22nd Jan 2020 12:14
(Alliance News) - Gulf Investment Fund PLC on Wednesday said its assets grew in the final quarter of 2019 but were not able to match the performance of its benchmark.
In the three months to December 31, the Gulf Cooperation Council-focused investment company's net asset value grew by 2.4% compared to the S&P GCC index, which added 4.4%. Over all of 2019, however, Gulf Investment's NAV was up 21%, whilst the benchmark added just 8.3%.
Including dividend payments, Gulf Investment said its NAV grew by 4.7% in the three-month period.
At June 30, the fund reported a NAV per share of USD1.3504.
Shares in Gulf Investment Fund were 1.5% higher in London on Wednesday at USD1.33 each.
"Global equity markets ended the year near record highs. GCC markets rose, with the S&P GCC index up 8.3% in 2019. Kuwait outperformed the others, ending the year up 23.7%. Bahrain performed similarly closing the year up 20.4%. Dubai and Saudi Arabia posted rises of 9.3% and 7.2% respectively. Qatar rose 1.2%, while Oman closed the year down 7.9," GIF explained.
Saudi Arabia raised USD25.6 billion by listing just 1.5% of state-owned oil company Aramco's shares on the Riyadh exchange. This translates to a USD2 trillion valuation.
Compared to the benchmark, GIF continued to be overweight Qatar.
GIF's weightings in Saudi Arabia, UAE and Kuwait are 26%, 23% and 17%, respectively. The benchmark is weighted 54% towards Saudi Arabia.
"Military action by US and Iran has heightened tensions in the region, but it has not, at the time of writing, caused any of the GCC governments to change their economic outlooks. Nor do we expect it to, given that these sorts of events have occurred in the past," GIF added.
Looking ahead, the investment company said: "The IMF expects growth in the region rise to 2.5% in 2020, up from 0.7% in 2019. Gradual recovery in oil prices and continued infrastructure spending will likely boost economic activity in the medium term. Rising oil output in Kuwait and Saudi Arabia, and gas output in Qatar and Oman, should support growth in the hydrocarbon sector."
"With large investments anticipated over the next few years, the Investment Adviser expects to see increasing opportunities in banking, infrastructure and industrials. The oil price remains a key risk," GIF added.
By Paul McGowan; [email protected]
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