Qatar Business Optimism Survey Q1 2010

1. Qatar Business Optimism Survey Q1 2010 Presented by Dun & BradstreetQatar Financial Centre (QFC) Authority

2. Business Optimism Index • The D&B Business Optimism Index is recognized world over as an indicator which ascertains the pulse of the business community • Provides insight into the short-term outlook of business units on sales, profit growth, investment, etc. • Provides analysis of major trends, outlook and issues concerning the business units

3. Survey • Sample of business units representing Qatar’s economy was selected • 500 business owners and senior executives across business units were surveyed • Survey conducted during December 2009 for the 1st quarter of 2010 • Respondents are asked questions about their expectations on relevant business parameters • Survey also captures respondent feedback on current business conditions

4. Composite Business Index • The Composite Business Index is calculated separately for the hydrocarbon and non hydrocarbon sector • Weights are assigned to each of the parameters and the base period is chosen to calculate the index • For the non hydrocarbon sector, the Composite Index captures the aggregate behavior of six individual indices • For the hydrocarbon sector, the Index takes into account the aggregate behavior of three individual indices

5. World Economic Outlook Real GDP Growth Q3 2009 (yoy) Manufacturing PMI December 2009 • Global economic recovery led by emerging markets such as BRIC countries • US economy expanded while Euro zone & UK posted negative growth, if at a lesser annual rate of decline • Global Manufacturing PMI indicates renewed expansion across all major economies

6. Economy of Qatar Gross Domestic Product -Q3 2009 • Qatar’s nominal GDP grew 11.3% sequentially in Q3 2009, indicating early stages of recovery • Recovery in oil prices and output a major factor behind growth revival • Manufacturing posted strongest growth amongst all sectors

7. Composite Business Optimism Indices • Composite BOI for Non Hydrocarbon sector sees a minor dip • Higher energy prices in the international markets leads to improved outlook for the Hydrocarbon sector

8. Business Optimism Trends – Non Hydrocarbon Sector

9. GDP 8.3% Manufacturing Sector Global Manufacturing Purchasing Managers’ Index BOI - Manufacturing Sector Source: J P Morgan and market economics in association with ISM and IFPSM • Global manufacturing activity expands further, December reading at 44-month high • Qatar manufacturing sector outlook for Q1 mixed • Lower expectations regarding sales and inventory suggests current demand has moderated • However, increased optimism about new orders signals expectations of future improvement

10. GDP 4.9% Construction Sector Residential Construction Outlook 2008-13 Compound annual growth (%) BOI – Construction Sector • Global construction sector currently driven by infrastructure spending as commercial property undergoes correction • Qatar construction firms less optimistic in Q1 amid softer sales outlook • More business units expect prices to fall than rise

11. GDP 3.3% Trade & Hospitality Sector BOI – Trade & Hospitality sector • Global wholesale/retail trade & hospitality sector is expected to pick up in 2010, but recovery will be slow as consumers confidence remains weak • Qatar Q1 outlook mixed with widespread concerns about profitability • New orders points towards sustained recovery in demand going forward in 2010

12. Logistics & Communication Sector Global transport & communications sector expected to witness gradual recovery in 2010 Rising concerns about profits as weak demand puts downward pressure on prices Half of respondents expect an increase in new orders as global trading activity resumes GDP 3.3% BOI – Transport & Comm. sector

13. Finance and Business Services Sector GDP 9.9% BOI – Finance & Business Services sector • The Global Services PMI recovery has leveled out following extended recovery • Qatar service sector bullish about current demand with increased optimism regarding sales, prices and profit

14. Oil & Gas sector GDP 61.7% • Half of surveyed firms in the Hydrocarbon sector expect selling prices to increase • 48% expect to add new employees during Q1

15. Other Key Highlights • Availability of finance remains a key concern for many businesses in Qatar, reflecting global financial crisis aftermath • However, 42% of respondents expect borrowing conditions to improve during the quarter, only 5% expect a deterioration • Manufacturing sector facing pressure due to higher raw materials cost • More than one third of companies in the non hydrocarbon sector plan to invest in business expansion in Q1 • 60% of companies in the hydrocarbon sector facing project delays

16. Conclusion • Business Optimism levels in Qatar suffer a minor dip • Majority of Non hydrocarbon sectors expect an increase in New Orders • Qatar’s manufacturing industry shows a drop in net additional optimism with respect to sales, employees and stocks • Improving liquidity in the international financial markets lifts optimism levels in Finance & business services sector • Hydrocarbon sector optimism levels improve further due to higher crude prices

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