MENA-1 SUNDAY MORNING ROUND-UP UAE Drake & Scull Internationals 2Q2011 headline results a notch below expectations;

maintain Buy Union Properties 2Q2011 results: net loss 26% greater than expected on weaker property revenue Tabreed 2Q2011 results: ahead of estimates Kuwait Kuwaits budget surplus KWD5.3 billion for current fiscal year Iraqs Prime Minister Al-Maliki says that the country will ask the UN to intervene to halt port project Qatar Nakilat to complete barge for Qatar Petroleum in 2012 UDCs unit inks QAR350 million deal with QIB Fitch affirms QNBs IDR at A+, outlook stable Qatari Diar JV acquires Olympic Village in EUR636 million deal Bahrain United Gulf Banks 2Q2011 profit at USD8.5 million Al-Wefaq party to boycott parliamentary elections EFG Hermes Research Qatar Economics and Banking Update - Further Cut in Benchmark Interest Rates; QNB and CBQ Remain Our Top Picks - 11 August 2011 Qatar Electricity and Water Company (QEWC) - Upgrade FY2011 Earnings After Strong 2Q2011 Results; Adjust Fair Value and Reiterate Buy - Company Note - 11 August 2011 Agenda Qatar Sun 14 August >> Qtel 2Q2011 results Sun 14 August >> Doha Insurance 2Q2011 results Sun 14 August >> Qatar German for Medical Devices Company 2Q2011 results Sun 14 August >> Ezdan Real Estate Company 2Q2011 results Sun 14 August >> Al Meera Consumer Goods Company 2Q2011 results Sun 14 August >> Qatar Fuel Company (Woqod) 2Q2011 results Mon 15 August >> Qatar German for Medical Devices Company press conference

Mon 15 August >> Zad Holding Company 2Q2011 results Mon 15 August >> Salam International 2Q2011 results Mon 15 August >> The Qatar Company for Meat & Livestock Trading (Mawashi) 2Q2011 results UAE News Drake & Scull Internationals 2Q2011 headline results a notch below expectations; maintain Buy Drake & Scull International (DSI) [DSI.DU] held a results conference call and issued a press release with headline 2Q2011 results showing revenues of AED739 million, 4% ahead of our estimate (11% ahead of the consensus), and attributable net income of AED51.3 million, a notch below our AED54.3 million estimate (6% ahead of consensus). We note that DSI booked AED1.5 million in valuation losses on an investment fund, implying a clean net income of cAED52.8 million. DSIs backlog stood at AED7.5 billion as at 30 June, 2011. Overall, DSIs 2Q2011 results are broadly in line with expectations. The slight variance at the bottom line is due to weaker margins at the gross level (14.2%). Management attributed this weaker margin to increased turnover from civil contracting coinciding with decreasing revenues from IWP operations. We maintain our current 2011 full-year current forecasts and reiterate our Buy rating on the stock, with our current fair value (FV) of AED1.27 per share offering significant upside potential from the current levels. We will provide more commentary on the results once full financials are released. (Expected on Sunday, 14 August) (Company Disclosure, Jad Abbas) Drake & Scull: AED0.90, Rating: Buy, FV: AED1.27, MCap: USD524 million, DSI UH / DSI.DU Union Properties 2Q2011 results: net loss 26% greater than expected on weaker property revenue Union Properties (UP) [UPRO.DU] reported its headline 2Q2011 results showing revenues of AED769 million, 39% below our AED1,269 million estimate (37% below the consensus), and a net loss of AED521 million, greater than our AED413 million net loss estimate (the consensus forecasted positive net income of AED44 million). UP booked AED530.2 million in revaluation losses in 2Q2011, in line with our expectations. Total assets stood at AED13.4 billion with shareholders equity of AED3.5 billion. UPs total debt pile stood at AED6,177 million (down 10% Y-o-Y), with cash balances amounting to AED470.7 million (Implied debt-to-equity ratio of 1.76). Lower-than-expected revenue, likely due to slower unit handovers in 2Q2011, contributed to the larger-than-expected net loss. We view the ongoing deleveraging as positive, and we reiterate our decreased concerns over UPs liquidity position. We also highlight UP as a key potential beneficiary in light of the witnessed yield stabilisation in the property market in Dubai (and yield upticks in select areas in Dubai, including UPs Motor City) which would positively impact our valuation of UPs investment properties portfolio. We will look to get more details on UPs current handover process in the DIFC and will adjust our forecasts and valuation accordingly.

For now, we maintain our Neutral rating following this set of results, with the stock continuing to trade broadly in line with our AED0.40 fair value. UP reported AED436.4 million in revenue from its operating activities (namely Fit-Out & Thermo Contracting), ahead of our AED347.4 million estimate. Income from property management and sales amounted to AED333 million, well below our estimate of AED921.8 million. We attribute the weakness to slower deliveries in 2Q2011 after a solid 1Q2011. We also highlight potential downside risk to our revenue estimate for UPs DIFC projects. With SG&A and net interest income broadly in line, and revaluation losses as expected, the weaker top line meant that UPs reported AED520.8 million loss was greater that our AED412.7 million net loss estimate. UP conducts a valuation exercise on its investment properties semi-annually, and hence we had incorporated a AED524 million revaluation loss in our 2Q2011 forecasts. UP recoded AED530.2 million in revaluation losses during the quarter. In 2Q2011, UP transferred AED3,363 million worth of development properties into investment properties, in line with expectations (we had forecasted cAED3 billion in transfers from development properties). The transfers, which represent unsold inventory across UPs projects, could be a source of future revaluation losses (particularly at year end). We note that we forecast cAED2.1 billion in revaluation losses for FY2011 (of which AED596 million has been recognised). However, we highlight significant forecast risk related to the estimated revaluation losses, especially in light of improving yields in UPs Motor City (a large portion of UPs GLA). (Company Disclosure, Jad Abbas) Union Properties: AED0.38, Rating: Neutral, FV: AED0.40, MCap: USD351 million, UPP UH / UPRO.DU Tabreed 2Q2011 results: ahead of estimates Tabreed (TABR.DU) reported 2Q2011 revenues of AED286.6 million (up 8% Y-o-Y and 17% Q-o-Q), 4% ahead of our forecast of AED276.1 million. The variance between our forecast and the actual top line was due to higher-than-expected chilled water capacity coming on line in 2Q2011. Chilled water revenues, the utilitys largest revenue generator, grew 26% Y-o-Y in 2Q2011 and were 22% greater than our expectations. Gross margins came in at 51.3%, considerably lower than our forecast of 55.2%, as cost of sales of AED139.5 million were well ahead of our forecast of AED123.8 million, partly due to the stronger top line. SG&A expenses of AED37.0 million were only 3% shy of our forecast, leading to an EBITDA figure of AED110.1 million (just below our forecast of AED114.1 million). Depreciation expenses of AED29.7 million came in as expected, which meant that net operating profit of AED80.4 million was also below our AED84.5 million estimate, drawing from the weaker gross profit line. Below the operating income line, net interest expenses of AED52.4 million was in line with our forecast of AED53.2 million. Nevertheless, net income of AED43.8 million (up 9% Y-o-Y, up 37% Q-o-Q), came in ahead of our estimate of AED29.9 million mainly on a stronger-thanexpected contribution from the companys share of income of associates. This is likely due to

higher-than-expected capacity ramp-up and growth of Qatar Cool (44% owned by Tabreed) and Saudi Tabreed (25% owned). Our View: Tabreeds 2Q2011 results reflect an overall good operational performance and could provide some upside potential to our FY2011 estimates, which currently look for revenues of AED1,062 million and net income of AED158 million. We believe Tabreeds recapitalisation process, which closed in April 2011, has helped to stabilise the company, while improving profitability through lower finance costs. However, recapitalisation dilutes existing shareholders to a minimum of 72% (based on 659 million shares) in the long term (2019), with no additional shares to be issued to minority shareholders upon the conversion of Mubadalas facilities. (Company Disclosure, Abid Riaz, Nadine Hassouna) Tabreed: AED0.84, Rating: Sell, FV: AED1.01, MCap: USD150 million, TABREED UH / TABR.DU Kuwait News Kuwaits budget surplus KWD5.3 billion for current fiscal year Kuwait recorded a budget surplus of KWD5.3 billion (USD19.4 billion) for the fiscal year ending 31 March 2011, down from KWD6.4 billion in the previous year. The government had forecast a budget deficit of KWD6.6 billion for the year based on an oil price of USD43/barrel. Income was KWD21.5 billion, while spending amounted to KWD16.2 billion. (Bloomberg) Iraqs Prime Minister Al-Maliki says that the country will ask the UN to intervene to halt port project Iraqs Prime Minister Nouri Al-Maliki said that he will ask the United Nations (UN) to stop construction of the Mubarak Al-Kabeer Port project, which is being built by Kuwait at the Boubyan Island if Iraq discovers that the facility will hurt their interests. A team of Iraqi experts will visit Kuwait to study the ports construction. Kuwait says that the project will be built in three stages, but there is talk of a fourth stage, which could damage Iraqs maritime activity. (Kuwait Times) Qatar News Nakilat to complete barge for Qatar Petroleum in 2012 Qatar Gas Transport Company (QGTS.QA), known as Nakilat, along with its joint venture partner, Damen Shipyard, has announced a Load-Out/Recovery barge for Qatar Petroleum is scheduled for completion by 2012, The Gulf Times reported. The barge will be 140 metres in length with a beam of 35 metres and a capacity to launch and recover vessels and offshore equipment up to a weight of 10,000 tonnes. (Bloomberg) Nakilat: QAR17.00, Rating: Buy, FV: QAR25.70, MCap: USD2,615 million, QGTS QD / QGTS.QA UDCs unit inks QAR350 million deal with QIB

United Development Company (UDC) [UDCD.QA] announced that its unit has signed a financing agreement with Qatar Islamic Bank (QIB) [QISB.QA] worth QAR350 million, Bloomberg reported. No further details are currently available. (Bloomberg) Qatar Islamic Bank: QAR76.60, Rating: Neutral, FV: QAR90.00, MCap: USD4,351 million, QIBK QD / QISB.QA Fitch affirms QNBs IDR at A+, outlook stable Fitch Ratings has affirmed Qatar National Banks (QNB) [QNBK.QA] Long-Term Issuer Default Rating (IDR) at A+ with a stable outlook, Bloomberg reported. (Bloomberg) Qatar National Bank: QAR137.50, Rating: Buy, FV: QAR176.40, MCap: USD20,580 million, QNBK QD / QNBK.QA Qatari Diar JV acquires Olympic Village in EUR636 million deal Qatari Diar announced that it has acquired the Olympic Village for the London 2012 Olympic Games in a joint venture deal valued at EUR636 million, Property EU reported. Delancey, a UK specialist property investor, is the joint venture partner. The deal is structured to provide a future profit share for the public sector. (Property EU, Bloomberg) Bahrain News United Gulf Banks 2Q2011 profit at USD8.5 million United Gulf Bank (UGBB.BH), the asset management and investment banking arm of Kuwait Projects (KIPCO) [KPRO.KW], reported a profit of USD8.5 million for 2Q2011, down 65%. The decline was mainly because the bank recorded a gain of USD43.8 million on the sale of Tunis International Bank in 2010. (Bloomberg) Al-Wefaq party to boycott parliamentary elections Al-Wefaq party, Bahrains main Shiite opposition group, said that it will boycott a special parliamentary election scheduled in next month, Khalil al-Marzooq, a representative of the group said. Al-Marzooq said that the decision to boycott the election is final. We need to see some real political amendments, he added. The government said that it will hold elections on 24 September 2011 to fill at least 18 vacant seats in parliament after Al-Wefaq members resigned in February in protest against the governments crackdown on pro-democracy rallies. A second round of voting will take place on 1 October 2011, the Bahrain News Agency reported, citing Justice Minister Sheikh Khalid bin Ali Al Khalifa. (Bloomberg) EFG Hermes Research Qatar Economics and Banking Update - Further Cut in Benchmark Interest Rates; QNB and CBQ Remain Our Top Picks - 11 August 2011 Qatar Cuts Benchmark Rates: Second Time Since April: Qatar Central Bank (QCB) cut its benchmark interest rates yesterday, the second time since April 2011. The overnight deposit rate was reduced by 25 basis points (bps) to 0.75%. The overnight lending facility and the repo rate

were both cut by 50 bps to 4.5%. The lower reduction in the deposit rate was likely due to the earlier and deeper cuts than for the lending and repo rates. Lending Rate Cut to Support Credit Growth; Further Cuts Likely: We believe that the lowering of the lending rate is aimed at supporting private sector credit growth and the non-hydrocarbon investment programme, which will require greater domestic funding as Qatar shifts away from gas investments. The lending rate cut was in line with our expectations. We believe that there still remains room to reduce the lending rates by a further 50-100 bps, as inflation pressures remain muted and credit growth is largely directed towards productive areas. Credit Demand Driven by Strong Macro-Economic Backdrop: Private sector credit growth has already accelerated to 15.8% Y-o-Y in June 2011 from 7.7% Y-o-Y growth in December 2010, mainly driven, in our view, by strong government spending and the solid investment backdrop. We currently forecast private sector credit growth of 17.0% in 2011, but we now see some upside risks to this forecast. The sectors seeing the strongest credit growth are those linked to the governments investment programme (including real estate, up 19.9% YTD) and related areas (trade, up 31.5% YTD). Consumption-related loan growth rebounded by a solid 9.0% M-o-M in June after contracting in April, following the introduction of new stricter regulations regarding retail lending by the QCB in April 2011, to a great extent as a result of lower retail lending rates. Non-Resident Deposit Rates Already Responding to Rate Cuts: The reduction in the overnight deposit rates reduces the attractiveness of non-resident deposits being placed in the banking sector. Deposit rates in Qatar are now closer to those in other GCC countries. Non-resident deposits have fallen by 25.8% YTD in June, supported by the earlier benchmark deposit rate cuts. Domestic public (35.4% YTD) and private (14.4% YTD) sector deposits continue to see strong growth. Slight Negative Impact on Banks Margins; Top Picks Remain QNB and CBQ: Qatari banks net interest margins have been resilient in 2Q2011, with our covered banks reporting either flat or slightly higher margins Q-o-Q, thanks to lower funding costs, despite some pressure on asset yields. In our view, the recent rate cut will have only a minor negative impact on margins, as we expect lower deposit rates and higher volume growth to compensate for lower asset yields. Our top picks in Qatar remain QNB (QAR135.5 as at 11 Aug 2011, Buy, FV QAR176.4), which offers one of the most solid growth stories in MENA, and CBQ (QAR70.9 as at 11 Aug 2011, Buy, FV QAR113.5), a discounted stock offering with good growth prospects. (Monica Malik, Elena Sanchez-Cabezudo) Qatar Electricity and Water Company (QEWC) - Upgrade FY2011 Earnings After Strong 2Q2011 Results; Adjust Fair Value and Reiterate Buy - Company Note - 11 August 2011 QEWC Remains our Top Utilities Pick; Adjust FV and Reiterate Buy: We believe QEWC continues to offer investors an attractive low-risk opportunity to gain exposure to Qatar. We forecast double-digit earnings growth of 23% in 2011. QEWC offers an attractive estimated dividend yield of 6.0% in 2011, supported by strong revenue and cash flow visibility. Beyond 2011, upside risk to our forecasts arises from QEWCs foreign expansion plans, which remain at an initial stage. Our revised DCF-based fair value (FV) of AED186.2/share, up from

AED183.2/share, provides 39% upside potential. We believe that further share price weakness, driven by global events, could offer an attractive entry point, and we maintain our Buy rating. Upgrade FY2011 Earnings on Strong 2Q2011 Performance: While we keep our FY2011 revenue forecast unchanged at QAR4,905 million, we reduce our cost-of-sales estimate by 1.2% to QAR2,056 million following better-than-expected gross margins in 2Q2011 owing to the full commissioning of the Ras Girtas plant. We also decrease our FY2011 finance costs forecast to reflect the decline in benchmark interest rates. We increase our miscellaneous income estimate to include the QAR35.3 million one-off gain reported by the company in 2Q2011, which we did not include in our forecasts. As a result, our FY2011 earnings forecast increases by 3.7% to QAR1,433 million. Subsequent earnings forecasts are adjusted upwards accordingly. 2Q2011 Net Income Beats Forecast Helped by One-Off Gain: Revenues for 2Q2011 came in at QAR1,202 million, 2% shy of our QAR1,224 million estimate. QEWC efficiently maintained its cost base in 2Q2011, which meant that operating margins beat our forecasts on all levels, despite the weaker top line. Below the operating profit line, a combination of lower-than-expected net interest expenses and a positive contribution of QAR35.3 million from miscellaneous income (which we did not include in our forecasts) meant that net income of QAR443.6 million came in above our QAR370.1 million forecast. The QAR35.3 million in miscellaneous income is a nonrecurring one-off income item concerning the final settlement of liquidated damages, according to management. (Abid Riaz, Nadine Hassouna) [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 companys 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. It is not tailored to the specific investment objectives, financial situation or needs of any specific person that may receive this report. We strongly advise potential investors to seek financial guidance when determining whether an investment is appropriate to their needs. No part of this document may be reproduced without the written permission of EFG Hermes.