Markaz's Emerging Markets Fund Invests In Five Enticing Themes


Markaz recently launched a new diversified investment product, Atlas Emerging Markets Thematic Class “Atlas EMT”, which is a single product that captures the growth from the ?ve most promising investment themes, namely, Infrastructure, Commodities, Consumer, Telecom and Agribusiness. Mr. Gopal Menon, Executive Vice President of Investments at Markaz, said “Atlas EMT seeks to obtain superior returns by investing in a portfolio of globally diversified equities with a primary focus on Emerging Markets with special emphasis on Asian countries. Investments are comprised of listed and unlisted equities, derivatives encompassing options and futures on currencies, equities, interest rates products and equity indices.” Mr. Menon added, “The investment strategy adopts a dynamic asset allocation approach. Strategic asset allocation is based on long-term objectives. At the same time, tactical asset allocation will be employed to enhance performance by making use of changing market conditions and transient opportunities. The investment process is backed by intensive quantitative and qualitative analysis undertaken by a professional team.” Mr. Bisher A. Al-Bisher, Senior Analyst - International Investments at Markaz, said “We strongly believe that investments in Atlas EMT will provide investors with the opportunity to achieve consistent and higher returns for the following reasons: The selected themes will continue to dominate equity markets for the long term, the growth of S&P 500 index is not broad based, most of it arises from gains in select sectors. Since themes do not necessarily follow the index movements, the incorporation of five high potential themes in one fund is expected to result in superior returns for the investor.” Mr. Al-Bisher added, “Markaz’s track record in thematic investments was established as early as 2003 by investing its investments in the Energy Sector. In 2006, the thematic investments expanded to areas such as Basic Materials, Water, Power, and Life Sciences. Markaz further expanded its investments into Agribusiness and Infrastructure by 2007. Markaz returns on proprietary investments in themes from the period May 2005 - Dec. 2007 reached 115%, whereas MSCI World posted 43.90% for the same period.” Mr. Menon offered a brief outlook for the five themes: Agriculture: Outlook for agriculture products and food prices is bullish for the long-term, driven by rising developing world incomes, high oil prices, demand for biofuels, pressure on agricultural land due to population growth and low inventory levels. However, short-term corrections can take place that may present opportunities for further investments. Commodities – Oil, Basic Materials, and Precious Metals: As economies grow, oil demand is expected to grow as well. Emerging Markets, led by China and India, will increase their imports significantly to meet with the rising industrial production needs. In addition, the supply situation becoming tougher could also propel a hike in oil prices. We also do not rule out geopolitical factors to technically support the higher oil prices for a long time. Infrastructure: We believe there will be substantial infrastructure spending ahead. The specific demand drivers, in our opinion, are robust economic growth, rapid urbanization, and rising income levels, which have increasingly stressed Asia’s infrastructure system, driving demand for upgraded infrastructure. The expected expenditure by 2030 will be in the vicinity of $30 trillion. Telecommunications: We believe the Telecom sector in emerging markets has still a lot more to offer in terms of growth opportunities. 64% of global mobile users are in emerging markets. In fact, China on its own is the world’s biggest market for fixed, mobile and Internet subscribers. Consumer Segments: We focus on automotives and consumer finance as the key potential growth areas for the next several years. The auto segment in the emerging markets is an exciting story. China is witnessing stupendous growth in both the passenger and commercial vehicles sectors. In Indian market, we are bullish on passenger cars. With regard to consumer finance, our belief has always been that credit growth is highly correlated to the growth in the economy, and so emerging economies which are forecasted to witness brisk growth rates are potential target segments. Atlas EMT class is available for subscription to investors of all nationalities with a minimum of US$ 50,000. Subscriptions and redemptions are monthly. It is the latest addition to Markaz’s portfolio of international products which collectively outperformed their respective benchmarks for the year 2007. The products include the flagship Atlas Diversified Class which invests in diversified asset classes and geographically diversified markets, Markaz IPO/Pre-IPO Program, Atlas Fund of Hedge Funds and Atlas ETFs Program. Markaz Investment Advisory Services assist clients by creating tailor-made conventional and Islamic portfolios with optimal asset allocation models and selecting investments aimed to achieve the return and liquidity within the desired risk tolerance. Global asset allocation is offered across several asset classes: Equities, Fixed Income, Currencies, Commodities and Real Estate. A team comprising experienced investment professionals who are alert to changes in local and international markets make key decisions. High quality third-party research is reviewed on a periodic basis to help in superior decision making. Further, in-house research reports are produced at regular intervals that focus on assets, markets and macro-economic outlook, and appropriate asset allocation methodologies. ### Kuwait Financial Centre S.A.K. 'Markaz', with total assets under management of over USD 5.32 billion as of 30 June 2008, was established in 1974 has become one of the leading asset management and investment banking institutions in the Arabian Gulf Region. Markaz was listed on the Kuwait Stock Exchange (KSE) in 1997; and was recently awarded a BBB+ corporate rating by Capital Intelligence Ltd. Photo Caption: Mr. Gopal Menon - Executive Vice President of Investments; Mr. Bisher A. Al-Bisher- Senior Analyst.