Qatar Business Optimism Survey Q Presented by Dun & Bradstreet Qatar Financial Centre (QFC) Authority

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 Business Optimism Index

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 Survey

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

World Economic Outlook 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 Real GDP Growth Q (yoy)Manufacturing PMI December 2009

Economy of Qatar 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 Gross Domestic Product - Q3 2009

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

Business Optimism Trends – Non Hydrocarbon Sector

Manufacturing Sector 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 Global Manufacturing Purchasing Managers’ Index Source: J P Morgan and market economics in association with ISM and IFPSM BOI - Manufacturing Sector GDP 8.3%

GDP 4.9% 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 Residential Construction Outlook Compound annual growth (%) BOI – Construction Sector

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 BOI – Trade & Hospitality sector GDP 3.3%

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 BOI – Transport & Comm. sector GDP 3.3%

Finance and 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 BOI – Finance & Business Services sector GDP 9.9%

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

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

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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