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14 April 2024

Admiral to invest 25% of its $300m fund in UAE bourses

By Parag Deulgaonkar




London-based Mena Admiral Fund is hoping to increase its size to $300 million (Dh1.1bn) of which up to 25 per cent will be invested in UAE bourses.

The open-ended fund is currently worth $62m and has invested 20 per cent in local bourses, Khaled Abdel Majeed, Managing Partner, Mena Capital, told Emirates Business.

“We have invested a substantial portion of the fund in the UAE bourses, as we believe that the market valuations are very attractive.”
The fund has invested in shares of Arabtec, etisalat, Aldar, Air Arabia and Islamic Arab Insurance. However, there are no plans to add more shares to the list.

The Mena Admiral Fund, which was launched in March 2006 with $22m, is a fundamental long/short equity fund focused exclusively on the Middle East and North Africa.

It aims to provide investors with substantial capital appreciation, generate superior risk adjusted performance and aim for low correlation to major global equity markets. Majeed expects an upside potential for Saudi Arabia and Qatar stock market this year.

The Saudi Tadawul is the largest market in the Gulf Co-operation Council (GCC) and is in the process of opening up to foreign investors.

While valuations in Qatar look attractive as the country is expected to almost triple liquid petroleum gas production by 2011, he said.

“Oil prices are close to $100 a barrel and that is a positive development for the market. Moreover, demographics and reforms have clearly put the region on the world map.”

According to HSBC Global Research, the GCC markets have performed very strongly recently and have risen up 23 per cent over the past three months.

“We continue to be attracted to Gulf equities. Indeed, the factors that are hurting the United States – weak growth and high oil prices, for example – actually turn out to be positive for GCC. We strongly believe that this environment will remain intact for some time,” the bank said.

HSBC named Kuwait as its most preferred market on the back of recent legislation that eliminated its 55 per cent capital gains tax and reducing foreign corporate taxes from 55 per cent to 15 per cent.
Earlier Essa Kazim, Chairman of Borse Dubai, told Emirates Business that efforts to market local companies in London and New York have generated a lot of interest from foreign investors. The larger macro-economic situation in the region has given investors all “the elements to believe in the GCC, and more specifically, UAE markets”, he said.

According to Majeed, Mena Capital would consider opening an office in the region only after the fund size touches $150 million.

However, he did not specify when that would happen.