MENA-2 TUESDAY MORNING ROUND-UP

Egypt

Former interior minister to be tried with Mubarak Cabinet pledges reforms to placate protesters Egypt sells EGP3 billion in 2-year bonds Total vehicle sales continue to recover M-o-M in June, but down 23% Y-o-Y Cairo Poultry 2Q2011 net profit down 9% Y-o-Y, operationally misses estimates Trading on ESRS and al IRAX suspended given missed deadline to report 4Q2010, 1Q2011 earnings TDA to review land plots withdrawn from developers today

Saudi Arabia

Aramco, Dow to build USD20 billion chemicals complex in Jubail Maaden awards tank farm contract to CB&I

Lebanon Sudan

BLOM Bank reports 4.6% Y-o-Y growth in 1H2011 net profit South Sudan says North wages economic war with oil fee

Kuwait

Kuwait ISPs have not reduced fees, Al-Jaridah reports

Agenda
Egypt Thu 28 July >> Sixth of October Development and Investment Company (SODIC) stock split Tue 26 July >> Mobinil 2Q2011 results Saudi Arabia Sat 6 August >> Etihad Atheeb AGM and EGM

Egypt News
Former interior minister to be tried with Mubarak A court postponed on 25 July 2011 the trial of former interior minister Habib al-Adli, who has been accused of killing of protesters during the popular uprising that began on 25 January 2011, until 3 August 2011 so that he can be tried alongside ousted President Hosni Mubarak. Judge Adel Abdel-Salam ordered that the trial of al-Adli be postponed and that the former interior minister and Mubarak be tried together given that the evidence and charges were the same. Six others in the Adli case will be tried on the same day. Sources had earlier said that Mubarak's trial could be held in the Red Sea resort of Sharm el-Sheikh. (Reuters) Cabinet pledges reforms to placate protesters Egypt's cabinet pledged on 25 July 2011 to clear out officials that held senior posts in Hosni Mubarak's regime, continue with public corruption trials, and press on with other reforms to placate protesters that have turned their anger towards the ruling military. In a statement issued to reporters, the cabinet committee charged with crisis management said that it would "cast out all the ranks of the former regime from positions of responsibility in all state agencies as fast as possible." It also stressed "the principle of public trials for all symbols of former regime and the former president and calling on the court responsible to announce the procedures his trial and its location and revealing his real health condition."

The cabinet committee also made other pledges, including setting a maximum wage for higher paid officials within a month and referring new cases to trial more quickly. (Reuters) Egypt sells EGP3 billion in 2-year bonds The Ministry of Finance said on 25 July 2011 that it sold EGP3 billion (USD503 million) in two-year bonds. The bonds, which mature on 26 July 2013, have a 13.10% coupon. The yields at the auction ranged 13.013.27%. This was the first bond issuance post-revolution as the government relied on more short-term maturities after yields rose considerably on the back of Egypts deteriorating political, security and economic outlook. (Reuters) Total vehicle sales continue to recover M-o-M in June, but down 23% Y-o-Y Egypts total vehicle sales fell 23% Y-o-Y but continued to show a M-o-M recovery rising 18% during the month of June to c17,400, according to a report by the Automotive Marketing Information Council (AMIC) reported. Passenger car sales dropped 21% Y-o-Y, but rose 23% M-o-M to 13,700 cars. Buses fell 35% Y-oY, but rose 6% M-o-M, to 1,100 units. Truck sales were down 24% Y-o-Y, but flat M-o-M at 2,600. Passenger car sales in 1H2011 fell 36% Y-o-Y to 77,000. Imported vehicles (56% of total fell) 41% Y-o-Y, while total locally-assembled vehicle sales fell 31% Y-o-Y. (AMIC, Al Borsa) Cairo Poultry 2Q2011 net profit down 9% Y-o-Y, operationally misses estimates Cairo Poultry Company (CPC) [POUL.CA] has released 2Q2011 audited financials, highlighted by a net profit of EGP64.4 million, down 9% Y-o-Y, but up 38% Q-o-Q and 9% above our expectation. A disappointment at the operating margin level was compensated for by provision and impairment reversals. Revenue growth of 15% Y-o-Y was more than offset by pressured margins, with net operating profit (EBIT) plunging 62% Y-o-Y to EGP40.7 million. The EBIT margin came in at 7.2%, nearly a third of 2Q2010s 21.8%, and significantly below our 16.5% estimate. This drop was largely compensated for by the booking of EGP20 million in provision reversals as well a one-off EGP20 million inventory impairment reversal. Excluding provisions and one-offs, 2Q2011 net profit came in at EGP25.5 million, down 73% Y-o-Y, but up 11% Q-o-Q and 62% below our expectation, which assumed no one-off bookings and flat provisions Q-o-Q. Feed revenue grew 32% Y-o-Y (and missed our estimate by 39%) to EGP290 million as CPC was likely able to benefit from passing on higher commodity prices, in our view. The poultry segments revenue was roughly flat Y-o-Y at EGP268 million and came in broadly in line with our estimate likely on lower prices due to higher competition in the poultry market as the government has taken measures to increase the local supply, in our view. Top line level growth in 2Q2011 was solid, mainly propelled by the feed segment, while the poultry segment continued to perform in line with 2Q2010s performance. (Company Disclosure, Nada Amin, Wafaa Baddour)

CPC: EGP13.9, Rating: Neutral, FV: EGP15.6, MCap: USD337 million, POUL EY / POUL. CA Trading on ESRS and al IRAX suspended given missed deadline to report 4Q2010, 1Q2011 earnings The Egyptian Exchange (EGX) has suspended trading on Ezz Steel (ESRS.CA) and al Ezz Dekheila (EZDK) [IRAX.CA] as both companies have missed the 15-day deadline announced on 6 July 2011 to report earnings for 4Q2010 and 1Q2011. Trading will resume once the companies publish consolidated financials for these periods. Last week, Ezz published its standalone results for 4Q2010 showing an EGP86 million loss, and stated in a release that the publication of the consolidated financial performance for the group depends on the EZDKs board of directors (BoD) approving EZDKs results. The company expected that this would happen on, or around, 24 July 2011, which would have allowed Ezz Steel to announce its consolidated results one week after. (Mist, Company Disclosure) Ezz Steel: EGP9.65, Rating: Buy, FV: EGP12.10, MCap: USD880 million, ESRS EY / ESRS.CA EZDK: EGP641.44, Rating: Neutral, FV: EGP693, MCap: USD1,438 million, IRAX EY / IRAX.CA TDA to review land plots withdrawn from developers today The Tourism Development Authoritys (TDAs) board of directors (BoD) will hold its first meeting today to discuss the status of land plots that it has withdrawn from developers and any complaints that these developers may have filed, Al Masry Al Youm reported, quoting the Minister of Tourism, Mounir Fakhry Abdel Nour, as saying. The TDA has withdrawn these plots in order to implement the Tourism Ministers directive, which called for cancelling land contracts to developers that have either not begun developing the land or those who have developed less than 1% of it. The authority has withdrawn plots from a total of 350 developers, of which 178 plots are located on the Red Sea Coast (Hurghada) and South Sinai, Al Masry Al Youm reported, citing sources close to the tourism

sector. We note that in April 2011, the TDA cancelled the contract that allocated 25 million square metres (sqm) of sellable land to Egyptian Resorts Company (ERC) [EGTS.CA] in phase III of the companys Sahl Hasheesh project. ERC has sent an informal complaint to the TDA requesting that it reconsider its withdrawal. (Al Masry Al Youm, Jan Pawel Hasman, Shaza El Kady) ERC: EGP1.10, Rating: Sell, FV: EGP0.9, MCap: USD194 million, EGTS EY / EGTS.CA

Saudi Arabia News

Aramco, Dow to build USD20 billion chemicals complex in Jubail Saudi Aramco and Dow Chemical have both given final approval to build a proposed USD20 billion joint venture (JV) chemicals complex, to be called Sadara Chemical Company (Sadara). Located in Jubail, Saudi Arabia, the complex will be comprised of 26 manufacturing units, including an olefins cracker and production units for polyurethanes, low density polyethylene (LDPE), linear low density polyethylene (LLDPE), elastomers, propylene oxide, propylene glycol, glycol ethers and amines. Sadara is expected to generate cUSD1 billion in EBITDA when it becomes commercially operational in 2016. The majority of financing for the JV project is expected to come from debt, with the bulk of it sourced from export credit agencies that the companies plan to begin approaching at the beginning of next month, according to MEED. The companies are also expecting to launch an initial public offering (IPO) sometime in 2013-2014, when they will offer around 20% of the shares to the public, according to Zawya Dow Jones. (ICIS, Zawya Dow Jones, MEED, Bloomberg)

Maaden awards tank farm contract to CB&I The Saudi Arabian Mining Company (Maaden) [1211.SE] has awarded a USD60 million contract to CB&I to build a tank farm at its aluminium complex in Raz Az Zawr in Saudi Arabia. CB&I will begin construction work immediately and is expected to complete the construction of the 126 steel storage structures by 2014. (MEED)

Lebanon News
BLOM Bank reports 4.6% Y-o-Y growth in 1H2011 net profit BLOM Bank (BLOM.BY), Lebanons second largest bank by assets, has reported preliminary results showing that net income rose to USD 163.56 million in 1H2011, up 4.6 % Y-o-Y. The banks asset grew to USD 23.1 billion during the same period, while deposits grew to USD20.45 billion, up 9.6% Y-o-Y. BLOM Bank: USD8.68, Rating: Buy, FV: USD10.7, MCap: USD2,083 million, BLBD LB / BLOM.BY

Sudan News
South Sudan says North wages economic war with oil fee South Sudan has said that its former civil war foe, Khartoum, which controls the pipelines for its oil exports, has declared economic war against the new African nation by demanding a transit fee of almost USD23/barrel. This charge would take up about 20% of the value of oil sold by South Sudan. The dispute could threaten to disrupt the flow of crude from the country, a significant exporter, particularly to China and Japan. South Sudan became independent on 9 July 2011 after an independence referendum in January. The South took 75% of the country's 500,000 barrels/day of oil production, but depends on the North to use the only cross-border pipeline to the Red Sea port of Port Sudan to sell the oil. Refineries also only exist in the north. Experts say South Sudans plans to connect to a pipeline in east African neighbor, Kenya, are years away. Both sides have been unable to agree on how to divide oil revenues, which are the lifeblood for both economies. Analysts expect the South to pay gradually less in transit fees than the 50-50% revenue split agreed upon under the 2005 peace deal. (Reuters)

Kuwait News
Kuwait ISPs have not reduced fees, Al-Jaridah reports Kuwaits Internet Service Providers (IPSs) have not yet started to reduce their fees as they claim that the Ministry of Communications (MoC) has yet to officially inform them of new stipulations, Al-Jaridah Daily reported. The ministry's undersecretary had allegedly given a one-week ultimatum for companies to reduce their prices, which has since passed with no changes in local ISPs price schemes. Subscribers who

have called the countrys ISPs have been met with claims that the companies have not received any official notification about the new prices. However, Al-Jaridah quoted informed sources as saying that the countrys four ISPs have taken a unanimous decision not to cut costs until the ministry reduces the prices of international circuits. (Al-Jaridah, Zawya Dow Jones)
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