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Saudi Gateway Fund
The Saudi Gateway Fund is an open-ended single country equity fund giving regional and international investors access to the Saudi Arabian capital market.
| Structure | An open-ended investment company incorporated as an exempted company with limited liability in the Cayman Islands on February 27 2007 with registration number CD-182800 |
| Objective | To achieve long-term capital appreciation primarily through investing in publicly traded Saudi equity securities |
| Markets covered | Saudi Arabian Stock Exchange ("Tadawul") |
| Base currency | USD |
| Management Fee | 1.50% |
| Performance Fee | Performance Equalization - 10% over 8% |
| Minimum subscription | USD 100,000 |
| Subscription/Redemption | Weekly |
| Administrator | Close Funds Services Ltd. |
| Custodian | Hong Kong and Shanghai Banking Corporation |
| Bloomberg | SAUDGAT KY |
| ISIN | KYG331501067 |
The Fund Manager's Market Commentary as of January 31, 2012
The Saudi Gateway Fund rose 1.38% in January vs. a gain of 3.19% for the S&P Saudi Arabia Index. The Tadawul extended its strong December surge to make new highs and stands as one of the best performing markets in the region for 2012 thus far. From an investment perspective, it’s been a challenging January with the fund gaining performance from holdings in Insurance, mining and telecommunications. However these gains were more than offset as small caps in the banking and industrials sector rose sharply while some of our blue chip holdings did not perform over the last few weeks.
In line with our well flagged expectations, macro data in the US and emerging markets continues to show remarkable resilience and has underscored a bang of a start to the year across global markets. Although European debt issues remain front page news, for now they seem to have found greater acceptance in the context of the global growth picture. However, without doubt Europe remains the greatest and most poignant threat to the current recovery; accordingly we expect inevitable hurdles in the process to take a toll on already fragile market sentiment and precipitate further volatility. Having said that, our base case remains a gradual, upward trending global economic expansion and barring a game changing economic event, we would view such volatility as an opportunity to be taken advantage of.
We remain constructive on the Saudi market, however given the recent strong performance we expect near term softness and stand ready to deploy our cash through it. Our increased bet in banking has begun to pay off with Saudi banks now on the move reflecting their sharply improving fundamentals and contrasting low valuations. Although provisions rose selectively in fourth quarter earnings we do not see this seasonal increase as any indication of change in an improving asset quality picture. In addition, we continue to expect banks to remain prime beneficiaries of record levels of government infrastructure spending through 2012. Although we remain EW chemicals for now, focusing on yield at the moment, we do look for entry points in some of the stronger names over the coming months given a slightly improving energy outlook. Lastly, we continue to focus on the domestic consumption story with positions in retail, building and construction as well as real estate all of which will benefit significantly, along with financials, from the robust levels of planned government spending in Saudi Arabia. We also point to two further significant catalysts supporting our constructive thesis namely, the announcement by GOSI of increasing its stakes in public companies as well as the imminent opening up of the Saudi market to foreigners by the CMA.
Accumulated Deemed Distributed Income
Saudi Gateway Fund LTD has appointed PwC FS Tax GmbH Frankfurt to examine and certify the annual German Tax reporting figures including the Deemed Distribution Income (DDI), which is published in the electronic Federal Gazette as well as to WM Datenservice each year, four months after the Fund's fiscal year end at the latest.
To view the latest published Accumulated Deemed Distribution Income (ADDI) figures, please click here
Disclaimer
SHUAA Capital psc, its affiliates, and the Fund do not provide tax advice, and nothing in this section should be construed as tax advice. Before acting on any such information, consult your own accountant or tax advisor.
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