The fund’s NAV rose by 0.82% in January

In th e month of January 2012 LHV Persian Gulf Fund´s NAV gained 0.82%. During the month a number of our investments delivered their Q4 2011 results. First Gulf Bank (UAE) released a strong set of results, coupled with greater than expected dividend pay-out. FGB reported net profit up 11% Q-o-Q and 18% Y-o-Y. Earnings were ahead of the consensus estimate.

Another of our investments, Commercial Bank of Qatar, showed slightly mixed result for the period. Net profit was up 22% Y-o-Y, with revenues being the main driver. However, earnings fell 32% Q-o-Q and were 15% below estimates due to higher-than-expected provisions. Credit quality improved, with the NPL ratio falling due to write-offs and bringing CBQ’s asset quality in line with peers.

The stock’s dividend yield is currently around 7%. Positive results were shown by Qatar National Bank where net profit rose 35% YoY and 10% Q-o-Q, earnings were 6% above estimates. Growth outlook in 2012 remains strong for the bank since loan growth is expected to be well above average.

Politics: with increasing
sanctions from EU and US towards Iran regarding the country´s nuclear developments, tensions are rising in this geographical area. Iran has threatened to close the Strait of Hormuz which, for instance, clearly would push the oil price even higher. In the short run positive for oil producing countries but the effect could hamper the needed recovery of world economy.

Mikael Kvibäck