Daman Investments PSC, a leading UAE-based fund manager today reported positive performance results of three of its regional funds. Daman also sees better times ahead for the UAE equities markets.
The recently launched Daman Second Emirates Fund recorded growth of 10.45% during Q2 2007, its inaugural operating quarter. The Fund was launched on April 1, 2007 at an NAV of AED 100.00 per unit, and achieved an NAV of AED 110.45 on June 30.
Daman also announced a first dividend payout of AED 1.00 per share, which results in an ex-dividend NAV of AED 109.45 for subscribers into the Fund at the July 1 subscription date. The UAE-focused AED 200 million equity Fund is open for subscriptions at the beginning of every month and allows for quarterly redemptions.
Commenting on the Daman Second Emirates Fund’s early positive performance and dividend announcement, Mr. Shehab Gargash, CEO of Daman Investments said: “This is proof of our much earlier stated belief that the market would begin to tread a recovery path in 2007. We are confident that this is beginning of a long, steady upward trend, regardless of dips and turns the market takes in the near term.”
The dividend of AED 1.00 per share reflects an annualized dividend yield of 3.65% to the Fund investors, higher than the current average benchmark NBAD Index yield of 2.70%.
When asked about recent valuations, Mr. Gargash replied: “There has been a recent rally in a few securities that have surpassed their fair valuation levels based on available financial information. However, it is our belief that overall valuations have swung back to more realistic levels than in 2006 and that this trend is both inevitable and healthy.”
In addition, the group announced the performance of its second UAE product offering also launched in 2007, the Daman Islamic Fund. The first Shari’ah based fund offered by Daman reported its first month’s performance with a fractional growth of 0.29% and a June 30th closing NAV of AED 100.29.
On the positive performance made by the Daman Islamic Fund in its very first month, when the overall UAE markets declined by more than 1% during June, Mr. Gargash commented: “The Daman Islamic Fund took a cautious note and controlled risk during its first month especially after a short period of market volatility was witnessed pre-ceding to the Fund launch. Despite largely remaining in cash in its first month, the Fund was able to produce a positive result. This sets a solid foundation for the remainder of 2007.”
The minimum investment for both the Daman Second Emirates Fund and the Daman Islamic Fund is AED 200,000.
Arabian Programmed Trading Fund – YTD growth of 13.70%
The results of a third Daman offering, were also announced for the group’s risk managed Fund, The Arabian Programmed Trading Fund (APTF).
The APTF Fund closed the mid-year mark with a 2007 year to date growth of 13.70%. This growth outperforms its benchmark GIC GCC Index, which for the same period, clocked growth of 9.36%. The Fund’s NAV as of 30 June 2007 stood at US$78.12.
Regarding APTF, Mr. Gargash said: “We are proud to announce the positive performance results achieved by our risk managed Fund which we believe is perfect for sideways market conditions. The Fund was designed for a long or cash strategy; using cash as an effective tool that helps the Fund to stay dynamic and manage the portfolio positions towards building a long term value in the portfolio”.
Overall Market Indicators and Future Trends
When asked about overall market indicators and future trends, Mr. Gargash, stated: “After decent Q1 corporate earnings announced by the premier companies, we are getting early signals of continued good performance for Q2 as well. This sustainability in corporate earnings over a backdrop of strong macro economic fundamentals and growing business confidence will provide the necessary impetus that will translate into a positive outlook for the markets in the immediate future.”
Regarding market sentiment Mr. Gargash said: “Market sentiment has accompanied the rally on a sharp upwards spike and we are witnessing stronger investor confidence. Selling pressure has been taken as an opportunity to establish fresh entry points and should not be seen as a sign of panic or weakness. This is a work in progress and an important component of the overall health and future direction of the markets which we see as positive.”
Mr. Gargash added “The UAE markets are currently witnessing a key turning point after a healthy recovery from their lows as more and more foreign and institutional investors are looking into the region as a key new value opportunity”. He further added “We feel that as the markets open for foreign investor participation, the standards of disclosure and transparency would automatically improve, helping investors across the board to take informed investment decisions.”
Mr. Gargash continued: “The drive by the markets to attract foreign investment through a series of steps is a positive sign towards the overall development of the market. It will be this category of investor money that will make the difference in the coming investment cycle. Foreign investors accounted for around 30% of total DFM trading liquidity during the first half of 2007. For Q1 2007, we saw a tripling in net Buying volume from foreign investors in the DFM to over AED 2.5 billion in net investment inflows.”
Commenting further, he concluded: “Several other factors bode well for the markets in the coming period, including the eventual disclosure of details related to several deals in the making, such as the NBD/EBI merger and the Dubai Holdings/Emaar transaction. Finally, the IPO pipeline remains healthy and the coming weeks will see the debut of several new scripts including Air Arabia and Deyaar.”
