AL Mal UAE Equity Fund — Fund Information / Factsheet 2019

Jun 12, 2019

Al Mal MENA Equity Fact Sheet NAV Per Unit: USD 9.01

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May 2019

Fund Objective: The objective of the Fund is to achieve significant capital appreciation, primarily through investment in equity and equity related securities in the Middle East and North African markets.

Key Terms:

Key Terms:
Fund Manager	Charles-Henry Monchau, CFA
	Vrajesh Bhandari, CFA
Inception Date	15th June 2008
Fund Size	USD 25 million
Strategy Size	USD 80 million
Fund Registration	Bahrain
Currency	USD
Subscription	Weekly
Min Subscription	USD 250,000
Bloomberg Code	MALMENE BI
Reuters Code	LP65123002
Management Fee	1.75%
Subscription Fee	Up to 3%
Redemption Benchmark Index	Weekly S&P Pan Arab Composite
Fund Type	Open Ended
Administrator	Apex
Custodian	Standard Chartered
Auditors	Deloitte

	Performance 2019	Fund 5.8%	Benchmark 5.1%	Relative Perf. 0.7%
	2018	2.6%	6.8%	-4.1%
	2017	17.8%	1.3%	16.5%
	2016	-3.7%	4.1%	-7.8%
	2015	-12.5%	-17.6%	5.1%
	2014	-0.7%	-1.5%	0.8%
	2013	31.1%	18.9%	12.2%
	2012	6.6%	2.6%	4.0%
	2011	-8.8%	-15.1%	6.3%
	2010	15.7%	13.9%	1.8%
	2009	17.7%	12.7%	5.0%
	2008	-47.5%	-49.9%	2.4%
	Since Inc.	-3.2%	-35.9	32.7%
	Performance1	Fund	Benchmark2	Relative Perf.
	1 Month	-6.3%	-6.8%	0.5%
	YTD*	5.8%	5.1%	0.7%
	1 Year	-1.1%	4.2%	-5.3%
	3 Years	26.2%	21.7%	4.5%
	5 Year	-7.5%	-17.5%	9.9%
	Since Inc.	-3.2%	-35.9%	32.7%

Performance

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Al Mal MENA Equity Fund S&P Pan Arab Composite Index (Rebased)
12.0
10.0
8.0
6.0
4.0
Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Feb-15 Jun-15 Oct-15 Feb-16 Jun-16 Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Jun-18 Oct-18 Feb-19
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• As of 29 of May 2019

Source: Al Mal internal performance measurement based on reports from third-party administrators (Apex)

1 Performance is net of fees; 3-year and 5-year return is cumulative

2S&P Pan Arab Composite Index

Al Mal MENA Equity Fact Sheet NAV Per Unit: USD 9.01

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May 2019

Fund Manager Commentary:

The month of May lived true to its reputation. Equities were routed globally due to the trade tariff tensions. The S&P Pan Arab Index lost - 6.8%, more than half of its 2019 gain, though better than the -9.2% decline in MSCI Emerging Markets Index. Saudi Arabia and UAE were the worst hit, whereas Kuwait and the smaller markets of Oman and Bahrain fared better. The Fund outperformed the benchmark by 50 basis points.

Portfolio holding NMC Health raised its 2019 guidance to reflect the impact of the newly formed JV in KSA with GOSI/ Hassana. EBITDA was revised to USD580m and net income is expected to grow to USD325m. NMC will fully consolidate the JV operations and will have a combined bed capacity of 1,490 beds (665 beds contributed by NMC and 825 by CARE) – effectively adding 38% to its 2018 year end bed capacity of 2,185.

Orascom Construction, one of our bottom up ideas in Egypt, reported strong numbers. EBITDA grew 17% y/y with no drag from the US operations. Stock trades on 2x 2019e EV/EBITDA. With conservative assumptions of no growth in project awards, we still see upside of 40%.

In the Kingdom of Saudi Arabia, the Red Sea Development Co. is in talks with local and global companies for investment in the project. We have a close eye on actual on-ground progress to assess the impact on cement demand and bank lending, the two ways in which we like to play the theme.

	Top Portfolio Holdings	% of Fund
	Al Rajhi Bank	6.2
	National Bank of Kuwait	5.7
	Qatar National Bank	5.6
	Saudi Basic Industries Corp	3.9
	Samba Financial Group	3.8
	Total # of Holdings	36

Source: Al Mal internal performance measurement based on reports from third-party administrators (Apex)

	Fund Characteristics2	Fund	Benchmark
	Standard Deviation	14.5%	14.8%
	Sharpe Ratio	-0.29	-0.43
	Beta	0.88
	Tracking Error	6.7%
	Information Ratio	0.32

2 Calculated using 5-year weekly data

We have added a new idea in the Saudi midcap space – Leejam Sports. The company operates 126 fitness clubs and is the market leader in the space with a 27% share. Saudi Arabia has one of the most overweight population globally, with around 34% obese and 68% overweight, according to the WHO. The young population is increasingly fitness conscious - a huge addressable market. Leejam runs four diverse formats – for mass market, budget, premium and junior- useful in capturing a wide range of customers based on different income brackets. Female fitness market is in its infancy and presents an excellent growth opportunity.

Geographic Allocation

Sector Allocation

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Cash Cash
Others
Other
Consumer Discretionary
Egypt
Consumer Staples
United Arab Emirates Real Estate
Industrials
Kuwait
Telecom
Qatar
Materials
Saudi Arabia Financials
0% 10% 20% 30% 40% 50% 60% 0% 10% 20% 30% 40% 50% 60%
Benchmark Fund Benchmark Fund
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Disclaimer

None of the information and opinions contained herein is intendedto form the basis for any investment or trading decision, and no specific recommendations are intended. The products and transactions described herein are not suitable for every investor. Such products and transactions are only suitable for sophisticatedand knowledgeable professional users of financial instruments, and are structured and customizedto the needs and objectives of each investor. The information and opinions contained herein have been prepared for informational purposes only and do not constitute an offer to sell, or solicitation of an offer to purchase, any security, any commodity futures contractor commodity-related product, any derivative product, or any trading strategy or service described herein. Neither Al Mal Capital PSC nor any of its affiliates, directors, authorizedmanagers and/or employees accepts liability for any loss arising from the use of or makes any representation as to the accuracy or completeness of the terms and conditions of products and transactions described herein. Finalizedterms and conditions are subject to further discussion and negotiation, andwill be determinedin part on the basis of pricing andvaluation models, data, and assumptions that are proprietary to Al Mal Capital and its affiliates. No assurance can be given that a product or transaction can, in fact, be executed on any representative terms indicated herein.

Al Mal UAE Equity Fact Sheet

NAV Per Unit: AED 1.23

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May 2019

	May 2019
	Fund Manager Charles-Henry Monchau, CFA Vrajesh Bhandari, CFA Inception Date 5th April 2006 Fund Registration UAE Currency AED Fund Size AED 38mn Subscription Weekly Dividend Frequency Yearly Min Subscription AED 100,000 Management Fee 1.50% Performance Fee 20% over 10% hurdle with high watermark Subscription Fee Up to 2% Redemption Weekly Benchmark Index S&P UAE Composite Index Fund Type Open Ended Administrator Standard Chartered Custodian Standard Chartered Financial Year End 31st December Auditors Deloitte Fund Objective: The Al Mal UAE Equity Fund’s objective is to achieve medium to long-term capital growth by investing primarily in equities listed on the UAE Exchange. Key Terms:	Performance1 Fund Benchmark2 Relative Perf. Performance Yearly Fund Benchmark Relative Perf. 2019 5.4% -1.3% 6.7% 2018 -5.7% -7.7% 2.0% 2017 7.8% -1.6% 9.4% 2016 7.9% 9.0% -1.1% 2015 -15.3% -17.6% 2.3% 2014 11.2% 7.5% 3.7% 2013 81.4% 88.0% -6.6% 2012 28.7% 23.5% 5.2% 2011 -18.4% -17.7% -0.7% 2010 -1.0% -8.8% 7.8% 2009 31.2% 24.6% 6.6% 2008 -56.9% -69.4% 12.5% 2007 50.4% 54.8% -4.4% 2006 -19.1% -35.2% 16.1% Since Inc. 37.6% -44.1% 81.7%
		1 Month -4.4% -10.0% 5.6% YTD 5.4% -1.3% 6.7% 1 Year -5.0% -4.4% -0.6% 3 Years 13.5% -4.0% 17.5% 5 Year -16.1% -35.5% 19.4% Since Inc.* 37.6% -44.1% 81.7%

Performance

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Al Mal UAE Equity Fund S&P UAE Index (Rebased)
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Apr-18 Aug-18 Dec-18 Apr-19
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• As of 29[th] of May 2019

Source: Al Mal internal performance measurement based on reports from third-party administrators (Standard Chartered Bank)

1 Performance is net of fees; 3-year and 5-year return is cumulative

2S&P UAE Composite Index

Al Mal UAE Equity Fact Sheet

NAV Per Unit: AED 1.23

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May 2019

Fund Manager Commentary:

The S&P UAE Index lost 10% last month taking the year to date return in negative territory. Dubai did marginally better than Abu Dhabi. The Fund limited the damage with a decline of 4.4% resulting in the year to date outperformance growing to 670 basis points.

Aldar reported a good set of Q1 results. Off plan sales jumped to AED 1bn, driven by the Alreeman project, where 80% of units launched have been sold. The hospitality segment benefitted from Special Olympics and IDEX events in Abu Dhabi. In related development, the government has received 6,000 applications for long-term visas from investors and entrepreneurs under the new long-term residency program. The number is small but has the potential to grow and would benefit the local economy, in particular the real estate sector.

The UAE central bank revised down its 2019 growth estimate to 2% compared to its previous estimate of 3.5%. This compares to IMF growth estimate of 2.7%. Oil GDP growth has been revised downward to 2.7% from 3.7% previously while non-oil economy is now forecasted to grow by 1.8% against earlier estimate of 3.4%. We note the CB goes on to say ‘The announced fiscal stimulus packages and the new investment law will encourage economic growth, increase consumption, reinvigorate the property market, and improve the labor markets as the investors and consumer sentiments continue to solidify’

	Top Portfolio Holdings	% of Fund
	Emirates NBD	11.5
	Dubai Islamic Bank	10.2
	Abu Dhabi Commercial Bank	9.1
	Total # of Holdings	13

Source: Al Mal internal performance measurement based on reports from third-party administrators (Apex)

	Fund Characteristics2 Standard Deviation	Fund 19.2%	Benchmark 21.1%
	Sharpe Ratio	-0.29	-0.47
	Beta	0.87
	Tracking Error	6.4%
	Information Ratio	0.69

2 Calculated using 5-year weekly data

The ruler of Dubai has unveiled the UAE ‘Golden card’ for permanent residency scheme. 6800 selected investors and residents are identified worth an estimated AED100bn existing investment, in aggregate. This comes at a time when, according to latest reports – average apartment and villa prices in Dubai are down 20% from the level in September 2015 to AED 1.7mn and AED 4.5m respectively. Exact criteria for the visa are yet to be made public, but government hopes to generate foreign investment, encourage entrepreneurship, and attract top engineers, scientists and students.

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Geographic Allocation Sector Allocation
Cash Cash
Other
Other
Health Care Equipme
Nasdaq
Transportation
Telecom
Dubai
Real Estate
Abu Dhabi
Banks
0% 10% 20% 30% 40% 50% 60%
0% 10% 20% 30% 40%
Benchmark Fund
Benchmark Fund
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Disclaimer

None of the information and opinions contained herein is intendedto form the basis for any investment or trading decision, and no specific recommendations are intended. The products and transactions described herein are not suitable for every investor. Such products and transactions are only suitable for sophisticatedand knowledgeable professional users of financial instruments, and are structured and customizedto the needs and objectives of each investor. The information and opinions contained herein have been prepared for informational purposes only and do not constitute an offer to sell, or solicitation of an offer to purchase, any security, any commodity futures contractor commodity-related product, any derivative product, or any trading strategy or service described herein. Neither Al Mal Capital PSC nor any of its affiliates, directors, authorizedmanagers and/or employees accepts liability for any loss arising from the use of or makes any representation as to the accuracy or completeness of the terms and conditions of products and transactions described herein. Finalizedterms and conditions are subject to further discussion and negotiation, andwill be determinedin part on the basis of pricing andvaluation models, data, and assumptions that are proprietary to Al Mal Capital and its affiliates. No assurance can be given that a product or transaction can, in fact, be executed on any representative terms indicated herein.