Interest in Saudi equity market seen increasing

19/06/2014 06:47 AST

Global Investment House Saudia (Global Saudi) announced today the remarkable performance of its managed equity funds and the Asset Manager’s view on the Saudi capital market expecting increased interest and potentially enhanced liquidity.

Since the beginning of the year, the Global Saudi Equity Fund and Global Saudi Islamic Equity Fund (Al-Noor) have both outperformed their respective benchmarks reporting 17.2 percent (benchmark: 15.1 percent) and 27.5 percent (benchmark: 12.5 percent) respectively.

Launched in January 2009, The Global Saudi Equity Fund has consistently outperformed its benchmark and peers, with stock selection being the main driver. Since its inception, the fund achieved 144.9 percent return compared to the benchmark return of 105.1 percent, outperforming the benchmark by more than 39.8 percent.

The Global Saudi Equity Fund is today the second largest Saudi conventional equity fund and the largest equity fund in the Saudi market managed by a non-bank owned Investment Company with total assets under management exceeding $170 million.

On the other hand, Al-Noor fund is the best performing Saudi fund investing in Shariah-compliant equities since the beginning of the year. Since its inception in January 2009, the fund achieved 172.4 percent return compared to 131.8 percent reported by the respective benchmark.

Commenting on the funds’ performance, Zeyad Awad, Head of Asset Management at Global Saudi, said “we are proud with the consistent performance of the Funds we manage which clearly indicates that the strategy we have been following is achieving the desired results. Our experienced investment team will continue analyzing companies to determine their economic worth based on projected future earnings and cash flows, while taking into consideration economy and market activity.”

He added “the Saudi equity market had a strong performance early in 2014 with growth concentrated in the local economy stocks that rely on the local demand in the Kingdom. The clarity of growth in the global economy has been weak; however oil prices continue to be at elevated levels which will continue to support the growth for the Saudi economy. This strong economic growth is supporting the companies that serve the local economy and that have limited reliance on international demand.”

The IPO market has been very active early in the year and there are expectations that there will be several listings on the Saudi market in the second half of 2014. We anticipate that these listing will increase interest in the Saudi equity market and potentially enhance liquidity.”

Global Saudi Equity Fund invests in stocks listed on the Saudi stock exchange and seeks to achieve long-term capital growth with predefined and controlled levels of risk. It aims to realize returns that exceed the average by benefiting from the expected economic growth in Saudi Arabia while maintaining a suitable level of diversification for fund assets and reduction of total risk by investing in different market sectors. Al Noor fund follows the same strategy of the Global Saudi Equity Fund; however its investment population is limited to Shariah-compliant equities approved by our Shariah-consultants.

Saudi Gazette