> Equities MENA
PROMOTIONAL DOCUMENT
FOR PROFESSIONAL INVESTORS ONLY
January 2009
2Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
SGAM Fund Equities MENA
What is MENA (Middle East and North Africa)?……………………………… 3
Why invest in MENA countries?………………………………….……………. 6
MENA & Oil…………………………………..……………………….………….. 13
MENA & real estate ………………………………..……………………….……. 16
Team & Process …………………………….…..……………………….………. 20
Appendix………………………………………………………………………….. 30
Contents
3Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
SGAM Fund Equities MENA
What is MENA (Middle East and North Africa)?……………………………… 3
Why invest in MENA countries?………………………………….……………. 6
MENA & Oil …………...…………………………………………………………. 13
MENA & Real Estate……...………………………………………….………….. 16
Team & Process …………………………….…..……………………….………. 20
Appendix………………………………………………………………………….. 30
4Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
What is MENA?
EgyptReal GDP growth: 19.5%Nominal GDP 2007: USD 127.9bnPopulation: 73.6m
AlgeriaReal GDP growth: 12.1%Nominal GDP: USD 131.6bnPopulation: 34.4m
MoroccoReal GDP growth: 13.0%Nominal GDP: USD 73.4bnPopulation: 30.7m
TunisiaReal GDP growth: 16.6%Nominal GDP: USD 35.0bnPopulation: 10.3m
OmanReal GDP growth: 20.5%Nominal GDP: USD 40.1bnPopulation: 2.6m
QatarReal GDP growth: 37.5%Nominal GDP 2006: USD 67.8bnPopulation: 0.8m
KuwaitReal GDP growth: 23.9%Nominal GDP: USD 111.3bnPopulation: 3.2m
BahrainReal GDP growth: 22.5%Nominal GDP: USD 19.6bnPopulation: 0.8m
UAEReal GDP growth: 27.1%Nominal GDP: USD 192.6bnPopulation: 4.2m
Saudi ArabiaReal GDP growth: 15.2%Nominal GDP: USD 376.0bnPopulation: 23.7m
LebanonReal GDP growth: 8.1%Nominal GDP 2006: USD 24.6bnPopulation: 3.7m
JordanReal GDP growth: 20.3%Nominal GDP: USD 16.0bnPopulation: 5.7m
Sources: Nominal GDP figures & estimates 2007: IMF; Real three year compounded GDP growth as of end of 2007: IMF.
5Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
The region is linked by cultural and linguistic ties
The Middle East has a population of 200 million people, of which half are under the age of 20
GCC produces over a third of global oil supply and represents over 60% of global oil reserves
Throughout most of the GCC a zero tax regime exists
The majority of currencies are pegged to the USD
Source: World Bank Report August 2007, “MENA 2007 Economic Developments and Prospects”.
What is MENA?
6Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
SGAM Fund Equities MENA
What is MENA (Middle East and North Africa)?……………………………… 3
Why invest in MENA countries?………………………………….……………. 6
MENA & Oil ……… …………...………………………………………………… 13
MENA & Real Estate……...………………………………………….………….. 16
Team & Process …………………………….…..……………………….………. 20
Appendix………………………………………………………………………….. 30
7Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
Positive Growth Outlook
Attractive Valuations
MENA & Oil
Real Estate
Why invest in MENA countries?
8Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
Source: IMF
GDP growth in MENA
0
1
2
3
4
5
6
7
8
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
%
Why invest in MENA countries?Economic growth
9Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
Why invest in MENA countries?MENA growing faster than the rest of the world
World Economic Outlook : % Change by Region
2007 2008E 2009E
World Output 5.0 3.7 2.2
Advanced Economies 2.6 1.4 -0.3
Newly Industrialized Asian Economies 5.6 3.9 2.1
Central & Eastern Europe 5.7 4.2 2.5
MENA 6.0 6.1 5.3
World Economic Outlook : % Change by Region
2007 2008E 2009E
World Output 5.0 3.7 2.2
Advanced Economies 2.6 1.4 -0.3
Newly Industrialized Asian Economies 5.6 3.9 2.1
Central & Eastern Europe 5.7 4.2 2.5
MENA 6.0 6.1 5.3
Source: IMF, World Economic Outlook, Nov 2008
10Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
The prospective infrastructure spending is the main growth driver.
The table below shows that the GCC countries are currently planning on spending US$1.5 trillion in projects in the five years to come.
Why invest in MENA countries? Government expenditure & structural reforms
Source: HSBC Global Research, Meed, Thomson Financial Datastream, as of August 2007.
Infrastructure spending Annual average infrastructure spend US$ trillion (% of 2006 GDP)
Bahrain 0.03 43.2Kuwait 0.25 49.1Oman 0.05 25.2Qatar 0.14 53.1
Saudia Arabia 0.36 20.2UAE 0.66 80.7
Total GCC 1.49 41.1
GCC countries: Projected infrastructure spend (approximate five-year horizon)
Country
11Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
Selected market performance (in US$)
Why invest in MENA countries? Attractive valuations due to stock market boom and bust
Source: Bloomberg. Data as of 13 January 2009. Indices used are MSCI Egypt Index, Dubai Financial Market General Index, Abu Dhabi Securities Market Index, Tadawul All Share Index and Doha Securities Market 20 Index, capital return in US $.
0
100
200
300
Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09
Egypt Oman Kuwait Abu Dhabi Saudi Dubai Qatar
12Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
P/E P/B Div Yield % *
Doha Bank 6.1 1.4 10.6
Aldar Properties 2.7 0.7 2.4
Eipico 8.2 1.7 6.9
Qatar Electricity 13.7 2.6 4.6
Commercial Bank of Qatar 7.5 1.4 5.6
Arabtech 2.3 1.3 13.6
Qatar Navigation 7.3 0.6 5.7
Emaar Properties 2.2 0.4 8.5
Burgan Bank 6.7 1.6 10.5
National Société Générale Bank 5.5 1.2 1.4
Company Name
Source: ZawyaBased on price as of 13/01/2009 - trailing 12 months earnings – adjusted for corporate actions* 2008 dividend based on current price
Why invest in MENA countries? Attractive valuations
13Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
SGAM Fund Equities MENA
What is MENA (Middle East and North Africa)?……………………………… 3
Why invest in MENA countries?………………………………….……………. 6
MENA & Oil …………………………………………………….………….. …… 13
MENA & Real Estate…………………………………………………….………….. 16
Team & Process …………………………….…..……………………….………. 20
Appendix………………………………………………………………………….. 30
14Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
MENA & Oil
Estimated deficits are small compared to recent surpluses
Cumulative Fiscal Surplus 2003-2008(USD bn)
Cumulative Fiscal Surplus 2003-2008(USD bn)
Bahrain 6.4 -0.9
Kuwait 183.7 13.1
Oman 22.5 -3.1
Qatar 34.1 -1.2
Saudi Arabia 378.1 -26.5
UAE 221.9 12.8
Source: Regional Central Banks
15Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
$
exuberance
anxious
net borrowers
distress
Source: Bloomberg
MENA & OilOil Price - impact on MENA region producer countries
0
20
40
60
80
100
120
140
160Ja
n-04
Apr
-04
Jul-0
4
Oct
-04
Jan-
05
Apr
-05
Jul-0
5
Oct
-05
Jan-
06
Apr
-06
Jul-0
6
Oct
-06
Jan-
07
Apr
-07
Jul-0
7
Oct
-07
Jan-
08
Apr
-08
Jul-0
8
Oct
-08
Jan-
09
16Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
SGAM Fund Equities MENA
What is MENA (Middle East and North Africa)?……………………………… 3
Why invest in MENA countries?………………………………….……………. 6
MENA & Oil ……..…………...………………………………………………….. 13
MENA & Real Estate………...………………………………………….………….. 16
Team & Process …………………………….…..……………………….………. 20
Appendix………………………………………………………………………….. 30
17Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
UK
USA
Israel
Lebanon
UAE
Morocco
Jordan
Egypt 12.00%
9.73%
6.56%
5.50%
5.13%
5.13%
4.37%
4.12%
Source: www.globalpropertyguide.com
MENA & Real EstateGross rental yields
18Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”Source: Citi Investment Research
0 5000 10000 15000 20000 25000 30000
Cairo
Marrakesh
Beijing
Berlin
Dubai
Sydney
Singapore
Paris
New York
London
Cit
y
$ Price per Square Metre
MENA & Real EstateComparable apartment prices (USD per sq. m)
19Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
A value orientated investment approach tailored to take advantage of inefficiencies in MENA region
Total return strategy
Emphasis on company meetings and in-depth research to identify high quality stocks at reasonable valuation levels.
Concentrated portfolio 40-60 stocks
High conviction positions
No country/sector constraints
Strategy
The Style:
The Process:
The Product:
The Aim:
The History:
Investing in the region since 1997
Built up regional know-how that is difficult to replicate
SG Arab Board provide further credibility & expertise
20Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
SGAM Fund Equities MENA
What is MENA (Middle East and North Africa)?……………………………… 3
Why invest in MENA countries?………………………………….……………. 6
MENA & Oil …………...………………………………………………………… 13
MENA & Real Estate…………………………………………………….……… 16
Team & Process …………………………….…..……………………….………. 20
Appendix………………………………………………………………………….. 30
21Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
Mark Krombas Fund Manager – SGAM – London(Over 10 years of experience in emerging markets and 8 years in the region)
Mark was educated at Kingston University and graduated with a degree in Business Studies. He began his career at Trans Arabian Investment Bank before moving to Prime Securities in Egypt. He was subsequently involved in institutional equity sales within the EFG - Hermes Group before moving to work for Société Générale Securities within their EMEA sales team specializing in Middle East and African markets. Prior to joining Société Générale Asset Management UK Limited in March 2004, Mark was employed at Equest
Partners specializing in Global Emerging markets. Mark has been instrumental in the running of the MENA strategy since joining SGAM.
Akhilesh Baveja MENA Equities Analyst – SGAM Bahrain(9 years experience)
Akhilesh joined SGAM Bahrain in October 2008 as an analyst specialising in Saudi Arabian equities. Prior to joining SGAM Bahrain, he was a Senior Analyst and Associate Director with Al-Rajhi Financial Services Company in Riyadh for two and a half years, primarily covering the Saudi market. He also spent four years on equity and equity derivative
research at Unit Trust of India Investment Advisory Services. Akhilesh holds a Master of Management Science in Finance.
Waleed Hamdy MENA Equities Analyst(15 years experience)
Waleed, a CFA holder, joined SGAM UK as a Middle East and North Africa (MENA) Equities Analyst in September 2008 from Beltone Financial, one of the fastest growing investment banks in the Middle East, where he spent three years covering regional institutions and high net worth individuals. Being an Egyptian national, Waleed has brought to SGAM UK a strong knowledge of businesses in the region, as well as management skills acquired as CFO of a regional institution prior to Beltone Financial. Waleed is based in National Société Générale Bank’s Cairo office.
Team & Process2 analysts added
22Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
Company Fundamental Analysis
Investment universe Listed stocks of MENA countries
Approximately 1400 stocks
Stocks Buy-List
Portfolio Construction
Investable universeApproximately 330 stocks
Criteria of LiquidityStocks open to foreign
ownership
Support of SG Group presence
in the Middle East
Exploiting inefficiencies due
to under researched companies
Strong emphasis on company
Visits (130+ in 2007)
In-depth knowledge of the selected companies driven by open dialog with
management
Bottom-up investment process
23Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
20
40
60
80
100
120
140
160
180
200
220
240
260
280
300
Jun-05 Jun-06 Jun-07 Jun-08MENA Composite MSCI ARABIAN MARKETS $- TOT RETURN IND
Track record
Even if SGAM Fund Equities MENA is managed with the same strategy as the composite, the past performance of the composite does not constitute either a commitment or an indication of the future performance of SGAM Fund Equities MENA. Société Générale Asset Management claims compliance with the Global Investment PerformanceStandards (GIPS®). To receive a complete description of the composite and a presentation that adheres to the GIPS standards, contact (UK-SGAM/[email protected]). The figures shown in this graph are those applicable for the years mentioned. Past performances are not a guarantee for future results, they are not constant over time .
annualized returnsPerformance* 1 month 3 months YTD 1 year 3 years
MIDDLE EAST & NORTH AFRICA EQUITIES COMPOSITE (MENA) 1.47% -41.26% -51.75% -51.75% -2.92%
MSCI Arabian Markets Total Return Index -0.73% -38.28% -53.75% -53.75% -24.14%* Net of management fees, in USD, monthly data as of end of January 2008.
cumulative returns
24Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
Portfolio detailsCountry weightings
SGAM Data as of end of December 2008.
Country allocation
Qatar
United Arab Emirates
Saudi Arabia
Egypt
Kuwait
Oman
Tunisia
Middle East Area
0% 5% 10% 15% 20% 25% 30%
25Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
Sector allocation
Portfolio details Sector weightings
Source: SGAM Data of Ocean Fund Equities MENA Opportunities as of end of December 2008.
Banks
Real Estate
Others
Capital Goods
Transportation
Pharmaceuticals
Utilities
Energy
Materials
Diversified Financials
Telecommunication
0% 5% 10% 15% 20% 25% 30% 35%
26Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
Portfolio detailsTop 10 holdings
SGAM Data as of end of December 2008.
Stock % Country
DOHA BANK LTD 7.27 QATARALDAR PROPERTIE PJSC 4.80 ABU DHABIEIPICO 4.65 EGYPTQATAR ELECTRICITY 4.50 QATARCOM. BANK OF QATAR 4.24 QATARARABTECH 4.18 DUBAIQATAR NAVIGATION 4.00 QATAREMAAR PROPERTIES PJS 3.93 DUBAIBURGAN BANK 3.92 KUWAITNATIONAL SOC GEN BANK 3.43 EGYPT
27Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
Risks
Geopolitical tensions …could have a negative impact on equity markets and therefore cause a loss in value
Political succession …could have a negative impact on equity markets and therefore cause a loss in value
Decline in oil price …could have a negative impact on equity markets and therefore cause a loss in value
Inflation…could have a negative impact on equity markets and therefore cause a loss in value
28Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
Exciting nascent asset class with strong outlook
Experienced team with strong (and long) track record
Flexible/unconstrained product able to capture this potential….
Summary….
29Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
Growth still present in the GCC
Valuations pricing in huge slow down
Main risks – Inflation and lower oil price
In our view the rewards outweigh the risks
….Summary
30Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
SGAM Fund Equities MENA
What is MENA (Middle East and North Africa)?……………………………… 3
Why invest in MENA countries?………………………………….……………. 6
MENA & Oil ……….…………...………………………………………………… 13
MENA & Real Estate.……………………………………………….………….. 16
Team & Process …………………………….…..……………………….………. 20
Appendix………………………………………………………………………….. 30
31Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
SGAM Fund Equities MENA Characteristics
1:00 pm, Luxembourg time
D-1 (no cut-off on Thursdays)
Total Return strategy inception
October 2002 Settlement on D+2
Fund inception May 13, 2008 Subscription currencies USD / EUR
NAV Daily (D)
Class A /AH P/ PH B / BHLU0357743359 / LU0357745057 / LU 0357743789 /
LU0357743607 LU0357745214 LU 0357743946
Initial value price USD / EUR 100 USD / EUR 100 USD / EUR 1,000
Minimum subscription 1 share USD / EUR 500,000 USD / EUR 3,000,000
Maximum initial charge 5% 5% 5%
Redemption fees Nil Nil Nil
Max. management fees 2.00% 1.50% 1.00%
Performance fee
Characteristics
- 15 % of outperformance over 10% hurdle (net of fees); - Calculated on a high watermark basis.
ISIN
Base currency USDSubscription / redemption / conversion cut-off time
32Société Générale Asset ManagementJanuary 2009
‘’Non Promotional document. This document is intended for professional clients as defined in the European Directive 2004/39/EC”
Important Note
This product is a Luxembourg open-ended investment fund (“SICAV”) compliant with EU Directive 85/611/EEC.
Distribution of this product is restricted to the countries for which it has been approved, pursuant to applicable local legislation and regulations. The product may not be distributed outside these countries. This document has not been approved by any competent authority in any country. It is your responsibility to verify that the regulations applicable to you do not prohibit the purchase or sale and/or distribution of the product. Before investing in this product, it is your responsibility to carry out your own analysis of the legal, tax and financial risks related to this type of investment, without relying exclusively on the information supplied here. Should you find it necessary, you should seek the opinion of your own advisers and experts in these fields. Subject to compliance with the regulatory constraints arising from the Markets in Financial Instruments Directive (MiFID), in particular the requirement to verify that the product is suitable to your needs, experience and financial situation, neither the product, nor SGAM, nor any related companies or their management or employees may be held liable for the financial or other consequences of your investment in or divestment from this product. We recommend that you refer to the section entitled “Risk Profile” in the full prospectus for this product. The information in this document is indicative only. This document may be amended from time to time without prior notice and must be read in connection with the most recent version of the product’s full prospectus and the appropriate simplified prospectuses. These documents, as well as the most recent annual and interim reports of the product, may be obtained upon request from the head office of SGAM. Any offer, invitation or solicitation shall be made only by means of the prospectus.
This document and its contents are the property of SGAM and the companies of the SGAM group. Reproduction or distribution is strictly prohibited without prior written permission from SGAM.
In addition, the most recent prospectus, the relevant simplified prospectuses and the latest annual-/semi-annual reports are available free of charge upon request as well under www.sgamfonds.de or directly from SG Asset Management (Deutschland) GmbH, Neue Mainzer Straße 46-50, D-60311 Frankfurt / Main,[email protected], +49 (0)69 71 04 28 08 0; for Austria: +43 (1)506 95 49.
Top Related