Daman UAE Value Fund grows by 11.51 per cent in first five months

Commenting on the Fund's performance, Mr. Gargash said: "Our Fund has both contributed to and benefited from increased trading in the UAE. The UAE stock market has set single-day record highs in early December. On the Dubai Financial Market, volume in November was more than double the amount in June. I am pleased that the Fund has been able to play a small role in this return of liquidity to the UAE market, and indications are that this trend will continue into next year."

Mr. Gargash announced the new per-share NAV of the Fund for November 30, 2001, which is AED 109.51. Starting next week, the Fund's NAV will be displayed on the Dubai Financial Market board, but shares of the Fund will not be traded on the market until next year, Mr. Gargash said. "The Fund is currently in its initial offer period, during which subscribers can purchase shares at the prevailing Net Asset Value. After the initial offer period, the Fund will be traded on the Dubai Financial Market, in exactly the same way that shares of listed companies are traded."

Announcing that the Fund's NAV would be listed on the Dubai Financial Market, Mr. Essa Kazim, Director General, Dubai Financial Market, said: "We are pleased to support the listing of the Daman UAE Value Fund at the Dubai Financial Market, and we look forward to the commencement of trading of the shares on the market next year, pending the completion of listing requirements by the Fund."

Daman UAE Value Fund has grown in absolute terms by 11.51% in only five months, which has out-paced all other UAE mutual funds over that period. Mr. Mustafa Farid Geninah, the Senior Portfolio Manager of the Fund, stressed that while the Fund seeks to provide high returns to investors in the form of income and capital growth, the Fund is fundamentally conservative.

Mr. Farid said that one of the key unique features of the Fund that has attracted investors and underscores the Fund's conservative approach is the dividend policy. "Distributing up to 50% of our realized gains to investors in the form of dividends every quarter forces us to realize our gains so that our performance will be reflected in our dividend. This benefits investors because it is essentially a profit lock-in mechanism," he said.

"In fact, we have a very strict profit-taking policy at the Fund that forces us to liquidate an investment once a certain benchmark is reached, as well as a stop-loss policy. Active enforcement of these guidelines by the Fund's very active Investment Committee has been important to producing solid returns for our investors in our first five months," Mr. Farid continued.

The Fund is set to complete its second dividend distribution after closing its second quarter of activity on December 31, 2001. In line with the Fund's Placement Memorandum, the Board of Directors will distribute up to 50% of the Fund's realized gains over the 4th quarter of 2001 to shareholders.

UAE Market Showing Strong Signs of Revival
Mr. Gargash emphasized that the increase in activity in the UAE stock market is not a matter of seasonal variation. Volume on the DFM was 19 percent higher during September and October than it was across the same period in 2000. Much of this growth is the result of depressed interest rates, new investment mechanisms and a better regulatory framework that have all boosted investor confidence in the stock market.

"The return of liquidity to the market that has driven recent growth appears to be more than a short-term phenomenon. Market data suggests that investor confidence is increasing significantly, and that investors see the UAE market as a strong alternative to both international equities and bank deposits," Mr. Gargash said.

"The jump in the value of the benchmark UAE indices is the result of increases in the share price of highly capitalized UAE companies since the beginning of November. For example, Etisalat, which represents roughly 30% of the total market, was alone responsible for more than half of the index gains during November," Mr. Gargash continued.