Markaz energy fund

The Fund will invest in the shares of companies operating in the energy sector of the GCC and neighboring countries, which may arise in light of the sector's growth potential.

Mr. Manaf Alhajeri, General Manager at Markaz, announced that the Fund will have a joint management team comprising of Markaz as the Fund Manager and Noor Financial Investments ("Noor") as Co-Manager supported by a team of investment advisors. The management team will be instrumental in the success of the Fund, given its extensive experience in the financial and energy sectors.

Alhajeri highlighted that Markaz conducted an extensive study of the regions' energy sector in a joint effort with a leading international consultant firm. As a result, the study concluded that over $330 billion of energy related projects will be executed in the region over the next decade, and has also identified the target high growth segment of the industry.

These major projects will develop additional capacity and upgrade the existing infrastructure and facilities across the energy value chain. In addition, some of the projects will focus on refining and petrochemicals; which are intended to diversify income sources and reduce dependency on exports of oil and gas. The execution of such projects will require the participation of well capitalized local service companies; which the Fund intends to invest in.

Alhajeri clarified that the Fund will predominantly invest in unlisted companies that require capital for growth. The Fund will target companies that have a sound operation but require the capital to acquire equipment and technology to execute their growth strategies. Many of these companies in the region still depend on bank loans; and this will allow the Fund to offer these companies a stable alternative source of funding.

Alhajeri added that investments in companies working in the energy sector are promising because the sector is not yet saturated and promises excellent growth. This is supported by the regional government's efforts to allow private sector participation in the energy sector in order to reduce the fiscal burden on the regional governments, create job opportunities for nationals in the private sector, and enhance the efficiency of project execution.

Alhajeri cited efforts to privatize Al-Qurain Petrochemicals, Al-Oula and Al-Sour retail gasoline stations. He also commended directions towards the privatization of companies such as KUFPEC and KOTC that were announced lately.

Naser Al-Marri, Deputy Chairman and Managing Director at Noor Financial Investments commented that the launch of Markaz Energy Fund is concurrent with the boom in the region's energy sector resulting from the increase of oil prices, and the expected stability at the current levels.

It is worth noting that subscriptions to Markaz Energy Fund will be open shortly and continue until the end of April 2006. Subscriptions will be open for all nationalities. The minimum subscription will be 5,000 units. Redemption is allowed on a quarterly basis after a lock-in period of one year for each subscriber.