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Partners in Growth

IPO MARKET DURING 2007

GULF CAPITAL RESEARCH GROUP

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2Partners in Growth

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Outline

1. Macro Overview Of The GCC

2. Overview Of The IPO Market In The GCC

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MACRO OVERVIEW OF THE GCC

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4Partners in Growth

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“GCC IPO Market”Strong Growth in the GCC

Prospects of strong economic growth have continued

7.1%

4.4%4.5%

6.1%

7.1%

8.4%

9.5%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Qatar UAE Bahrain Oman KSA Kuwait GCC

Sources: IMF World Economic Outlook (October 2007), Gulf Capital

2006-2007 GDP GROWTH

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5Partners in Growth

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“GCC IPO Market”Stock Market Performance

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

Nasdaq FTSE-100 Bahrain Oman Kuwait Qatar UAE KSA

2004

2005

2006

2007-to-date

Sources: Nasdaq, LSE, BSE Index, MSM-30, KSE Index, DSM index, NBAD index, Tadawul

2004-2007 Stock Market Performance

GCC stock markets have reversed the downward trend of 2006, increasing by an average 36% during 2007-to-dateSince the beginning of 2007, all GCC indices witnessed a positive trend

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OVERVIEW OF THE IPO MARKET IN THE

GCC

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“GCC IPO Market”Rising Number Of IPOs

9 1223 23

0

20

40

60

80

100

120

95-03 '04 '05 '06 '07-10

Number of IPOs rose during last couple years in GCC …

Sources: Zawya, Gulf Capital

Number Of IPOs In The GCC

Number

IPOs include privatization

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8Partners in Growth

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“GCC IPO Market”Rising Number Of IPOs

9 1223

3323

0

20

40

60

80

100

120

95-03 '04 '05 '06 '07-10

33 IPOs have been closed during 2007, against 23 during 2006…

Sources: Zawya, Gulf Capital

Number Of IPOs In The GCC

Number

IPOs include privatization

Closed 2007

9

9Partners in Growth

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“GCC IPO Market”Rising Number Of IPOs

9 1223

33

42

23

0

20

40

60

80

100

120

95-03 '04 '05 '06 '07-10

During 2007-2010, 42 IPOs have assigned a manager …

Sources: Zawya, Gulf Capital

Number Of IPOs In The GCC

Number

IPOs include privatization

Closed 2007

Manager assigned

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“GCC IPO Market”

9 1223

33

42

41

23

0

20

40

60

80

100

120

95-03 '04 '05 '06 '07-10

And another 41 have announced their intention to conduct an IPO

Sources: Zawya, Gulf Capital

Number Of IPOs In The GCC

Number

IPOs include privatization

Closed 2007

Manager assigned

Announced

Total IPOs during the 2007-2010 period should exceed 116

116

Rising Number Of IPOs

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11Partners in Growth

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“GCC IPO Market”2007 IPOsSize Of Offering

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000

DP World

Saudi Kayan Petrochemical Co

Dar Al Arkan Real Estate Dvpt Co

Deyaar Development Co

Kingdom Holding Co

Air Arabia

J abal Omar Development Co

Al Khalij Commercial Bank

Galfar Engineering and Contracting

Middle East Specialized Cables Co

Saudi Printing and Packaging Co

United International Transportation Co

Seef Properties

Saudi Vitrified Clay Pipe Co

Mediter and Gulf Cooperative Ins and Reins

Qatar and Oman Investment Co

Al Khaleej Training and Education

Malath Cooperative Ins and Reins

Trade Union Ins Co

Gulf Union Cooperative Ins Co

Al Sagr Saudi Ins Co

Arabia Ins Cooperative Co

Arabian Shield Cooperative Ins Co

Saudi United Cooperative Ins Co

Sanad for Cooperative Ins and Reins

Saudi IAIC Cooperative Ins Co

Saudi Indian Ins Co

Saudi Arabian Cooperative Ins Co

Allied Cooperative Ins Group

Al Ahlia Cooperative Ins Co

SABB Takaful

Saudi Fransi Cooperative Ins Co

Alahli Takaful Co

Source: Zawya

Average 2007 offering sizeUS$ 363 million

million

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“GCC IPO Market”Increasing IPO Size

Average IPO size increased by 25% during 2006 and by 11% during 2007

$401

$363

$327

$262

$128

$45

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

95-03 '04 '05 '06 '07 '08-10

Sources: Zawya, Gulf Capital

AVERAGE IPO SIZE

Based on available data, average IPO size is estimated to increase by 11% during 2008-2010

million+11%

+11%

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“GCC IPO Market”An Increase During 2007 In Amount Raised From IPOs

Total amount raised from IPOs has increased by 60% during 2007 relative to 2006

$12.0

$7.5

$6.0

$1.5

$0.4

$0

$2

$4

$6

$8

$10

$12

$14

95-03 '04 '05 '06 '07

Sources: Zawya, Gulf Capital

TOTAL IPOs OFFERINGS

billion

+60%

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“GCC IPO Market”… And More Will Be Raised In Coming Three Years

Of the 83 upcoming IPOs in 08-10, 42 “manager-assigned” IPOs and another 41 “announced” IPOs total an estimated $10 billion

$10.0

$12.0

$7.5

$6.0

$1.5

$0.4

$0

$2

$4

$6

$8

$10

$12

$14

95-03 '04 '05 '06 '07 '08-10

Sources: Zawya, Gulf Capital

AGGREGATE IPO SIZE

billionIncrease

dfrom

previousestimate

s

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“GCC IPO Market”Markets Are Becoming More Diversified

Previous IPOs were mainly concentrated in a limited number of sectors

0 10 20 30 40 50 60 70 80

Financial Services

Oil and Gas

Real Estate

Construction

Transport

Power & Utility

Food

Telecom

Consumer Goods

Media

Industry

Logistics

Travel & Tourism

Conglomarate

Education

Agriculture and Food

Healthcare

Mining and Metals

2004-2007

Upcoming

Sources: Zawya, Gulf Capital

IPOs BY INDUSTRY

* Financial services include insurance IPOs

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“GCC IPO Market”Markets Are Becoming More Diversified

0 10 20 30 40 50 60 70 80

Financial Services

Oil and Gas

Real Estate

Construction

Transport

Power & Utility

Food

Telecom

Consumer Goods

Media

Industry

Logistics

Travel & Tourism

Conglomarate

Education

Agriculture and Food

Healthcare

Mining and Metals

2004-2007

Upcoming

Sources: Zawya, Gulf Capital

IPOs BY INDUSTRY

* Financial services include insurance IPOs

… but upcoming IPOs are relatively expanding to new sectors

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“GCC IPO Market”Distribution Of Offering By Country

KSA attracted 26 of the 33 IPOs in the GCC during 2007 and UAE witnessed the largest amount of IPO with US$ 6.6 billion $1,803

$3,183

$1,316

$54

$1,037

$120

$6,559

$4,814

$389$156 $69 $0

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

UAE KSA Qatar Oman Bahrain Kuwait

2006

2007

Sources: Zawya, Gulf Capital

IPO AMOUNTS RAISED

million

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“GCC IPO Market”IPOs Outperformed Market

GCC markets increased by an average of 8% during 2006/07-to-date

Sources: Gulf Capital

2006-2007 STOCK PERFORMANCE

84.0%

7.0%21.0%

-14.0% -16.0%-35.0%

-100%

-50%

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

500%

Bahrain Oman Kuwait Qatar UAE KSA

Overall market

IPOs closed during 06/07-to-date

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“GCC IPO Market”IPOs Outperformed Market

Sources: Gulf Capital

2006-2007 STOCK PERFORMANCE

84.0%

7.0%

171.0%

113.0%

239.0%

21.0%

-14.0% -16.0%-35.0%

29.0%

454.0%

-100%

-50%

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

500%

Bahrain Oman Kuwait Qatar UAE KSA

Overall market

IPOs closed during 06/07-to-date

IPOs launched did better than overall stock performance, appreciating by an average of 201%

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“GCC IPO Market”Slowing Down Over-Subscription

Over-subscription levels during 2007 have decreased when compared to 2006 figures

6.3

48.2

73.069.0

7.0

0

10

20

30

40

50

60

70

80

95-03 2004 2005 2006 2007

Sources: Gulf Capital

OVER-SUBSCRIPTION PER IPO

x times

-87%

Stablefrom

previousestimate

s

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“GCC IPO Market”Demand Generated For IPOs

The average demand per IPO stood at US$ 3.4 billion at end-2007, compared to US$15.3 billion at end-2006 and US$15.7 billion at end-2005

$3.4

$15.3$15.7

$11.4

$0.1$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

95-03 2004 2005 2006 2007

Sources: Gulf Capital

AVERAGE TOTAL DEMAND PER IPO

billion

Projected 08-10offerings$10 B

Avg. 2007 demand per

IPO$3,411 M

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“GCC IPO Market”IPOs Are Sold At A Discount And Outperform The Market

During 2007, IPOs were sold at a discount to book value and to earnings

4.2

2.5

3.94.8

1.4

0123456

IPOs 04 IPOs 05 IPOs 06 IPOs 07 GCC stockmarket 07

Sources: Gulf Capital

PRICE TO BOOK VALUE

18.0

10.114.7

19.2

6.4

0

510

1520

25

IPOs 04 IPOs 05 IPOs 06 IPOs 07 GCC stockmarket 07

PRICE TO EARNINGS

Partners in Growth