SHUAA Capital Asset Management relies on an in-depth fundamental research approach, which blends our top-down macro and sector views with long-term, bottom-up value picks. Our valuation approach is based on classifying companies into distinct classes and picking the best companies based on identified criteria for each class. Although fundamental analysis is the backbone of our investment process, we use technical and quantitative analyses to complement our “entry” and “exit” timing decisions and enhance returns on our core picks through volatile markets.
Our valuation methodologies encompass DCF, DDM and NAV techniques, among others, to value various businesses at all stages of their lives. These methodologies are complemented by constant management interaction to ensure accurate forecasting and a keen understanding of each investment’s evolving value potential. Our analysts are generalists, who ensure a broader understanding of the investment opportunities on offer across sectors and countries. We also augment our in-house research with third party research providers as well as constant up-to-the-minute information from a network of over 50 brokers in the region, leading to an enhanced situational awareness at all times. Over the short-term, technical and quantitative analysis helps us select entries and exits for our core positions. In addition to fundamental and technical criteria we also pay close attention to liquidity, given the nature of Middle Eastern markets, and have strict liquidity criteria for investments in our funds.
An internal Quantitative Analytics team employs trading algorithms that are used to enhance execution quality and determine when to enter or exit a fund position as targeted by the valuation methodologies. Back-testing and continuous evaluation of trading strategies allows for a highly adaptive trading desk. Proprietary algorithms implement a quantitative approach to technical analysis as well as neural nets, cycle finders, event clustering and turning point detection systems.
In addition to quantitative analytics, the Quantitative Analytics Team is actively involved in market risk management. This team monitors VAR, liquidity risk, tracking error, downside risk, expected shortfall, and many other ex-ante and ex-post risk measures. The Fund Control team prevents operational failures and breaches of investment guidelines via an automated monitoring and control system. Compliance is ensured by automation of pre and post compliance rules. At the corporate-level, The Group Risk Management is responsible for company-wide analysis and risk management of credit and operational risks .