FY 2006 ALSO LOOKS PROMISING SAYS SHEHAB GARGASH
DUBAI – United Arab Emirates:
Announcing the results for the year 2005 at a press conference in Dubai, , Mr. Shehab Gargash, Managing Director, Daman, said: “The year has been a good one. We are particularly pleased that our flagship DUV fund closed 2005 by registering a growth of 92.02%. Since its inception in July 2001, the Fund has given shareholders a remarkable 435.06% returns.”
“The returns clearly indicate the fund’s outstanding performance. We have once again demonstrated that our strategic portfolio management policies are built to maximize shareholder returns while still building residual core value in each fund we manage” added Mr. Gargash.
The Daman UAE Value Fund (DUV) a specialized mutual fund which invests in UAE stocks, declared a fourth quarter dividend of AED15, taking the total annual dividend paid for the year 2005 to a record AED40 against AED15.75 for 2004, a year-on-year increase of 153.96%.
2005 and the future
Looking forward, Mr. Gargash predicted 2006 would be another year of positive growth. “Although it is hard to predict performance for the next 12 months, the liquidity in the market and the appetite for growth are all positive indicators for 2006. Stability, confidence and the general buoyant feeling will help encourage growth. Investors naturally hope for positive growth as robust corporate earnings are expected to outweigh negative factors such as inflationary pressures and liquidity drain through rights issues. If the proposed unification of the GCC markets happen alongside other major developments such as DFM’s plans to go public, this will surely lead to a further liquidity boost,” he said.
Other factors including continued diversification of the UAE economy , government budgetary surpluses, stricter market controls and a conducive environment for listing of family-owned businesses on the primary markets can only encourage investor confidence, Mr. Gargash added.
“It is important to note that during 2005, Daman tapped into the growing pool of well-trained young UAE nationals and has achieved the 40% benchmark in Emiratization. These figures for national employment by far exceed industry standards. This is an on-going policy initiative at Daman. We will continue appointing qualified UAE nationals in every part of the group’s rapidly expanding activities in the days and years to come,” pointed out Mr. Gargash.
Daman is a leading UAE based non-bank financial services provider and one of the key organizations in the regional financial services sector offering innovative financial products and outstanding service quality to its clients.
DUV Fund – outstanding performance and residual value
The DUV ex-dividend Net Asset Value (NAV) for the fund on January 1, 2006 stood at AED456.06 per unit against AED258.34 at the beginning of the year 2005, an impressive 92.02% increase in value, ex-dividend.
The annualized dividend yield for 2005 stood at 8.77% as against 0.81% yield returned by the benchmark NBAD Index. Dividend since inception has so far touched AED79. The annualized performance for the DUV Fund since inception in July 2001 is 96.88% with current Beta of 0.82 and a Sharpe Ratio of 2.78.
“The Fund’s investments in the ‘UAE Sector’ accounted for 95% of the total allocated assets with the rest in the non-UAE sector. The total number of holdings within the fund at the end of the year was 36 with the top five holdings accounting for nearly 59.39% of the total fund size,” Mr Gargash added.
Explaining how the fund was well-diversified by sector to capitalize on the broad gains made by the markets, Mr. Gargash pointed out that the fund’s exposure to banking was 45%, real estate 21%, Telecom 18%, Services 14% and the rest in Insurance sector. In its 54 months of operation, it has achieved 46 months of positive returns as against 39 months by the NBAD Index.
APTF – yields 23% return in eight-and-a-half months
The Arabian Programmed Trading Fund (APTF), Daman’s risk-managed fund, the first tailored for the GCC market, recorded a significant growth. In just eight and a half months since inception, the Fund yielded a good return of 23% in US Dollars which compares very favorably to well run global hedge funds. The Daman APTF Fund did this with average cash levels of 36% in the portfolio.
Launched in February 2005, the APTF has proven to be a solid balance in major portfolio planning against market fluctuations. The APTF Fund in November and December was up by 2% compared to the UAE which was down 8.8%, which justifies the use of sophisticated hedging strategies and a diversified portfolio.
The cash position as of January 18, 2006 was 44%.
On why the Fund holds so much cash when the GCC markets are so strong, Mr. Gargash said: “The Fund held larger amounts of cash in areas such as the UAE where prices have been weak than in Kuwait where equities have been strong. Of course when the Dubai and Abu Dhabi shares begin to rise, the APTF will buy those shares again and if Kuwait starts to fall the APTF will sell Kuwait shares demonstrating the flexibility of the APTF and its speed to respond.
“The APTF looks at the individual equities in the Fund and not at the market. Shares can fall while the market rises. Recent falls in leading shares in the UAE are examples of holdings that the Fund has successfully sold in the past few months,” added Mr. Gargash.
Mr. Gargash pointed out, “We emphasize the need for a risk managed portfolio in the GCC markets to complement traditional portfolios. Markets can fall sharply without warning and for no particular reason as witnessed with the sharp drop in the Japanese market recently. The APTF is well positioned to address such an event should it ever occur in our local markets.”
The APTF was launched in conjunction with Facet Funds plc, an offshore funds platform regulated by Cayman Islands Monetary Authority and Commander Asset Management Ltd, authorized and regulated by the UK’s Financial Services Authority (FSA). The APTF utilizes Commander Asset Management’s proprietary risk analysis programme model.
ALF YAD – Exceptional entrepreneurial opportunity launched in 2005
Launched in partnership with Young Arab Leaders (YAL) UAE Chapter in December 2005, Daman announced Alf Yad, a major new regional venture capital initiative. Mr. Gargash explained that Young Arab Leaders UAE Chapter and Daman will form a Dubai International Financial Centre (DIFC) incorporated joint venture company, Alf Yad LLC, to manage the Fund.
Starting with Alf Yad Fund I in December, 2005, the Alf Yad fund will raise and deploy AED 100 million to promising businesses across the region. The amount of contribution in ALF YAD Fund I has been fixed at AED1 million for each individual or corporate entity. By 2015, Alf Yad will have raised and deployed AED 1 billion in private equity investments throughout the region. Investors in each fund will benefit from the growth of Arab businesses invested in by the Fund.
Closure of the Iraq Opportunity Fund
During the year, the company announced the successful closure of the Daman Iraq Opportunity Fund, which yielded investors an impressive gross rate of return (GRR) of 204.18%. The Fund was set up in January 2003 as a private investment initiative aimed at providing investors with an opportunity to participate in the international reintegration and reconstruction of Iraq,
The Fund was launched with an authorized capital of US$50 million and at a Net Asset Value (NAV) of US$100 a share. The original holding of 1,000 shares has been valued at US$284.18 per share, which along with the interim dividend of US$20 a share, represents an annualized increase in excess of 60% per annum for the period the fund was operational.
GCC markets – overview
In general, FY 2005 proved to be bullish. The UAE markets ended the year as the second best performing market in terms of Annual Index growth in the GCC region. The Dubai Financial Market (DFM) Index registered a growth of 132.36% and the Abu Dhabi Securities Market (ADSM) witnessed 69.43% growth during the year.
The benchmark NBAD General Index that is comprised of the major actively traded stocks in the UAE, ended the year at 17,108.45 points, up by 101.70%.
Total market capitalization of the UAE markets touched AED835.15 billion (up172.78%) during 2005 from AED 306.16 billion in 2004.
With 36 new secondary listings across both the bourses, the volume of trading also registered a record growth of 656% to AED509.86 billion from just AED67.39 billion, illustrating the abundant liquidity in the market.
Around AED40 billion worth of capital was raised through rights issues across both the markets during 2005.
For further details please contact:
Daman Corporate Communications
Tel: 971 4 332 41 40
Fax: 971 4 332 42 40
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(As of December 31st 2005)
Daman Value Fund ( DUV):
Year beginning information:
|NAV at beginning of Year 2005||AED 258.34|
|NBAD Index at beginning of Year 2005||8,482.04|
|Parameters||Daman UAE Value Fund||Benchmark NBAD Index|
|Ex Dividend NAV,
January 1st , 2006
|Ex Dividend NAV,
December 1st , 2005
|Percentage Change, December 2005||(3.17 %)||(3.64 %)|
|Year To Date growth, 2005||92.02 %||101.70 %|
|Fund growth since inception||435.06 %||596.31 %|
|Dividend distributed during 2005||AED 40.00||N/A|
|Dividends since Inception||AED 79.00||N/A|
|Annualized Dividend Yield, 2005||8.77 %||0.81 %|