Global's equity funds record impressive returns in May

While all the funds under management have performed well, the actively management funds in particular have shown a sharp recovery from the negative returns recorded earlier this year due to the sharp market decline.

In May, the Global Local Fund and the Global Mamoun Fund recorded returns of 10.2% and 12.3%, respectively. The Global Local Fund is up 8% while the Global Mamoun Fund has yielded 8.8% during the first five months of 2009. Both funds have also outperformed their respective benchmarks.

Global's GCC funds have also benefitted from the strong rally by regional markets and have demonstrated superior performance this year. With timely deployment of cash in selective names, the Global GCC Large Cap Fund and the Global GCC Islamic Fund were up 16.8% and 13.1% for the year, respectively, at the end of last month. The Global Energy, Petrochemicals, and Downstream Industries (EPADI) Fund, in particular, has performed exceptionally well, increasing by 19.6% in May to be up 33.5% for the first five months of the year.

Shahid Hameed, the Head of GCC Asset Management at Global, said he was pleased with the funds' performance.

Hameed added:

"Our equity mutual funds are amongst the best-performing funds in their respective peer groups so far this year, which is a testament to our long-term commitment to our clients."

The Gulf markets continued to rally in May with the MSCI GCC Index increasing by 12.9% for the month. Even though the performance of the Saudi Tadawul remained relatively subdued, other markets picked up the slack with the Doha Securities Market, Muscat Securities Market, Kuwait Stock Exchange and Dubai Financial Market all witnessing strong gains. The Doha market was the star performer in the region, increasing by 24.6% in May. The Kuwait Stock Exchange also performed well after the elections in mid-May, crossing the psychological barrier of 8,000 points and making a new high for the year.

All GCC markets have now posted significant rallies from their lows earlier in the year. In particular, the Doha Securities Market and Saudi Tadawul have witnessed extraordinary gains and are up 65.0% and 42.7% from their lows, respectively.

Commenting on the recent market performance, Mr. Hameed said, "GCC markets have primarily been driven by a global revival in investor sentiment and higher oil prices. Investors have been encouraged with the sharp rebound in international markets with consensus now developing that the worst might be behind us."

He went on to add that, "Panic selling in the last quarter of 2008 had resulted in markets overshooting on the downside, providing investors an opportunity to accumulate stocks at compelling valuations."

The sharp increase in oil price, which has almost doubled to $67/bbl from its lows, has also had a positive impact on investor sentiment.

While referring to this, Mr. Hameed said, "The rise in oil prices should bode well for the GCC markets as it will enable all regional economies to continue expansionary policies and report budget surpluses."

He further added that "While correlations between the GCC markets with developed and emerging markets have risen substantially in the recent financial crisis, we should see some decoupling as oil prices rise further."

In view of the strong performance in GCC markets, Mr. Hameed stated, "Markets could perhaps consolidate in the near-term given the sharp run-up in regional markets over the past few months. In addition, we are entering the summer months, which have historically been characterized by low trading activity. Nevertheless, we still see many stock-picking opportunities across all sectors and markets. Valuations continue to remain attractive in a historical perspective as well as in comparison to other global markets."