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JET ALU’s revenue is so briskly growing that the company expects an 8.2% CAGR between 2011e and 2015e. Likewise, we anticipate the margin rate to edge down 0.9 point, moving from 13.9% in 2011e to 13.0% by late 2015e. Such is the result of higher cost of depreciation and amortization cost following the company’s investment in building the new production site.Our target stock price is based on DCF, given the good visibility of cash-flows. Using stock market yardsticks for comparison would be inappropriate especially because of lack of a Peer group, different business models and different maturity levels.

Backed by vast oil-based reserves and government stimulus packages, the economic prospects of the GCC region have remained positive despite ongoing political unrest in the wider Middle East region. • Efforts to maintain a balanced and diversified economic base have remained the primary focus of the regional governments as evidenced by a steady stream of investments into construction and infrastructure developments. • Construction contracts worth USD 40 billion were awarded to contractors in the first quarter of 2011, 47 percent of which were in the energy sector. • Global demand for oil and gas escalated as political unrest caused uncertainty on future supply. • KSA is the largest economy of the GCC region and is leading investments in the construction sector. • Over USD 500 billion investment opportunities in energy, transportation, education, healthcare and other critical sectors of economic development. • The UAE is ranked as the second largest market with investments worth USD 9bn allocated to the buildings, infrastructure and energy sectors in the first quarter of 2011. • Qatar is the fastest growing economy in the GCC region and holds an 8 percent share of the total value of projects. • Backed by vast reserves of natural gas and an expansionary budget concentrated on all round economic development encompassing a wide spectrum of sectors.

In 2011, the story for public and private sector entities involved in construction in the west was in fact not much of a story at all. Seemingly forever stuck in the mire of stagnant economic growth, there was nothing to tell, nothing to grab headlines, when the only news to be heard would have been regarding a continued reluctance to invest in new major capital projects. The news in the GCC, however, told a different tale – we woke up every morning teased with glimpses of an economy with indications it was well into recovery mode. Whilst western economies grapple with issues ranging from unemployment, unsecure securities, legacy debt and grid-locked liquidity, in the GCC it has become commonplace to drink your daily coffee while learning of eye-widening announcements regarding the planned infrastructure spend justified by the global demand for oil and gas. While the types of projects, location and the method for procurement may have changed, the spending through different GCC governments continues even today. Not surprisingly, this has quite simply captivated – with great fascination - every major business involved in construction from east to west.

Egypt is nearing the historic moment of its first post-Mubarak presidential election. Voting of Egyptians living abroad ended May 17 and lasted for a week, with around 296k Egyptians having voted. According to the data released from 50 Egyptian embassies and consulates worldwide, the Muslim Brotherhood's Mohamed Morsy led Egypt's presidential race, gathering 106,890 votes. Abdel- Moneim Abul-Fotouh came in the second place with 81,594 of the votes. Independent leftist candidate Hamdeen Sabbahi, came in the third place, with 45,754 of the votes. Following was Mubarak-era foreign minister Amr Moussa – 38,979 votes. Ahmed Shafiq, Mubarak's last prime minister, came in the fifth place, receiving 22,886 votes. Elections in Egypt will be held on May 23 and 24, and in case no single candidate wins an outright majority, then a run-off is to be held on June 16 and 17. June 21 will mark the official announcement of Egypt’s next president. It is worth highlighting that the latest weekly opinion poll by the Cairo-based Al-Ahram Centre for Political and Strategic Studies puts Mubarak-era foreign minister Amr Moussa at the head of Egypt's presidential race, gathering almost 41% of the votes. This indicates a slight increase in Moussa's popularity since the previous poll – conducted from 28 April to 1 May – in which he received 39%. Ahmed Shafiq, Mubarak's last prime minister, jumped to second place, receiving almost 20% – a 2% increase on the last poll. Shafiq pushed Abdel-Moneim Abul-Fotouh into third place, now with 17.8% down from 24% in the previous poll. The Muslim Brotherhood's Mohamed Morsy, meanwhile, maintained his fourth-place position with 9.4%. Independent leftist candidate Hamdeen Sabbahi, came in the fifth place, with 7% of the votes. Based on this preliminary result and that of Egyptians abroad we highlighted brief bios for these front-runners and their economic programs.

Zain KSA will be going through significant capital restructurings during the second quarter of 2012, with a proposed capital reduction and subsequent capital increase. The proposed SAR 9.2 billion capital reduction will be used to absorb accumulated losses of the company and the ensuing SAR 6 billion capital increase will be done through a conversion of shareholders’ loans and a rights issue. We expect these restructurings to be complete by June 2012.

On 14 May 2012, Moody's Investors Service has downgraded the standalone bank financial strength rating (BFSR) of ICICI Bank Limited to D+ from C-, which now maps to a baseline credit assessment (BCA) of baa3 from baa2 on the long-term scale. As a result of the lower BCA, which is the starting point for notching hybrid securities, Moody's has also downgraded the hybrid ratings of ICICI Bank Limited to Ba3 (hyb) from Ba2 (hyb). These rating actions follow an ongoing global review affecting all banks whose standalone ratings are higher than their respective sovereign ratings.

Moody's Investors Service has today affirmed the A3 insurance financial strength rating (IFSR) of Al-Ain Ahlia Insurance Co, which is based in Abu Dhabi in the United Arab Emirates. The rating outlook is stable.

We assign a standalone bank financial strength rating (BFSR) of D- to United Gulf Bank B.S.C. (UGB), mapping onto ba3 on our long-term scale. The bank's standalone rating is constrained by (i) UGB's modest investment banking franchise, (ii) its high reliance on wholesale funding, (iii) its modest earnings quality and (iv) high investment concentration in relatively illiquid assets that expose capital to the risk of investment losses. The rating is supported by the bank's close integration with its controlling shareholder (KIPCO), which provides access to business opportunities and funding.

The D- standalone bank financial strength rating (BFSR) of Cairo Amman Bank (CAB), which maps to a standalone credit assessment of ba3, reflects CAB's moderate franchise as the seventh-largest bank in Jordan and its adequate financial metrics as at YE2011, including a relatively stable non-performing loans (NPLs)-to-gross loans ratio (5.8%), adequate capitalisation (Tier 1: 14.0%) and sufficient liquidity (liquidto- total assets ratio: 41.1%).

Saudi Arabia's Aa3 government ratings are supported by "very high" government financial strength and "high" economic strength. Windfall oil revenues in the past several years have generated very large fiscal surpluses, allowing the government to build a sizeable asset cushion and reduce sharply its debt ratios to levels much lower than rating peers. The Kingdom's dominant position in OPEC with the greatest amount of spare capacity - more than all other members combined - makes it geopolitically important for the US and other industrialized nations.

We recommend investors to "SUBSCRIBE" to the IPO of Nizwa Bank (Under Formation) and find the issue as an attractive opportunity for investors to be a part of the high growth Islamic Banking sector in the Sultanate. Our fair value of RO 0.129 is based on blended DDM-Excess ROE-Relative valuation methods, provides an upside potential of 26% from the offer price. We expect the high demand for IPOs in Oman to provide the investors with opportunity for considerable listing gains from the issue. The major risks to our view are the nascent development stages of the Islamic Banking industry in the country as well as increased competition that might emerge from the Islamic Banking windows of established conventional banks in the country.

The Saudi economy maintains a positive outlook, enhancing the investment case for the TASI. Strong GDP growth expected in 2012 is combined with low debt levels, strong reserves and continued government infrastructure spending, making the Saudi economy resilient to any global slowdown. Despite the good market performance in 1Q12, the TASI remains at a discount to historic valuations with good earnings growth supporting upside potential of the market.

The Arabia Monitor Country Views series will place under the rigorous lens of our team the latest developments in MENA countries. For our inaugural issue, we focus on Algeria. Now that the dust has settled from the much anticipated parliamentary elections, we present our analysis on this momentous milestone for the country and the region. Henceforth, the Arabia Monitor Monthly will be available to our members only. Kindly let us know if you are interested in receiving this service on a regular basis, or would like more information on other services we offer.

The Arabia Monitor Monthly provides a forward looking update for the coming four weeks in the MENA region. Our first issue is launches ahead of important presidential elections in Egypt and in a context marred by on-going instability in Syria, Sudan and Mali. Henceforth, the Arabia Monitor Monthly will be available to our members only. Kindly let us know if you are interested in receiving this service on a regular basis, or would like more information on other services we offer.

GCC petrochemical companies profit declined by 10.2% YoY during 1Q12   Iraq oil production at its 30year high – to exert further pressure on oil price   Overcapacity threatens GCC petrochemicals profitability – Alix partners  

1Q12 net sales almost maintained (-2% YoY), 15% below CI Capital Research estimates (CICRe) as average price per ton declined.  EBITDA margin narrows YoY on higher electricity cost, quarry fees and packaging cost.  Earnings drop 28% YoY (14% lower than CICRe) on weaker operating and non-operating performance.  Trading at 2013 forward PER of 8.8x versus global, regional and local peers’ average PER of 9x.  With results dropping YoY and missing estimates, we maintain our TP of EGP73.8/share as well as Sell recommendation.

1Q12 net sales improve year-on-year (YoY), matching CI Capital Research estimates (CICRe) on higher sales volume despite decline in average price per ton.  Opex increases YoY on higher 33% natural price effective January 1, 2012 as well as 2-fold increase in technical management fees paid for operations of new 1.5mtpa production line effective April 2011.  EBITDA margin narrows YoY, but higher than CICRe.  Earnings rose YoY, matching CICRe, on a better operational and non-operational performance.  Trading at 1-year forward PER of 7.1x, a 20% lower than global, regional and local peers’ average of 9x.  Despite YoY performance improvement, downgraded to Hold on 12% stock-price appreciation since our last note.