Middle-Eastern stock markets took a breather in April, NAV for Persian Gulf Fund declined 2.05%


After a strong start to the year the Middle-Eastern stock markets
took a breather in April and the fund’s performance for the month
was –2.05%. In April many of the fund’s companies reported their
Q1 results where majority of the fund’s investments surprised to
the upside. For example from the industrial sector Industries
Qatar and Saudi Basic Industries showed strong Q1 numbers
that helped to alleviate the fears of lower demand in the
environment of slowing global economic growth. The fact that
Qatar National Bank’s and Commercial Bank of Qatar’s loan
books continue to grow also inject confidence in our financial
sector investments. During the conference calls both banks said
that on average they expect 10%-15% loan growth from this year
and as the year progresses they see higher loan growth that
should further accelerate next year.
According to the fresh assessment of Qatar National Bank the
investment programmes of Qatar already foresee $180 billion of
investments into the country in the next 10 years – that’s 100% of
Qatar’s last year’s GDP. Investment projects are different in
nature spanning from real estate to modern infrastructure buildouts
but regardless of the sector these government investments
help to increase the pace of economic growth. For example over
the next 10 years all GCC countries will make investments into
fresh water projects in the total sum of $300 billion. These costly
government programmes are being financed by their vast oil and
gas wealth reserves that according to QNB Capital are worth
today around $65 trillion.