Qatar Investment Fund plc 2011 pot

Qatar Investment Fund plc
October 2011
www.qatarinvestmentfund.com Page 2
Contents
Macroeconomic Overview
Snapshot Page 3
GDP Growth & Capital Expenditure Page 4
Infrastructure Spending Page 5
Qatar and the Other GCC Countries Page 6
National Development Strategy 2011-2016 Page 7
Qatar Exchange (QE)
Increasing Market Depth Page 9
Current Sectoral Breakdown Page 10
Market Performance Page 11
Qatar Investment Fund plc (QIF)
Investment Case Page 13
Investment Team – Qatar Insurance Company Page 14
Investment Performance Page 15
Sectoral Exposure Page 16
Banking Sector – Government Support Page 17
Top Holdings Page 18-19
Conclusion Page 20
www.qatarinvestmentfund.com Page 3
Macroeconomic Overview: Snapshot
• Qatar owns the world’s third largest natural gas reserves
after Russia and Iran. By next year, as gas production
continues to ramp up, Qatar will be in oil equivalents the
world’s fourth-largest hydrocarbon producer after Saudi
Arabia, Russia, and the US.
• Production of raw liquid hydrocarbons, crude oil,
condensates and natural gas liquid totaled 1.57m bpd in

2010 and is forecast to grow to 1.90m bpd in 2012.
• Expanding energy revenues continue to underpin stellar
GDP growth rates (the IMF expects Qatar to be the world’s
fastest growing economy in 2011). This year, Qatari GDP
per capita is expected to be the highest in the world.
• The Qatari Government invests a large proportion of energy
revenues in improving the country’s infrastructure, and
diversifying and expanding its economic base. Foreign and
domestic private capital is encouraged through
privatizations, outsourcing of public services and the
development of industrial zones.
• Qatar is planning US$225bn of investment in 2011-16.
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Macroeconomic Overview: GDP Growth &
Capital Expenditure
• Qatar’s nominal Gross Domestic Product (GDP)
growth averaged 25.5% over the past five years
(2006-2010) and is expected to reach $160bn in
2011. The Non-Oil and Gas sector is predicted to
account for 40% of GDP in 2011.
• Qatar unveiled its budget for the 2011/2012 fiscal
year that forecasts 22.5 billion QR ($6.2 billion) in
surplus revenues.
• Total government capital expenditure, as a
proportion of total revenues, has increased from
28% in 2005/06 to a budgeted 40% in 2010/11.
The public projects include the New Doha Port, the
metro system and the completion of New Doha
International Airport.
• The combination of budget surpluses, increases in

export volumes, and the various price floors and
ceilings in the long-term gas contracts, should
ensure that Government expenditure in the
domestic economy will be largely unaffected by all
but the most dramatic and sustained fall in oil spot
prices.
Source: IMF* Preliminary ,** Forecast
Strong GDP growth supported by the non hydrocarbon sector
Source: QIC, Qatar Central Bank
Capital expenditure program to continue
($ Million)
2007 2008 2009 2010* 2011**
Oil & Gas Sector 45,781 59,080 45,419 70,776 96,623
% Change 28.0% 29.1% -23.1% 55.8% 36.5%
Non-Oil & Gas
Sector
34,970 51,632 52,894 56,079 63,850
% Change 41.4% 47.6% 2.4% 6.0% 13.9%
Total GDP 80,751 110,712 98,313 126,856 160,473
GDP per capita ($) 65,854 76,435 59,990 74,621 90,765
Qatar State Budget ($m) 2010/11 2011/12 % Change
Revenue 35,027 44,643 27%
Expenditures 32,390 38,434 19%
Salaries & rents 6,291 6,923 10%
Current 12,500 13,626 9%
Capital 1,648 1,978 20%
Public projects 11,951 15,934 33%
Balance 2,665 6,181 132%
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Macroeconomic Overview: Infrastructure

Spending
• The total value of projects in Qatar, both current and planned, is US$185bn. The majority of projects are related to
infrastructure, construction, water and power. The largest project in progress is the development of the national rail
system, which aims to relieve congestion in Doha.
• Phase 1 of the new US$10bn airport in Doha is scheduled for completion in 2011. Other prominent projects include a
US$7bn deep water seaport and a US$1bn crossing to link the new airport with projects in the northern part of Doha. An
additional US$20bn will also be spent on improving the road network.
• A number of housing projects are currently underway and further plans are being drawn up to accommodate Qatar’s
rising population, which at 1.7 million has witnessed a 128 per cent increase since 2004.
• The preparations for the FIFA World Cup in 2022 will entail substantial infrastructure spending over the next decade. To
host the tournament officials estimate infrastructure spending to be around US$55bn, which is over and above the total
expenditure earmarked above. However the analyst community expects the actual cost of hosting the World Cup to be
in the region of US$65-100bn.
Source: MEED Projects
Selected non-hydrocarbon
mega projects
Cost
($bn)
Scope
Completion
Date
Qatar National Railway
System
25
300km Doha metro, light rail, freight and high speed lines, passenger
stations
2025
New Doha International
Airport
10

Handle 50 million passengers. Phase 1 expected in 2011 to handle 24
million.
2015
New Doha Port 7 Port with a capacity of 6 million 20 foot equivalent units 2027
Dohaland 5.5
Spread over 750,000 m2, 226 buildings to house 28,000 residents, parks,
schools and hotels with around 700 rooms
2017
Qatar Bahrain causeway 4 Road and rail bridge from Qatar to Bahrain 2015
Doha Bay crossing 1 12 km crossing and associated works 2014
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Macroeconomic Overview: Qatar and the Other
GCC Countries
• The table above shows the real GDP growth rates for the 6 countries that make up the Gulf Cooperation Council (GCC).
• The extent of Qatar’s outperformance is clear: in real GDP terms Qatar grew by 16.3% in 2010 and is forecast to grow
by 20.0% in 2011 and by 7.1% in 2012, far in excess of the forecasted growth rates of the other GCC countries.
• We believe that Qatar offers the most attractive investment opportunities among the GCC economies, in view of the its
strong growth prospects and economic fundamentals.
Source: IMF
Qatar’s Real GDP growth expected to continue at a healthy pace
Real GDP Growth (%) 2006 2007 2008 2009 2010 2011(F) 2012(F)
Qatar 18.6 26.8 25.4 8.6 16.3 20.0 7.1
Saudi Arabia 3.2 2.0 4.2 0.6 3.7 7.5 3.0
Kuwait 5.3 4.5 5.5 (4.8) 2.0 5.3 5.1
UAE 8.7 6.1 5.1 (2.5) 3.2 3.3 3.3
Bahrain 6.7 8.4 6.3 3.1 4.1 3.1 5.1
Oman 5.5 6.8 12.8 3.6 4.2 4.4 4.1
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Macroeconomic Overview: National
Development Strategy 2011-2016

• The five year National Development Strategy for 2011-2016 predicts gross domestic investment will reach QR820bn
(US$225bn) with almost half of the investment earmarked for the non-hydrocarbon sector.
• Total investment by the government is estimated at QR347bn (US$95.3bn), private sector hydrocarbon investment is
expected to reach QR85bn (US$23.4bn) with the remaining QR389bn (US$107bn) being spent by the private sector
into non-hydrocarbon industries.
• The strategy highlights the importance of private investment outside the hydrocarbon sector in driving growth over the
period. The baseline scenario assumes that non-hydrocarbon investment will mainly be driven by spending by large
government linked Qatari companies, such as Barwa Real Estate, Qatar Diar, Qatar National Bank and Qatalum.
389
347
85
0
50
100
150
200
250
300
350
400
Private, nonhydrocarbon
sector
Public, central government Private, hydrocarbon sector
Cumulative gross domestic investment, 2011–2016 (QR billions)
Source: National Development Strategy 2011–2016 estimate
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Qatar Exchange (QE)
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QE: Increasing Market Depth
• The Qatari Government is taking a number of steps to enhance the attractiveness of the QE as an investment destination:

• Creating a robust regulatory environment through the development of a unified regulator and improving the legal
framework of the local market.
• Encouraging companies to list on the QE. Recent stock market introductions (Vodafone Qatar, Al Meera
Consumer Goods Co., Mazaya Qatar) bring to 42 the number of companies currently listed on the Qatar
Exchange.
• Following the acquisition of a 20% stake in the QE, NYSE Euronext has introduced their Universal Trading
Platform which will provide enhanced scalability, capacity, low latency, functionality and resiliency to the
exchange.
• Since inception the market capitalisation has risen from QR 9.4bn in 1997 ($2.5bn) to c.QR 445bn ($122bn) at the end of
June 2011. The 30 day average volumes for the index have increased over 3 fold in the last 5 years from 1.3m to 4.4m
shares.
Source: QE,QIC
0
50
100
150
200
250
300
350
400
450
500
Market Capitalization (QR. Bln)
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QE: Current Sectoral Breakdown
• The QE Index is the local benchmark, made up of 20 stocks; its composition reviewed semi-annually. The market
capitalisation of the stocks in the index is currently c. QR 338bn ($93bn) and represents 76% of the total market.
• Listed companies are divided into four sectors: Banking, Insurance, Industrial and Services. The 5 largest companies
(Qatar National Bank, Industries Qatar, Commercial Bank of Qatar , Qatar Islamic Bank and Rayan Bank) constitute

55.3% of the QE Index.
• The Banking sector represents 56% of the QE Index and has been a major contributor to its positive performance over
the last 12 months.
Source: QIC, Bloomberg
Banking
56%
Services
28%
Industrial
13%
Insurance
3%
% Weight in the QE Index
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QE: Market Performance
• Robust GDP growth over the last 5 years has translated into strong earning growth across all sectors.
• Attractive stock valuation levels are well-supported by an established dividend payout record by companies and a
current market dividend yield of 5.4%.
• Positive outlook for the equity market in Qatar. The Qatar stock market looks undervalued compared to a basket of its
GCC peers.
• In June 2011 MSCI announced the extension of the review period for the potential reclassification of the U.A.E. and
Qatar MSCI indices from frontier to emerging market status until December 2011.
Source: QE, QIC estimates
* Net profit calculation excluded one time fair value gain of QAR8.3 million reported
by Ezdan Real Estate.
Earnings
Growth ($ M)
2006 2007 2008 2009 2010
5 Year
CAGR

H1-10 H1-11
Banks 1,484 2,241 2,747 2,722 3,389 23.8% 1,624 2,027
Growth (%) 28% 51% 23% -1% 25% 25%
Insurance 150 210 258 228 244 7.1% 148 150
Growth (%) -14% 40% 23% -12% 7% 2%
Services 2,074 1,810 2,485 2,119* 2,672 26.2% 1,452 1,361
Growth (%) 148% -13% 37% -15% 26% -6%
Industry 1,154 1,606 2,349 1,692 1,916 13.6% 944 1,349
Growth (%) 14% 39% 46% -28% 13% 43%
Total 4,862 5,867 7,839 6,761 8,222 20.8% 4,168 4,887
Growth (%) 52% 21% 34% -14% 22% 17%
Markets
Summary
PE PB Div Yld EPS Growth (%)
11E (x) 12E (x) 10E (x) 10E (%) 11E (%)
10E
(YoY)
11E
(YoY)
UAE
8.5 7.4 0.7 2.3 2.6 -5.7 15
Qatar
9.1 7.7 1.8 4.3 5.4 16.2 15
Bahrain
9.8 8.0 0.6 3.2 nm 0.4 23.3
Oman
10.4 8.8 1.7 5.3 5.4 7.5 8.8
Saudi Arabia
11.0 9.6 1.6 3.5 3.9 5.0 15.2
Kuwait

13.0 10.6 1.5 1.6 3.5 4.5 8.6
Average
10.3 8.7 1.3 3.4 4.2 4.7 14.3
Source: Deutsche Bank
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Qatar Investment Fund plc (QIF)
www.qatarinvestmentfund.com Page 13
QIF: Investment Case
• QIF is a LSE listed (QIF LN Equity), closed end, long only vehicle investing primarily in quoted Qatari equities, and up to
15% in regional (GCC) equities. The Company as of 8
th
September 2011 has net assets of c.$242m.
• The Company benefits from the 40 years plus investment experience which the Doha based QIC team has acquired in
Qatar and the GCC markets.
• It represents a unique, actively-managed way to access the Qatar equity market and has out performed the QE Index by
6.6% since achieving full investment in Q1 2008.
• For the financial year to June 2011, and in line with the Board’s progressive dividend policy, it is proposed to pay on 4
November 2011 a dividend of 2.7 cents per ordinary share to shareholders on the register on 7 October 2011. This
represents an increase of 8 per cent over the 2010 dividend of 2.5 cents per share.
www.qatarinvestmentfund.com Page 14
QIF: Investment Team – Qatar Insurance
Company
• The Qatar Insurance Company (QIC), established in 1964, is one of the oldest property and casualty insurers in the
region. QIC’s investment department manages the investment and treasury functions for the insurer and contributes
over 50% to group net profits.
• The department directly manages an investment (including cash) portfolio of $1.3bn out of which a total of $421m is
invested in the local Qatari equity market.
• The key members of the investment team are:
Deputy-CEO of QIC Sunil has had overall responsibility for QIC’s global investment portfolio
for over 20 years. Chartered Accountant with 30 years’ experience in the Middle East.

Research Analyst
Masters in Economics with 6 years’ experience with a leading research firm in India
Sunil Talwar
Sandeep Nanda
Jubin M. Jose
Executive Vice President of Investments, QIC, responsible for investment portfolio performance.
Worked with leading consultants and investment houses in the Middle East, US and Europe.
Chartered Accountant with almost 20 years’ industry with over 10 years in the region.
www.qatarinvestmentfund.com Page 15
QIF: Investment Performance
QIF trades at an discount to NAV
Source: QIC, Bloomberg
QIF cumulative performance
summary to 08/09/11
2011
YTD 3M 6M 9M 12M 24M
Full Investment
(07/02/08)
QIF NAV 0.0% 1.2% 4.2% -0.1% 12.6% 21.0% -9.8%
QE Index -3.8% 0.3% 2.0% -4.4% 10.5% 14.4% -16.8%
QIF NAV Performance Summary
Excluding dividend reinvestment
QIF annual performance
summary 2010 2009 2008
QIF NAV 29.9% 10.4% -36.4%
QE Index 24.8% 1.1% -31.4%
Excluding dividend reinvestment
-60%
-45%
-30%

-15%
0%
15%
30%
45%
60%
75%
90%
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
30-Jul-07
18-Oct-07
10-Jan-08
3-Apr-08
26-Jun-08
2-Oct-08
25-Dec-08
19-Mar-09
11-Jun-09
3-Sep-09
26-Nov-09
18-Feb-10
13-May-10
5-Aug-10

28-Oct-10
20-Jan-11
14-Apr-11
7-Jul-11
Premium/Discount (%)
NAV per share (USD)
Share Price NAV Premium/Discount
www.qatarinvestmentfund.com Page 16
QIF: Sectoral Exposure
Banks
56.2%
Services
19.6%
Industries
13.6%
Real Estate
6.5%
Cash
0.5%
Insurance
3.6%
Industry Allocation (% of Mkt Value)
Qatar
98.8%
Cash
0.5%
Oman
0.7%
Country Allocation (% of Mkt Value)
• The Company is 99.5% invested as of 8th Sept 2011. The top five companies constitute 62.3% of the Company’s NAV.

• At present, the group has a portfolio of 16 companies (15 in Qatar and one in Oman). The group’s largest exposure
continues to be the financial services industry, with the banking sector accounting for 56.2% of the portfolio.
• During FY 2011, earnings in the Banks sector increased at a faster rate than the Qatari stock market average as a
whole.
• Banks to see healthy volume growth and an improvement in asset quality underpin earnings recovery for the banks.
• The support of a wealthy government mitigates the risks of investing in Qatari banks.
www.qatarinvestmentfund.com Page 17
QIF: Banking Sector – Government Support
Proactive Government through global financial crisis
• During the global financial crisis the Qatari government took proactive measures to protect the banking sector and local
economy by removing over $7bn in real estate and equities from the banks’ balance sheets.
• The authorities’ preemptive intervention in the banking sector reached c. 6.5% of GDP. In addition, the QIA announced
another 10% capital injection to the banking sector in 2011.
• These measures initiated a process of consolidation among a number of listed and unlisted Qatari enterprises, in order
to ensure their continued competitiveness.
Date Event USD million spent
2008-Dec Equity capital injection into banks (5%) 900.0
2009-Mar Purchase of banks’ domestic equities 1,668.0
2009-Jun Purchase of banks’ Real Estate assets 3,660.0
2009-Dec Equity capital injection into banks (5%) 900.0
Total 7,128.0
www.qatarinvestmentfund.com Page 18
QIF: Top Holdings
Top Three investments
QNB 2010A 2011E
Revenues (in QAR m)
7,609
7,814
Net Profit (in QAR m)
5,702

5,889
EPS (QAR)
14.60
15.04
EPS Growth 36.44 16.50
DPS (QAR) 5.0 3.01
ROE (%) 23.50 22.60
Source: Deutsche Bank Qatar Banks Report
Industries Qatar 2010E 2011E
Revenues (in QAR m) 11,687 14,138
Net Profit (in QAR m) 4,402 5,622
EPS (QAR) 8.00 10.22
EPS Growth -4.50 14.10
DPS (QAR) 4.25 4.85
ROE (%) 23.20 23.50
EBITDA margin % 42.7 44.8
Source: HSBC Global Research
Qatar National Bank (18.1% of NAV)
• High quality proxy stock for Qatari economic growth given its strong ties with the public
sector and access to state liquidity.
• Government of Qatar owns 50% of QNB. Market shares are c.56% for loans, c.53% for
deposits, and as high as 57% of the asset base of the Qatari Banking sector.
• This drives high asset quality, with NPLs at 0.7% in 2009, and offers superior visibility on
balance-sheet momentum and earnings growth.
• In addition to an international presence in key financial centers around the world such as
London, Paris and Geneva, QNB has been building a network of branches, representative
offices and associates (Jordan, UAE, Iraq, and Tunisia) throughout the MENA region.
Industries Qatar (13.6% of NAV)
• IQ is a holding company with interests in petrochemicals via 80% owned Qatar
Petrochemical Co., fertilizers via 75% owned Qatar Fertilizer Co., steel via 100% owned

Qatar Steel Co. and fuel additives via 50% owned Qatar Fuel Additives Co.
• IQ is one of the lowest cost producers in the industry with operating and net margins in
excess of 50-55% compared to global peers with operating margins in the mid-teens.
• The company procures its natural gas at a price range of US$1.75- 2.25/mmBtu compared
to current global natural gas prices in the range of US$5-5.5/mmBtu.
• With a low and largely fixed cost structure, any uptick in basic chemical commodity prices
should flow straight to the bottom line.
www.qatarinvestmentfund.com Page 19
QIF: Top Holdings
Source: HSBC Global Research
Top Three investments cont…
Masraf Al Rayan 2010A 2011E
Revenues (in QAR m) 1,369 2,003
Net Profit (in QAR m) 1,220 1,652
EPS (QAR) 1.63 2.20
EPS Growth 38.6 35.4
DPS (QAR) 0.66 0.80
ROE (%) 18.6 20.2
Source: Deutsche Bank Qatar Banks Report
Masraf Al Rayan (12.2% of NAV)
• Founded in January 2006, the bank offers Islamic commercial and investment banking
services.
• Masraf Al Rayan has strong ties with the government through the Qatar Investment
Authority (QIA) with the majority of the banks assets’ and liabilities from public sector
deposits and demand for credit.
• Given the link to the public sector, Masraf has a stronger growth outlook than the other
banks in the sector; the Investment Adviser expects loan growth to be 35% in FY11
and 31% in FY12.
• Masraf has a strong balance sheet with low leverage (equity/ assets at 18%), high CAR
(Tier 1 ratio at 19.1% in FY10) and solid asset quality (NPL ratio at 0.06% in FY10).

www.qatarinvestmentfund.com Page 20
QIF: Conclusion
• Macroeconomic outlook is positive for Qatar.
• Qatari economy continued strong economic growth and attractive economic fundamentals underpin
investment in Qatar.
• Infrastructure driving growth.
• A continued positive economic outlook should lead to increased profitability at a corporate level and
improved stock market valuations.
• Valuation and earnings outlook remain compelling.
• A continued positive economic outlook should lead to increased profitability at a corporate level and
improved stock market valuations.
• The Company is well-positioned to benefit from all these positive trends.
• Despite stronger economic growth and average company earnings, stocks in Qatar continue to trade
at a discount to the MENA average. There remains the potential for a re-rating.
• Market structure, depth, liquidity and regulatory environment are improving.
QIF: Investment Status
Disclaimer
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QIF: Investment Status
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