MENA domiciled assets booming
The total assets of funds domiciled in the Middle East and North Africa (MENA) region increased by three per cent in the first half of 2012 to hit $89.6 billion from $87.8 billion at the the end of 2011 on the backing of a major surge in money market fund assets, said a study.
There was an estimated $2.47 billion in net inflows to these funds which was primarily attributable to a $3.33 billion increase in money market fund assets (conventional and sharia), according to the recent 'Mena Asset Management Survey 2012'.
The survey was jointly sponsored by Dubai International Financial Centre Authority, Qatar Financial Centre Authority, ING Investment Management Middle East, PwC, Lipper and National Bank of Abu Dhabi.
According to the survey, the trade finance funds saw net inflows of $564 million in 2012. However, the equity fund assets (including sub-types) fell 2.9 per cent despite net outflows of $590 million.
The four largest funds in the Middle East and North Africa region were money market funds, it added.
At the end of June 2012, the survey identified 1,424 funds with assets of $89.6 billion. The dataset includes locally domiciled funds, local company sponsored funds irrespective of domicile, and funds with the Menaor one of the constituent markets as their geographic focus.
There were 1,340 Mena-domiciled funds with assets under management of $86.6 billion.
The survey pointed out that in 2011, the Mena-domiciled fund assets had witnessed a 13 per cent drop from end-2010, thanks to a $13 billion net outflow from these funds. The decrease was primarily attributable to a $6.9 billion drop in money market fund assets, the survey added.
However on the global scale, the mutual fund assets stood at $24.8 trillion, down 4.5 per cent year-on-year at the end of the second quarter of 2012 in 73,490 funds according to data compiled by Investment Company institute (ICI) from 46 countries.
The decline in mutual fund assets largely emanated from the decline in global equity prices from a year earlier and due to Euro weakness and the exchange rate effect weighing on European fund assets in US dollar terms, it added.
Worldwide funds experienced $91 billion in net inflows in the second quarter of 2012 (net inflows were $193 billion in Q1) according to ICI, with flows into bond funds ($155 billion), while equity and money market funds saw outflows ($18 billion and $53 billion, respectively).
Money market funds have experienced outflows since the first quarter of 2009 due to a near zero interest rate environment. In the second quarter of 2012, the equity fund assets were lower than the first quarter and also lower than the previous year, the survey said.
By the end of last June, the survey identified a total of 1,424 funds (with assets of $89.6 billion), compared to 1,438 funds with assets of $87.1 billion at the end of 2011.
Dr Gıyas Gökkent, the group chief economist (NBAD) said three years after the launch of the first edition of this book, it continues to provide a description of the regional asset management industry and act as a catalyst for its development.
"This year’s edition expands coverage to more countries in the Mena region and provides additional content to render this publication the definitive reference source on the regional asset management industry. The book is the result of industry-wide participation and contains some data which are published for the first time," he noted.
Shashank Srivastava, the QFC Authority chief executive said, "The survey is an invaluable and comprehensive source of current opinion and information on the mutual fund industry in our region and demonstrates the significant development potential of the industry for all market participants."
Graham Hayward, the partner and ME financial services leader at PwC said: “It has again been a great pleasure for PwC to support this excellent publication which now not only brings together information on the Mena mutual fund industry but it also provides an analytical perspective and valuable source of reference for anyone with an interest in the funds sector."
Chirag Shah, Head of Strategy & Corporate Planning at DIFC Authority said the fund management industry in Mena is experiencing tremendous growth, with asset managers in the region quadrupling and assets under management in the region increasing three-fold over the last decade.
"Similarly, we have witnessed a positive response within the DIFC, where 11 of the top 20 money managers are now based in the Centre and the first Real Estate Investment Trust (REIT) in the UAE has been established," he added.
- Need some space? UAE's banking sector is getting too crowded
- Bank funding in the Middle East doesn't boil down to liquidity alone
- Why is the Israeli shekel so weak?
- What doesn't kill you, makes your stronger: why the Arab Bank is likely to emerge from the Israeli lawsuit 'unscathed with flying colors'
- Too foreign? An inside look into the struggles of foreign banks in Saudi Arabia