TheStar
KUALA LUMPUR: CIMB-Principal Asset Management Bhd yesterday launched the country’s first fund that will offer investors exposure to large-cap stocks in the Middle East and North Africa (MENA) region.
Chief executive Datuk Noripah Kamso said the CIMB-Principal MENA Equity Fund had a benchmark target of 10% growth in net asset value (NAV) per annum.
“The MENA region is made up of 12 countries with combined nominal gross domestic product (GDP) exceeding US$1tril. Its GDP growth is forecast to grow 5.9% this year, compared with 5.8% for the Asean region,” chief investment officer Raymond Tang said at the fund’s launch yesterday.
Tang said the oil-producing region was set to benefit from the commodity’s record prices with the incoming flow of petro-dollars utilised to grow the region’s economy rapidly.
The fund’s main sectors are real estate and banks, sectors that are set to benefit from mega infrastructure projects.
Noripah said the fund offered Malaysian investors the opportunity to gain access to the MENA region, which would otherwise be unavailable or difficult for an individual to invest in.
“The fund also takes advantage of the region’s booming sectors benefiting from the oil wealth in the MENA economies,” she said.
According to her, the fund traded at a price-to-earnings ratio of 16.4 times which made it a cheaper valuation compared with other emerging markets in Asia which were trading at 21 times.
“Low correlation between the MENA region and other world markets makes it an opportune time to invest in this region amidst the current market volatility,” she added.
The fund’s initial offer period is from Feb 19 to March 10. It has an opening NAV of 50 sen per unit and approved fund size of 300 million units. Its annual management fee is 1.8%.
This initiative is in collaboration with global asset management company Societe Generale Asset Management (SGAM).
“We will increase the fund size depending on demand,” Noripah said.
The fund feeds into SGAM’s Ocean Fund/Equities MENA Opportunities Fund, which invests in securities of companies principally established and listed in the MENA region.
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