4th Quarterly Dividend Announced; Yield tops 7 percent
Daman UAE Value Fund has completed its first year with growth of 30.08%, Shehab M. Gargash, Director, announced today. The Fund’s one year performance has exceeded all other UAE focused mutual funds since its inception on July 1, 2001.
The Fund has also announced its 4th quarterly dividend distribution of AED 2.25/share for the Second Quarter of 2002, bringing the total payout since inception to AED 8.75/share. Based on the Fund’s last published ex-dividend NAV/share, this represents a yield of 7.21% for the year.
Commenting on the completion of the Fund’s first full calendar year of operations, Shehab M Gargash, Director, said: “These results validate our core investment strategy to actively participate in the UAE capital market while taking steps to help insulate our investors from market volatility.”
Mr. Gargash continued: “Our ability to meet our goal of distributing quarterly dividends to our investors adds value to their investment, especially in the current relatively low-yield environment for equities and bank deposits. We are also encouraged by the Fund’s ability to realize gains for twelve consecutive months since its inception, including those when the market posted negative returns and trading volume was low. We feel that this ability to mitigate market volatility through the structure and trading strategy of the Fund is one of its key strengths.” Daman UAE Value Fund is the only UAE focused mutual fund that pays a regular dividend.
“Our consistent track record with respect to quarterly dividend distributions and our overall performance have been important to our efforts to differentiate ourselves in the local market during the past year,” he said. “The Fund’s dividend yield compares favorably with leading UAE stocks as well as time deposits.”
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|Emirates Bank International||
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NOTE: Sources: Daman database, Emirates Bank International. The above is based on cash dividends distributed for 2001 and current prices as of July 8, 2002, except for the Daman dividend, which covers the one year period from July 1, 2001 – June 30, 2002.
Commenting on the UAE market, Mr. Mustafa Farid, Senior Portfolio Manager, Daman UAE Value Fund, said. “The UAE market has performed poorly relative to most of the rest of the GCC this year. The NBAD Index has grown only about 4.67% this year, while Kuwait has grown 20%, Oman is up 21.66%, Qatar has grown 26.51% and Saudi Arabia is up approximately 13%. This difference between the UAE and the rest of the GCC comes despite the fact that the UAE economy is performing very well and the public companies posted growth of about 8% in the First Quarter, and reflects continued weak investor confidence in the UAE.”
Mr. Farid continued: “In addition, the global picture remains weak. The lack of confidence in corporate earnings in the US, the weak global economy and continued low interest rates worldwide should reduce the flow of liquidity leaving the UAE and promote investment in equities as an alternative to time deposits, which should inject money into the local market. This trend is emphasized by the entry of new mutual funds, which bodes well for liquidity.”
“As the corporate earnings in the UAE are released this month and with all of these factors at play, we expect to see appreciation in the prices in the local equity market of 10% by the end of 2002. The market will remain attractive, however, because we expect earnings growth to compensate for the price appreciation.”
Discussing the Fund, Mr. Farid said: “The implementation of several steps initiated by the Fund to protect investors and enhance the Fund’s performance has been important to our success. One of the steps that the Fund has taken to protect investors from market volatility is the Profit Lock-In Mechanism, whereby a portion of realized gains are transferred to the Fund’s Dividend Reserve Account each month. This account helps ensure the Fund’s ability to pay future dividends and is currently sufficiently funded with cash to pay one year of dividends based on our historical distributions. Daman UAE Value Fund is the only mutual fund in the UAE to implement this strategy.”
About Daman UAE Value Fund:
Daman UAE Value Fund is a closed-ended, offshore mutual fund focused on the UAE stock market. It was launched on July 1, 2001 with shares valued at a par value of AED 100.00. The Fund has released an independently audited Net Asset Value (NAV) at the end of each month since its inception. The Fund has announced four quarterly dividends totaling AED 8.75/share in the past year, the most recent being AED 2.25/share for the Second Quarter of 2002.
Daman UAE Value Fund is a Mauritius-registered public company. The Fund’s governance structure, which includes a Board of Directors, an Advisory Board, an Investment Committee and a Fund Management Company acting as Fund Manager, is designed to ensure maximum transparency and accountability to shareholders.
For more information, please contact Mohammed Sulaiman, Daman Securities Tel: +971.4.332.4140 Fax:+ 971.4.332.4240 Email: [email protected]