Qatar Investment Fund’s (QIF) exposure to the UAE market has grown up. The exposure of the Fund in the market has reached 6.8 percent of net asset value (NAV) by the end of fourth quarter of 2016 (Q4, 2016) ended December 31. It was 4.3 percent in the previous quarter, latest data released by the a UK-based closed-ended investment company showed.
According to the QIF’s fourth quarterly investment report, the Fund had 23 holdings, 16 in Qatar and seven in the UAE, while in the previous quarter (Q3, 2016) it had 22 (17 in Qatar and five in UAE) at the end of Q3 2016.
The report revealed that QIF added three holdings during the quarter, which included Qatar International Islamic Bank (QIIB), Air Arabia and First Gulf Bank, while the Fund sold its holdings in Vodafone Qatar and Qatar First Bank (QFB).
Providing sector wise investment exposure, the report said that QIF remains overweight in the Qatar banking sector (including financial services) at 42.4 percent of NAV (market weighting 38.4 percent). Qatar National Bank (QNB) remains QIF’s largest holding accounting for 19.4 percent of NAV. For the period from January to December 2016, credit in Qatar grew 12.1 percent, mainly driven by the public sector (up 25.7 percent). The Investment Adviser believes that public sector loan growth will remain strong, driven by the government’s infrastructure development plans and a rising population. Industrials remain QIF’s second largest exposure at 25.8 percent of NAV, mainly in Industries Qatar (11.7 percent of NAV).
QIF aims at capitalising on the investment opportunities in Qatar and other GCC markets, arising from the economic growth being experienced in the area. The Company invests in quoted Qatari equities listed on the Qatar Stock Exchange (QSE) in addition to companies soon to be listed, with a possible allocation of up to 15 percent in other listed companies elsewhere in the GCC region.
QIF’s NAV was down 2.6 percent in 2016, and the dividend adjusted NAV was up 0.5 percent, while the QSE’s main index edged-up marginally by 0.1 percent on the quarter. As on December 31, 2016, the QIF share price was trading at a 14.3 percent discount to NAV.
The report also said that QIF’s top 10 holdings remained unchanged in the quarter. The Investment Adviser reduced holdings in Commercial Bank of Qatar and Gulf International Services (GIS) given the outlook for these businesses while holdings in Qatar Electricity and Water Company (QEWC) were increased as valuations became attractive.
The holding in GIS reduced to 3.8 percent from 5.6 percent in the quarter, while exposure to QEWC increased to 7.9 percent from 6.3 percent. The Transportation sector accounts for 10.1 percent of NAV. Qatar Gas Transport Company rose to 6.4 percent of NAV from 3.5 percent.
The holding in services and consumer goods rose to 2.9 percent from 2.3 percent. Exposure to the Telecoms sector reduced to 5.9 percent from 7 percent in Q3 2016, following the sale of its stake in Vodafone Qatar. Exposure in the Insurance sector has fallen by half reducing to 1.8 percent from 3.4 percent, while investment in the real estate sector has doubled during the quarter with the holding in Emaar Properties increased to 3.5 percent, compared to 1.8 percent in the previous quarter, said the report.
