(Alliance News) - Gulf Investment Fund PLC on Thursday said its portfolio was performing well and that the outlook appears positive for the Gulf Cooperation Council.
Gulf Investment Fund is an Isle of Man-based investment fund focusing on Saudi Arabia, United Arab Emirates, Qatar, Bahrain, Kuwait and Oman, the six countries which make up the GCC.
Shares in the fund closed down 2.4% at USD2.40 on Thursday in London.
GIF said its net asset value increased by 17% in the quarter ended June 30. This outperformed the benchmark S&P GCC Index, which increased by 5.8%.
"Performance in 2023 so far has been 20.6%, outperforming the benchmark by 15.2% over the six months," GIF said. "Outperformance in the quarter was driven by stock selection, particularly in Saudi and Qatar and an underweight position in Kuwait."
GIF assets which performed well included Middle East Healthcare, which was up 88% during the period, and Saudi Ground Services which was up 53%. Alamar Foods, on the other hand, was down 9.0%.
During the quarter, GIF said it increased its exposure to the real estate, financial, industrial, utilities, materials and healthcare sectors, "because of a combination of attractive valuations and growth prospects."
Gulf Investment Fund's weighting in real estate increased to 4.8% of its NAV from 1.8%. Its healthcare weighting increased to 5.6% from 3% after it increased its stake in Middle East Healthcare Co.
Its financial weighting increased to 35.0% from 32.0% after adding Emirates National Bank to its portfolio. Industrial exposure increased to 27.9% from 25.6% with the additions of Bawan Co and Integrated Holding Co, which boosted its access to infrastructure projects in Saudi Arabia and Qatar.
"GIF reduced its exposure to Energy, Consumer Discretionary and Communication Services as lower oil prices and the global slowdown increased risk in these sectors," the fund added.
For the rest of 2023, GIF said the outlook for the Gulf Cooperation Council "remains positive" due to "comparatively benign inflation, fiscal surpluses, giga & mega infrastructure projects and social and economic reforms." This lower inflation, GIF said, gives GCC governments space to maintain and/or increase their fiscal spending despite an anticipated decrease in the oil industry's contribution, with structural reforms in recent years allowing non-oil activities to increase their share in the economy.
"The global economy is grappling with the Ukraine Russia war, constrained government spending (except in GCC), high inflation and recessionary pressure from high-interest rates.
"GCC is a bright spot on where these headwinds are less and are offset by domestic public and private spending."
By Emma Curzon, Alliance News reporter
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