The fund’s NAV fell in February – but there are potential for good investments

In February witnessed the unrest in the region and could see them spread from Egypt to other nearby countries. In the GCC region, we saw clashes in Bahrain between Shiites and Sunnis. The governments of various countries have taken action in their respective budgets to calm down their citizens. We have still to see if it is enough.

The fund’s NAV fell by -6.74% in February as a consequence of the situation in the region. The unrest has continued to push the oil prices to record levels. This is a positive development for the region in the short term. However, should the oil price reach to what some experts believe, $150 per barrel, this will have an impact on the world economy and probably drive the economies into a recession.

According to the Saudi Arabian Minister of Finance, their economy is not so affected by the unrest in the region (Saudi Arabia is by far the largest economy in the GCC). The Finance Minister said in late February that revenues are likely to be higher than budgeted, but expenses will also increase because of the government’s “benefit package” for its citizens.

We estimate that it will be many good opportunities for us as a fund to invest favorably in a number of carefully selected shares since we parried most of the development earlier this month.