GulfBase GCC Cap Indices
IndexLevelChg%
Large Cap4,023 -0.59
Med Cap4,090 -0.80
Small Cap5,206 -1.07
Micro Cap8,840 -1.57

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Ticker Price Volume
QNBK 155.5 365,143
SABIC 96.83 3,103,324
BKMB 0.48 1,815,133
OOREDOO 1220 32,999
RIBL 10.74 773,549
EMAAR 7.53 2,658,668
DIB 6.24 4,547,495

Saudi Vision 2010

Source: Shuaa Capital

Saudi Arabia has weathered the storm of the _nancial crisis well, with 2009 real GDP growth estimated at 0.2%. We expect growth to accelerate to 3.2% in 2010 on the back of a sustained global recovery and associated higher oil prices (relative to 2009), continued expansionary _scal policy, and the resumption of local bank lending, which would ease _nancing constraints on the private sector. Higher oil prices will also support the external accounts and we expect the current account surplus to widen to almost 9% of GDP this year.

We anticipate c. 20% increase in the Saudi index in 2010, corresponding to a TASI benchmark target in the proximity of 7,400, on the back of strong commodities prices, expansionary _scal policy, recovering private sector growth, and a steadily improving local credit environment. We expect 2010 earnings to grow by around 26%, after having witnessed a 21% decline in 2009. The strong headline earnings growth across the board would be one of the key drivers of market performance for the year.

Potential risks to our forecasts include a steep decline in oil prices and a possible wave of selling in global equity markets. Also, the emergence of other conglomerate bankruptcy cases and the negative repercussions stemming from the inability of Dubai World to reach a satisfactory agreement with creditors are likely to take a heavy toll on the markets and investor con_dence in the region.

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