Quarterly Update

RNS Number : 4461B

Epicure Qatar Equity Opportunities

27 October 2009

Epicure Qatar Equity Opportunities plc

Quarterly Update to Quarter End September 2009

Report to Shareholders

A FORMATTED VERSION OF THIS REPORT IS AVAILABLE FROM THE COMPANY ADMINISTRATOR, GALILEO FUND SERVICES LIMITED, ISLE OF MAN UPON REQUEST. PLEASE CONTACT enquiries@galileofs.co.im TO REQUEST A COPY.

Epicure Qatar Equity Opportunities plc

Investment Advisers Report - Quarterly Update to Quarter End September 2009

Investment Objective

Epicure Qatar Equity Opportunities plc ("the Company" or "EQEO") was established to capitalise on attractive investment opportunities in Qatar and the Gulf Cooperation Council ("GCC") region, resulting from the economic boom being experienced in the area. The Company invests in quoted Qatari equities listed on the Qatar Exchange (formerly the Doha Securities Market "DSM") in addition to companies soon to be listed, with a possible allocation of up to 15 per cent in regional GCC listed companies. The Investment Adviser invests using both a top-down screening process, as well as fundamental industry and company analysis.

Market Update

With the advent of summer holidays and Ramadan, the third quarter of the year is traditionally a quiet one. This is generally a period of low trading volumes and limited interest in the markets.

During the third quarter of 2009, the Qatar Exchange (QE) continued to trade in positive territory, rising by 14.2 per cent quarter-on-quarter. All other markets in the region, with the exception of Kuwait and Bahrain, posted positive returns.

Embedded image removed - please refer to the Company's website www.epicure-qatarequity.com for a table depicting GCC Equity Market Performance

Source: Reuters, Qatar Insurance Company S.A.Q.

In Qatar, the banking and financial sector was the most active followed by the insurance sector. The banking index increased by 19.7 per cent whereas the insurance sector index gained 16.9 per cent. The upward trend in GCC markets was accompanied by more positive sentiment across global equity markets and increasing hope that the global economy is emerging from deep recession. With oil prices continuing to hover around US$70 a barrel, the GCC benefited from bolstered export revenues throughout the quarter.

In the third quarter of 2009, the QE's market capitalisation increased by 24.4 per centto QR336 billion compared to QR270 billion at the end of the second quarter. The increase was due to the performance of the market as well as the listing of Vodafone Qatar.

While the Investment Adviser believes that in the medium term a sustained recovery in global markets is a prerequisite for restoring confidence in equities, they also believe that Qatar and the GCC will continue to demonstrate strong economic growth, which will be reflected in the performance of its local stock markets. It is the opinion of the Investment Adviser that the forthcoming third quarter results of Qatari companies will have a positive impact on the trend of the bourse over the coming months.

company update

During the third quarter the Company continued to perform positively and the Company's NAV improved to US$0.88 as of 24 September 2009 compared with US$0.76 as at 30 June 2009.

The Company is invested in 22 companies in the GCC, with 17 of them being in Qatar, four in the UAE, and one in Kuwait (30 June 2009: 22 in Qatar, 4 in UAE, 1 in Kuwait). The total market value of investments was US$202.2 million at the end of the third quarter. The Company reduced its cash to 1.1 per cent of NAV as of the end of the current quarter as compared to 4.3 per cent at the end of the second quarter of 2009.

During the quarter the Company repositioned its investments in the QE to best capture the next leg of growth in the Qatari economy. This resulted in the Company exiting from three investments. A further two companies announced merger plans with listed entities already in the portfolio. The redeployment of assets and reduction of the cash position led to an increased allocation to the banking sector and to certain other companies within the portfolio believed to offer compelling valuations and good earnings visibility.

corporate profitability

The global recession has affected the profitability of the companies listed on the QE. After a long period of growth, the first two quarters of the year saw the total profitability of companies listed on the exchange fall year-on-year. The total combined net profit for all companies listed on the QE for the six months ended 30 June 2009 amounted to QR13.9 billion compared to QR15.4 billion for the comparable period in 2008, a 10 per cent decrease. On a quarter-on-quarter comparison, all listed companies on the QE showed a net income increase of 1.2 per cent (QR6.98 billion net profit in Q2 09 compared to QR6.90 billion net profit in Q1 09). The Investment Adviser does not expect to see any major surprises in the third quarter results and this bolsters their belief in the capacity of QE-listed companies to grow their earnings.

Embedded image removed - please refer to the Company's website www.epicure-qatarequity.com for a graph
depicting net income of top five holdings.

Source: Qatar Insurance Company S.A.Q. , DSM (Figures in QR Million)

Within the top five holdings of the Company, Industries Qatar witnessed the biggest fall in H1 income. This was mainly due to the decline in petrochemical and fertilizer product pricing from its 2008 peak. The Investment Adviser believes that the worst of the price declines for the basket of products to which Industries Qatar is exposed was seen in Q4 08. Assuming oil prices remain at around the US$70 per barrel level, the Investment Adviser anticipates that Industries Qatar will see the full benefit of planned capacity additions between H2 09 and 2011. The Investment Adviser expects the group's gearing to both an economic recovery and commodity price movements will enhance future earnings.

industry allocation

The Company's largest investment exposure continues to be to the financial services industry. As noted in the previous report, the Investment Adviser believes that Qatari banks are extremely well placed to benefit from a recovery in the local economy. As a first sign of recovery, the Central Bank's monthly data for August showed that new loans rose significantly month-on-month, reversing a two month decline, driven primarily by public sector loans (+46.8 per cent month-on-month). Both private sector and public sector deposits continued to grow. As expected, asset quality does not appear to be a major concern for Qatari banks as loan loss provisions remained flat in August.

Reflecting these positive developments, the banking & financial sector index was the best performing index in Qatar during the quarter, rising by 19.7 per cent. The Company's exposure to the banking sector increased from 43.0 per cent at 30 June 2009 to 50.7 per cent at the end of the third quarter.

The services sector, which is broadly defined and includes companies in telecommunications and utilities, accounted for 23.1 per cent of all investments. The Company's exposure to the real estate sector stood at 5.1 per cent at the end of the third quarter of 2009. The industries and insurance sectors accounted for a further 16.1 per cent and 3.9 per cent respectively.

Embedded image removed - please refer to the Company's website www.epicure-qatarequity.com for a pie chart depicting Industry Allocation (% of market value)

Source: Qatar Insurance Company, Qatar Statistical Authority (Figures in QR. Millions)

portfolio breakdown - top five holdings

Embedded image removed - please refer to the Company's website www.epicure-qatarequity.com for a table depicting the top five holdings

Source: Qatar Insurance Company, Qatar Statistical Authority (Figures in QR. Millions)

During the quarter Qatar National Bank's investment exposure as a percentage of NAV slightly crossed the maximum individual stock exposure of 15 per cent as set out in the Company's investing policy due to its relative performance in the last week of the quarter. The Investment Adviser will take relevant steps to manage the excess exposure in due course.

At 30 September 2009, the top five investments of the Company constituted 60.3 per cent of NAV (compared with 48.0 per cent at 30 June 2009).

regional allocation

Embedded image removed - please refer to the Company's website www.epicure-qatarequity.com for a graph depicting the country allocation of the portfolio (% of mkt)

As at 30 September 2009, the Company was invested in 17 companies in Qatar, four companies in UAE, and one company in Kuwait. Investments outside Qatar constituted 0.5 per cent of the Company's investments.

important news flow

Qatari Diar appoints QIB as lead arranger and bookrunner for QR3.5 billion syndicated Islamic facility

Qatari Diar Real Estate Investment Company has appointed Qatar Islamic Bank (QIB) as Initial Mandated Lead Arranger and Bookrunner to raise a five year QR3.5 billion Sharia-compliant syndicated facility to finance European investments. This is the first time that a local Qatari bank has been appointed as the sole MLA and Bookrunner for such a high-profile transaction.

QIB & QAPCO sign a US$200 million finance deal

Qatar Islamic Bank (QIB) and Qatar Petrochemicals Company (QAPCO), a subsidiary of Industries Qatar, have signed a US$200 million Murabaha financing deal. This financing project will be utilised for QAPCO's new Low-Density Polethylene-3 (LDPE-3) project and related operations.

Fitch Ratings affirms Doha Bank's Long-term Issuer Default rating

Fitch Ratings affirmed Doha Bank's Long-term Issuer Default rating (IDR) at 'A' with Stable Outlook, Short-term IDR at 'F1', Individual rating at 'C', Support rating at '1' and the Support Rating Floor at 'A'.

Moody's assigns Masraf Al Rayan with A3 long-term & Prime 2 short-term

Masraf Al Rayan announced that Moody's Investors Services has assigned an A3 long-term and Prime 2 short term rating to Masraf Al Rayan, with a stable outlook.

Al Khaliji receives US$100 million raised by Alpen Capital

Al Khalij Commercial Bank (Al Khaliji) has received US$100 million of a Secured Medium Term Credit Facility raised by Alpen Capital Investment Bank (Qatar) LLC for Al Khaliji.

Qtel's US$1.5 billion facility oversubscribed 100 per cent

Qatar Telecom (Qtel) completed the general syndication of its US$1.5 billion forward start revolving facilities, of which the senior offering closed in February 2009. Despite the current difficult global credit environment, the general syndication attracted additional subscriptions of over US$1.5 billion, leaving the total facility more than 100 per cent oversubscribed. In response to the substantial demand from investors for Qtel's credit, the Company elected to increase the final facility size to US$2.0 billion. The facility will be used for general corporate purposes and the refinancing of an existing US$ 2.0 billion facility maturing in November 2009.

Qatar Shipping signed SPA for sale of its subsidiary

Qatar Shipping Company (Qship) has signed a share purchase agreement for the sale of its subsidiary Qatar Engineering and Construction Company (QCon) to a consortium led by Qatar America Asia Consortium for a consideration of US$110 million.

Fitch Affirms Qatar Real Estate Investment Company at "BBB+"

Qatar Real Estate Investment Company announced that Fitch Ratings has affirmed the company's long-term Issuer Default Rating (IDR) and Senior Unsecured Rating at "BBB+" and its short-term IDR at "F2". The outlook for the long-term IDR is stable.

Qatar Navigation receives second container vessel from Korean ship building company

Qatar Navigation Company has received the second of the four container vessels built on demand for the company in South Korea. The new ship will be named "Al Bidda" and will fly the Qatari flag. Equipped with the latest shipping technology, Al Bidda is 144.5 meters long, 22.6 meters wide, and draws more than 11 meters in depth. It is capable of carrying more than 1,000 containers equivalent to 12,400 dead weight tons.

Fitch reaffirmed Nakilat Inc.'s senior secured debt rating at A+

Fitch reaffirmed Nakilat Inc's senior secured debt rating at A+ and its subordinated debt rating at A- with Stable Outlook. In a statement released by Fitch, the Rating Agency said: "The affirmations reflect the stable performance of the underlying project in line with vessel delivery expectations and the charterer's construction schedule. As of 30 June 2009, all 16 liquefied natural gas (LNG) vessels of the initial fleet financed under the initial debt programme had been delivered on schedule and within budget."

Barwa increases its stake in al Imtiaz Company

Barwa Real Estate Company has subscribed to new shares in the capital increase of Al Imtiaz (a Closed Kuwaiti Shareholding Company). As a result, Barwa now holds 24.5 per cent of the capital of Imtiaz.

Embedded image removed - please refer to the Company's website www.epicure-qatarequity.com for a graph depicting the DSM20 Index since Jan 2005

Source: Reuters

Embedded image removed - please refer to the Company's website www.epicure-qatarequity.com for a table depicting the NAV performance of the Company (% net in USD).

Source: Galileo Fund Services Ltd

NAV Performance is unaudited

Performance figures are based on the NAV calculated on the last Thursday of each month and published via the regulatory news service of the London Stock Exchange.

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares when redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Additional information regarding policies for calculation and reporting returns is available upon request.

Epicure Qatar Equity Opportunities plc

NAV Update

NAV at launch US$ 0.96

NAV as at 24 Sep 2009 US$ 0.88

Inception Date 31 July 2007

The NAV is estimated net of fees and expenses every week and announced through the regulatory news service of the London Stock Exchange.

As at 24 Sep 2009

Market Price -Shares US$0.72

Market Price -Warrants US$0.12

Key Features

Domicile Isle of Man

Shares in Issue 235,537,952

Warrants Issued 34,271,000

Maturity Continuation vote at 2012 Annual General Meeting

Year End 30 June

Management Fee 1.25% of NAV

Performance Fee

The performance fee is 20% of the of the increase in Adjusted Net Asset Value per Ordinary Share above the Target Net Asset Value per Ordinary Share, subject to the achievement of two tests (i) the year end Adjusted Net Asset Value per Ordinary Share is greater than the High Watermark and (ii) the year end Adjusted Net Asset Value per Ordinary Share exceeds the Target Net Asset Value per Ordinary Share during the relevant Performance Period. The Target Net Asset Value per Ordinary Share for the first performance period is the US$1 placing price increased by the hurdle rate of 8% per annum. For further details, please refer to the Company's admission document.

Investment Manager Epicure Managers Qatar Limited

Investment Adviser Qatar Insurance Company S.A.Q

Administrator Galileo Fund Services Limited

Custodian Anglo Irish Bank Corporation, International PLC

Nominated Adviser and Broker Panmure Gordon (UK) Limited

Auditor & Tax Adviser KPMG I.O.M.

Legal Adviser Stephenson Harwood

Ordinary Shares

ISIN IM00B1Z40704

SEDOL B1Z4070

Bloomberg ticker EQEO

Valoren 3268997

Warrants

ISIN IM00B1Z40G96

SEDOL B1Z40G9

Bloomberg ticker EQEW

Valoren 3271492

Exchange Rate US$1.00=QR3.64

Webpage: www.epicure-qatarequity.com

Contacts

Epicure Qatar Equity Opportunities plc

Leonard O'Brien

T: +41 (22) 908 1190

Nominated Adviser & Broker

Panmure Gordon (UK) Limited

Moorgate Hall
London, EC2M 6XB

T: +44(0) 207 459 3600

Administrator & Registrar

Galileo Fund Services Limited

Third Floor

Britannia House
St George's Street
Douglas
Isle of Man, IM1 1JE

T: +44(0)1624 692600

F: +44 (0)1624 692 601

E: enquiries@galileofs.co.im

Custodian

Anglo Irish Bank Corporation (International) PLC

Jubilee Buildings
Victoria Street
Douglas
Isle of Man, IM1 2SH

PR/ Media Contact

Tim Draper

Milbourne

T+44(0)2079202367
F +44 (0)20 7920 2304

Tim.draper@milbournegroup.com

1 Ropemaker Street
34th Floor
London
EC2Y 9HT

Disclaimer

The contents of this document have been prepared by Qatar Insurance Company S.A.Q as Investment Adviser to the Epicure Qatar Equity Opportunities Fund PLC ("the Company"). This document has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of the Investment Adviser or the Company to any person to buy or sell any security or investment product. Any reference to past performance is not necessarily a guide to the future. The information and analyses contained in this publication have been compiled, or arrived at from sources believed to be reliable, but the Investment Adviser does not make any representation as to their accuracy or completeness, and does not accept liability for any loss arising from their use. The investments discussed in this report may not be suitable for all investors. and are provided for information purposes only. The ordinary shares and warrants in the Company have not been, and will not be, registered under the United States Securities Act of 1933 as amended (the "Securities Act") or qualified for sale under the laws of any state of the United States or under the applicable laws of any of Canada, Australia, Republic of South Africa or Japan and, subject to certain exceptions, may not be offered or sold in the United States or to, or for the account or benefit of, US persons (as such term is defined in Regulation S under the Securities Act) or to any national, resident or citizen of Canada, Australia, Republic of South Africa or Japan. None of the Company, the Manager or any of their respective members, directors, officers or employees, nor any other person, accepts any liability whatsoever for any loss, however arising, from any use of such information or opinions.