From: Paul Barrett Sent: Monday, July 23, 2018 3:45 AM To: Jeffrey E. Cc: Richard Kahn Subject: Saudi Jeffrey Do you have any strong opinions on the Saudi stock m=rket? Here is a summary of what changes are coming. 1. On June 20th, MSCI included the MSCI Saudi Arabia Index in=the MSCI Emerging Markets Index, representing approximately 2.6% of the MS=I EM Index with 32 securities. The first inclusion will coincide with the May 2019 Semi- Annual Ind=x Review and the second step in August 2019. Forei=n ownership of Saudi equities (as a proportion of total market cap) is ext=emely low, at just 1.9%. In contrast, other more mature EM markets such as South Africa and Russia have -40% and=-45% foreign ownership respectively. The Saudi market's foreign parti=ipation level is also surpassed by Dubai (16%) and Qatar (19%) which were =ncluded in the indices in 2014. 2. Currently there is $350b1n of passive and $1.3Trn of a=tive money following MSCI EM Index products. Bank of America estimates the=inclusion would ultimately result in —$20bIn of inflows going into 32 securities with a combined current market cap of $140BIn. Th=s results in anywhere between 2 and 200 days of buying based on current li=uidity of the underlying stocks (weighted average >60 days)<=li> 3. A Saudi Aramco IPO would result in a 4.5% weighting in the EM Ind=x. 4. The chart below tells the story of just how under-own=d Saudi currently is. 5. Index trading around 14.5x PIE (banks and petrochems =ccount for around 70% of index) One could buy the US listed ETF (which is up =4% YTD and 5% since the June inclusion) or ask DB if we can do a total ret=rn swap on the 32 names. &nbs=; You know this place better than most. What=do you think? Paul Barrett Alpha Group Capital LLC EFTA_R1_01789062 EFTA02601347

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