AL Mal UAE Equity Fund — Fund Information / Factsheet 2024

Dec 6, 2024

Al Mal MENA Equity Fact Sheet November 2024 NAV Per Unit: USD 11.89

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Fund Manager Commentary

Objective

The GCC equity markets declined for the second consecutive month, reflecting a global sell-off in emerging market indices. The downturn was primarily driven by stronger-than-expected economic growth and higherthan-anticipated inflation in the US for October 2024, fuelling speculation that interest rates may remain elevated for a prolonged period. However, we expect the Fed to cut rates by 25 basis points in both December 2024 and January 2025, bringing the federal funds rate to 3.625% by 1H2025.

Achieve capital appreciation, primarily through investment in equity and equity related securities in the Middle East and North African markets.

	Performance1	Fund	Fund Performance Benchmark2	Alpha
	1 Month	-1.8%	-1.4%	-0.4%
	YTD*	0.4%	-1.4%	1.8%
	2023	23.1%	9.8%	13.3%
	2022	-0.9%	-5.9%	5.0%
	2021	29.5%	32.0%	2.5%
	Since Inc.	64.5%	-19.5%	84.0%

As a result, the MSCI GCC Index fell by 1.2% in November, with three of the seven GCC benchmarks posting losses. Oman experienced the sharpest monthly drop at 3.9%, followed by Saudi Arabia and Abu Dhabi with declines of 3.2% and 1.0%, respectively. Meanwhile, Dubai outperformed with a 5.7% gain, contributing to marginal positive performances in other GCC indices.

1 Performance is net of fees; return is cumulative 2 S&P Pan Arab Composite Index

3 As of 27th November 2024

	Holding	Top 5 Holdings	% of Fund
	ELM Company		5.6
	Adnoc Drilling Company		5.1
	Adnoc Logistics and Services		5.0
	Saudi National Bank		4.4
	Al Rajhi Bank		4.0
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	11.5%	12.0%
	Tracking Error	5.4%
	Beta No. of Holdings	0.9 31

The big story last month was the Saudi 2025 budget that projects a manageable deficit of 2.3% of GDP, down from 2.8% in 2024, supported by sustained high expenditure levels and modestly conservative revenue forecasts. In KSA, government spending remains a key driver of economic support. Budgeted expenditure for 2025 is set to fall by 4.5% compared to 2024, reflecting the non-recurrence of one-off spending this year, but strategic Vision 2030 projects are expected to receive increased funding. Despite the reliance on debt to finance the deficit, Saudi Arabia’s debt-toGDP ratio is projected to remain low at 32.2%, slightly above the government’s estimate of 29.9%.

We believe that GCC fiscal spending with the decline in rates are going to be supportive of the markets. The key remains oil price where our view is that Brent crude will remain in the $70-80 range in 2025. There are upside price risks in the short term if Iran’s supply decreases due to stricter sanctions enforcement. However, medium-term price risks are tilted to the downside, given the high level of spare capacity.

4 Calculated using 3-year weekly data

Sector Allocation 23.4% - Financials 13% - Industrials 12.5% - Energy 12% - Consumer Discretionary 8.7% - Information Technology 8.6% - Cash 8.5% - Consumer Staples 4% - Materials 3.8% - Real Estate 2.7% - Communication Services 1.6% - Health Care 1.2% - Utilities enforcement. However, medium-term price risks are tilted to the , given the high level of spare capacity.	Faisal Hasan, CFA Fund Manager 15th June 2008 Inception Date USD 23.2 million Fund Size USD 250 million Strategy Size Bahrain Domicile USD Currency Weekly Subscription & Redemption USD 50,000 Min Subscription MALMENE BI Bloomberg Code 1.75% Management Fee S&P Pan Arab Composite Benchmark Index Open Ended Fund Type Apex Administrator Standard Chartered Custodian Fund Information

10Y Fund Strategy Performance

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Geographic Allocation 30 Al Mal MENA Equity Fund Benchmark
52.3% - Saudi Arabia 25
29.9% - UAE 20
7.6% - Cash
15
5.9% - Qatar
10
3% - Kuwait
5
1.3% - Bahrain
0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24
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Disclaimer

None ofthe information andopinions containedherein is intendedto form the basis for any investment or trading decision, andno specific recommendations are intended. The products andtransactions describedherein are not suitable for every investor. Such products and transactions are only suitable for sophisticated and knowledgeable professional users offinancial instruments, and are structured andcustomized to the needs andobjectives 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 MalCapital PSC nor any ofits affiliates, directors, authorized managers and/or employees accepts liability for any loss arising from the use ofor makes any representation as to the accuracy or completeness ofthe terms andconditions ofproducts and transactions described herein. Finalized terms and conditions are subject to further discussion and negotiation, and will be determined in part on the basis of pricing and valuation 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 November 2024 NAV Per Unit: AED 1.87

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Fund Manager Commentary

The GCC equity markets declined for the second consecutive month, reflecting a global sell-off in emerging market indices. The downturn was primarily driven by stronger-than-expected economic growth and higherthan-anticipated inflation in the US for October 2024, fuelling speculation that interest rates may remain elevated for a prolonged period. However, we expect the Fed to cut rates by 25 basis points in both December 2024 and January 2025, bringing the federal funds rate to 3.625% by 1H2025.

As a result, the MSCI GCC Index fell by 1.2% in November, with three of the seven GCC benchmarks posting losses. Oman experienced the sharpest monthly drop at 3.9%, followed by Saudi Arabia and Abu Dhabi with declines of 3.2% and 1.0%, respectively. Meanwhile, Dubai outperformed with a 5.7% gain, contributing to marginal positive performances in other GCC indices.

On corporate profitability, the aggregate net profits of companies listed on GCC exchanges dropped by 3.3% year-on-year (y-o-y) in Q3-2024, while sequentially, profits also fell by 2.0% compared to Q2-2024. The y-o-y decline was primarily driven by an 18.5% decrease in Energy sector profits due to lower oil prices. Additionally, weaker performance in the Real Estate and Food & Beverage (F&B) sectors further weighed on the overall profits of GCC-listed companies. However, robust profit growth in the Banking and Materials sectors helped to partially offset the decline.

We believe that GCC fiscal spending with the decline in rates are going to be supportive of the markets. The key remains oil price where our view is that Brent crude will remain in the $70-80 range in 2025. There are upside price risks in the short term if Iran’s supply decreases due to stricter sanctions enforcement. However, medium-term price risks are tilted to the downside, given the high level of spare capacity.

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Sector Allocation
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23.1% - Financials
17.4% - Industrials
15.2% - Energy
12.5% - Real Estate
10.2% - Consumer Discretionary
8.5% - Utilities
7.7% - Cash
3.1% - Consumer Staples
2.3% - Materials
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Objective

Achieve medium to long-term capital growth by investing primarily in equities listed on the UAE Exchange.

Fund Performance

	Performance1 1 Month YTD* 2023	Fund 1.6% 14.0% 14.5%	Benchmark2 2.2% 6.1% 7.6%	Relative Perf. -0.6% 7.9% 6.9%
	2022 2021 Since Inc.	6.2% 32.2% 170.5%	5.4% 37.7% -20.6%	0.8% -5.5% 191.1%

1 Performance is net of fees; return is cumulative

2 S&P UAE Domestic 10% Capped Index

3 As of 27th November 2024

Top 3 Holdings

		Top 3 Holdings
	Holding		% of Fund
	Adnoc Logistics and Services		8.0
	Adnoc Drilling Company		7.2
	Salik Company		6.3
	Matrix4	Fund Analysis Fund	Benchmark
	Standard Deviation	10.1%	14.0%
	Tracking Error	6.0%
	Beta	0.7
	No. of Holdings	24

4 Calculated using 3-year weekly data

		Fund Information
	Fund Manager	Faisal Hasan, CFA
	Fund Size	AED 47 million
	Domicile	UAE
	Currency	AED
	Subscription & Redemption	Weekly
	Min Subscription	AED 40,000
	Management Fee	1.50%
	Performance Fee	20% over 10% hurdle with high watermark
	Financial Year End	31st December
	Benchmark Index	S&P UAE Domestic 10% Capped Index
	Fund Type	Open Ended
	Administrator & Custodian	Standard Chartered

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10Y Fund Strategy Performance
Al Mal UAE Equity Fund Benchmark
40
Geographic Allocation
37
34
51.1% - Abu Dhabi
31
39.9% - Dubai 28
25
7.7% - Cash 22
19
1.4% - KSA
16
13
10
Feb-12 Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18 Feb-19 Feb-20 Feb-21 Feb-22 Feb-23 Feb-24
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Disclaimer

None ofthe information andopinions containedherein is intendedto form the basis for any investment or trading decision, andno specific recommendations are intended. The products andtransactions describedherein are not suitable for every investor. Such products and transactions are only suitable for sophisticated and knowledgeable professional users offinancial instruments, and are structured andcustomized to the needs andobjectives 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 MalCapital PSC nor any ofits affiliates, directors, authorized managers and/or employees accepts liability for any loss arising from the use ofor makes any representation as to the accuracy or completeness ofthe terms andconditions ofproducts and transactions described herein. Finalized terms and conditions are subject to further discussion and negotiation, and will be determined in part on the basis of pricing and valuation 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.