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					                                   mena-2 morning round-up
                                                                                                                14 december 2009

                                 OD Holding started its EDR trading yesterday, rising 9.4%
                                 OT proposes USD800 million rights issue
                                 OT refuses to sell Mobinil, EFSA clarifies that accepting FT's tender offer is at the discretion of individual
                                 OT's WIND Canada cleared to launch, OT accepts Mobinil's offer for LINKdotNET
                                 Citibank Egypt to stop auto lending by March 2010
                                 MCQC establishes ready-mix company with ASEC

                                 Saudi Arabia
                                 CMA approves Savola's Herfy IPO
                                 SEC to invest SAR2 billion in the first phase of the GCC power grid
                                 SPIMACO sets 26 December as new date for EGM

                                 EFG-Hermes Research
                                 OD Holding - EDR Listing: A New Era? - Flash Note 13 December 2009

                                 Wed 23 Dec >> OCI AGM and EGM

                                 Saudi Arabia
                                 Sun 26 Dec >> SPIMACO EGM

     kindly refer to the
01   important disclosures and
     disclaimers on back page
mena-2 morning round-up                                                            14 december 2009
mena daily note

egypt news
OD Holding started its EDR trading yesterday, rising 9.4%
The opening price for the newly listed OD Holding's EDR yesterday was EGP21.03 and the EDR gained
9.4% during the session to close at EGP23.49, while the day's turnover was close to EGP2 million. Despite
the small turnover in the first day of trading, there seems to be retail investor interest in the stock. We,
however, will wait until the end of the week before assessing whether appetite has returned for the stock.
We also believe that the currency difference between the shares listed on the Swiss Exchange (SIX) and the
EDRs listed on the Egyptian Exchange (EGX) will create arbitrage opportunities for investors able to execute
high-volume transactions. (Daniyah Darwish and Jan Pawel Hasman)

OD HOLDING: EGP23.49, ST Buy./LT Buy, FV EGP29.5, MCap USD2,005 m

OT proposes USD800 million rights issue
Orascom Telecom (OT) intends to increase the company’s authorised capital through a USD800 million
rights issue. Its purpose is to both strengthen OT's balance sheet and to ensure that the company has
enough liquidity to meet financial obligations at the holding company level, in case liquidity is further
affected by the Algerian tax situation and the Mobinil dispute with France Telecom (FT), both of which are
affecting OT’s ability to receive dividends.

The rights issue will offer existing shareholders new shares for every existing share in OT at par of EGP1 per
share. The EGM to approve the rights issue will be held on 27 December, and the subscription period will
start 15 days after the publication of a public subscription notice (subject to EGM approval) and last for a
minimum of 30 days. If the issue is not subscribed in full, a second round may be opened whereby
subscribed shareholders can subscribe for the remaining rights regardless of their pro rata stake. Weather
Investments, owned by Naguib Sawiris and holder of a 50.6% stake in OT, has already confirmed that it
will subscribe to at least its pro rata share. The company’s CEO, Khaled Bichara, clarified that this move is
to settle OT’s liquidity issues in the medium-term, rather than the short-term, Al Mal reported. It should
also allow OT to benefit from any expansion opportunities that presents themselves, he added. (OT Press
Release, Al Mal)

OT: EGP31.3, ST/LT Buy, LTFV EGP57.9, MCap USD5,136 m, ORTE EY / ORTE.CA

OT refuses to sell Mobinil, EFSA clarifies that accepting FT's tender offer is at the discretion of
individual shareholders
Orascom Telecom (OT) refuses to accept France Telecom's (FT) offer for the minority shares in the Egyptian
Company for Mobile Services (ECMS) at EGP245 per share, Al-Mal quoted OT’s CEO, Khaled Bichara, as
saying. The justification presented by FT for the two different prices are not acceptable to OT, and have been
rejected by the regulator on three different occasions, he added. On the other hand, FT’s vice president
Hisham Al Alayly clarified that both companies are set to meet shortly to decide how to handle the
cooperation between them, especially if OT plans to retain its 20% minority stake.

Separately, the Egyptian Financial Supervisory Authority (EFSA) clarified in a release yesterday that FT's tender
offer for ECMS, while obligatory for FT, is not obligatory for shareholders. The EFSA also clarified that the offer
is different from the three previous ones, as it offers EGP58 per share more than the first bid. In addition,
while the EFSA has rejected the previous bids on the basis that they offer two different prices for the same
asset, this time FT has presented sound legal and numerical justification for the two different prices. An
unnamed source at the EFSA, quoted by Al-Mal, clarified that the execution of the tender offer is not linked in
any way to the execution of the ICC ruling. (Al-Mal, EFSA release)
OT: EGP31.3, ST/LT Buy, LTFV EGP57.9, MCap USD5,136 m, ORTE EY / ORTE.CA

Mobinil: EGP238.64, ST/LT Neu., LTFV EGP229.2, MCap USD4,354 m, EMPN EY / EMOB.CA
mena-2 morning round-up                                                         14 december 2009
mena daily note

OT's WIND Canada cleared to launch, OT accepts Mobinil's offer for LINKdotNET
Orascom Telecom's (OT) Canadian unit Globalive - branded WIND Mobile - has received the go-ahead to
immediately launch commercial operations after Canadian Minister of Industry, Tony Clement, announced
that the government had found WIND Mobile to be in compliance with Canadian ownership and control
requirements as per the Telecommunications Act, OT said in a press release. This decision overrides the
previous decision of the Canadian Radio-television and Telecommunications Commission (CRTC). Globalive
will not have to alter its structure or shareholder arrangements, including its debt and equity financing
arrangements, nor change the composition of its board of directors, according to a press release from
Industry Canada. WIND Mobile is due to launch services before Christmas, according to OT's CEO Khaled
Bichara, a statement which the company's Executive Chairman Naguib Sawiris has repeatedly confirmed
over the past few weeks. Globalive was awarded 30 licenses, worth CAD442 million, in the Advanced
Wireless Services auction in August 2008.

Separately, OT has decided to choose the offer presented by Mobinil for its internet service provider (ISP)
subsidiary, LINKdotNET, Al-Mal newspaper reported, without mentioning the deal’s value. The deal will be
finalised in January 2010, Al-Mal quoted Mobinil’s chairman, Alex Shalaby, as saying. The latest Mobinil
board of directors meeting approved various conditions that OT had imposed on the deal, concerning the
company’s leverage, employees and brand. LINKdotNET is the second player in terms of market share in
Egypt’s broadband market. ((OT release, Industry Canada release, Al-Mal)

OT: EGP31.3, ST/LT Buy, LTFV EGP57.9, MCap USD5,136 m, ORTE EY / ORTE.CA

Mobinil: EGP238.64, ST/LT Neu., LTFV EGP229.2, MCap USD4,354 m, EMPN EY / EMOB.CA

Citibank Egypt to stop auto lending by March 2010
Citibank Egypt will stop providing car finance from March 2010, Al Mal newspaper wrote quoting Avitab
Ahmed, the chairman of Egypt's Citibank, as saying. The decision is part of a general re-engineering at the
corporate global level, and is not specific to the Egyptian market. Although we do not have access to
Citibank's figures, we believe Citibank has been the largest provider of auto loans in Egypt. We assume that
it has recently moderated its lending, in the aftermath of the credit crisis and as a result of a change in its
global lending policy.

For GB Auto, management had indicated to us that its credit-to-cash ratio in passenger car sales has
reached 30% at one point. Although previously mostly financed by Citibank, we believe that GB Auto has
recently started to cooperate with other commercial banks in Egypt to provide finance for its customers.
Citibank’s withdrawal from providing car finance is not positive, as it was quite aggressive and partly drove
the strong car sales in the booming years of 2005-2008. However, its impact might be mitigated, as other
private and public sector commercial banks in Egypt now eye retail banking to be an important growth
opportunity for them and are taking steps to capture market share. (Al-Mal, Nour Farrag)

MCQC establishes ready-mix company with ASEC
Misr Cement Qena Co (MCQC) and ASEC Cement Co (ASEC) will establish an Egyptian corporation to
produce and sell ready-mix concrete. MCQC will own 45% of the company's capital and ASEC the
remaining 55%. (MCQC disclosure)

saudi news
CMA approves Savola's Herfy IPO
Saudi Arabia's Capital Market Authority (CMA) approved the initial public offering (IPO) for Savola’s fast
food chain subsidiary, Herfy Food Services, Zawya reported yesterday. Herfy will offer 8.1 million shares
(30% of its shares) between 11 January and 17 January 2010. Part of the offering will be allocated to
investment funds and the IPO prospectus will be published shortly. Herfy is 70% owned by Savola and 30%
by Herfy’s chairman. Savola's management revived plans for the IPO in 3Q2009, after putting them on
hold due to the stock market crash at the end of 2008. Savola expects Herfy to reach 158 stores by the
end of 2009, up from 138 stores at the end of 2008, and to increase its net profit by 10% to SAR110

The CMA's approval for the IPO came as one of three, along with Saree Commercial and Industrial Group
(plans to sell 9 million shares between 1-7 February 2010) and Al Tayyar Travel Group (offering 24 million
shares between 22-28 February 2010). (Tadawul, Zawya and Savola 3Q2009 press conference)

SAVOLA: SAR29.5, ST Buy/LT Buy, FV SAR39.4, MCap USD3,931, SAVOLA AB/2050.SE
mena-2 morning round-up                                                          14 december 2009
mena daily note

SEC to invest SAR2 billion in the first phase of the GCC power grid
Saudi Electricity Company (SEC) plans to invest SAR2 billion in the first phase of the USD1.4 billion (SAR5.25
billion) GCC power grid that will connect six gulf states, the Saudi Press Agency reported, citing the
company’s CEO, Ali Bin Saleh Al Barak. The first phase will connect Kuwait, Bahrain, Qatar and Saudi Arabia.
The UAE will join the grid in 2011, while Oman is also expected to participate in the project but has not yet
announced a timeframe. SEC also plans to invest SAR50 billion by 2015 to link local power grids in the
Kingdom. The utility has previously announced its plan to invest USD80 billion over the next 10 years to add
20,000 megawatts of power generation capacity. (Zawya Dow Jones)

SEC: SAR10.7, ST Neutral/ LT Accumulate, LTFV SAR12.7, MCap USD11,888 million, SECO AB / 5110.SE

SPIMACO sets 26 December as new date for EGM
Saudi Pharmaceutical Industries and Medical Appliances Corporation (SPIMACO) has announced that its new
EGM will be held on Saturday 26 December. Shareholders will vote on the company's SAR295 million rights
issue offering and, should it pass, the ex-dividend date will be 27 December. The price and number of shares
to be offered will be determined during the EGM. (Tadawul)

efg-hermes research
OD Holding - EDR Listing: A New Era? - Flash Note9
EDR Listing, Finally: OD Holding has finalised the process of listing its EGP-denominated Egyptian
Depository Receipts (EDRs) on the Egyptian Exchange (EGX), and trading started on 13 December. We
believe that this listing will increase the stock’s desirability on the EGX at the retail investor level, given
that the CHF-denominated shares experienced some execution difficulties that affected trading volumes.
The swap ratio is 20 EDRs for every CHF share, and the EDRs are denominated in EGP. After the listing, the
number of EDRs listed (not traded) on the EGX will be 464, 393,160 (equivalent to 20-times the
23,219,658 shares listed on the SIX).

LTFV of EGP29.5 per EDR, Retain our Buy Recommendation: Based on the new number of EDRs, and after
applying the CHF:EGP exchange rate of 5.35 (as at 13 December), our fair value of CHF110.5 per share is
translated into EGP29.5 per EDR. If we were to assume no discount to our estimated NAV, which is
currently at 25%, our estimated fair value would reach EGP39.4 per EDR. We maintain our ST/LT Buy

Revising Down 4Q2009e Revenue Forecasts, Gross Margin Up, Valuation Unchanged: Despite doubling our
4Q2009e hospitality revenue forecasts, we have lowered our total revenue forecasts by 21% to reflect the
slowdown in real estate deliveries, mainly in El Gouna and the budget housing project. We have raised our
gross margin estimate by 2pp to 30%, to reflect good cost control at the hotel level and the lower-than-
expected contribution from the low-margin budget housing project. We look for revenue and net profit
growth in 4Q2009e of 35% and 15% Q-o-Q, respectively. Our valuation, which remains unchanged, does
not account for the new Montenegro and UK projects, nor the planned hotels in Morocco, given their early
stage of development.

[Note – EFG-Hermes is not responsible for the accuracy of news items taken from other media.]
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Our investment recommendations take into account both risk and expected return. We base our long-term fair value estimate on a fundamental analysis of the
company's future prospects, after having taken perceived risk into consideration. We have conducted extensive research to arrive at our investment
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