KAMCO Energy Services Fund foresees promising returns from expected oil market rebound

The KAMCO Energy Services Fund, which is a Shari'a compliant Fund was launched in 2007 and aims to optimize value through a conservative yet opportunistic approach.

The Fund is benchmarked against the MSCI All Country World Energy Equipment Index and the ML Renewable Index.

The Fund is the first hybrid energy fund in the Middle East, offering medium-to-long term appreciation from listed and unlisted equities pertaining to the oil and energy sectors in key regional and international markets.

The Fund follows a dual energy investment model, by focusing both on ancillary services for the traditional energy industry (oil, coal and gas) and alternative energy (wind, solar, bio-fuels and fuel cells).

Backed by the Direct Investment Department and the Fund Advisor, Investec Asset Management's expertise, the Company foresees promising returns for the Fund from the impending oil market rebound. Given the growing global focus on harnessing alternative energy sources, particularly the recent historic US Alternative Energy Bill, the hybrid Fund holds high potential for growth.

"Despite the present economic challenges, oil prices are expected to eventually rebound, thereby undoing the bottleneck that temporarily put investments in the oil sector on hold,"

says Mr. Khalil El Khoury, Senior Vice President & Head of Direct Investment Department, KAMCO.

"This allows the KAMCO Energy Services Fund to continue generating value. The Fund has performed favorably against the MSCI ACWI Index in 2009 and has recorded substantial growth since March with a rate of return of 31.4% (YTD as of 31st May 2009)." Mr. Khoury added, "We have introduced two new managers as part of the Fund's Investment Committee, Mr. Jonathan Waghorn and Mr. Mark Lacey from Investec, who bring with them their expertise in the oil and gas industry and prior experience in this sector at Goldman Sachs."

The Fund also reflects the positive investor sentiment during the market rally over the last quarter and presents itself as a viable option for investors seeking returns from investment opportunities that are designed to promote environmental and energy sustainability.

Mr. Khoury further added, "The Fund is positioned in high quality energy equities that are expected to benefit from stabilization and rebound in energy commodities and investment levels."

Global, regional and local developments towards economic revival reflect opportunities to profit from oil, gas and petrochemical production and export over the long-term, including an increased dependence on alternative energy sources.

Kuwait, which presently accounts for 10% of the world's oil reserves, holds strong potential for converting energy resources into economic wealth through partnership with International Oil Companies (IOCs). In early June, oil prices rose to seven-month highs above $69 per barrel, after having increased by 30% in May 2009.

The expectation for oil price in 2009 is $60 per barrel and structural limitations in oil supply will lead to higher oil prices in years to come. Beyond 2009, the Fund Manager expects a shortage in global oil supply, leading to higher prices as demand steadily improves in line with economic activity.

The International Energy Association (IEA) stated in the World Energy Outlook 2008 Report that prices will average more than $100 a barrel through 2015 and up to $200 a barrel by 2030. It also emphasized on the growing importance of enhanced oil recovery and extraction in order to sustain global production levels, going by the rates at which existing fields have been depleting. IEA forecasts energy consumption to grow by more than 50% by 2020 and double by 2050.