Richard Melson

April 2006

TAIB

http://www.taib.com/about_us.htm

TAIB Bank B.S.C. (c ) , a private bank based in Bahrain, was established in 1979 and is regulated by the Bahrain Monetary Agency. Listed on the Bahrain Stock Exchange since 1994, TAIB is one of the region's first private banks with a focus on providing complete wealth management solutions to both high-net-worth individuals and institutional investors alike. Our strength lies in identifying and creating unique investment opportunities and is a testament to our 25 years of investment expertise and our network of six subsidiaries around the world.

Our headquarters at TAIB Tower is located in the Diplomatic Area in Manama, Bahrain. This is the home to the Private Bank, TAIB Bank B.S.C. (c ), as well as our brokerage subsidiary, TAIB Securities W.L.L.

E-mail TAIB Bank

Research@taib.com

E-mail TAIB Securities W.L.L.

TAIB Tower
Manama, Bahrain

INDIA

TAIB maintains a merchant banking entity in Mumbai, TAIB Capital Corporation Ltd. (TCCL). That entity, in turn, wholly owns TAIB Securities India Limited (TSIL) in Mumbai, a brokerage services company engaged in equity trading and asset management services.

KHAZAKSTAN

TAIB Kazak Bank (TKB) is a full commercial bank based in Almaty, Kazakhstan. TKB primarily conducts leasing and commercial banking business and intends to form a joint venture company to expand its leasing activities in the country.

TURKEY

TAIB YatirimBank A.S. (TYB) has been in operation for 18 years and continues to focus on direct equity, asset management and debt investments along with its brokerage subsidiary TAIB Yatirim (TY).

UNITED KINGDOM

TAIB Securities, Ltd. (TSL) is one of the groups subsidiary and helps to identify, structure and monitor real estate projects in the U.K. It also provides support to the group's private banking clients when they visit London.

UNITED STATES

TAIB Securities, Inc. (TSI) is a wholly owned company focused on direct investments and asset management. The office also contributes to TAIB's wealth management group by helping to identify and monitor the group's real estate investments in the U.S. It also oversees the work of external, U.S. based asset managers.

Dear Investor,

We would like to present our First Reaction Report to the FY 2005 results published by Saudi Basic Industries Corporation (SABIC), listed on the Tadawul Stock Exchange in Saudi Arabia

For the year ended December 31 2005, SABIC reported a net profit of SAR 19.2 billion compared to a net profit of SAR 14.2 billion for 2004, representing a y-o-y growth of 35.2%. The sales for the year came in at SAR 78.206 billion, up 13.77% from SAR 68.738 billion in 2004. The full-year profits came from price increases in major products, coupled with 9% rise in production capacity to 46.7 million tons, and a 9% increase in sales to 36.6 million tons. The company’s board recommended the distribution of Cash dividends of SAR 23 per share for the year

SABIC enjoys a strong brand image as the largest petrochemical company in the gulf region. The company has seen a dream run of profits in the last two years. Backed by the Saudi Arabian Govt., SABIC carries tremendous credibility and reach. Its size and integration of operations enable it to reap rich economies of scale. However, demand for and pricing of some petrochemical products are on a downturn at present. In addition, large projects to raise production capacities of petrochemical products are underway in countries like Iran and China, which may depress pricing in future. On the flip side, with global oil prices continuing to be buoyant, raw material costs do not show any signs of relenting. Further, the company’s strategy is too tilted toward demand growth driven by Asian economies.

While SABIC has taken steps to cut costs and improve profitability, there are concerns about whether it will be able to repeat the performance of the last couple of years. SABIC’s growth has slowed down already and falling prices of petrochemicals may affect profitability in 2006. Although SABIC’s Management expects good profits this year, it is not clear yet whether they will top those of 2005. We, therefore, maintain our cautious outlook on SABIC’s stock

In order to view the report, please click on the hyperlink below:

http://www.taib.com/reports/E01025040906/FRR%5F2010%2ESE%5FAPR06.pdf

We hope that you find it interesting reading, while welcoming your valuable feedback on the issue.

For any further information or clarifications, please get in touch with us at:

Tel: + 973 17549485; Fax: + 973 17916035;

Email: research@taib.com

Best regards,

Chinku Thankappan

Senior Analyst - GCC

TAIB Bank BSC(c)

Post Box 20485, Manama

Kingdom of Bahrain

First Reaction Report from TAIB Bahrain: SABIC

TAIB Research Research@taib.com

Sunday, April 9, 2006