1. Business Optimism Index Saudi Arabia – Q2 2009 Saudi Arabia Business Optimism Index – Q2 2009 Presented by Dun & Bradstreet National Commercial Bank

2. Business Optimism Index Saudi Arabia – Q2 2009  The D&B Business Optimism Index is recognized world over as an indicator which measures the pulse of the business community  Provides insights into the short-term outlook of the business community on investment, sales, profit growth etc  Analysis of major trends, outlook and issues concerning the business units  Widely used by policymakers and investors for assessment of business sentiment  Overtime it gives a composite index which emerges as a leading business indicator of turning points in economic activity Business Optimism Index

3. Business Optimism Index Saudi Arabia – Q2 2009  Sample of business units representing the Saudi Arabian economy selected  500 business owners and senior executives across business units surveyed  Conducted during March 2009 for the quarter starting April 2009  Respondents are questioned on their expectations for relevant business parameters  Hydrocarbon sector survey conducted separately  Respondents were also surveyed regarding current business conditions vis-à-vis: investment plans, industry concerns, effects of global financial crisis Survey

4. Business Optimism Index Saudi Arabia – Q2 2009 Business Optimism for Q2 2009  Inflationary pressure expected to retreat further  Business units remain cautious about inventory levels

5. Business Optimism Index Saudi Arabia – Q2 2009 Demand seen declining  40% business units expect an increase in sales volumes  Volume of Sales and New Orders expectations highest in construction sector  Trade, hotels and transport sector least optimistic about Volume of Sales

6. Business Optimism Index Saudi Arabia – Q2 2009 Positive but low profit expectations  40% of all the business units expect increased profitability  Construction sector most upbeat about Net Profits expectation  Trade, hotels and transport sector continues to display subdued sentiments

7. Business Optimism Index Saudi Arabia – Q2 2009 New employment plans on hold  Two thirds of the business units hold new hiring plans  60% of the business units expect no change in inventory levels  Construction sector most optimistic about increasing employee count

8. Business Optimism Index Saudi Arabia – Q2 2009 Prices set to ease further  Selling Price likely to decline across all sectors  59% of the business units in the finance, insurance and business services sector expect prices to remain at the level of last quarter

9. Business Optimism Index Saudi Arabia – Q2 2009  Profitability expectations continue to remain positive  48% of the business units expect Level of Selling Prices to remain flat  Cost of Extraction seen unchanged Oil and Gas sector

10. Business Optimism Index Saudi Arabia – Q2 2009 Impact of global financial crisis  Global financial crisis to affect majority of the business units  A quarter of hydrocarbon respondents see no impact of the crisis  39% of the business units in manufacturing and trade, transport & hotels sector do not expect to be impacted by the crisis

11. Business Optimism Index Saudi Arabia – Q2 2009 Investment plans of non hydrocarbon sector  Most businesses positive about business expansion  27% of finance, insurance & business services units to undertake investment in addition to technology  Sharp rise in number of units polling for no investments

12. Business Optimism Index Saudi Arabia – Q2 2009  Manufacturing sector most concerned about rise in raw material prices  33% of units in the services sector apprehensive about availability of finance  Oil & gas sector continues to be concerned about drop in global oil prices Business concerns Non HydrocarbonOil & Gas

13. Business Optimism Index Saudi Arabia – Q2 2009 Global economic recovery  Most business units expect global economy to begin recovery in year 2010 Non HydrocarbonOil & Gas

14. Business Optimism Index Saudi Arabia – Q2 2009  Business optimism indices drop for all six parameters  Further easing of inflationary pressure  Business units cautious about inventory levels  Increased number of businesses lean towards no investments  Sentiments dip further in the Hydrocarbon sector Outlook for Q2 2009

15. Business Optimism Index Saudi Arabia – Q2 2009 THANK YOU