which will insure that the DFM and ADX will grow rapidly,
U.A.E., namely;

• New regulations proposed under the new Companies Act, are expected to soon
permit companies to sell only a minimum of 30 per cent of their enlarged issued
capital under an IPO (currently 55 per cent).
• Regulations are currently being adopted to enable IPO pricing to relate more of the
fundamental value of the company (currently based on par value).
• These changes will substantially increase the number of new issues from the family
groups (i.e. a very significant increase in IPO’s).
• The Dubai Government plans several significant new IPO’s, (such as the Emirates.
Airlines), again substantially increasing market volumes.
• The extensive surplus cash in the U.A.E. and the Region from oil revenues.
• The relatively low P.E.’s when one considers the corporate profit growth.
• Substantial population growth as imported labour, financial centers and a growing
tourism and industrialisations.




4.1 The DIFC is a new financial centre in Dubai.

The DIFC’s vision is “To be a universally recognized hub for institutional financial services
and the regional gateway for investment”

It’s a financial free zone with its own civil and commercial laws established in 2004 in the
emirate of Dubai. The DIFC has been granted authority to self-legislate in civil and
commercial areas. Companies operating in the DIFC are subject to the Companies Law.
Financial services in the DIFC are governed by the DIFC Regulatory Law No.1 of 2004, which
also governs the operation of the Dubai Financial Services Authority, a financially and
administratively independent body created by Law No (9) of 2004 issued by the Ruler of
Dubai on 13th September 2004 (the ‘‘DIFC Law’’) that acts as the independent financial
regulator in the DIFC. Legislation, rules and regulations governing companies incorporated in
the DIFC and financial activities in the DIFC are available on the websites of the DIFC and
the DFSA at and, respectively.

It aims to develop the same stature as New York, London and Hong Kong. It primarily serves
the vast region between Western Europe and East Asia.

4.2 Legal structure.

The legal structure of the DIFC is as follows;







(* Commenced operations COMPANIES
on 26th September 2005) (“ROC”)
(A Subsidiary of Borse Dubai) Corporation administered
by the DIFCA



(“DFSA”) (“DJA”)
(Independent) (Autonomous)

4.3 The formation of the NASDAQ DUBAI (earlier called DIFX)

In a demonstration of Dubai’s commitment to the expansion of its significance in the Global

Financial Markets, it established the Dubai International Financial Exchange (renamed
“NASDAQ DUBAI in” November 2008) within the DIFC on 26th September 2005. The DIFC is
a separate, autonomous zone within Dubai and is not subject to the laws of Dubai. It
features market incentives such as full foreign ownership rights for companies listing on the
NASDAQ DUBAI and companies operation and formed within the DIFC and the ability to list
companies with a market capitalization of US$ 50 million or more from anywhere in the

NASDAQ Dubai was incorporated as a limited liability company under the Companies Law on
29th September 2004, and was a wholly owned subsidiary of the DIFC Authority, a financially
and administratively independent body created by the DIFC Law. It is owned by NASDAQ
OMX (33%) and Borse Dubai (67%), but the Parties agree that DFM will acquire 100% of the

share capital of NASDAQ Dubai from Borse Dubai and NASDAQ OMX (owned as to 66.7%
and 33.3% respectively).

Dubai Financial Market, PJSC (“DFM”) has made an offer to Borse Dubai Ltd. (“Borse Dubai”)
and The NASDAQ OMX Group Inc. (“NASDAQ OMX”) enabling DFM to acquire 100% of
NASDAQ Dubai. The offer, which has been approved by Borse Dubai and NASDAQ OMX, is
valued at US$ 121 million and comprises US$ 102 Million in cash and 40 million DFM shares.
The transaction has been endorsed by DFM’s Board of Directors on 21st December, 2009 and
is subject to certain closing conditions, including the receipt of regulatory approvals. DFM will
continue to be regulated by SCA and NASDAQ Dubai will continue to be regulated by DFSA.

This transaction will bring NASDAQ OMX into the shareholder base of DFM through a minority
stake of 1% (equating to 80 million shares). Meanwhile, NASDAQ OMX will continue to allow
NASDAQ Dubai to use its brand and technology. The NASDAQ OMX stake in DFM will not
require issuance of new shares as 40 million shares will be transferred from DFM’s existing
treasury shares and the other 40 million shares will be purchased from Borse Dubai. The
group will continue to be involved in NASDAQ Dubai, and will have representation on
NASDAQ Dubai’s Board of Directors.

The total consideration for the transaction due from DFM will amount to US$ 121,304,348
and be paid as follows:
 US$ 80.8 million to be paid in cash to Borse Dubai.
 40 million shares of DFM Company with a value of US$ 20 million to be transferred to
Borse Dubai on behalf of NASDAQ OMX.
 US$ 20 million in cash to Borse Dubai against the transfer of 40 million shares from
Borse Dubai stake to NASDAQ OMX.

To date, the NASDAQ DUBAI has adopted two sets of rules: the Business Rules and the
Listing Rules. The Business Rules govern membership of the NASDAQ DUBAI, including
eligibility requirements for financial institutions, categories of membership, rights and
obligations of members and the process for membership applications. The Business Rules
also govern procedures, responsibilities and fees regarding clearing and settlement of
securities traded on the NASDAQ DUBAI. The Listing rules govern the listing of equity, debt
and other securities on the NASDAQ DUBAI, covering such areas as eligibility of issuers for
listing, the listing application process, continuing obligations following a listing and sanctions
for non-compliance with the Listing Rules. The Business Rules and the Listing rules are
available on the website of the NASDAQ DUBAI at

The NASDAQ DUBAI is governed by its board of directors, comprised of seven non- executive
directors and three standing committees: the audit and risk management committee, the
market oversight committee and the nomination remuneration committee, all of which have
formal charters.

Many leading financial institutions, both international and regional, are market participants
on NASDAQ Dubai. Among these, 30 have been admitted as Members. These institutions can
trade and/or provide securities clearing services on the exchange.

4.4 Advantages

• 100% foreign ownership.

• No tax on income or profits.
• A wide range of double tax treaties available to UAE incorporated entities.
• No restriction on foreign exchange.
• Freedom to repatriate capital and profits without restrictions.
• World-class legal and regulatory framework; and
• Access to excellent facilities and support services.
• Access to the substantial and rapidly growing regional capital flows.
• Multi-currency listings – including US dollar and UAE Dirahm.
• The ability to list any company in the world (this, recently, also applies to UAE Companies) with
a sound business, an appropriate corporate structure and a market capitalization in excess of
US$ 50 million.
• A free float of as little as 25% of issued share capital.
• A time zone which enables live trades from the US, Asian and European markets.



• The ability for companies from outside the region to list their shares on the NASDAQ DUBAI
and use their listing to tap into the large pool of investable assets in the region through equity
and / or bond financings; and
• The NASDAQ DUBAI market has developed a reputation for transparency, innovation, liquidity
and efficiency.

It is, in our view, potentially a major direct competitor to the AIM in London, the TSX
Venture Exchange in Toronto and eventually will be a major international Exchange in its
own right. The NASDAQ DUBAI is looking to the main Exchanges in London, New York and
Hong Kong as its role models.

4.5 Taxation

Unlike many “offshore” tax havens, the DIFC is a fully fledged “onshore” capital market,
comparable to Hong Kong, Singapore, London and New York.

4.6 Recent listings and activity

The exchange currently lists equities, equity derivatives, Dubai Gold Securities, structured
products, Sukuk (Islamic bonds) and conventional bonds. NASDAQ Dubai issuers are based
in countries all over the world including Australia, Bahrain, China, Germany, India, Kuwait,
Saudi Arabia, Switzerland, the UK and the US as well as the UAE. As it grows, the exchange
plans to introduce other securities such as exchange-traded funds (subject to regulatory
approval), some of which do not currently exist in the region.

As the NASDAQ DUBAI was only opened on 26th September 2005, it has not as yet seen the
sort of activity experienced on the DFM. It has however seen some interesting transactions;
• Investcom (a Lebanese telecommunication group), which raised US$ 741 million and was
8 times over subscribed. ( the company subscription was taken over and delisted from
the Exchange)
• Kingdom Hotel Investments - owned by Prince Alwaleed bin Talal, a Saudi billionaire and
reputed to be the fifth richest man in the world---- listed its shares on the NASDAQ
DUBAI on 1st March 2006. This listing clearly underpins the regional support for a
regional stock exchange of international standard, particularly when one considers that
Kingdom Hotels is head quartered in London.
• More recently the South African gold mining operation, Goldfields Limited, listed on the
• The following companies were listed on the NASDAQ DUBAI as on 31st March, 2010;
Company Country Instrument
1. Albaraka Banking Group Bahrain Ordinary Shares
2. Boulder Steel*** (delisted) Australia Ordinary Shares
3. China Security & Surveillance Tech. Inc. ** China Ordinary Shares
4. Citigold Corporation Limited*** (delisted) Australia Ordinary Shares
5. Damas International Limited U.A.E. Ordinary Shares
6. DEPA Limited U.A.E. Ordinary Shares
7. DP World Limited U.A.E. Ordinary Shares
8. Fortune Management Inc. U.S.A. Ordinary Shares
9. Gold Fields Limited South Africa ADR
10. Hikma Pharmaceuticals PLC India GDR
11. Investcom LLC* (delisted) Lebanon GDR
12. Kingdom Hotels Investments Saudi Arabia Ordinary Shares
13. Man Industries (India) Limited India GDR
14. Monarch Gold Mining Company* (delisted) Australia Ordinary Shares
15. NetSol Technologies Inc.*** United States Ordinary Shares
16. Rana Sugars* (delisted) India GDR
17. Sphere Investment *** (delisted) Australia Ordinary Shares
18. Unigold Inc Canada Ordinary Shares
19. NASDAQ OMX Group Inc.*** U.S.A. Ordinary Shares
(* Delisted) (** MAC Capital advised on the listing) (*** MAC Capital was a market maker on the stock)



• A watershed moment for the NASDAQ DUBAI has been the listing of DP World – the
largest IPO in the Middle East. In November 2007, DP World listed 23 per cent of its
stock on the NASDAQ DUBAI. Although it aimed to raise US$4.96 billion, investors
interested exceeds US$75 billion in over subscriptions. This is a crucial achievement as
it has propelled the NASDAQ DUBAI from a concept to reality. The activity surrounding
the trading of DP World has cleared many of the operational cobwebs, has improved the
systems and connectivity of the market, has introduced retail investors to the DIFC for
the first time, has attracted a number of new brokers to the market, and most
importantly, has generated a substantial amount of volume.
• In 2008, MAC Capital advised on the first China-based company to list on the NASDAQ
Dubai. It was also the first NYSE Company to list its shares on that exchange.
• Equity futures are listed on 21 individual U.A.E. companies and on the FTSE Nasdaq
Dubai U.A.E. 20 share index, which has been designed as a hedging and investment
mechanism for GCC and international investors.
• The Index rose 5 per cent from 31st December, 2009 to 1,851 as on 31st March, 2010.
• Equities trading volumes on NASDAQ Dubai rose to 1.09 billion in the first quarter of
2010, their highest quarterly level since 2007, before the start of the global economic
crisis. The Q1 2010 figure was 40 per cent higher than the fourth quarter of 2009 total
of 776 million. It was also 5 per cent up on the first quarter of 2009 level of 1.04 billion.
• Equities volumes in March 2010 reached 567 million, the highest monthly figure since
2007. The total was 76 per cent higher than the 322 million shares traded in February
2010, and 90 per cent up on the March 2009 figure of 298 million. The exchange
introduced mandatory reporting of all over the counter equities trades in September
• A total of 17,110 equity derivatives contracts traded on NASDAQ Dubai in the first
quarter of 2010, up 135 per cent from 7,292 traded in the first quarter of 2009. NASDAQ
Dubai launched its equity derivatives market in November 2008.
• NASDAQ Dubai’s equity derivatives market has won the Futures & Options World (FOW)
2009 Award for "Best Innovation by an Exchange in Product Design, Middle East."
• Dr. Nasser Al Saidi, Chief Economist of the DIFC Authority said: “Though the global crisis
has caused a decline in IPO activity in the MENA region, the stabilisation in advanced
economies and recovery in emerging Asia, the region’s main trading partner, are
encouraging the business community to revive plans for new listings. The pipeline of
IPOs and M&A deals is building up and we are likely to witness a resurgence of the
market in the coming two years.”

4.7 The World’s Largest Sukuk Market

In addition to listed equities, the listed bond market on the NASDAQ DUBAI has grown to be
the World’s largest market for Sukuks (Islamic Bonds) and hosts the World’s two largest
Sukuks, Dubai Port’s US$3.5 Billion issue and Nakheel’s US$3.52 billion Sukuk.
NASDAQ Dubai has one of the world’s largest listed Sukuk markets, with a total nominal
value of $17.3 billion.
Most recently, GE Capital, the finance arm of General Electric, listed a $500 million Sukuk on
NASDAQ Dubai on December 10. The Sukuk was the first to be issued by a major US
company and was sold to investors across the Middle East, Asia and Europe.

4.8 Size of the NASDAQ DUBAI Market

The NASDAQ Dubai’s market capitalization as at 31st March, 2010 was;

Market Value of all Market Value of all

securities listed (US$) securities listed (US$)
31st March, 2010 31st December, 2009
Equities 16,390,419,535 14,644,931,213
GDR’s and ADR’s 9,960,527,188 11,094,999,194
Bonds 6,454,925,000 6,454,925,000
Sukuks 17,186,226,157 17,186,226,157
Total 49,992,097,880 49,381,081,564
Source: NASDAQ Dubai Report



4.9 Trading Volume by Counters

Trading volume by stocks is inserted below;

Market Total Volume

Capitalization 3 months ended 31st March, 2010
Stock Name Type
31st March, 2010 No. Shares Value US$
Al Baraka Banking Group Equity 1,343,850,000 - -
China Securities &
Equity 534,253,200 - -
Damas Equity 173,114,902 3,931,178 738,773
Depa Limited Equity 442,603,043 31,689,058 19,001,143
DP World Equity 8,549,000,000 1,053,227,116 459,971,504
Fortune Management Equity 5,053,536 - -
Gold Fields ADS 8,056,101,960 - -
Hikma Pharmaceuticals GDR 1,841,070,552 - -
Kingdom Hotels Equity 817,128,000 - -
Man Industries (India) Ltd. GDR 63,354,676 - -
NASDAQ OMX Equity 4,452,821,100 22,931 1,280,057
NetSol Technologies Equity 30,829,320 - -
Unigold Inc Equity 41,766,435 - -
Total 25,739,930,407 1,088,870,283 480,991,477
Source: & Bloomberg
Citigold delisted in March, 2010; Boulder Steel delisted from the exchange in November 2009. The volume and value
traded were 5,112,808 and 324,548 respectively. In addition, the NASDAQ Dubai trades a number of derivative stocks.

4.10 NASDAQ DUBAI to become a more Retail Market

Currently a “Wholesale” market (no investor with a net worth of less than US$ 1 million), in
an effort to improve liquidity on the NASDAQ DUBAI, there are certain changes now being
• Retail clients in the UAE may now trade through a local broker which has a link to a
NASDAQ DUBAI Broker (now possible). There is no financial restriction or definition in
this regard. This is not widely known yet.
• The definition of a “retail” client was reduced to US$ 500,000 net liquid asset at the end
of June, 2008.





U.A.E. air and seaport developments as of 1st September, 2009:

Project Budget Project Budget

Project Project
status $m status $m
Abu Dhabi Airports Execution 110 DCAA – Dubai World Execution 300
Company – Abu Dhabi Central (Jebel Ali) –
Airport – Air Traffic Control Dubai Logistics City
Tower Labour Village
Abu Dhabi Airports Execution 500 DCAA – Dubai World Complete 165
Company – Abu Dhabi Central Al-Maktoum
Airport - Terminal Complex International Airport
(Central Utilities
Abu Dhabi Airports Execution 6.800 DP World – Jebel Ali Port EPC Bid 400
Company – Abu Dhabi - Expansion Offshore
Airport Expansion Island
Abu Dhabi Airports EPC Bid 1,851 DPA – Jebel Ali Port Execution 1,300
Company – Abu Dhabi Expansion
Airport – Midfield Terminal
Abu Dhabi Airports EPC Bid 600 FFZA – Logistics Park Execution 150
Company – Free Trade
Abu Dhabi Ports Company EPC Bid 2,100 Fujairah Government – Execution 100
– Khalifa Port & Industrial Expansion of Fujairah
Zone International Airport
(FIA) : Phase I & II
Abu Dhabi Ports Company Execution 381 Fujairah Government – EPC Bid 445
– Khalifa Port & Industrial Expansion of Fujairah
Zone : Onshore Civil & International Airport
Building Works (FIA): Phase III, IV & V
Aldar/TDIC – Saadiyat Execution 125 Fujairah Port Expansion Execution 200
Island – Abu Dhabi
International Airport
DCAA – Dubai Airport Execution 1,334 Jebel Ali Free Zone Execution 550
Expansion (Concourse 3) Auhtoirty – South Zone
DCAA – Dubai World Execution 7,000 Nakheel – Dubai Execution 500
Central (Al-Maktoum Maritime City
International Airport)
DCAA – Dubai World EPC Bid 120 Nakheel – EPC Bid 1,000
Central (Al-Maktoum Redevelopment of Mina
International Airport) – Rashid
helipad & Tunnel
DCAA – Dubai World Execution 600 RAK Civil Aviation Execution 100
Central (Jebel Ali) – Dubai Department – RAK
Logistics City Airport Expansion
TOTAL $ 26,731 million
Source: Zawya, News reports




Outward M&A Activity Statistics have also been staggering.

Date of Amount %
Acquirer Target Type
acquisition (US$ million) Acquired
1. Abraaj Capital Ltd Egyptian Fertiliser Co Chemicals 4-Jun-07 1410 100
2. Abraaj Capital Ltd Mediaquest Corporation Media Apr-09 n/a Minority
3. Abu Dhabi Investment AMP NZ Office Trust Office Property 19-Feb-08 157.22 19.9
4. Abu Dhabi Investment Citigroup Banking -
Authority 1-Nov-2007 7,500
5. Abu Dhabi National Energy Co PrimeWest Energy Trust Oil Company 22-Jan-08 4,481.28 100
6. Abu Dhabi National Energy Co Pioneer Natural Resources Oil Company 27-Nov-07 540 100
7. Abu Dhabi National Energy Co TAQA North Ltd Oil Company 14-Aug-07 2000 100
8. Abu Dhabi National Energy Co Fujairah Water and Electricity Utilities Apr-09 302 90
9. Addax Bank Al Zahour School Educational Mar-09 n/a LBO 100%
10. Arabtec Holding Co Target Engineering Engineering 13-Nov-07 117.67 60
11. Barwa Real Estate Co First Finance Co Financial Services May-09 356 100
12. Borse Dubai Ltd London Stock Exchange Group Financial Services 20-Sep-07 1,592.77 28
13. DP World Ltd Egyptian Container Handling Transport-Marine 31-Oct-07 670 90
14. Dubai Aerospace Enterprise Flugwerkzeuge Aviation Computer Software 12-Mar-08 25 100
15. Dubai Holding Alliance Medical Holdings Ltd Diagnostic Equipment 5-Nov-07 1248.3 100
16. Dubai Holding Marfin Investment Group Investment 31-Mar-08 542.04 6.45
17. Dubai Holding LLC GBD Investment Ltd Energy 9-Apr-08 49.5 30
18. Dubai Holding LLC Istituto Salus srl Medical-Hospitals 4-Mar-08 15.23 100
19. Dubai Holding LLC Och-Ziff Capital Management Investment 29-Oct-07 1,258.57 9.9
20. Dubai International Financial Smartstream Technologies Commercial Services 11-Dec-07 412.8 100
21. Dubai Investment Group Mazaya Saudi for Commercial Real Estate Sep-2008 136.1 20
22. Dubai World Labroy Marine Ltd Shipbuilding 6-Feb-08 1,597.69 100
23. Dubai World MGM Mirage Casino Hotels 8-Oct-07 28.66 0.12
24. EFG Hermes Gulf Housing Solution Real Estate Sep-2008 65 -
25. Intel Capital Corporation Pulse Technologies Technologies Feb-09 n/a Minority
26. Intel Capital Corporation Conservus International Technologies Feb-09 n/a Minority
27. Intel Capital Corporation Vertex Animation Studio Technologies Feb-09 n/a Minority
28. International Petroleum Cosmo Oil Co Ltd Oil Refining 5-Oct-07 775.3 20.76
29. International Petroleum Abar Investment Investment Sep-2008 1,800 -
Investment Company IPIC
30. Kipco Asset Management Co. Capital Bank of Jordan Banking Feb-09 79 20%
31. Kuwait Investment Authority Citigroup Banking -
15-Jan-2008 3,000
32. Kuwait Investment AuthoritY Merrill Lynch Financial Services 15-Jan-2008 2,000 -

33. Medoil LLC Dubai Titan Virgo Transport-Marine 30-Oct-07 91 100

34. Millenium Private Equity Kuwait Energy Company Energy Jan-09 25 Minority
35. Nakheel PJSC Fontainebleau Miami beach Hotels & Motels 9-Apr-08 375 50
36. National Bank of Kuwait Boubyan Bank Banking June-09 422 19
37. Navis Capital Partners Edutech Middle East Educational Apr-09 n/a LBO majority
38. Qatar Investment Authority Credit Suisse Banking 18-Feb-2008 500 -
39. RAK Petroleum Exploration Assets in Oman Gas 1-May-07 375.64 100

40. Rasmala Investment Holdings Delta Securities Egypt Financial Service 29-Oct-07 15.33 51
41. Shuaa Capital Orion Holding Overseas Financial Service 12-Feb-08 52.55 20
42. Shuaa Capital Oman National Investment Co Financial Service 12-Apr-07 85.52 35
43. Unicorn Investment Bank Bahrain Financing Company Financial Services Sep-2008 1000 100
44. Waha Capital AerVenture Limited, a fully Aviation Leasing 22-Jun-2009 135.00 50
owned subsidiary of AerCap
(listed on NYSE)
Source: Zawya, News reports
More recently, M&A activity in Middle East was down 86% YoY in the first half compared to 46%
globally. Large private equity deal flow remains virtually non-existent in 2009, but we believe this
will be a high growth area as full restructuring commences.




With liquidity constraints and market volatility, we expect IPO activity to remain weak in 2009,
with potential for improvement emerging in early 2010. Even here, we would need to see markets
stabilize and valuations become richer for companies (especially family-owned businesses) to
consider equity raising as a financing option. It is entirely likely that the state will continue it part-
privatization program as a means to help pick up interest in the stock market.
Prospective IPOs in the U.A.E. Face Further Delays
Offering Size Equity
Potential Issuer Date Sector
(USD m) Offered
Al Habtoor Engineering May 2009 Construction - 40%
Al Nahda Int'l Education H1 2009 Consumer Services 198 72%
Al Yousuf Motors H1 2010 Automotive 123 30%
Alpha Tours H1 2011 Travel and Tourism 150 50%
Damac for Comm. & Ser. H1 2012 Consumer Services 245 -
Jumbo Electronics H1 2013 Consumer Goods - -
SAIB BNP Paribas AM H1 2014 Financial Services - 55%
Abraaj Capital 2009 Financial Services 1,000 -
Al Benaa Real Estate 2009 Real Estate - -
Al Fara'a Const. Group 2009 Conglomerates - -
Al Qudra Holding 2009 Conglomerates 997 55%
Al Rayan Investment 2009 Financial Services - 55%
Aswaaq 2009 Consumer Goods - 55%
Burooj Properties 2009 Real Estate - -
DAMAC Holding 2009 Conglomerates - -
DAMAC Properties 2009 Real Estate - -
Dubai Bank 2009 Financial Services - -
Dubai Properties 2009 Real Estate - -
Emirates Airline 2009 Transport 7,500-9,000 -
Emirates Post 2009 Transport 272 49%
ESCAN 2009 Real Estate - -
Eshraq Properties 2009 Real Estate - -
Future Pipe Industries 2009 Basic Materials 420-554 35%
Int'l Petroleum Invest. 2009 Financial Services 545-817 -
Mada'in Properties 2009 Real Estate - -
Manazel Real Estate 2009 Real Estate - -
Mawarid Finance 2009 Financial Services - -
Metito Overseas 2009 Power and Utilities - -
ME Broadcasting Corp 2009 Media - -
Nakheel 2009 Real Estate - -
Palm District Cooling 2009 Power and Utilities - -
Palm Utilities 2009 Power and Utilities - -
RAK Petroleum 2009 Oil and Gas - -
Rasmala Invest. Holdings 2009 Financial Services - -
Reem Emirates Alum. 2009 Ind. Manufacturing - -
Sama LelTayaran Dubai 2009 Real Estate - -
Showtime Arabia 2009 Media - -
Thani Petroleum Co. 2009 Oil and Gas - -
Thuraya Sat. Telecoms 2009 Telecoms and IT - -
Gulf Capital H1 2010 Financial Services - -
Khoie Properties 2010 Real Estate - 33%
M'sharie 2010 Financial Services - 55%
Rotana Hotel Mgmt. 2010 Travel and Tourism - -
Abu Dhabi Investment 2011 Financial Services - -
Source: Zawya




The AED is pegged to the US$ at around AED 3.67 = USD 1.00. Whilst there has been some
discussion on floating the AED or repegging, few believe this will happen soon, if at all.

In 2001, the six members of the GCC – a loose political and economic alliance – agreed to set up a
monetary union like that of the European Union. The GCC single currency was initially scheduled to
be launched in early 2010 but the summit officially confirmed earlier reports that said the target
date was too ambitious and unrealistic.

Gulf States are likely to adopt a single currency in 2015 but the United Arab Emirates is unlikely to
reconsider joining the planned Gulf monetary union this year, according to a Reuters poll forecast.
Only four out of six GCC members — Saudi Arabia, Kuwait, Qatar and Bahrain — may now go
ahead with the project.

Kuwait aims to bring both the UAE and Oman back to the project during its 2010 presidency of the
Gulf Cooperation Council. Oman, which withdrew in 2006, has no plans to review its decision to
withdraw now or in the future. Kuwait is the only GCC country which pegs its currency to a basket
of currencies rather than just the dollar.

The UAE, the second-largest Arab economy, abandoned the project in protest over the decision to
base the Gulf central bank in the Saudi capital, Riyadh.

9.0 AND NOW BOURSE DUBAI ---------

Formation of Borse Dubai – the DFM and NASDAQ DUBAI under one

On 6th August, 2007, we saw further evidence of the commitment to make the U.A.E. a major
force in the international markets announced.
The Dubai Government announced that it would consolidate its holding in the DFM (80 per cent)
and NASDAQ DUBAI (67 per cent) into a new holding company to be called “Borse Dubai”
The DFM will still be governed by ESCA and the NASDAQ DUBAI will still be governed by the DFSA
This innovation is another step towards making Dubai a truly international financial centre.
More recently (2010), Borse Dubai announced that it would acquire the balance of NASDAQ Dubai
(33 per cent).
It was also announced that DFM and NASDAQ Dubai would merge their trading systems, creating a
single plat form for trading. This will dramatically improve trading on both exchanges.




Within days of the establishment of the Borse Dubai being announced, it was also announced that
Borse Dubai was to make a general offer for Sweden’s OMX market (at a total bid approaching
USD 4 billion), the London Stock Exchange and eventually NASDAQ. Similar moves were being
made by the Qatar investment groups.

Today, GCC groups have substantial holdings in many of the World’s major stock exchanges;



100% 80%
NYSE 20%

80% 100%*** 19.99% 21%

(20% is publicly listed)

97.2% 5% 100%


(* Was earlier called DIFX)

(** Was called Doha Securities Market until NYSE bought stakes)
(*** The acquisition of 33% of NASDAQ Dubai by DFM was announced on 22/12/09)
(Note A : Merger talks were announced in March, 2010)

There are many who would like to see;
• Borse Dubai continue its current acquisition programme --- further acquisitions are
rumored to be planned in Karachi (Pakistan), Taiwan and Tokyo.
• Borse Dubai eventually list its shares on the NASDAQ DUBAI (to show further support for
that market).
• Borse Dubai: potentially to increase its interest in the LSE.
• NASDAQ OMX to offer companies applying to list in the U.S.A., simultaneous listing on
• ADX to merge with Borse Dubai (and therefore the DFM and NASDAQ Dubai), creating
the second largest market in the region – concept announced March, 2010.






If you want information about this regards please contact

Robert W. McMillen Lalida Rojanavasee Gerhard Hametner

Chairman Director Director

Tel: +971 4 449 6541 Tel: +971 4 449 6542 Tel: +971 4 449 6543
Fax: +971 4 447 4031 Fax: +971 4 447 4031 Fax: +971 4 447 4031

Email: Email: Email:

Office No. 909, 9th Floor, Liberty House, Dubai International Financial Centre,
Sheikh Zayed Road, P.O.Box 122723, Dubai, UAE






Appendix I

Islamic (Sharia) investment banking is substantially based on the principles of:

• Speculation: Arrangements which involve speculation are not permissible where the
intended speculation is a pure gamble
• Uncertainty: Any real uncertainty or clear definition as to one of the fundamental
terms of the contract between 2 parties (e.g. price or time of delivery) are to be
• Interest: earning of interest (rather than a capital gain due to profit) is not acceptable

Sukuk Asset – backed bonds. Can not be traded as paper so usually backed by
Marabaha, Ijara and Istisna’ products. These are certificates representing
undivided shares in ownership of assets or services.
Mudaraba Capital provider invests through an entrepreneur borrower, profits are
shared at a pre-arranged rate but any losses are suffered wholly by the
financer. Profit Sharing arrangement at between a capital provider and
service (labour/expertise)
Murabaha A form of loan, accounting for 85% of global Islamic finance market. A
bank agrees to buy an asset for a client and then sells the asset to the
client at an agreed mark-up price. Sale of goods at a pre-agreed cost plus
Istisna A loan backed by a project rather than a tangible asset. Payment can be
linked to progress on the project.
Ijara Rental agreement. A banks buys an asset and leases it to an end-user.
There may be an option to buy the asset at the end of the contract.
Takaful Islamically acceptable insurance. It takes away the element of gharar
(obscurity/uncertainty) and maisir (gambling), by defining all terms at the
beginning i.e. what you would receive in defined events. Moreover, it
incorporates the traditional Islamic concept of tabarru’ (gift), whereby
other policy holders agree to relinquish a certain portion of their
contributions, in order to assist other participants in greater need.

Musharakah A joint enterprise or partnership structure with profit/loss sharing

implications that is used in Islamic finance instead of interest-bearing
loans. Musharakah allows each party involved in a business to share in the
profits and risks. Instead of charging interest as a creditor, the financier
will achieve a return in the form of a portion of the actual profits earned,
according to a predetermined ratio. However, unlike a traditional creditor,
the financier will also share in any losses.
Arboun Down payment with seller and buyer with regards to sale of assets or
(deposit) goods. A non-interest bearing deposit.
Ijara Lease of assets in return for rent payments

Istisna Agreement between buyer/seller to manufacture goods and deliver goods

at a predetermined point in return for a pre-agreed lump-sum of money.
Murabaha Sale of commodity goods at a pre-agreed cost plus profit basis
Qard Cash loan repayable on demand or as agreed but with no interest

Tawarruq Deferred payment sale to buyer who immediately resells the asset/goods
for cash
Wakala Agency where the agent receives a fee for the agency services provided



Appendix II



Rank Country Construction Construction Country Ease of Indexed
Spend Growth Risk doing Total
Business Score*
1 China 100 79 73 54 652
2 South Korea 17 41 81 87 100
3 India 42 62 55 33 96
4 Saudi Arabia 8 40 84 92 50
5 Brazil 25 39 65 37 49
6 Taiwan Province of China 10 45 84 66 49
7 Russia 15 60 69 34 42
8 Poland 9 51 77 58 41
9 Singapore 3 56 100 99 36
10 Hong Kong 4 47 94 98 36
11 Thailand 7 39 64 93 34
12 Turkey 9 42 61 68 34
13 Argentina 7 62 61 56 33
14 South Africa 6 42 69 83 32
15 Malaysia 5 46 74 89 31
16 Nigeria 4 49 52 95 21
17 Indonesia 12 48 57 29 19
18 U.A.E. 2 62 88 75 17
22 Egypt 6 55 61 37 15
25 Kuwait 2 45 92 72 12

*Because China skew the results for the other countries, total scores have been indexed on the basis of South
Korea at 100.
Sources: International Monetary Fund; ICON Construction reports; World Bank ease of doing business index;
Euromoney country risk index; A.T. Kearney analysis





ABU DHABI Right to own land anywhere Right to own land in pre- Leasehold rights only:
designated investment areas
Right to lease land Usufruct Leases: Right to
anywhere enjoy 99-years leases of
already built-up land.
Musatahah leases: Right to
enjoy 50-year development
leases, which allow lessees
to build and enjoy
undeveloped land.
DUBAI Right to own land anywhere Right to own land anywhere Right to own freehold and
leasehold (99 years) in
designated areas
BAHRAIN Right to own land anywhere Right to own land anywhere Right to own property in
selected areas designated
by the Government.
Foreigners can secure a
permanent resident permit
allowing them to own real
estate property (the permit
is terminated in the event of
sale of the property).
KUWAIT Right to own land anywhere Right to own land anywhere Not permitted to own
property in Kuwait
Ownership is in the form of
A project can be built and
operated for a period of 20,
25 or to 40 years depending
on the type of project that
was constructed and on a
case-by-case basis.
OMAN Right to own land anywhere Right to own property within Right to own property within
certain designated tourism certain designated tourism
areas either for residential areas either for residential
or investment purposes or investment purposes
QATAR Right to own land anywhere Right to own property in Right to own residential
wide investment areas property in three
developments only: The
Pearl-Qatar, Al Khor and
Usufruct Lease: Right to
enjoy 99 year leases in
areas in and around Doha
with the ability to bequeath
the property to subsequent
SAUDI Saudi Muslims are the only Legal residents have the right to own their place of
ARABIA ones who have ownership residents with a permit from the Ministry of Interior.
rights in the holy cities of
Madinah and Makkah

Foreign investors have the right to own real estate required

for the project itself or for employee housing of the licensed
Non Saudi Muslims are permitted to lease property within
the vicinity for a period of two years, renewable for the
same term.



Appendix III

MCMILLEN ADVANTAGE CAPITAL LIMITED (“MAC”) is a company incorporated in Hong Kong and founded by Robert W.
McMillen. Together with its local partners, the Company has establishing two new stock brokers in Dubai, serving the U.A.E.
(with seats on all three markets)

1.1 The DFM and ADX Broker

MAC established a local joint venture company called MAC Sharaf Securities (U.A.E.) LL (“MAC Sharaf”), owned
49 per cent by MAC and 51 per cent is owned by the Sharaf Group and Mr. Mohammed Abdul Rahim Al Ali. This was
our first foot hold in the U.A.E. Markets. Starting as a local broker focusing on the local and GCC retail market, this
company and its affiliates will eventually hope to develop a very sound local investment banking team once regulations
allow. Much of its business will then be IPO and M&A related.
MAC Sharaf ranked in the Top 20 (of 93 brokers) in October, 2009.

1.2 The NASDAQ DUBAI Broker

A second entity, MAC Capital Limited, (“MAC Capital”), is based in the DIFC. This is our flagship vehicle in the U.A.E.
and its principal services includes;
(i) Listing international companies on the NASDAQ DUBAI (both local and foreign)
(ii) Raising capital in Dubai and elsewhere for international companies wishing to have a connection to the region.
(iii) Focus on cross border transactions in the Regions east of Dubai, particularly Asia.
(iv) Arranging joint ventures for local and international clients
(v) Brokerage on the NASDAQ DUBAI, DFM, ADSM and other global markets.
(vi) Consulting advice to its new associate, a new securities company to be formed under the ESCA regulations

1.3 Our Local Partners

The Sharaf Group of Companies was established in Dubai in 1976. The founders, Mr. Ibrahim Sharaf and Mr.
Sharafuddin Sharaf, are brothers of UAE origin. With its core business in the Shipping Industry, the Sharaf Group now
has significant businesses in Retailing, Fashion, Real Estate, Retail Electronics, Cargo, Logistics, Financial Services,
Warehousing, Travel and Tourism. It employs over 2,600 staff in 50 different locations, both locally and internationally.

The Sharaf Group may also introduce other major local family groups as shareholders to further strengthen the contact
base offered to the DFM Company. These parties include Mohammed Abdul Rahim Al Ali, a well known
businessman and advisor to the current ruler of Dubai.

1.4 Other international partners

MAC also has other shareholders and partners who have brokerage and investment banking interests in Hong Kong,
Paris, Japan, Bangkok, Geneva, Johannesburg, Gaborone, Harare and London.

Our international network is extensive…with our shareholders based in most of the key global financial

• Capital Partners Securities Co., Ltd,

Stock Brokers, Fund Managers and Investment
• Killik & Co, Bankers
Stock Brokers, Wealth Managers and Fund
Managers Hong Kong

• Quam Securities Co Ltd*,

Paris Stock Brokers, Fund Managers and Investment
• Lloyd Edward Jones, • FIDCO, Fiduciary Services
Investment Bankers Corporate Advisory


• Thanhcong Securities Joint Stock

• Banque Morval, Dubai Company
Private Bankers Thailand • Stock Broker and Investment Banking

• MAC Sharaf Securities (UAE) LLC, • Finansia Syrus Securities PLC *

Stock Brokers on ADX and DFM Stock Brokers and Investment Bankers
• MAC Capital Limited * Listed in their home markets
Investment Bank and Stock Broker NASDAQ


We strongly believe that MAC’s Team will be able to offer international investors and inter-brokers access to this considerable
market and to the capital it provides. In addition, our management’s track record also demonstrates our ability to achieve our
targets. In this regard, consider,

1.0 We have equity interests in two brokers, one with seats on the DFM and ADX and the other with a seat

2.0 Our Award Winning Team has excellent credentials;

2.1 Building new businesses

• Three months after the commencement of the Asian Crisis of 1997, the Team rescued a local Thai broker
from near collapse in 1997 to build it to a ranking of Thailand’s third largest broker.
• The company, Seamico Securities Plc, had a market capitalization of Baht 259.53 million (US$7.11 million)
and subsequently hit a high of Baht 10.37 billion (US$ 263.12 million).
• Prior to our exit, it had 10 offices and over 600 staff and is still managed by the same team.

Raimon Land
• In addition, Mr. McMillen, working closely with an investment syndicate and the management team of
Raimon Land Plc, a then failed property company, that was suspended from trading on the Stock Exchange
of Thailand, invested Baht 100 million (US$ 2.5 million) to acquire 80% of the company.
• Today, Raimon Land has a market capitalization of Baht 2.8 billion (US$ 87 million), with over Baht 15
billion of completed projects and projects under development.
• Almost half of Raimon’s shares were recently sold to IFA Hotels and Resorts (24.99%) and Istithmar Hotel
FZE (24.99%).

And now we have opened the MAC Group --------

2.2 Awards won under the Team’s management

In the past, our Chairman has led a securities company to win the following awards;

• Winner “Best Under a Billion”, Forbes Global 200 Best Small Companies for 2003.
• Winner “Best Under a Billion”, Forbes Asia/Pacific 100 Best Small Companies for 2004.
• Winner “Best Under a Billion”, Forbes Asia/Pacific 200 Best Small Companies for 2005.
• Winner “Triple A Best Equity House Thailand 2003”, The Asset Magazine.
• Winner “Best Local Broker”, FinanceAsia Magazine for the years 2001, 2002, 2003 and 2004.
• Top 50 Companies in Thailand ranked on Corporate Governance.
• Top 3 Securities Companies, ranked by Corporate Governance Standard 2006 (Thailand).
• Promotion to a component member of the Stock Exchange of Thailand 100 Index

2.3 Group companies managed or formed by the Team won the following awards;

• Raimon Land Plc: “One of the 12 Best Property Companies in Asia”, Euro Money Magazine, 2004
• Seamico Knight Fund: “Best Asia Ex Japan Fund Award 2003 (Fund of the Year)”, Asia Hedge
Fund Magazine.

3.0 All the required experience is available to MAC

3.1 Mature and Developing Markets

• The Team has held very senior positions in Thailand, Hong Kong, London, Australia and South Africa.
3.2 Extensive cross border experience, with major international corporate clients

• The Team has extensive cross border corporate advisory and investment banking experience.
• Major clients it has acted for or which have acquired companies from its clients include: APC Group, Asia
Pacific Wire & Cable Corporation Limited, AXA Insurance, Capital Z, Guardian Insurance, HIH Winterthur
International Holdings Limited, Lend Lease Global, Manu Life, National Mutual, Newscorp, NRMA Insurance
Limited, Prudential Insurance of the UK, QBE Insurance, South China Morning Post, Standard Chartered
Bank Plc., the Koos Group, United Broadcasting Corporation Plc, and Keppel Group.
3.3 A Team skilled in international broking and investment banking, holding positions with;

• Deutsche Morgan Grenfell, Hambros Bank and Ernst & Young.

3.4 Strong industry experience

Since 1992, the Team has developed significant in-house expertise in the following sectors:



Sector No. of Total transactions

Transactions volume
(US$ millions)
Automotive 5 14.74
Banking, finance and securities 53 1,737.99
E-Commerce and Telecommunications 18 57.12
Electronic Components 7 113.85
Energy and Petrochemical 11 561.17
Healthcare 5 4.34
Insurance 26 232.26
Manufacturing and Industrial 30 323.22
Media, entertainment, printing and publishing 26 345.25
Property 40 787.15
Steel and constructions 23 1,017.79
Transportation 4 15.94

3.5 Significant product experience

The team has had significant product experience:

Product No. of Total transaction volume
Transactions (US$ millions)
Capital raisings 72 1,301.01
Debt and Quasi-Debt 18 632.08
M&A Transactions 71 1,971.90
New listings 54 1,397.07
Rescues, rehabilitation, reorganisations and delistings 27 2,281.11
Specialist advice and valuations 83 2,292.53
Underwriters 117 792.42

4.0 The Team has a proven track record in Introducing New Products to Developing Markets;
In the U.A.E., we are the
• First “Start up” firm to obtain a Category 2 license in the DIFC;
• Advised on First Chinese Company to list on the NASDAQ Dubai;
• Advised on First NYSE listed company to list o the NASDAQ Dubai;
• First Broker to trade on Australian dual-listed stocks
• First Broker to trade on USA dual-listed stocks
• One of only 12 brokers who can arrange trades on all four U.A.E. markets.

In Thailand, it advised on;

• The first Initial Public Offering under the Securities and • The first Right Issue, coupled with a Special Dividend
Exchange Act (“SEC Act”) and Warrants
• The first Conditional Application to conduct an Initial Public • The first Right Issue with Warrants, issued below par
Offering under the SEC Act.
• The first Public Tender Offer under the SEC Act • The first Warrant Issue in Thailand with a 10 year
• The first Underwritten Debenture with Warrant by Rights under • The first Pre-Approved Exemption from Clause 30
SEC Act (Delisting) regulations
• The first Non-public Offering of a Pre-IPO Convertible under • The first Capital Reduction, simultaneous with a Rights
the SEC Act Issue
• The first five year Call Warrant issued by Rights • The first IPO and Listing on the MAI (Second Board)
• The first Employee Share Option Programme where more than • The first IPO with Warrants attached in Thailand (and
5 per cent of the Company’s capital was issued to employees on the MAI)
• Called the first (and second) Call Warrants • The first IPO with Warrants attached on the Stock
Exchange of Thailand
• The first Rights Issue with Concurrent Special Dividend

5.0 Our distribution capabilities are strong:

Joining the Team in this venture are international brokerage and investment banking partners from around the World,
• Abu Dhabi • Australia • Malaysia • Zambia • Singapore
• Dubai • Sweden • Hong Kong • Namibia • France
• Bahrain • Indonesia • London • Jordan • Egypt
• Kuwait • South Africa • New York • Nigeria • Thailand
• Oman • Kenya • Nairobi • Botswana • Japan
• Qatar • Zimbabwe • Geneva • Malawi • Gaberone
• Saudi Arabia • Tanzania • Phillippines • Mauritius • Harare
• Lusaka • Canada • Scandinavia • China • Cote D’Voire
• Taiwan • Vietnam • U.S.A. • Uganda • Turkey