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GCC equity funds continue upward trend

Dubai, November 15, 2009

GCC equity funds continued the upward trend noticed during the second quarter, gaining 16.31 per cent on average, bringing year-to-date performance to almost 39 per cent, according to a report from Lipper, a Thomson Reuters Company.

As of the end of September 2009, almost all Lipper equity categories ended the quarter on a positive note, with the sole exception of funds invested in Kuwait, which lost 0.39 per cent. This was mainly due to the negative performance of the Kuwait Stock Exchange during third quarter 2009; the index decreasing 2.89 per cent.

Conversely, funds invested in emerging markets remained the best performers of the quarter.

Focusing on funds invested in the GCC, Equity United Arab Emirates recorded the best return, posting a 22.64 per cent quarterly return, according to the latest Fund Market Insight Report from Lipper.

UTI International India IT was the best performing fund registered for sale in the GCC over the quarter, gaining almost 46 per cent.

Twelve of the 20 top-performing funds in the region were funds invested in emerging markets, particularly India and Russia. Five funds among the top 20 were invested in Europe, as illustrated by Invesco Continental European Small Cap Eq USD A, which increased nearly 40 per cent for the quarter, said the report.

Of GCC-domiciled funds, those invested in Asia Pacific ex Japan topped the Lipper equity category returns, posting a 23.86 per cent gain, followed by funds invested in the UAE, which gained 22.64 per cent.

The ADCB MSCI UAE Index registered the best performance of the quarter, increasing
34.77 per cent. This Emirati-domiciled fund, managed by Abu Dhabi Commercial Bank, benefited from the positive return of the Emirati markets. Its investment strategy consists of providing investors the MSCI UAE index return.

The 212 Shari’ah-compliant funds covered by Lipper and registered for sale in the GCC increased 6.11 per cent for third quarter 2009, bringing year-to-date performance to 13.27 per cent.

As noticed during the first half of 2009, conventional funds, gaining 12.87 per cent for third quarter 2009, performed clearly better than their Islamic peers. This situation is mainly ascribable to the lack of Islamic funds invested in emerging markets, which were by far the best performers during the quarter.

Unsurprisingly, equity funds topped the ranking, recording 9.13per cent, boosted notably by the emerging markets bounce: Equity Emerging Markets Global rose 18.04 per cent, and Equity India increased almost 18 per cent for third quarter 2009. Conversely, money market funds posted the lowest return, remaining flat by posting a marginal gain of 0.06 per cent, dragged down by plummeting Kuwaiti money market funds, which tumbled 2.76 per cent for third quarter 2009.

NBAD UAE Islamic-Al Naeem was the best performing Shari’ah-compliant fund during the quarter, increasing 20.80 per cent. This Emirati fund, managed by the National Bank of Abu Dhabi, benefited from its great exposure to the Emirati financial markets.

“After an upbeat second quarter GCC markets continued their upward trend during the third quarter. Five of the seven regional markets recorded positive double-digit returns, contributing to a global recovery after the heavy losses witnessed during the first quarter and moving these five markets to positive territory for the year-to-date,” said Merieme Boutayeb, research analyst for Lipper.

“The exceptions were the Kuwaiti and Bahraini markets, which lost 2.89 per cent and 1.71 per cent respectively.”-TradeArabia News Service




Tags: banking | investment | GCC | finance | equity funds | Thomson Reuters | Lipper |

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