PERFORMANCE: All about Egypt

zawya-logoEgyptian funds dominated the list of best performers in the third quarter, says data tracker Zawya.

Egypt was flavour of the third quarter in the Middle East and North African funds industry, driven by gains on the Arab Spring nation’s capital markets.

NSGB II Fund was the best performer in the Mena region with an increased quarterly return from -6.78% in the second quarter to 28.22% in the third quarter, according to Zawya Funds Monitor.

This fund, also known as Tawazon, is domiciled in and focused on Egypt and invests mainly in fixed and variable income securities and equities of companies listed on the Egyptian stock exchange.

Naeem Misr fund, managed by Naeem Financial Investments and investing in shariah-compliant Egyptian equities, ranked second.

Next were three non-Islamic, Egypt-focused funds: Misr Al Khair, EFG-Hermes Egypt and Misr Al Mostakbal Investment. These funds recorded returns of 25.01%, 23.72% and 23.42% respectively. Egyptian funds dominated the top 50 in the quarter’s list of top performing Mena funds.

The number of funds launched in the third quarter, however, was less than half the number launched in the previous three-month period. Funds domiciled in and focused on Morocco and Tunisia had the biggest share of launches, while Emirates NBD Asset Management added a sub-class to its Emerging Market Equity Fund, raising the number of funds launched in the quarter to six. This quarter also witnessed the start of the first three balanced funds in 2012, all launched from Tunisia.

Egypt funds did well thanks to good performance of the Egyptian stock market, which rose nearly 10% in September alone on hopes of a $4.8 billion loan from the International Monetary Fund. The Egyptian market might have finished even higher had it not been for tensions with the US after protesters attacked the US embassy in Cairo, raising fears of serious friction with Washington.

The Dubai and Kuwait markets led the Gulf region in September, rising by 2% during the month in the face of continued global economic uncertainty. Abu Dhabi’s market grew 1.7% as the domestic economic outlook improved. However, the Saudi Tadawul index dropped 4.2% in September, erasing gains from July and August, as oil markets trended lower on weak global demand and a slowdown in China.

The UAE and Egyptian markets were also buoyed by the decision by mutual fund giant Vanguard to benchmark 22 of its funds to FTSE indexes, replacing MSCI.

But there are fears that emerging markets may not be able to maintain these gains. The relative calm these economies enjoyed over the past two years could well be temporary, warns the International Monetary Fund in its latest report.

“There is a significant risk that advanced economies could experience another downturn, and in such an event emerging market and developing economies will likely end up ‘recoupling’ with advanced economies, much as they did during the global financial crisis,” it said.


Zawya is a business information database for the Middle East and North Africa

©2012 funds global

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