8/12/2019 NBK Capital MENA InFocus 05December2013 http://slidepdf.com/reader/full/nbk-capital-mena-infocus-05december2013 1/12 December 5, 2013 nbkcapital.com MENAinFocus Inside This Issue In Focus 1: Kuwait Aviation: A Snapshot of Kuwait Internation- al Airport’s Passenger Movement and Largest Operators In this section, we look at Kuwait International Airport’s performance in terms of passenger trafc for the past eight years. Moreover, we highlight the top 10 destinations and the top 10 carriers out of Kuwait International Airport. Kuwait Airways and Jazeera Airways continue to account for the highest market share; however, their regional peers have been growing their market shares over the past three years. Jazeera’s network is solely comprised of destinations within a three-hour ight time radius from Kuwait. Such destinations are logistically difcult for hub and spoke airlines to serve and are extremely impractical for passengers to reach from transit hubs. This validates, in our opinion, Jazeera Airways’ strategy of having a network solely composed of routes that are shorter than three hours. By: Sarah Dashti In Focus 2: Egypt’s Natural Gas Sector Egypt’s natural gas sector is currently undergoing a paradigm shift with the country contemplating importing gas, going against its historical status of being a reliable gas exporter. Driven by a steady rise in natural gas consumption, and a tapering off in natural gas production levels, the country’s ability to continue exporting, let alone fully cater to domestic demand, has come under question. We take a closer look at the government’s plans to tackle this situation and the implications for the gas-intensive industries. By: Wadie Khoury Performance of Regional Indices 70 80 90 100 110 120 130 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 S&P Pan Arab Large/Mid Composite S&P GCC Large/Mid Composite MSCI Jordan+Egypt+Morocco MENA Market Caps 0% 1% 1% 2% 2% 2% 5% 6% 10% 14% 16% 41% 0 100 200 300 400 500 Palestine Tunisia Lebanon Bahrain Oman Jordan Morocco Egypt Kuwait Qatar UAE Saudi Arabia (%) Share of MENA Market Cap Market Cap. (USD billion) Performance Summary of MENA Indices Index Level as of 30-Nov-13 % below 52-Week High % over 52-Week Low 1-Month Period YTD REGIONAL S&P Pan Arab Large/Mid Composite 157 158 125 -0.5% 25.5% 2.8% 23.0% 584 S&P GCC Large/Mid Composite 139 139 112 -0.5% 23.6% 3.1% 21.4% 541 MSCI Jordan, Egypt & Morocco 867 934 717 -7.2% 20.9% -0.7% -3.5% 867 GCC MSCI Bahrain 155 189 155 -17.6% 0.2% -6.7% -8.7% 16 MSCI Kuwait 568 587 540 -3.3% 5.1% -1.3% 3.8% 104 MSCI Oman 761 807 691 -5.8% 10.1% -1.3% 7.1% 24 MSCI Qatar 942 942 750 0.0% 25.5% 7.6% 24.6% 152 S&P Saudi Arabia Large/Mid Composite 204 206 155 -1.2% 31.7% 4.6% 27.2% 451 MSCI UAE 344 352 213 -2.4% 61.5% -1.6% 57.8% 169 OTHER MENA MSCI Egypt 1,252 1,325 992 -5.5% 26.2% 1.4% 5.4% 63 MSCI Jordan 197 235 172 -16.2% 14.3% 0.7% -10.4% 24 MSCI Morocco 273 313 247 -12.7% 10.4% -6.1% -8.0% 54 MSCI Lebanon 679 775 648 -12.5% 4.8% 1.8% -7.3% 9 MSCI Tunisia 1,291 1,437 1,276 -10.1% 1.1% -1.5% -5.1% 8 Palestine SE 530 537 451 -1.3% 17.5% 11.2% 10.9% 1 INDEX 52-Week High 52-Week Low % Change Market Cap (USD billions)
In this section we look at Kuwait International Airportrsquos performance in terms of passenger trafc
for the past eight years Moreover we highlight the top 10 destinations and the top 10 carriers outof Kuwait International Airport Kuwait Airways and Jazeera Airways continue to account for the
highest market share however their regional peers have been growing their market shares over the
past three years Jazeerarsquos network is solely comprised of destinations within a three-hour ight
time radius from Kuwait Such destinations are logistically difcult for hub and spoke airlines
to serve and are extremely impractical for passengers to reach from transit hubs This validates
in our opinion Jazeera Airwaysrsquo strategy of having a network solely composed of routes that are
shorter than three hours
Passenger traffic grew at a CAGR of 65 over the past eight years
Since 2005 Kuwait International Airport has sustained healthy growth and witnessed an increase
in passenger trafc Based on data provided by the Kuwait Directorate General for Civil Aviation
(DGCA) passenger trafc grew at a CAGR of 65 to reach 89 million in 2012 and increased
by 54 YoY in 9M2013 to stand at 72 million Passenger trafc growth has therefore outpaced
the 3 CAGR for the Kuwaiti population over the same period Monthly growth rates in the rst
nine months of 2013 were somewhat volatile for example there was a steep decline of 14 YoY
in July and recovery in August leading to an expansion of 26 YoY This volatility was due to
seasonality and the movement in the holy month of Ramadan
Egypt has close to two trillion cubic meters (TCM) of proven natural gas reserves representing just
over 1 of the worldrsquos proven reserves Egypt is the third-largest reserve in Africa falling behind
Algeria (45 TCM) and Nigeria (52 TCM) according to BPrsquos 2013 World Statistical Review
Unsurprisingly the Egyptian government has continuously promoted the domestic use of naturalgas as an energy source compared to other resources In addition Egypt had been ramping up its
production capacity considerably until 2009 allowing the country to export natural gas through
the Arab Gas Pipeline which serves as a key energy provider for many neighboring countries (such
as Jordan)
However between 2010 and 2012 annual production levels in Egypt remained relatively at (c
61 billion cubic meters) largely due to the political issues the country faced in 2011 onwards
According to the chairman of Egypt Natural Gas Holding Company (EGAS ndash a government-owned
entity that manages various gas projects) Egyptrsquos daily gas production actually declined by 85
YoY to an average of 015 billion cubic meters (BCM) during the rst nine months of 2013
The growth of domestic consumption (estimated at around 526 BCM in 2012) on the other
hand has not wavered marching on at a 7 CAGR between 2009 and 2012 Consequently as
consumption levels increased and production levels declined Egyptrsquos natural gas export levels
declined from 105 BCM in 2009 (20 of total production) to just 24 BCM in 2012 (4 of total
production) The Minister for Oil and Gas mentioned late last year that Egypt might have to start
importing natural gas by mid-2013 in order to meet domestic demand essentially transforming
Egypt from a net exporter to a net importer for the rst time in recent history
Figure 2-1 Egyptrsquos Production and Consumption Levels
Implications of switching from being a net exporter to a net importer
Until now there has not been any credible information on the issue of Egypt importing naturalgas however rumors continue to oat around According to an article on Egypt Oil amp Gas Egypt
is looking into importing LNG The article went on to mention that Egypt has signed an agreement
to begin importing natural gas from Algeria starting in 2013 at a cost of USD 11 per MMBTU
(compared to a market price of USD 12 per MMBTU) It also mentioned that Egypt would discuss
a potential agreement with other countries as a potential supplier of natural gas as well Although
imports from some of these countries may prove to be cheaper compared with global LNG prices
it is still well above the price paid to the local gas producers
Natural gas is a highly subsidized product in Egypt In the event of it importing natural gas
the Egyptian government could have additional nancial implications to deal with According
to the Central Bank of Egypt the country spent a total of EGP 96 billion in FY 2011-2012 on
subsidizing petroleum-related expenses making up 20 of the governmentrsquos total expenditureAs a result importing natural gas from Algeria or other neighboring countries could signicantly
increase petroleum related subsidies
Figure 2-2 Natural Gas Local Consumption and Export
(as a Percentage of Total Production)
83 80 8389
96
17 20 1711
4
-
20
40
60
80
100
120
0
25
50
75
100
2008 2009 2010 2011 2012
B C M
( ) o f T o t a l P r o d u c t i o n
Axis Title
Local Consumption [LHS] Export [LHS] Total Export [RHS]
The information opinions tools and materials contained in this report (the ldquoContentrdquo) are not addressed to or intended for publication distribution to or use by
any individual or legal entity who is a citizen or resident of or domiciled in any jurisdiction where such distribution publication availability or use would constitute a
breach of the laws or regulations of such jurisdiction or that would require Watani Investment Company KSCC (ldquoNBK Capitalrdquo) or its parent company its subsidiaries
or its afliates (together ldquoNBK Grouprdquo) to obtain licenses approvals or permissions from the regulatory bodies or authorities of such jurisdiction The Content unless
expressly mentioned otherwise is under copyright to NBK Capital Neither the Content nor any copy of it may be in any way reproduced amended transmitted to copied
or distributed to any other party without the prior express written consent of NBK Capital All trademarks service marks and logos used in this report are trademarks or
service marks or registered trademarks or registered service marks of NBK Capital
The Content is provided to you for information purposes only and is not to be used construed or considered as an offer or the solicitation of an offer to sell or to buy or
to subscribe for any investment (including but not limited to securities or other nancial instruments) No representation or warranty express or implied is given by NBK
Capital or any of its respective directors partners ofcers afliates employees advisors or representatives that the investment referred to in this report is suitable for
you or for any particular investor Receiving this report shall not mean or be interpreted that NBK Capital will treat you as its customer If you are in doubt about suchinvestment we recommend that you consult an independent investment advisor since the investment contained or referred to in this report may not be suitable for you
and NBK Capital makes no representation or warranty in this respect
The Content shall not be considered investment legal accounting or tax advice or a representation that any investment or strategy is suitable or appropriate for your
individual circumstances or otherwise constitutes a personal recommendation to you NBK Capital does not offer advice on the tax consequences of investments and
you are advised to contact an independent tax adviser
The information and opinions contained in this report have been obtained or derived from sources that NBK Capital believes are reliable without being independently
veried as to their accuracy or completeness NBK Capital believes the information and opinions expressed in this report are accurate and complete however NBK
Capital gives no representations or warranty express or implied as to the accuracy or completeness of the Content Additional information may be available upon request
NBK Capital accepts no liability for any direct indirect or consequential loss arising from the use of the Content This report is not to be relied upon as a substitution for
the exercise of independent judgment In addition NBK Capital may have issued and may in the future issue other reports that are inconsistent with and reach different
conclusions from the information presented in this report Those reports reect the different assumptions views and analytical methods of the analysts who prepared
the reports and NBK Capital is under no obligation to ensure that such other reports are brought to your attention NBK Capital may be involved in many businesses that
relate to companies mentioned in this report and may engage with them Past performance should not be taken as an indication or guarantee of future performance and
no representation or warranty express or implied is made regarding future performance Information opinions and estimates contained in this report reect a judgment
at the reportrsquos original date of publication by NBK Capital and are subject to change without notice
The value of any investment or income may fall as well as rise and you may not get back the full amount invested Where an investment is denominated in a currency
other than the local currency of the recipient of the research report changes in the exchange rates may have an adverse effect on the value price or income of that
investment In the case of investments for which there is no recognized market it may be difcult for investors to sell their investments or to obtain reliable information
about their value or the extent of the risk to which they are exposed
NBK Capital has not reviewed the addresses of the hyperlinks to or the websites referred to in the report and takes no responsibility for the content contained therein
Such address or hyperlink (including addresses or hyperlinks to NBK Capitalrsquos own website material) is provided solely for your convenience and information and the
content of the linked site does not in any way form part of this document Accessing such websites or following such links through this report or NBK Capitalrsquos website
shall be at your own risk
NBK Group may have a nancial interest in one or any of the securities that are the subject of this report Funds managed by NBK Group may own the securities that
are the subject of this report NBK Group may own units in one or more of the aforementioned funds
NBK Group may be in the process of soliciting or executing fee-earning mandate or doing business for companies that are either the subject of this report or are
mentioned in this report As a result you should be aware that NBK Group may have material conict of interest that could affect the objectivity of this report
copy COPYRIGHT NOTICE
This is a publication of NBK Capital No part of this publication may be reproduced or duplicated without the prior consent of NBK Capital
In this section we look at Kuwait International Airportrsquos performance in terms of passenger trafc
for the past eight years Moreover we highlight the top 10 destinations and the top 10 carriers outof Kuwait International Airport Kuwait Airways and Jazeera Airways continue to account for the
highest market share however their regional peers have been growing their market shares over the
past three years Jazeerarsquos network is solely comprised of destinations within a three-hour ight
time radius from Kuwait Such destinations are logistically difcult for hub and spoke airlines
to serve and are extremely impractical for passengers to reach from transit hubs This validates
in our opinion Jazeera Airwaysrsquo strategy of having a network solely composed of routes that are
shorter than three hours
Passenger traffic grew at a CAGR of 65 over the past eight years
Since 2005 Kuwait International Airport has sustained healthy growth and witnessed an increase
in passenger trafc Based on data provided by the Kuwait Directorate General for Civil Aviation
(DGCA) passenger trafc grew at a CAGR of 65 to reach 89 million in 2012 and increased
by 54 YoY in 9M2013 to stand at 72 million Passenger trafc growth has therefore outpaced
the 3 CAGR for the Kuwaiti population over the same period Monthly growth rates in the rst
nine months of 2013 were somewhat volatile for example there was a steep decline of 14 YoY
in July and recovery in August leading to an expansion of 26 YoY This volatility was due to
seasonality and the movement in the holy month of Ramadan
Egypt has close to two trillion cubic meters (TCM) of proven natural gas reserves representing just
over 1 of the worldrsquos proven reserves Egypt is the third-largest reserve in Africa falling behind
Algeria (45 TCM) and Nigeria (52 TCM) according to BPrsquos 2013 World Statistical Review
Unsurprisingly the Egyptian government has continuously promoted the domestic use of naturalgas as an energy source compared to other resources In addition Egypt had been ramping up its
production capacity considerably until 2009 allowing the country to export natural gas through
the Arab Gas Pipeline which serves as a key energy provider for many neighboring countries (such
as Jordan)
However between 2010 and 2012 annual production levels in Egypt remained relatively at (c
61 billion cubic meters) largely due to the political issues the country faced in 2011 onwards
According to the chairman of Egypt Natural Gas Holding Company (EGAS ndash a government-owned
entity that manages various gas projects) Egyptrsquos daily gas production actually declined by 85
YoY to an average of 015 billion cubic meters (BCM) during the rst nine months of 2013
The growth of domestic consumption (estimated at around 526 BCM in 2012) on the other
hand has not wavered marching on at a 7 CAGR between 2009 and 2012 Consequently as
consumption levels increased and production levels declined Egyptrsquos natural gas export levels
declined from 105 BCM in 2009 (20 of total production) to just 24 BCM in 2012 (4 of total
production) The Minister for Oil and Gas mentioned late last year that Egypt might have to start
importing natural gas by mid-2013 in order to meet domestic demand essentially transforming
Egypt from a net exporter to a net importer for the rst time in recent history
Figure 2-1 Egyptrsquos Production and Consumption Levels
Implications of switching from being a net exporter to a net importer
Until now there has not been any credible information on the issue of Egypt importing naturalgas however rumors continue to oat around According to an article on Egypt Oil amp Gas Egypt
is looking into importing LNG The article went on to mention that Egypt has signed an agreement
to begin importing natural gas from Algeria starting in 2013 at a cost of USD 11 per MMBTU
(compared to a market price of USD 12 per MMBTU) It also mentioned that Egypt would discuss
a potential agreement with other countries as a potential supplier of natural gas as well Although
imports from some of these countries may prove to be cheaper compared with global LNG prices
it is still well above the price paid to the local gas producers
Natural gas is a highly subsidized product in Egypt In the event of it importing natural gas
the Egyptian government could have additional nancial implications to deal with According
to the Central Bank of Egypt the country spent a total of EGP 96 billion in FY 2011-2012 on
subsidizing petroleum-related expenses making up 20 of the governmentrsquos total expenditureAs a result importing natural gas from Algeria or other neighboring countries could signicantly
increase petroleum related subsidies
Figure 2-2 Natural Gas Local Consumption and Export
(as a Percentage of Total Production)
83 80 8389
96
17 20 1711
4
-
20
40
60
80
100
120
0
25
50
75
100
2008 2009 2010 2011 2012
B C M
( ) o f T o t a l P r o d u c t i o n
Axis Title
Local Consumption [LHS] Export [LHS] Total Export [RHS]
The information opinions tools and materials contained in this report (the ldquoContentrdquo) are not addressed to or intended for publication distribution to or use by
any individual or legal entity who is a citizen or resident of or domiciled in any jurisdiction where such distribution publication availability or use would constitute a
breach of the laws or regulations of such jurisdiction or that would require Watani Investment Company KSCC (ldquoNBK Capitalrdquo) or its parent company its subsidiaries
or its afliates (together ldquoNBK Grouprdquo) to obtain licenses approvals or permissions from the regulatory bodies or authorities of such jurisdiction The Content unless
expressly mentioned otherwise is under copyright to NBK Capital Neither the Content nor any copy of it may be in any way reproduced amended transmitted to copied
or distributed to any other party without the prior express written consent of NBK Capital All trademarks service marks and logos used in this report are trademarks or
service marks or registered trademarks or registered service marks of NBK Capital
The Content is provided to you for information purposes only and is not to be used construed or considered as an offer or the solicitation of an offer to sell or to buy or
to subscribe for any investment (including but not limited to securities or other nancial instruments) No representation or warranty express or implied is given by NBK
Capital or any of its respective directors partners ofcers afliates employees advisors or representatives that the investment referred to in this report is suitable for
you or for any particular investor Receiving this report shall not mean or be interpreted that NBK Capital will treat you as its customer If you are in doubt about suchinvestment we recommend that you consult an independent investment advisor since the investment contained or referred to in this report may not be suitable for you
and NBK Capital makes no representation or warranty in this respect
The Content shall not be considered investment legal accounting or tax advice or a representation that any investment or strategy is suitable or appropriate for your
individual circumstances or otherwise constitutes a personal recommendation to you NBK Capital does not offer advice on the tax consequences of investments and
you are advised to contact an independent tax adviser
The information and opinions contained in this report have been obtained or derived from sources that NBK Capital believes are reliable without being independently
veried as to their accuracy or completeness NBK Capital believes the information and opinions expressed in this report are accurate and complete however NBK
Capital gives no representations or warranty express or implied as to the accuracy or completeness of the Content Additional information may be available upon request
NBK Capital accepts no liability for any direct indirect or consequential loss arising from the use of the Content This report is not to be relied upon as a substitution for
the exercise of independent judgment In addition NBK Capital may have issued and may in the future issue other reports that are inconsistent with and reach different
conclusions from the information presented in this report Those reports reect the different assumptions views and analytical methods of the analysts who prepared
the reports and NBK Capital is under no obligation to ensure that such other reports are brought to your attention NBK Capital may be involved in many businesses that
relate to companies mentioned in this report and may engage with them Past performance should not be taken as an indication or guarantee of future performance and
no representation or warranty express or implied is made regarding future performance Information opinions and estimates contained in this report reect a judgment
at the reportrsquos original date of publication by NBK Capital and are subject to change without notice
The value of any investment or income may fall as well as rise and you may not get back the full amount invested Where an investment is denominated in a currency
other than the local currency of the recipient of the research report changes in the exchange rates may have an adverse effect on the value price or income of that
investment In the case of investments for which there is no recognized market it may be difcult for investors to sell their investments or to obtain reliable information
about their value or the extent of the risk to which they are exposed
NBK Capital has not reviewed the addresses of the hyperlinks to or the websites referred to in the report and takes no responsibility for the content contained therein
Such address or hyperlink (including addresses or hyperlinks to NBK Capitalrsquos own website material) is provided solely for your convenience and information and the
content of the linked site does not in any way form part of this document Accessing such websites or following such links through this report or NBK Capitalrsquos website
shall be at your own risk
NBK Group may have a nancial interest in one or any of the securities that are the subject of this report Funds managed by NBK Group may own the securities that
are the subject of this report NBK Group may own units in one or more of the aforementioned funds
NBK Group may be in the process of soliciting or executing fee-earning mandate or doing business for companies that are either the subject of this report or are
mentioned in this report As a result you should be aware that NBK Group may have material conict of interest that could affect the objectivity of this report
copy COPYRIGHT NOTICE
This is a publication of NBK Capital No part of this publication may be reproduced or duplicated without the prior consent of NBK Capital
Egypt has close to two trillion cubic meters (TCM) of proven natural gas reserves representing just
over 1 of the worldrsquos proven reserves Egypt is the third-largest reserve in Africa falling behind
Algeria (45 TCM) and Nigeria (52 TCM) according to BPrsquos 2013 World Statistical Review
Unsurprisingly the Egyptian government has continuously promoted the domestic use of naturalgas as an energy source compared to other resources In addition Egypt had been ramping up its
production capacity considerably until 2009 allowing the country to export natural gas through
the Arab Gas Pipeline which serves as a key energy provider for many neighboring countries (such
as Jordan)
However between 2010 and 2012 annual production levels in Egypt remained relatively at (c
61 billion cubic meters) largely due to the political issues the country faced in 2011 onwards
According to the chairman of Egypt Natural Gas Holding Company (EGAS ndash a government-owned
entity that manages various gas projects) Egyptrsquos daily gas production actually declined by 85
YoY to an average of 015 billion cubic meters (BCM) during the rst nine months of 2013
The growth of domestic consumption (estimated at around 526 BCM in 2012) on the other
hand has not wavered marching on at a 7 CAGR between 2009 and 2012 Consequently as
consumption levels increased and production levels declined Egyptrsquos natural gas export levels
declined from 105 BCM in 2009 (20 of total production) to just 24 BCM in 2012 (4 of total
production) The Minister for Oil and Gas mentioned late last year that Egypt might have to start
importing natural gas by mid-2013 in order to meet domestic demand essentially transforming
Egypt from a net exporter to a net importer for the rst time in recent history
Figure 2-1 Egyptrsquos Production and Consumption Levels
Implications of switching from being a net exporter to a net importer
Until now there has not been any credible information on the issue of Egypt importing naturalgas however rumors continue to oat around According to an article on Egypt Oil amp Gas Egypt
is looking into importing LNG The article went on to mention that Egypt has signed an agreement
to begin importing natural gas from Algeria starting in 2013 at a cost of USD 11 per MMBTU
(compared to a market price of USD 12 per MMBTU) It also mentioned that Egypt would discuss
a potential agreement with other countries as a potential supplier of natural gas as well Although
imports from some of these countries may prove to be cheaper compared with global LNG prices
it is still well above the price paid to the local gas producers
Natural gas is a highly subsidized product in Egypt In the event of it importing natural gas
the Egyptian government could have additional nancial implications to deal with According
to the Central Bank of Egypt the country spent a total of EGP 96 billion in FY 2011-2012 on
subsidizing petroleum-related expenses making up 20 of the governmentrsquos total expenditureAs a result importing natural gas from Algeria or other neighboring countries could signicantly
increase petroleum related subsidies
Figure 2-2 Natural Gas Local Consumption and Export
(as a Percentage of Total Production)
83 80 8389
96
17 20 1711
4
-
20
40
60
80
100
120
0
25
50
75
100
2008 2009 2010 2011 2012
B C M
( ) o f T o t a l P r o d u c t i o n
Axis Title
Local Consumption [LHS] Export [LHS] Total Export [RHS]
The information opinions tools and materials contained in this report (the ldquoContentrdquo) are not addressed to or intended for publication distribution to or use by
any individual or legal entity who is a citizen or resident of or domiciled in any jurisdiction where such distribution publication availability or use would constitute a
breach of the laws or regulations of such jurisdiction or that would require Watani Investment Company KSCC (ldquoNBK Capitalrdquo) or its parent company its subsidiaries
or its afliates (together ldquoNBK Grouprdquo) to obtain licenses approvals or permissions from the regulatory bodies or authorities of such jurisdiction The Content unless
expressly mentioned otherwise is under copyright to NBK Capital Neither the Content nor any copy of it may be in any way reproduced amended transmitted to copied
or distributed to any other party without the prior express written consent of NBK Capital All trademarks service marks and logos used in this report are trademarks or
service marks or registered trademarks or registered service marks of NBK Capital
The Content is provided to you for information purposes only and is not to be used construed or considered as an offer or the solicitation of an offer to sell or to buy or
to subscribe for any investment (including but not limited to securities or other nancial instruments) No representation or warranty express or implied is given by NBK
Capital or any of its respective directors partners ofcers afliates employees advisors or representatives that the investment referred to in this report is suitable for
you or for any particular investor Receiving this report shall not mean or be interpreted that NBK Capital will treat you as its customer If you are in doubt about suchinvestment we recommend that you consult an independent investment advisor since the investment contained or referred to in this report may not be suitable for you
and NBK Capital makes no representation or warranty in this respect
The Content shall not be considered investment legal accounting or tax advice or a representation that any investment or strategy is suitable or appropriate for your
individual circumstances or otherwise constitutes a personal recommendation to you NBK Capital does not offer advice on the tax consequences of investments and
you are advised to contact an independent tax adviser
The information and opinions contained in this report have been obtained or derived from sources that NBK Capital believes are reliable without being independently
veried as to their accuracy or completeness NBK Capital believes the information and opinions expressed in this report are accurate and complete however NBK
Capital gives no representations or warranty express or implied as to the accuracy or completeness of the Content Additional information may be available upon request
NBK Capital accepts no liability for any direct indirect or consequential loss arising from the use of the Content This report is not to be relied upon as a substitution for
the exercise of independent judgment In addition NBK Capital may have issued and may in the future issue other reports that are inconsistent with and reach different
conclusions from the information presented in this report Those reports reect the different assumptions views and analytical methods of the analysts who prepared
the reports and NBK Capital is under no obligation to ensure that such other reports are brought to your attention NBK Capital may be involved in many businesses that
relate to companies mentioned in this report and may engage with them Past performance should not be taken as an indication or guarantee of future performance and
no representation or warranty express or implied is made regarding future performance Information opinions and estimates contained in this report reect a judgment
at the reportrsquos original date of publication by NBK Capital and are subject to change without notice
The value of any investment or income may fall as well as rise and you may not get back the full amount invested Where an investment is denominated in a currency
other than the local currency of the recipient of the research report changes in the exchange rates may have an adverse effect on the value price or income of that
investment In the case of investments for which there is no recognized market it may be difcult for investors to sell their investments or to obtain reliable information
about their value or the extent of the risk to which they are exposed
NBK Capital has not reviewed the addresses of the hyperlinks to or the websites referred to in the report and takes no responsibility for the content contained therein
Such address or hyperlink (including addresses or hyperlinks to NBK Capitalrsquos own website material) is provided solely for your convenience and information and the
content of the linked site does not in any way form part of this document Accessing such websites or following such links through this report or NBK Capitalrsquos website
shall be at your own risk
NBK Group may have a nancial interest in one or any of the securities that are the subject of this report Funds managed by NBK Group may own the securities that
are the subject of this report NBK Group may own units in one or more of the aforementioned funds
NBK Group may be in the process of soliciting or executing fee-earning mandate or doing business for companies that are either the subject of this report or are
mentioned in this report As a result you should be aware that NBK Group may have material conict of interest that could affect the objectivity of this report
copy COPYRIGHT NOTICE
This is a publication of NBK Capital No part of this publication may be reproduced or duplicated without the prior consent of NBK Capital
Egypt has close to two trillion cubic meters (TCM) of proven natural gas reserves representing just
over 1 of the worldrsquos proven reserves Egypt is the third-largest reserve in Africa falling behind
Algeria (45 TCM) and Nigeria (52 TCM) according to BPrsquos 2013 World Statistical Review
Unsurprisingly the Egyptian government has continuously promoted the domestic use of naturalgas as an energy source compared to other resources In addition Egypt had been ramping up its
production capacity considerably until 2009 allowing the country to export natural gas through
the Arab Gas Pipeline which serves as a key energy provider for many neighboring countries (such
as Jordan)
However between 2010 and 2012 annual production levels in Egypt remained relatively at (c
61 billion cubic meters) largely due to the political issues the country faced in 2011 onwards
According to the chairman of Egypt Natural Gas Holding Company (EGAS ndash a government-owned
entity that manages various gas projects) Egyptrsquos daily gas production actually declined by 85
YoY to an average of 015 billion cubic meters (BCM) during the rst nine months of 2013
The growth of domestic consumption (estimated at around 526 BCM in 2012) on the other
hand has not wavered marching on at a 7 CAGR between 2009 and 2012 Consequently as
consumption levels increased and production levels declined Egyptrsquos natural gas export levels
declined from 105 BCM in 2009 (20 of total production) to just 24 BCM in 2012 (4 of total
production) The Minister for Oil and Gas mentioned late last year that Egypt might have to start
importing natural gas by mid-2013 in order to meet domestic demand essentially transforming
Egypt from a net exporter to a net importer for the rst time in recent history
Figure 2-1 Egyptrsquos Production and Consumption Levels
Implications of switching from being a net exporter to a net importer
Until now there has not been any credible information on the issue of Egypt importing naturalgas however rumors continue to oat around According to an article on Egypt Oil amp Gas Egypt
is looking into importing LNG The article went on to mention that Egypt has signed an agreement
to begin importing natural gas from Algeria starting in 2013 at a cost of USD 11 per MMBTU
(compared to a market price of USD 12 per MMBTU) It also mentioned that Egypt would discuss
a potential agreement with other countries as a potential supplier of natural gas as well Although
imports from some of these countries may prove to be cheaper compared with global LNG prices
it is still well above the price paid to the local gas producers
Natural gas is a highly subsidized product in Egypt In the event of it importing natural gas
the Egyptian government could have additional nancial implications to deal with According
to the Central Bank of Egypt the country spent a total of EGP 96 billion in FY 2011-2012 on
subsidizing petroleum-related expenses making up 20 of the governmentrsquos total expenditureAs a result importing natural gas from Algeria or other neighboring countries could signicantly
increase petroleum related subsidies
Figure 2-2 Natural Gas Local Consumption and Export
(as a Percentage of Total Production)
83 80 8389
96
17 20 1711
4
-
20
40
60
80
100
120
0
25
50
75
100
2008 2009 2010 2011 2012
B C M
( ) o f T o t a l P r o d u c t i o n
Axis Title
Local Consumption [LHS] Export [LHS] Total Export [RHS]
The information opinions tools and materials contained in this report (the ldquoContentrdquo) are not addressed to or intended for publication distribution to or use by
any individual or legal entity who is a citizen or resident of or domiciled in any jurisdiction where such distribution publication availability or use would constitute a
breach of the laws or regulations of such jurisdiction or that would require Watani Investment Company KSCC (ldquoNBK Capitalrdquo) or its parent company its subsidiaries
or its afliates (together ldquoNBK Grouprdquo) to obtain licenses approvals or permissions from the regulatory bodies or authorities of such jurisdiction The Content unless
expressly mentioned otherwise is under copyright to NBK Capital Neither the Content nor any copy of it may be in any way reproduced amended transmitted to copied
or distributed to any other party without the prior express written consent of NBK Capital All trademarks service marks and logos used in this report are trademarks or
service marks or registered trademarks or registered service marks of NBK Capital
The Content is provided to you for information purposes only and is not to be used construed or considered as an offer or the solicitation of an offer to sell or to buy or
to subscribe for any investment (including but not limited to securities or other nancial instruments) No representation or warranty express or implied is given by NBK
Capital or any of its respective directors partners ofcers afliates employees advisors or representatives that the investment referred to in this report is suitable for
you or for any particular investor Receiving this report shall not mean or be interpreted that NBK Capital will treat you as its customer If you are in doubt about suchinvestment we recommend that you consult an independent investment advisor since the investment contained or referred to in this report may not be suitable for you
and NBK Capital makes no representation or warranty in this respect
The Content shall not be considered investment legal accounting or tax advice or a representation that any investment or strategy is suitable or appropriate for your
individual circumstances or otherwise constitutes a personal recommendation to you NBK Capital does not offer advice on the tax consequences of investments and
you are advised to contact an independent tax adviser
The information and opinions contained in this report have been obtained or derived from sources that NBK Capital believes are reliable without being independently
veried as to their accuracy or completeness NBK Capital believes the information and opinions expressed in this report are accurate and complete however NBK
Capital gives no representations or warranty express or implied as to the accuracy or completeness of the Content Additional information may be available upon request
NBK Capital accepts no liability for any direct indirect or consequential loss arising from the use of the Content This report is not to be relied upon as a substitution for
the exercise of independent judgment In addition NBK Capital may have issued and may in the future issue other reports that are inconsistent with and reach different
conclusions from the information presented in this report Those reports reect the different assumptions views and analytical methods of the analysts who prepared
the reports and NBK Capital is under no obligation to ensure that such other reports are brought to your attention NBK Capital may be involved in many businesses that
relate to companies mentioned in this report and may engage with them Past performance should not be taken as an indication or guarantee of future performance and
no representation or warranty express or implied is made regarding future performance Information opinions and estimates contained in this report reect a judgment
at the reportrsquos original date of publication by NBK Capital and are subject to change without notice
The value of any investment or income may fall as well as rise and you may not get back the full amount invested Where an investment is denominated in a currency
other than the local currency of the recipient of the research report changes in the exchange rates may have an adverse effect on the value price or income of that
investment In the case of investments for which there is no recognized market it may be difcult for investors to sell their investments or to obtain reliable information
about their value or the extent of the risk to which they are exposed
NBK Capital has not reviewed the addresses of the hyperlinks to or the websites referred to in the report and takes no responsibility for the content contained therein
Such address or hyperlink (including addresses or hyperlinks to NBK Capitalrsquos own website material) is provided solely for your convenience and information and the
content of the linked site does not in any way form part of this document Accessing such websites or following such links through this report or NBK Capitalrsquos website
shall be at your own risk
NBK Group may have a nancial interest in one or any of the securities that are the subject of this report Funds managed by NBK Group may own the securities that
are the subject of this report NBK Group may own units in one or more of the aforementioned funds
NBK Group may be in the process of soliciting or executing fee-earning mandate or doing business for companies that are either the subject of this report or are
mentioned in this report As a result you should be aware that NBK Group may have material conict of interest that could affect the objectivity of this report
copy COPYRIGHT NOTICE
This is a publication of NBK Capital No part of this publication may be reproduced or duplicated without the prior consent of NBK Capital
Egypt has close to two trillion cubic meters (TCM) of proven natural gas reserves representing just
over 1 of the worldrsquos proven reserves Egypt is the third-largest reserve in Africa falling behind
Algeria (45 TCM) and Nigeria (52 TCM) according to BPrsquos 2013 World Statistical Review
Unsurprisingly the Egyptian government has continuously promoted the domestic use of naturalgas as an energy source compared to other resources In addition Egypt had been ramping up its
production capacity considerably until 2009 allowing the country to export natural gas through
the Arab Gas Pipeline which serves as a key energy provider for many neighboring countries (such
as Jordan)
However between 2010 and 2012 annual production levels in Egypt remained relatively at (c
61 billion cubic meters) largely due to the political issues the country faced in 2011 onwards
According to the chairman of Egypt Natural Gas Holding Company (EGAS ndash a government-owned
entity that manages various gas projects) Egyptrsquos daily gas production actually declined by 85
YoY to an average of 015 billion cubic meters (BCM) during the rst nine months of 2013
The growth of domestic consumption (estimated at around 526 BCM in 2012) on the other
hand has not wavered marching on at a 7 CAGR between 2009 and 2012 Consequently as
consumption levels increased and production levels declined Egyptrsquos natural gas export levels
declined from 105 BCM in 2009 (20 of total production) to just 24 BCM in 2012 (4 of total
production) The Minister for Oil and Gas mentioned late last year that Egypt might have to start
importing natural gas by mid-2013 in order to meet domestic demand essentially transforming
Egypt from a net exporter to a net importer for the rst time in recent history
Figure 2-1 Egyptrsquos Production and Consumption Levels
Implications of switching from being a net exporter to a net importer
Until now there has not been any credible information on the issue of Egypt importing naturalgas however rumors continue to oat around According to an article on Egypt Oil amp Gas Egypt
is looking into importing LNG The article went on to mention that Egypt has signed an agreement
to begin importing natural gas from Algeria starting in 2013 at a cost of USD 11 per MMBTU
(compared to a market price of USD 12 per MMBTU) It also mentioned that Egypt would discuss
a potential agreement with other countries as a potential supplier of natural gas as well Although
imports from some of these countries may prove to be cheaper compared with global LNG prices
it is still well above the price paid to the local gas producers
Natural gas is a highly subsidized product in Egypt In the event of it importing natural gas
the Egyptian government could have additional nancial implications to deal with According
to the Central Bank of Egypt the country spent a total of EGP 96 billion in FY 2011-2012 on
subsidizing petroleum-related expenses making up 20 of the governmentrsquos total expenditureAs a result importing natural gas from Algeria or other neighboring countries could signicantly
increase petroleum related subsidies
Figure 2-2 Natural Gas Local Consumption and Export
(as a Percentage of Total Production)
83 80 8389
96
17 20 1711
4
-
20
40
60
80
100
120
0
25
50
75
100
2008 2009 2010 2011 2012
B C M
( ) o f T o t a l P r o d u c t i o n
Axis Title
Local Consumption [LHS] Export [LHS] Total Export [RHS]
The information opinions tools and materials contained in this report (the ldquoContentrdquo) are not addressed to or intended for publication distribution to or use by
any individual or legal entity who is a citizen or resident of or domiciled in any jurisdiction where such distribution publication availability or use would constitute a
breach of the laws or regulations of such jurisdiction or that would require Watani Investment Company KSCC (ldquoNBK Capitalrdquo) or its parent company its subsidiaries
or its afliates (together ldquoNBK Grouprdquo) to obtain licenses approvals or permissions from the regulatory bodies or authorities of such jurisdiction The Content unless
expressly mentioned otherwise is under copyright to NBK Capital Neither the Content nor any copy of it may be in any way reproduced amended transmitted to copied
or distributed to any other party without the prior express written consent of NBK Capital All trademarks service marks and logos used in this report are trademarks or
service marks or registered trademarks or registered service marks of NBK Capital
The Content is provided to you for information purposes only and is not to be used construed or considered as an offer or the solicitation of an offer to sell or to buy or
to subscribe for any investment (including but not limited to securities or other nancial instruments) No representation or warranty express or implied is given by NBK
Capital or any of its respective directors partners ofcers afliates employees advisors or representatives that the investment referred to in this report is suitable for
you or for any particular investor Receiving this report shall not mean or be interpreted that NBK Capital will treat you as its customer If you are in doubt about suchinvestment we recommend that you consult an independent investment advisor since the investment contained or referred to in this report may not be suitable for you
and NBK Capital makes no representation or warranty in this respect
The Content shall not be considered investment legal accounting or tax advice or a representation that any investment or strategy is suitable or appropriate for your
individual circumstances or otherwise constitutes a personal recommendation to you NBK Capital does not offer advice on the tax consequences of investments and
you are advised to contact an independent tax adviser
The information and opinions contained in this report have been obtained or derived from sources that NBK Capital believes are reliable without being independently
veried as to their accuracy or completeness NBK Capital believes the information and opinions expressed in this report are accurate and complete however NBK
Capital gives no representations or warranty express or implied as to the accuracy or completeness of the Content Additional information may be available upon request
NBK Capital accepts no liability for any direct indirect or consequential loss arising from the use of the Content This report is not to be relied upon as a substitution for
the exercise of independent judgment In addition NBK Capital may have issued and may in the future issue other reports that are inconsistent with and reach different
conclusions from the information presented in this report Those reports reect the different assumptions views and analytical methods of the analysts who prepared
the reports and NBK Capital is under no obligation to ensure that such other reports are brought to your attention NBK Capital may be involved in many businesses that
relate to companies mentioned in this report and may engage with them Past performance should not be taken as an indication or guarantee of future performance and
no representation or warranty express or implied is made regarding future performance Information opinions and estimates contained in this report reect a judgment
at the reportrsquos original date of publication by NBK Capital and are subject to change without notice
The value of any investment or income may fall as well as rise and you may not get back the full amount invested Where an investment is denominated in a currency
other than the local currency of the recipient of the research report changes in the exchange rates may have an adverse effect on the value price or income of that
investment In the case of investments for which there is no recognized market it may be difcult for investors to sell their investments or to obtain reliable information
about their value or the extent of the risk to which they are exposed
NBK Capital has not reviewed the addresses of the hyperlinks to or the websites referred to in the report and takes no responsibility for the content contained therein
Such address or hyperlink (including addresses or hyperlinks to NBK Capitalrsquos own website material) is provided solely for your convenience and information and the
content of the linked site does not in any way form part of this document Accessing such websites or following such links through this report or NBK Capitalrsquos website
shall be at your own risk
NBK Group may have a nancial interest in one or any of the securities that are the subject of this report Funds managed by NBK Group may own the securities that
are the subject of this report NBK Group may own units in one or more of the aforementioned funds
NBK Group may be in the process of soliciting or executing fee-earning mandate or doing business for companies that are either the subject of this report or are
mentioned in this report As a result you should be aware that NBK Group may have material conict of interest that could affect the objectivity of this report
copy COPYRIGHT NOTICE
This is a publication of NBK Capital No part of this publication may be reproduced or duplicated without the prior consent of NBK Capital
Egypt has close to two trillion cubic meters (TCM) of proven natural gas reserves representing just
over 1 of the worldrsquos proven reserves Egypt is the third-largest reserve in Africa falling behind
Algeria (45 TCM) and Nigeria (52 TCM) according to BPrsquos 2013 World Statistical Review
Unsurprisingly the Egyptian government has continuously promoted the domestic use of naturalgas as an energy source compared to other resources In addition Egypt had been ramping up its
production capacity considerably until 2009 allowing the country to export natural gas through
the Arab Gas Pipeline which serves as a key energy provider for many neighboring countries (such
as Jordan)
However between 2010 and 2012 annual production levels in Egypt remained relatively at (c
61 billion cubic meters) largely due to the political issues the country faced in 2011 onwards
According to the chairman of Egypt Natural Gas Holding Company (EGAS ndash a government-owned
entity that manages various gas projects) Egyptrsquos daily gas production actually declined by 85
YoY to an average of 015 billion cubic meters (BCM) during the rst nine months of 2013
The growth of domestic consumption (estimated at around 526 BCM in 2012) on the other
hand has not wavered marching on at a 7 CAGR between 2009 and 2012 Consequently as
consumption levels increased and production levels declined Egyptrsquos natural gas export levels
declined from 105 BCM in 2009 (20 of total production) to just 24 BCM in 2012 (4 of total
production) The Minister for Oil and Gas mentioned late last year that Egypt might have to start
importing natural gas by mid-2013 in order to meet domestic demand essentially transforming
Egypt from a net exporter to a net importer for the rst time in recent history
Figure 2-1 Egyptrsquos Production and Consumption Levels
Implications of switching from being a net exporter to a net importer
Until now there has not been any credible information on the issue of Egypt importing naturalgas however rumors continue to oat around According to an article on Egypt Oil amp Gas Egypt
is looking into importing LNG The article went on to mention that Egypt has signed an agreement
to begin importing natural gas from Algeria starting in 2013 at a cost of USD 11 per MMBTU
(compared to a market price of USD 12 per MMBTU) It also mentioned that Egypt would discuss
a potential agreement with other countries as a potential supplier of natural gas as well Although
imports from some of these countries may prove to be cheaper compared with global LNG prices
it is still well above the price paid to the local gas producers
Natural gas is a highly subsidized product in Egypt In the event of it importing natural gas
the Egyptian government could have additional nancial implications to deal with According
to the Central Bank of Egypt the country spent a total of EGP 96 billion in FY 2011-2012 on
subsidizing petroleum-related expenses making up 20 of the governmentrsquos total expenditureAs a result importing natural gas from Algeria or other neighboring countries could signicantly
increase petroleum related subsidies
Figure 2-2 Natural Gas Local Consumption and Export
(as a Percentage of Total Production)
83 80 8389
96
17 20 1711
4
-
20
40
60
80
100
120
0
25
50
75
100
2008 2009 2010 2011 2012
B C M
( ) o f T o t a l P r o d u c t i o n
Axis Title
Local Consumption [LHS] Export [LHS] Total Export [RHS]
The information opinions tools and materials contained in this report (the ldquoContentrdquo) are not addressed to or intended for publication distribution to or use by
any individual or legal entity who is a citizen or resident of or domiciled in any jurisdiction where such distribution publication availability or use would constitute a
breach of the laws or regulations of such jurisdiction or that would require Watani Investment Company KSCC (ldquoNBK Capitalrdquo) or its parent company its subsidiaries
or its afliates (together ldquoNBK Grouprdquo) to obtain licenses approvals or permissions from the regulatory bodies or authorities of such jurisdiction The Content unless
expressly mentioned otherwise is under copyright to NBK Capital Neither the Content nor any copy of it may be in any way reproduced amended transmitted to copied
or distributed to any other party without the prior express written consent of NBK Capital All trademarks service marks and logos used in this report are trademarks or
service marks or registered trademarks or registered service marks of NBK Capital
The Content is provided to you for information purposes only and is not to be used construed or considered as an offer or the solicitation of an offer to sell or to buy or
to subscribe for any investment (including but not limited to securities or other nancial instruments) No representation or warranty express or implied is given by NBK
Capital or any of its respective directors partners ofcers afliates employees advisors or representatives that the investment referred to in this report is suitable for
you or for any particular investor Receiving this report shall not mean or be interpreted that NBK Capital will treat you as its customer If you are in doubt about suchinvestment we recommend that you consult an independent investment advisor since the investment contained or referred to in this report may not be suitable for you
and NBK Capital makes no representation or warranty in this respect
The Content shall not be considered investment legal accounting or tax advice or a representation that any investment or strategy is suitable or appropriate for your
individual circumstances or otherwise constitutes a personal recommendation to you NBK Capital does not offer advice on the tax consequences of investments and
you are advised to contact an independent tax adviser
The information and opinions contained in this report have been obtained or derived from sources that NBK Capital believes are reliable without being independently
veried as to their accuracy or completeness NBK Capital believes the information and opinions expressed in this report are accurate and complete however NBK
Capital gives no representations or warranty express or implied as to the accuracy or completeness of the Content Additional information may be available upon request
NBK Capital accepts no liability for any direct indirect or consequential loss arising from the use of the Content This report is not to be relied upon as a substitution for
the exercise of independent judgment In addition NBK Capital may have issued and may in the future issue other reports that are inconsistent with and reach different
conclusions from the information presented in this report Those reports reect the different assumptions views and analytical methods of the analysts who prepared
the reports and NBK Capital is under no obligation to ensure that such other reports are brought to your attention NBK Capital may be involved in many businesses that
relate to companies mentioned in this report and may engage with them Past performance should not be taken as an indication or guarantee of future performance and
no representation or warranty express or implied is made regarding future performance Information opinions and estimates contained in this report reect a judgment
at the reportrsquos original date of publication by NBK Capital and are subject to change without notice
The value of any investment or income may fall as well as rise and you may not get back the full amount invested Where an investment is denominated in a currency
other than the local currency of the recipient of the research report changes in the exchange rates may have an adverse effect on the value price or income of that
investment In the case of investments for which there is no recognized market it may be difcult for investors to sell their investments or to obtain reliable information
about their value or the extent of the risk to which they are exposed
NBK Capital has not reviewed the addresses of the hyperlinks to or the websites referred to in the report and takes no responsibility for the content contained therein
Such address or hyperlink (including addresses or hyperlinks to NBK Capitalrsquos own website material) is provided solely for your convenience and information and the
content of the linked site does not in any way form part of this document Accessing such websites or following such links through this report or NBK Capitalrsquos website
shall be at your own risk
NBK Group may have a nancial interest in one or any of the securities that are the subject of this report Funds managed by NBK Group may own the securities that
are the subject of this report NBK Group may own units in one or more of the aforementioned funds
NBK Group may be in the process of soliciting or executing fee-earning mandate or doing business for companies that are either the subject of this report or are
mentioned in this report As a result you should be aware that NBK Group may have material conict of interest that could affect the objectivity of this report
copy COPYRIGHT NOTICE
This is a publication of NBK Capital No part of this publication may be reproduced or duplicated without the prior consent of NBK Capital
The information opinions tools and materials contained in this report (the ldquoContentrdquo) are not addressed to or intended for publication distribution to or use by
any individual or legal entity who is a citizen or resident of or domiciled in any jurisdiction where such distribution publication availability or use would constitute a
breach of the laws or regulations of such jurisdiction or that would require Watani Investment Company KSCC (ldquoNBK Capitalrdquo) or its parent company its subsidiaries
or its afliates (together ldquoNBK Grouprdquo) to obtain licenses approvals or permissions from the regulatory bodies or authorities of such jurisdiction The Content unless
expressly mentioned otherwise is under copyright to NBK Capital Neither the Content nor any copy of it may be in any way reproduced amended transmitted to copied
or distributed to any other party without the prior express written consent of NBK Capital All trademarks service marks and logos used in this report are trademarks or
service marks or registered trademarks or registered service marks of NBK Capital
The Content is provided to you for information purposes only and is not to be used construed or considered as an offer or the solicitation of an offer to sell or to buy or
to subscribe for any investment (including but not limited to securities or other nancial instruments) No representation or warranty express or implied is given by NBK
Capital or any of its respective directors partners ofcers afliates employees advisors or representatives that the investment referred to in this report is suitable for
you or for any particular investor Receiving this report shall not mean or be interpreted that NBK Capital will treat you as its customer If you are in doubt about suchinvestment we recommend that you consult an independent investment advisor since the investment contained or referred to in this report may not be suitable for you
and NBK Capital makes no representation or warranty in this respect
The Content shall not be considered investment legal accounting or tax advice or a representation that any investment or strategy is suitable or appropriate for your
individual circumstances or otherwise constitutes a personal recommendation to you NBK Capital does not offer advice on the tax consequences of investments and
you are advised to contact an independent tax adviser
The information and opinions contained in this report have been obtained or derived from sources that NBK Capital believes are reliable without being independently
veried as to their accuracy or completeness NBK Capital believes the information and opinions expressed in this report are accurate and complete however NBK
Capital gives no representations or warranty express or implied as to the accuracy or completeness of the Content Additional information may be available upon request
NBK Capital accepts no liability for any direct indirect or consequential loss arising from the use of the Content This report is not to be relied upon as a substitution for
the exercise of independent judgment In addition NBK Capital may have issued and may in the future issue other reports that are inconsistent with and reach different
conclusions from the information presented in this report Those reports reect the different assumptions views and analytical methods of the analysts who prepared
the reports and NBK Capital is under no obligation to ensure that such other reports are brought to your attention NBK Capital may be involved in many businesses that
relate to companies mentioned in this report and may engage with them Past performance should not be taken as an indication or guarantee of future performance and
no representation or warranty express or implied is made regarding future performance Information opinions and estimates contained in this report reect a judgment
at the reportrsquos original date of publication by NBK Capital and are subject to change without notice
The value of any investment or income may fall as well as rise and you may not get back the full amount invested Where an investment is denominated in a currency
other than the local currency of the recipient of the research report changes in the exchange rates may have an adverse effect on the value price or income of that
investment In the case of investments for which there is no recognized market it may be difcult for investors to sell their investments or to obtain reliable information
about their value or the extent of the risk to which they are exposed
NBK Capital has not reviewed the addresses of the hyperlinks to or the websites referred to in the report and takes no responsibility for the content contained therein
Such address or hyperlink (including addresses or hyperlinks to NBK Capitalrsquos own website material) is provided solely for your convenience and information and the
content of the linked site does not in any way form part of this document Accessing such websites or following such links through this report or NBK Capitalrsquos website
shall be at your own risk
NBK Group may have a nancial interest in one or any of the securities that are the subject of this report Funds managed by NBK Group may own the securities that
are the subject of this report NBK Group may own units in one or more of the aforementioned funds
NBK Group may be in the process of soliciting or executing fee-earning mandate or doing business for companies that are either the subject of this report or are
mentioned in this report As a result you should be aware that NBK Group may have material conict of interest that could affect the objectivity of this report
copy COPYRIGHT NOTICE
This is a publication of NBK Capital No part of this publication may be reproduced or duplicated without the prior consent of NBK Capital
The information opinions tools and materials contained in this report (the ldquoContentrdquo) are not addressed to or intended for publication distribution to or use by
any individual or legal entity who is a citizen or resident of or domiciled in any jurisdiction where such distribution publication availability or use would constitute a
breach of the laws or regulations of such jurisdiction or that would require Watani Investment Company KSCC (ldquoNBK Capitalrdquo) or its parent company its subsidiaries
or its afliates (together ldquoNBK Grouprdquo) to obtain licenses approvals or permissions from the regulatory bodies or authorities of such jurisdiction The Content unless
expressly mentioned otherwise is under copyright to NBK Capital Neither the Content nor any copy of it may be in any way reproduced amended transmitted to copied
or distributed to any other party without the prior express written consent of NBK Capital All trademarks service marks and logos used in this report are trademarks or
service marks or registered trademarks or registered service marks of NBK Capital
The Content is provided to you for information purposes only and is not to be used construed or considered as an offer or the solicitation of an offer to sell or to buy or
to subscribe for any investment (including but not limited to securities or other nancial instruments) No representation or warranty express or implied is given by NBK
Capital or any of its respective directors partners ofcers afliates employees advisors or representatives that the investment referred to in this report is suitable for
you or for any particular investor Receiving this report shall not mean or be interpreted that NBK Capital will treat you as its customer If you are in doubt about suchinvestment we recommend that you consult an independent investment advisor since the investment contained or referred to in this report may not be suitable for you
and NBK Capital makes no representation or warranty in this respect
The Content shall not be considered investment legal accounting or tax advice or a representation that any investment or strategy is suitable or appropriate for your
individual circumstances or otherwise constitutes a personal recommendation to you NBK Capital does not offer advice on the tax consequences of investments and
you are advised to contact an independent tax adviser
The information and opinions contained in this report have been obtained or derived from sources that NBK Capital believes are reliable without being independently
veried as to their accuracy or completeness NBK Capital believes the information and opinions expressed in this report are accurate and complete however NBK
Capital gives no representations or warranty express or implied as to the accuracy or completeness of the Content Additional information may be available upon request
NBK Capital accepts no liability for any direct indirect or consequential loss arising from the use of the Content This report is not to be relied upon as a substitution for
the exercise of independent judgment In addition NBK Capital may have issued and may in the future issue other reports that are inconsistent with and reach different
conclusions from the information presented in this report Those reports reect the different assumptions views and analytical methods of the analysts who prepared
the reports and NBK Capital is under no obligation to ensure that such other reports are brought to your attention NBK Capital may be involved in many businesses that
relate to companies mentioned in this report and may engage with them Past performance should not be taken as an indication or guarantee of future performance and
no representation or warranty express or implied is made regarding future performance Information opinions and estimates contained in this report reect a judgment
at the reportrsquos original date of publication by NBK Capital and are subject to change without notice
The value of any investment or income may fall as well as rise and you may not get back the full amount invested Where an investment is denominated in a currency
other than the local currency of the recipient of the research report changes in the exchange rates may have an adverse effect on the value price or income of that
investment In the case of investments for which there is no recognized market it may be difcult for investors to sell their investments or to obtain reliable information
about their value or the extent of the risk to which they are exposed
NBK Capital has not reviewed the addresses of the hyperlinks to or the websites referred to in the report and takes no responsibility for the content contained therein
Such address or hyperlink (including addresses or hyperlinks to NBK Capitalrsquos own website material) is provided solely for your convenience and information and the
content of the linked site does not in any way form part of this document Accessing such websites or following such links through this report or NBK Capitalrsquos website
shall be at your own risk
NBK Group may have a nancial interest in one or any of the securities that are the subject of this report Funds managed by NBK Group may own the securities that
are the subject of this report NBK Group may own units in one or more of the aforementioned funds
NBK Group may be in the process of soliciting or executing fee-earning mandate or doing business for companies that are either the subject of this report or are
mentioned in this report As a result you should be aware that NBK Group may have material conict of interest that could affect the objectivity of this report
copy COPYRIGHT NOTICE
This is a publication of NBK Capital No part of this publication may be reproduced or duplicated without the prior consent of NBK Capital
The information opinions tools and materials contained in this report (the ldquoContentrdquo) are not addressed to or intended for publication distribution to or use by
any individual or legal entity who is a citizen or resident of or domiciled in any jurisdiction where such distribution publication availability or use would constitute a
breach of the laws or regulations of such jurisdiction or that would require Watani Investment Company KSCC (ldquoNBK Capitalrdquo) or its parent company its subsidiaries
or its afliates (together ldquoNBK Grouprdquo) to obtain licenses approvals or permissions from the regulatory bodies or authorities of such jurisdiction The Content unless
expressly mentioned otherwise is under copyright to NBK Capital Neither the Content nor any copy of it may be in any way reproduced amended transmitted to copied
or distributed to any other party without the prior express written consent of NBK Capital All trademarks service marks and logos used in this report are trademarks or
service marks or registered trademarks or registered service marks of NBK Capital
The Content is provided to you for information purposes only and is not to be used construed or considered as an offer or the solicitation of an offer to sell or to buy or
to subscribe for any investment (including but not limited to securities or other nancial instruments) No representation or warranty express or implied is given by NBK
Capital or any of its respective directors partners ofcers afliates employees advisors or representatives that the investment referred to in this report is suitable for
you or for any particular investor Receiving this report shall not mean or be interpreted that NBK Capital will treat you as its customer If you are in doubt about suchinvestment we recommend that you consult an independent investment advisor since the investment contained or referred to in this report may not be suitable for you
and NBK Capital makes no representation or warranty in this respect
The Content shall not be considered investment legal accounting or tax advice or a representation that any investment or strategy is suitable or appropriate for your
individual circumstances or otherwise constitutes a personal recommendation to you NBK Capital does not offer advice on the tax consequences of investments and
you are advised to contact an independent tax adviser
The information and opinions contained in this report have been obtained or derived from sources that NBK Capital believes are reliable without being independently
veried as to their accuracy or completeness NBK Capital believes the information and opinions expressed in this report are accurate and complete however NBK
Capital gives no representations or warranty express or implied as to the accuracy or completeness of the Content Additional information may be available upon request
NBK Capital accepts no liability for any direct indirect or consequential loss arising from the use of the Content This report is not to be relied upon as a substitution for
the exercise of independent judgment In addition NBK Capital may have issued and may in the future issue other reports that are inconsistent with and reach different
conclusions from the information presented in this report Those reports reect the different assumptions views and analytical methods of the analysts who prepared
the reports and NBK Capital is under no obligation to ensure that such other reports are brought to your attention NBK Capital may be involved in many businesses that
relate to companies mentioned in this report and may engage with them Past performance should not be taken as an indication or guarantee of future performance and
no representation or warranty express or implied is made regarding future performance Information opinions and estimates contained in this report reect a judgment
at the reportrsquos original date of publication by NBK Capital and are subject to change without notice
The value of any investment or income may fall as well as rise and you may not get back the full amount invested Where an investment is denominated in a currency
other than the local currency of the recipient of the research report changes in the exchange rates may have an adverse effect on the value price or income of that
investment In the case of investments for which there is no recognized market it may be difcult for investors to sell their investments or to obtain reliable information
about their value or the extent of the risk to which they are exposed
NBK Capital has not reviewed the addresses of the hyperlinks to or the websites referred to in the report and takes no responsibility for the content contained therein
Such address or hyperlink (including addresses or hyperlinks to NBK Capitalrsquos own website material) is provided solely for your convenience and information and the
content of the linked site does not in any way form part of this document Accessing such websites or following such links through this report or NBK Capitalrsquos website
shall be at your own risk
NBK Group may have a nancial interest in one or any of the securities that are the subject of this report Funds managed by NBK Group may own the securities that
are the subject of this report NBK Group may own units in one or more of the aforementioned funds
NBK Group may be in the process of soliciting or executing fee-earning mandate or doing business for companies that are either the subject of this report or are
mentioned in this report As a result you should be aware that NBK Group may have material conict of interest that could affect the objectivity of this report
copy COPYRIGHT NOTICE
This is a publication of NBK Capital No part of this publication may be reproduced or duplicated without the prior consent of NBK Capital
The information opinions tools and materials contained in this report (the ldquoContentrdquo) are not addressed to or intended for publication distribution to or use by
any individual or legal entity who is a citizen or resident of or domiciled in any jurisdiction where such distribution publication availability or use would constitute a
breach of the laws or regulations of such jurisdiction or that would require Watani Investment Company KSCC (ldquoNBK Capitalrdquo) or its parent company its subsidiaries
or its afliates (together ldquoNBK Grouprdquo) to obtain licenses approvals or permissions from the regulatory bodies or authorities of such jurisdiction The Content unless
expressly mentioned otherwise is under copyright to NBK Capital Neither the Content nor any copy of it may be in any way reproduced amended transmitted to copied
or distributed to any other party without the prior express written consent of NBK Capital All trademarks service marks and logos used in this report are trademarks or
service marks or registered trademarks or registered service marks of NBK Capital
The Content is provided to you for information purposes only and is not to be used construed or considered as an offer or the solicitation of an offer to sell or to buy or
to subscribe for any investment (including but not limited to securities or other nancial instruments) No representation or warranty express or implied is given by NBK
Capital or any of its respective directors partners ofcers afliates employees advisors or representatives that the investment referred to in this report is suitable for
you or for any particular investor Receiving this report shall not mean or be interpreted that NBK Capital will treat you as its customer If you are in doubt about suchinvestment we recommend that you consult an independent investment advisor since the investment contained or referred to in this report may not be suitable for you
and NBK Capital makes no representation or warranty in this respect
The Content shall not be considered investment legal accounting or tax advice or a representation that any investment or strategy is suitable or appropriate for your
individual circumstances or otherwise constitutes a personal recommendation to you NBK Capital does not offer advice on the tax consequences of investments and
you are advised to contact an independent tax adviser
The information and opinions contained in this report have been obtained or derived from sources that NBK Capital believes are reliable without being independently
veried as to their accuracy or completeness NBK Capital believes the information and opinions expressed in this report are accurate and complete however NBK
Capital gives no representations or warranty express or implied as to the accuracy or completeness of the Content Additional information may be available upon request
NBK Capital accepts no liability for any direct indirect or consequential loss arising from the use of the Content This report is not to be relied upon as a substitution for
the exercise of independent judgment In addition NBK Capital may have issued and may in the future issue other reports that are inconsistent with and reach different
conclusions from the information presented in this report Those reports reect the different assumptions views and analytical methods of the analysts who prepared
the reports and NBK Capital is under no obligation to ensure that such other reports are brought to your attention NBK Capital may be involved in many businesses that
relate to companies mentioned in this report and may engage with them Past performance should not be taken as an indication or guarantee of future performance and
no representation or warranty express or implied is made regarding future performance Information opinions and estimates contained in this report reect a judgment
at the reportrsquos original date of publication by NBK Capital and are subject to change without notice
The value of any investment or income may fall as well as rise and you may not get back the full amount invested Where an investment is denominated in a currency
other than the local currency of the recipient of the research report changes in the exchange rates may have an adverse effect on the value price or income of that
investment In the case of investments for which there is no recognized market it may be difcult for investors to sell their investments or to obtain reliable information
about their value or the extent of the risk to which they are exposed
NBK Capital has not reviewed the addresses of the hyperlinks to or the websites referred to in the report and takes no responsibility for the content contained therein
Such address or hyperlink (including addresses or hyperlinks to NBK Capitalrsquos own website material) is provided solely for your convenience and information and the
content of the linked site does not in any way form part of this document Accessing such websites or following such links through this report or NBK Capitalrsquos website
shall be at your own risk
NBK Group may have a nancial interest in one or any of the securities that are the subject of this report Funds managed by NBK Group may own the securities that
are the subject of this report NBK Group may own units in one or more of the aforementioned funds
NBK Group may be in the process of soliciting or executing fee-earning mandate or doing business for companies that are either the subject of this report or are
mentioned in this report As a result you should be aware that NBK Group may have material conict of interest that could affect the objectivity of this report
copy COPYRIGHT NOTICE
This is a publication of NBK Capital No part of this publication may be reproduced or duplicated without the prior consent of NBK Capital
