DOHA: Amwal, Qatar’s first regulated investment company and leading independent asset management firm, in collaboration with Germany’s leading private bank Donner & Reuschel is launching a new GCC fund. The D&R Amwal GCC SICAV Equity Fund will invest in the emerging equity markets in the GCC.
The fund is open to private and institutional investors and will offer European investors the prospect of strong growth and long-term investment returns through investing in equities in the GCC.
Amwal founder and Chairperson Sheikha Hanadi Nasser Bin Khaled Al Thani, said : “The GCC region has seen rapid economic growth in recent years. However, as with most emerging markets, the region’s stock markets are relatively young and present some challenges. We are confident that our well researched and disciplined approach will help us achieve financial excellence offering the best-in-class services to our expanding client base. We are excited to collaborate with D&R on this new product and look forward to further enhancing the regional investment ecosystem.”
Marcus Vitt, Chairman of the Management Board at Donner & Reuschel, said the partnership heralds an auspicious future for its clients. “Amwal has reinforced its position as a leading asset manager in the Gulf region with a proven, successful track record since its inception in 1998. We are proud to collaborate in the region with this team of highly talented and capable investment specialists,” Vitt said.
Commenting on the new product, Fahmi Alghussein, CEO of Amwal, said: “We have always aimed to set new and higher standards of excellence in Qatar. Since its inception, Amwal has established new benchmarks through pioneering initiatives in investment and asset management launching Qatar’s first Equity Fund, the Qatar Gate Fund in 2005, and now a GCC UCITS fund. The UCITS platform in Luxembourg is now the global standard for all fund managers with over €260bn of Assets under Management (AuM) across asset classes. We are proud to be the first QFC asset management company to launch a UCITS fund in Qatar with our partners Donner & Reuschel.”
On investment opportunities in the GCC, Afa Boaran, Asset Management Head, Amwal told The Peninsula that the region’s equities are 20 percent cheaper compared to past six months or one year. The European investors are looking for something new and the new fund will be really attractive for them.
On the growth and corporate profitability, he said corporates in the GCC benefit lower energy prices, cheap feed stock and importantly generally large government spending budgets. GCC chemicals producers enjoy cheap access to key raw materials, which gives them a significant cost advantage over global peers. As a result, margins are materially higher than that of global peers, which also gives GCC chemicals a better cushion against downturns in commodity cycles than global peers.
On the banking sector, he said GCC banks benefit from demand for loans for government projects, consumer credit boom and at the same time good liquidity. The banking sector has seen average loan growth of around 10 percent in the last 17 years, strong ROA in the range of 2-3 percent, and an average ROE of around 18 percent during the same period.
Top consumer companies in GCC has seen 12 percent compound earnings in the last seven years. It’s true since oil price started to drop, GCC equity markets have fallen as well, but to a much lesser extent. “We believe this is due to investors are still assessing the profit impact, and hope of a partial rebound in oil prices,” he said.