MENA-2 SUNDAY MORNING ROUND-UP

Egypt
Ezz Steel maintains ex-mill long steel price constant M-o-M at EGP4,800/tonne in September 2011 Egypt to invite bids for Rod el-Farag Highway Subscription to Citadel Capitals capital increase starts today Ten Kuwaiti lawyers to help defend Mubarak Government seeks to settle land and other contract rows Ministry of Finance injects USD300 million to ease gasoline shortage

Saudi Arabia
SEC to start transmission unit in 2012 Saudi and Egypt power link project to be revised ahead of tender Dammam Port congestion delays polyolefin supply

Agenda
Egypt Tue 6 September >> Orascom Construction Industries (OCI) 2Q2011 results Sat 10 September >> Ezz Steel AGM Mon 12 September >> Maridive EGM regarding 1:6 bonus shares

Egypt News
Ezz Steel maintains ex-mill long steel price constant M-o-M at EGP4,800/tonne in September 2011 Ezz Steel (ESRS.CA) has decided to maintain its ex-mill long steel price constant M-o-M at EGP4,800/tonne (pre-tax) in September 2011. This comes after increasing prices by EGP150/tonne to EGP4.800/tonne in August 2011. Fixing prices in September comes as no surprise to us since scrap prices were stable M-o-M, relieving cost pressures on Ezz Steels scrap-based operations (ESR/ERM), which, based on the current price, are generating gross margins of around 6% (higher than the c3% gross margin seen in 2010 and versus 8% in 2009); while DRI-based EZDK would be generating gross margins of c17% (compared to 16% in 2010 and 22% in 2009). In addition, Ramadan this year has seen weaker than usual construction activity, according to the head of the Chamber of Metallurgical Industries, which reflected negatively on steel demand, and may have been emphasized by the steel price increase in August, we think. Other steel producers (e.g. Beshay Steel) have opted to cut their September steel prices to EGP4,875/tonne in order to stimulate demand for their products after the weak sales seen in Ramadan, according to al Borsa Newspaper. (Al Borsa, Rita Guindy) Ezz Steel: EGP8.55, Rating: Buy, FV: EGP12.10, MCap: USD781 million, ESRS EY / ESRS.CA EZDK: EGP595.09, Rating: Neutral, FV: EGP693.00, MCap: USD1,337 million, IRAX EY / IRAX.CA Egypt to invite bids for Rod el-Farag Highway Egypts Ministry of Housing, Utilities and Urban Development (MHUUD) in cooperation with the Ministry of Finance is preparing to invite contractors to bid for the contract to develop the USD1 billion Rod el-Farag Highway. The tender closing date is expected to be in October. In May, the highway was put on hold until after the parliamentary and presidential elections. In October 2010, the ministry prequalified five consortiums to bid on the project. Among these consortiums was Orascom Construction Industries (OCI) [OCIC.CA] in cooperation with Besix (50% owned by OCI) and Egis (France), according to MEED. This project was among several others planned to be carried out on a publicprivate partnership (PPP) basis. The successful bidder will design, build, finance, operate and maintain the highway for 20 to 25 years. (MEED)

OCI: EGP237.07, Rating: Neutral, FV: EGP265.00, MCap: USD8,325 million, OCIC EY / OCIC.CA Subscription to Citadel Capitals capital increase starts today Citadel Capital (CCAP.CA), an Egyptian private equity firm, has invited existing shareholders to subscribe to the companys issued capital increase to EGP4.36 billion from EGP3.31 billion through the issuance of 210 million shares, Argaam website reported. The new shares are comprised of 52.5 million preferred shares and 157.5 million common shares at a nominal value of EGP5.00 per share, excluding issuance fees. The subscription will be opened through Arab African International Bank (AAIB) on 4 September 2011 and will run until 3 October 2011. (Argaam) Ten Kuwaiti lawyers to help defend Mubarak Ten Kuwaiti lawyers will join the defence team for Egypts ousted president Hosni Mubarak in his trial on charges of corruption and authorising the killing of protesters, the state news agency MENA said. The Kuwaitis will be coming on board for the third session of his trial scheduled for Monday, MENA said, without giving reasons for the move. Analysts said close ties between Kuwait and the Mubarak family and respect for Egypts support of Kuwait after it was invaded by Iraq in 1990 prompted the lawyers decision. (Reuters) Government seeks to settle land and other contract rows The Egyptian government is seeking to settle disputes over the price of land and other issues with about 20 foreign and local investors in a bid to avoid costly arbitration and rebuild confidence in Egypt, an official said on 1 September 2011. One of the companies involved, Dubai property developer Damac, said in May that it had filed an international arbitration case against Egypt over a land row and the conviction of its chairman and owner, Hussain Sajwani. Al Ahram daily said that the cabinet could reach a resolution over Damac and other cases in days, but the senior official on the committee set up to negotiate settlements told Reuters, I think it will take a little longer. The committee is headed by Prime Minister Essam Sharaf. We have around 17-20 cases now. So what we are trying to do now is instead of going to arbitration; we are trying to reach a fair settlement between the two parties, said the official. The official did not list all the firms but confirmed names reported by Al Ahram, which included Al-Futtaim Group and Omar Effendi, an Egyptian retail chain owned by Saudi firm Anwal. (Reuters) Ministry of Finance injects USD300 million to ease gasoline shortage The Ministry of Finance injected USD300 million to the General Authority of Petroleum to import petroleum products to ease shortages of diesel and gasoline in the local market, Al Masry Al Youm reported. Year-to-date, the Ministry of Finance has transferred nearly USD900 million to the Ministry of Petroleum, according to Minister of Petroleum Abdallah Ghorab. He added that the funds are part of the EGP97 billion (USD16 billion) energy subsidy bill for FY2011-2012. (Al Masry Al Youm)

Saudi Arabia News

SEC to start transmission unit in 2012 Saudi Electricity Company (SEC) [5110.SE] announced that it will start an electricity transmission unit early in 2012 as part of the utilitys restructuring plan, Al-Hayat newspaper reported, quoting unnamed officials. The company will also start a distribution unit and four separate power-generating units in early 2013. SEC announced the restructuring plan in May 2009. (Bloomberg) Saudi Electricity Company: SAR13.20, Rating: Neutral, FV: SAR13.20, MCap: USD14,666 million, SECO AB / 5110.SE Saudi and Egypt power link project to be revised ahead of tender An agreement to connect the power grids of Egypt and Saudi Arabia will be revised ahead of launching the projects tender, Al-Riyadh newspaper reported, citing Egypts Minister of Electricity and Energy, Hassan Younes, as saying. The agreement will be signed by state-run utility Egyptian Electricity Holding Company and Saudi Electricity Company (SEC) [5110.SE]. The project will enable the two countries to exchange electricity at a capacity of 3,000 megawatts (MW), Younes explained. The project is scheduled to start trial operations in 2015. (Zawya Dow Jones) Saudi Electricity Company: SAR13.20, Rating: Neutral, FV: SAR13.20, MCap: USD14,666 million, SECO AB / 5110.SE Dammam Port congestion delays polyolefin supply According to market sources, the Dammam Port in Saudi Arabia is congested with a large number of containers, which is a causing a delay in dispatching polyethylene (PE) and polypropylene (PP) containers from the country. Producers are attributing the delays to Ramadan and summer, with shorter working hours and the summer heat slowing the loading of containers. Delays also occurred in July when suppliers tried to ship higher than normal

volumes out of the region, according to a source. According to ICIS, market participants had originally expected the situation to return to normal after Eid El-Fitr; however, this seems unlikely now because of all the build-up at the port. (ICIS, Argaam)
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