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UAE: Strong
macroeconomic global activities buoyed by promising sentiments for next
year have contributed to the exceptional performance of Union National
Bank (UNB)’s Al Samaha Islamic Fund, as equities rises in appeal as an
asset class to investors seeking enhancing returns. The fund, which
invests in Shariah compliant large caps across the Middle East region,
registered a return of 29.72% for the third quarter (as compared to
S&P GCC & Egypt custom Islamic index 29.42%), placing itself as
one of the top performing funds in the GCC.
Apart from the positive macro conditions, which has seen equities being
the best performing investment instrument of the current economic cycle,
solid microeconomic trends also bolstered the performance of the fund.
“On a micro level, the UAE economy has been steadily growing; efforts for
economy diversification have been fruitful as we see less reliance on the
oil and gas sector resulting in an improving activity in real estate,
banking, manufacturing and tourism areas,” explained Galal E Khadr, the
senior vice-president and head of UNB’s Treasury & Investment
Division. The UAE and its Gulf neighbors are expected to chart strong
growth in 2014 and 2015 amid projections that other Arab countries would
be experiencing less optimistic economic expansion as a result of
political and civil unrest in the region; the economic growth of the GCC
is forecasted by the IMF to reach an average 4.5% this year and the next.
“Concerning stock markets, despite the fact that the month of June
witnessed a correction of 30% in Dubai General Index and 15% in Abu Dhabi
Index, Al Samaha Islamic fund managed to minimize the effect on its
returns to end up the month by less than 10% on absolute basis. Also IPO
activities picked up as a natural reaction of enhanced investors
sentiment," said Galal.
Galal further elaborated that a market correction is a good indicator and
a sign of continuation of a healthy uptrend, more so after an outstanding
performance in 2013 and the first quarter of 2014. This projection
coupled with UNB’s prudent investment strategy in company selection and
market entry timing, the Al Samaha Islamic Fund is expected to maintain
its strong performance.
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