Asset Management Updates from ADCB AUGUST 2010, Issue 8€¦ · Global Market Performance Asset Management Updates from ADCB PAGE 3 GLOBAL MARKET PERFORMANCE WELCOME MACRO ECONOMIC

Asset Management Updates from ADCBAUGUST 2010, Issue 8

GLOBAL MARKETPERFORMANCE

WELCOME MACRO ECONOMIC

TRENDS

PERFORMANCE REVIEW

INVESTINGTODAY

PRODUCTSPOTLIGHT

Dear well informed investor,The first day back in the office after a long vacation is always interesting for me as I am greeted by 23 missed calls, 15 voice mail messages and a swollen inbox eagerly awaiting my full attention. The transition back to the real world is made that much more difficult as my senses still resonate with the fragrant aroma’s of durian fruit and coconut, the friendly greetings of Sawatdee and the gentle sound of ocean waves lapping on the white sand beaches of Thailand resort island of Koh Samui. A few sun-drenched days in the gulf of Thailand’s Samui Archipelago is enough to make the most hardened of executives forget briefly about the reality of balance sheets, income statements and index level of the ADX General Index. To my surprise though, I did get to experience one very serious and very real event during my stay in Thailand, a mass action rally in Samui which saw thirty-five thousand residents linking hands to form a 52 kilometre human chain along the islands ring road, an expression of

solidarity and opposition against plans to drill for oil of the island’s coast. This, a clear reminder of the devastation caused by the recent disastrous BP oil spill in the Gulf of Mexico and the irreparable damage to public opinion.

On 5th August 2010, 107 days after the BP Deepwater Horizon disaster began, the gushing oil well was successfully closed in a procedure known as a “static kill” where heavy mud is pumped down the well to reduce pressure followed by cement which permanently seals the well. As the focus now shifts from containment to remediation and clean-up, the estimated total cost of the disaster is rising exponentially. Total costs, including insurance, tourism, fishing, real estate, environmental, and the aggregate oil industry are difficult to accurately estimate, BP’s estimate of total costs is USD22bn assuming they are not found guilty of gross negligence. As of 2nd August 2010, it is estimated that 4.9 million barrels of oil have leaked into the Gulf of

Mexico, a rate of 62000 barrels per day. The cost to BP’s shareholders is a staggering GBP43bn as the company has seen 35% wiped off its market capitalisation since the Macondo blowout occurred. BP branded filling stations, most of which ironically are not owned by BP, have reported sales declines of between 10% and 40% as public opinion turns against the company. It is this tarnished public opinion which is likely to have the most significant economic, political and social impact, not only with respect to BP but also for the offshore oil drilling industry as a whole. Offshore oil production represents approximately 30% of global oil consumption so any moratorium of offshore oil production would jeopardise the stability of crude oil prices, a topic we discuss further in this newsletter. While such a moratorium is unlikely, we are likely to see far more regulated environment with higher taxes on oil companies and a greater share of royalties flowing to countries and states allowing offshore drilling.

In this month’s issue we look at the M&G Global Leaders Fund and as well as an overview of the brokerage services available to ADCB customers. To learn more about these and other ADCB wealth management products and services please contact your ADCB Relationship Manager or SMS INVEST to 2626.

Kind RegardsMark FriedenthalHead of Capital Market Solutions

Welcome to August’s asset management update from ADCB

Asset Management Updates from ADCB

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AUGUST 2010 ISSUE 8

Last month, all major equity markets worldwide closed higher due to satisfactory European stress test results for banks and IMF optimism on global growth. The surge was led by US markets after US retail sales rose faster than at any time in the past four years and new home sales increased. Further, earnings upgrades from Fedex, Intel, Apple and Ford boosted market confidence in the economic recovery. Consequently, Dow Jones, NASDAQ and S&P 500 rallied 7.08%, 6.90% and 6.88%, respectively. The FTSE jumped 6.94% supported by UK GDP growth of 1.1% in Q2 2010, a 4-year high, while June’s stronger than expected increase in retail sales eased concerns that the economic recovery may be stalling. In Asia, the Hang Seng added 4.48% on hopes that China may moderate its plans to contain lending growth and property prices. In addition, Taiwan’s industrial production rose 24.33% y-o-y in June, its 10th consecutive monthly increase, improving investor confidence. The Nikkei 225

closed 1.65% higher on a 3.2% increase in Japanese retail sales and 27.7% higher exports, both in June compared to the same period last year, supporting the central bank’s view that the economic recovery remains intact.

The Sensex 30 added 0.95% following an IMF decision to raise its 2010 Indian GDP growth forecast from 8.6% to 9.4%. All GCC markets closed higher in July except Bahrain BSE. The MSM 30 gained 3.90% due to broad-based buying led by Industrials. The DFM rose 3.46% supported by the Real Estate and Investment & Finance sectors, while the ADX increased 1.26% helped by demand for Energy stocks. The BSE eased 0.17% as Services eroded Insurance sector gains. For the first time in eight months, the euro rallied against the dollar with markets now less concerned that the Eurozone sovereign-debt crisis will worsen,

adversely affecting the global economy. As a result, investor appetite for safe-haven stocks receded while Gold prices fell 5.12% in July.NYMEX crude and OPEC prices increased 4.39% and 2.06% as the dollar weakened against the euro during the month, increasing the attraction of commodities as an alternative investment. Wheat prices jumped 42.36% on speculation that a drought in Russia may force the country to curb exports, squeezing global supplies, while sugar prices increased 21.86% as Asian demand increased and shipments from Brazil were delayed by rain. Dubai’s 5-year government bond (USD denominated) spread fell by ~25 bps m-o-m in July following the IMF’s decision to raise its global growth forecast for this year to 4.6%, reflecting a stronger-than-expected H1 2010.

Global Market Performance


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ISSUE 8

Global Market Performance


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ADCB Wealth Management Group I Research I +97126973525 | [email protected] 1

Commodities, Yields and Currencies

Commodity Latest 1M Change 1Yr Change YTD

NYMEX Crude

OPEC

Natural Gas

Gold

Platinum

Copper

Sugar

Soybean

Corn

Wheat

Rice

Yields and Currencies Latest 1M Change 1Yr Change YTD

2Y US Treasury

10Y US Treasury

EUR

GBP

JPY

Index Snapshot (World Indices)

Index Latest 1M Change 1Yr Change YTD

S&P 500

Dow J ones

NASDAQ

Hang Seng

Nikkei

FTSE-100

Sensex 30

MSCI World

MSCI EM

TASI

DFM

ADX

KSE

BSE

MSM 30

DSM

1,101.60 6.88% 11.56% (1.21%)

10,465.94 7.08% 14.11% 0.36%

2,254.70 6.90% 13.96% (0.64%)

21,029.81 4.48% 2.22% (3.85%)

9,537.30 1.65% (7.91%) (9.57%)

5,258.02 6.94% 14.10% (2.86%)

17,868.29 0.95% 14.03% 2.31%

1,124.83 8.02% 7.66% (3.73%)

991.41 8.00% 17.46% 0.20%

6,283.73 3.12% 8.75% 2.65%

1,512.40 3.46% (16.83%) (16.14%)

2,545.80 1.26% (9.10%) (7.21%)

6,654.90 1.71% (13.34%) (5.00%)

1,393.92 (0.17%) (7.21%) (4.41%)

6,294.55 3.90% 7.67% (1.17%)

7,029.45 1.88% 4.80% 1.01%

78.95 4.39% 13.68% (0.52%)

74.19 2.06% 11.70% (3.81%)

4.92 6.65% 34.88% (11.65%)

1,181.70 (5.12%) 23.91% 7.90%

1,576.80 3.00% 29.86% 8.00%

7,195.00 10.44% 25.13% (2.06%)

19.57 21.86% 5.16% (27.38%)

1,052.40 10.97% (7.20%) 1.23%

392.60 10.84% 16.15% (5.26%)

661.40 42.36% 25.27% 22.16%

10.56 11.93% (23.24%) (27.53%)

0.55 (0.06) (0.58) (0.59)

2.94 (0.03) (0.56) (0.91)

1.3066 7.19% (8.40%) (8.85%)

1.5710 4.14% (5.96%) (2.84%)

86.46 (2.19%) (8.57%) (7.12%)


Commodities, Yields and Currencies

Commodity Latest 1M Change 1Yr Change YTD

NYMEX Crude

OPEC

Natural Gas

Gold

Platinum

Copper

Sugar

Soybean

Corn

Wheat

Rice

Yields and Currencies Latest 1M Change 1Yr Change YTD

2Y US Treasury

10Y US Treasury

EUR

GBP

JPY

Index Snapshot (World Indices)

Index Latest 1M Change 1Yr Change YTD

S&P 500

Dow J ones

NASDAQ

Hang Seng

Nikkei

FTSE-100

Sensex 30

MSCI World

MSCI EM

TASI

DFM

ADX

KSE

BSE

MSM 30

DSM

1,101.60 6.88% 11.56% (1.21%)

10,465.94 7.08% 14.11% 0.36%

2,254.70 6.90% 13.96% (0.64%)

21,029.81 4.48% 2.22% (3.85%)

9,537.30 1.65% (7.91%) (9.57%)

5,258.02 6.94% 14.10% (2.86%)

17,868.29 0.95% 14.03% 2.31%

1,124.83 8.02% 7.66% (3.73%)

991.41 8.00% 17.46% 0.20%

6,283.73 3.12% 8.75% 2.65%

1,512.40 3.46% (16.83%) (16.14%)

2,545.80 1.26% (9.10%) (7.21%)

6,654.90 1.71% (13.34%) (5.00%)

1,393.92 (0.17%) (7.21%) (4.41%)

6,294.55 3.90% 7.67% (1.17%)

7,029.45 1.88% 4.80% 1.01%

78.95 4.39% 13.68% (0.52%)

74.19 2.06% 11.70% (3.81%)

4.92 6.65% 34.88% (11.65%)

1,181.70 (5.12%) 23.91% 7.90%

1,576.80 3.00% 29.86% 8.00%

7,195.00 10.44% 25.13% (2.06%)

19.57 21.86% 5.16% (27.38%)

1,052.40 10.97% (7.20%) 1.23%

392.60 10.84% 16.15% (5.26%)

661.40 42.36% 25.27% 22.16%

10.56 11.93% (23.24%) (27.53%)

0.55 (0.06) (0.58) (0.59)

2.94 (0.03) (0.56) (0.91)

1.3066 7.19% (8.40%) (8.85%)

1.5710 4.14% (5.96%) (2.84%)

86.46 (2.19%) (8.57%) (7.12%)

ISSUE 8

Withdrawal of monetary stimulus in emerging economies to slow Both developed and emerging economies worldwide adopted aggressive monetary stimulus measures to support economic growth during the recent financial crisis. However, over the past six months, both markets have pursued different individualised monetary policies with emerging economies recovering more rapidly than their developed counterparts. While central banks in most emerging economies have begun gradually withdrawing monetary stimulus initiatives, developed countries have apparently decided to retain their benign monetary policies due to a deterioration in risk appetite and consequent hording of liquidity caused by high sovereign debt levels. Emerging market central banks have now begun withdrawing measures designed to stimulate monetary activity. The People’s Bank of China (PBOC) has increased bank reserve requirements three times within a very short period to dampen rapid

credit growth and a sustained accumulation in asset inflation within the real estate market. Similarly, the Reserve Bank of India has raised the repo rate on four occasions so far this year by a total of 100 bps mainly in response to the strong recovery in economic growth, high food price inflation, and an impending bubble in property markets. As in India and China, various East-Asian economies such as South Korea, Malaysia, Singapore, Taiwan and Thailand have recently tightened monetary policy supported by rapidly closing output gaps and strong growth momentum. Conversely, central banks in developed economies are currently maintaining very-accommodative monetary policies given increased uncertainty following the sovereign debt crisis in the Eurozone. Re-emergence of risk aversion, and consequent shortage of liquidity has exerted stress on interbank funding. In order to alleviate this problem, the ECB and US Federal Reserve have restored greater flexibility to their liquidity operations. The ECB suspended its collateral

requirements on Greek sovereign debt, and the Federal Reserve reinstated its foreign exchange swap lines to ease tight liquidity conditions. However, euro area banks continue to hoard liquidity and retain funds in deposit facilities. Moreover, recovery in developed economies is expected to significantly lag that in their emerging counterparts delaying the withdrawal of current relaxed monetary policies. Recently, emerging economies have moved quickly to reduce monetary stimulus. However, the rate at which such measures are withdrawn in emerging economies may slow in the near term given tight financing conditions and a reduction in broad risk appetite in developed economies. Moreover, asset price valuations and overheating in several industries have already eased due to tougher measures adopted by central banks, which could delay further elimination of monetary stimulus measures. For example, PBOC’s active measures have already dampened economic growth with GDP increasing by “only” 10.3 % in Q2 2010

compared to 11.9% in Q1 this year. Similarly, growth in China’s real estate market transaction value has slowed, reflecting the effectiveness of PBOC policies.

Macro Economic Trends


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0

75

-75

150

225

Source: IMF Estimates

Source: Global �nancial stability report, IMF


GDP Growth %

0.5

2.6 2.4

6.1

2.5

6.8 6.4

-3.2-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

2008 2009 2010 2011

Advanced Eco. Emerging and Dev. Eco. Mar

-10

Sep-

09

Mar

-09

Sep-

08

Mar

-08

Sep-

07

Growth of Real Estate Market Transaction Value in China(%, yoy growth)

Others, 1.24

Nigeria, 0.31

Kuwait, 0.29

UAE, 0.43

Saudi Arabia,3.85

Spare Capacity with OPEC (million boe/d)

Crude Oil Prices (Nymex WTI, $/boe)

80.081.5

85.082.8

75.0

80.0

85.0

90.0

Q3'10 Q4'10 Q1'11 Q2'11

Global Oil Demand (million boe/d)

45.4 45.5 45.3

39.3

41.0

42.5

38

40

42

44

46

2009 2010 2011

OECD Non-OECD

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Stable crude oil prices in the near termCrude has traded between USD 70-80 boe over the past three months as a result of increased risk aversion and the appreciation of the US dollar (due to sovereign debt worries in the Eurozone). While increasing demand for crude oil may be sustained in emerging markets based on the economic recovery in such countries, the combination of ample spare capacity in OPEC and increasing inventories in OECD markets is likely to ensure markets continue to be well-supplied. Therefore, crude oil prices are likely to remain stable at USD 80-85 boe as shown by Bloomberg consensus estimates. The International Energy Agency (IEA) expects global crude oil demand to grow by 1.8 million boe/d y-o-y to 86.5 million boe/d in 2010. The IEA expects non-OECD demand to increase by 1.7 million boe/d and OECD demand to increase by 0.1 million boe/d. However, global crude oil demand growth could slow to 1.3 million boe/d in 2011, based on a continued structural shift away

from oil in OECD countries, and improving end user efficiency. Non-OECD Asia, the Middle East and Latin America will continue to account for a substantial share of growth in oil demand in 2011 despite a withdrawal of fiscal and monetary stimulus measures by both governments and central banks, respectively. Instead, the IEA expects OECD oil demand to slow in 2011 to 45.3 million boe/d compared to 45.5 million boe/d in 2010 due to greater fuel efficiency and increased investments in public transit systems in developed markets, such as the USD 8bn proposed investments by President Obama’s US government. Against a background of increasing demand in non-OECD markets and a more moderate outlook elsewhere, the combination of rising crude inventories within the OECD and a comfortable supply situation, especially given high excess production capacity within OPEC, could leave crude oil prices largely unchanged. According to the IEA OECD petroleum inventories jumped by 78 million boe to 2.75 billion

boe over the past three months. Further, OPEC reports over 6 million boe/d of spare capacity, three quarters of which lie in Saudi Arabia, UAE and Kuwait, which could easily absorb the effects of any unexpected supply disruption. As the IEA does not expect a significant reduction in spare capacity over the next two years, crude oil prices are likely to remain stable in the near term.

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0

75

-75

150

225




GDP Growth %

0.5

2.6 2.4

6.1

2.5

6.8 6.4

-3.2-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

2008 2009 2010 2011


-10

Sep-

09

Mar

-09

Sep-

08

Mar

-08

Sep-

07


Others, 1.24

Nigeria, 0.31

Kuwait, 0.29

UAE, 0.43

Saudi Arabia,3.85



80.081.5

85.082.8

75.0

80.0

85.0

90.0

Q3'10 Q4'10 Q1'11 Q2'11


45.4 45.5 45.3

39.3

41.0

42.5

38

40

42

44

46

2009 2010 2011

OECD Non-OECD

0

75

-75

150

225




GDP Growth %

0.5

2.6 2.4

6.1

2.5

6.8 6.4

-3.2-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

2008 2009 2010 2011


-10

Sep-

09

Mar

-09

Sep-

08

Mar

-08

Sep-

07


Others, 1.24

Nigeria, 0.31

Kuwait, 0.29

UAE, 0.43

Saudi Arabia,3.85



80.081.5

85.082.8

75.0

80.0

85.0

90.0

Q3'10 Q4'10 Q1'11 Q2'11


45.4 45.5 45.3

39.3

41.0

42.5

38

40

42

44

46

2009 2010 2011

OECD Non-OECD

0

75

-75

150

225




GDP Growth %

0.5

2.6 2.4

6.1

2.5

6.8 6.4

-3.2-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

2008 2009 2010 2011


-10

Sep-

09

Mar

-09

Sep-

08

Mar

-08

Sep-

07


Others, 1.24

Nigeria, 0.31

Kuwait, 0.29

UAE, 0.43

Saudi Arabia,3.85



80.081.5

85.082.8

75.0

80.0

85.0

90.0

Q3'10 Q4'10 Q1'11 Q2'11


45.4 45.5 45.3

39.3

41.0

42.5

38

40

42

44

46

2009 2010 2011

OECD Non-OECD

ISSUE 8

For the month of August, we would like to highlight the M&G Global Leaders Fund. This fund has been short listed by ADCB’s Asset Management team as one of the best in its category.

Investment objective and policyThe Fund invests in a wide range of global equities that the fund manager considers to be leading in their field with the objective of maximizing long-term total return (the combination of income and growth of capital).

Investment approachThe M&G Global Leaders Fund is a distinctive global equity fund that invests in stocks carefully selected from the full spectrum of the global equities universe. The investment strategy of the fund is very clear: it is an active investment strategy focused on bottom-up, individual stock selection, aimed at identifying companies undergoing positive internal

change leading to improvements in return on capital, such as a new emphasis on shareholder value creation or efficiency of capital allocation.

The fund manager follows a clearly defined active investment approach, focused exclusively on the selection of individual stocks and driven by fundamental company analysis. He tends to avoid imposing top-down views on sector, country or currency selections, but will take into account macroeconomic factors when they are relevant for a particular stock. There is no reference to a benchmark in the stock selection process. Candidate companies for the fund are identified by the fund manager in conjunction with the M&G Global Equities team using a comprehensive research process and the full range of equity fund management expertise at M&G.

Proprietary analysis by the M&G Global Equities team consists of systematic bespoke screening of

the global equity universe using the Credit Suisse HOLT database to search for companies that are delivering improving returns and strategies that are undervalued by the market; this screening is then followed by comprehensive company specific fundamental analysis. From the stocks that successfully pass through the team’s rigorous investment process, the fund manager then uses the best of these ideas to construct the portfolio, guided by a risk management process designed to ensure proper diversification and that the appropriate risks are being taken by the fund. The key test in the fund’s stock selection process is the depth of the fund manager’s personal conviction over each company’s prospects of long-term success. The fund manager bases his judgment on a comprehensive assessment of two key factors: the company’s valuation and the ability of its management to deliver the appropriate corporate strategy.


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Product Spotlight

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M&G Global Leaders Vs. Benchmarks

40%

60%

80%

100%

120%

140%

160%

180%

M&G Global Leaders S&P 500 Bloomberg Active Index

Jul-1

0

Apr

-10

Jan-

10

Oct

-09

Jul-0

9

Apr

-09

Jan-

09

Oct

-08

Jul-0

8

Apr

-08

Jan-

08

Oct

-07

Jul-0

7

Apr

-07

Jan-

07

Oct

-06

Jul-0

6

Apr

-06

Jan-

06

Oct

-05

Jul-0

5

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

US 46.6%

UK 9.1%

Japan 8.4%

Germany 5.9%

Hong Kong 3.9%

Korea 3.9%

Netherlands 3.6%

Canada 3.4%

Other 13.5%

Cash 1.7%

Geographical Breakdown

0.0% 5.0% 10.0% 15.0% 20.0%

Industrials 18.5%

Financials 15%

Technology 13.7%

Consumer Services 11%

Healthcare 11%

Oil & Gas 9.6%

Consumer Goods 9.3%

Telecommunications 3.8%

Other 6.4%

Cash 1.7%

Industry Weighting


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PRODUCTSPOTLIGHT

Product Spotlight

Index Snap shot (World Indices)

Fund size £929.8m / $1,455.9m (30-Jun-10)

Launch 12-Jan-2001

Dealing frequency Daily

Fund type UK Open Ended Investment Company (OEIC)

Sector Global Growth

Asset Class Equity

Annual management charge 1.50%

Trustee / Depositary Royal Bank of Scotland Plc

Registrar M & G Securities Limited

Multi-Manager n/a

Fund Details:

The fund has a three star rating from Morningstar, and an AA rating from S&P.

CONTINUE

ISSUE 8


40%

60%

80%

100%

120%

140%

160%

180%


Jul-1

0

Apr

-10

Jan-

10

Oct

-09

Jul-0

9

Apr

-09

Jan-

09

Oct

-08

Jul-0

8

Apr

-08

Jan-

08

Oct

-07

Jul-0

7

Apr

-07

Jan-

07

Oct

-06

Jul-0

6

Apr

-06

Jan-

06

Oct

-05

Jul-0

5

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

US 46.6%

UK 9.1%

Japan 8.4%

Germany 5.9%

Hong Kong 3.9%

Korea 3.9%

Netherlands 3.6%

Canada 3.4%

Other 13.5%

Cash 1.7%


0.0% 5.0% 10.0% 15.0% 20.0%

Industrials 18.5%

Financials 15%

Technology 13.7%


Healthcare 11%

Oil & Gas 9.6%

Consumer Goods 9.3%


Other 6.4%

Cash 1.7%

Industry Weighting


40%

60%

80%

100%

120%

140%

160%

180%


Jul-1

0

Apr

-10

Jan-

10

Oct

-09

Jul-0

9

Apr

-09

Jan-

09

Oct

-08

Jul-0

8

Apr

-08

Jan-

08

Oct

-07

Jul-0

7

Apr

-07

Jan-

07

Oct

-06

Jul-0

6

Apr

-06

Jan-

06

Oct

-05

Jul-0

5

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

US 46.6%

UK 9.1%

Japan 8.4%

Germany 5.9%

Hong Kong 3.9%

Korea 3.9%

Netherlands 3.6%

Canada 3.4%

Other 13.5%

Cash 1.7%


0.0% 5.0% 10.0% 15.0% 20.0%

Industrials 18.5%

Financials 15%

Technology 13.7%


Healthcare 11%

Oil & Gas 9.6%

Consumer Goods 9.3%


Other 6.4%

Cash 1.7%

Industry Weighting


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INVESTINGTODAY

PRODUCTSPOTLIGHT

Product Spotlight

Index Snap shot (World Indices)

Microsoft 2.6%

Pfizer 2.5%

Merck 2.5%

AstraZeneca 2.4%

JP Morgan 2.3%

Astellas Pharmaceuticals 2.3%

Samsung Electronics 2.3%

Wells Fargo 2.3%

Kerry 2.2%

Top Holdings:

ISSUE 8


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Investing Today

ADCB offers brokerage facilities to its institutional and private clients through two channels. Depending on the nature of the transactions, the following departments are at your disposal:

Al Dhabi Brokerage:Al Dhabi Brokerage LLC (ADB), a wholly owned subsidiary of ADCB, provides access to the Dubai Financial Market and the Abu Dhabi Securities Exchange, both regulated by the Emirates Securities and Commodities Authority (ESCA).

ADB is located at the ADCB head office, with representative offices in Al Ain, Dubai and the Abu Dhabi Exchange Floor and has a paid-up capital of AED 30 Mn. ADB started operations in May 2005, and currently services more than 8,500 clients whilst maintaining a top position in the national markets’ ranking.

ADB’s services include trading as well as account opening formalities such as obtaining the mandatory National Investor Numbers (NIN), a requirement in order to access the UAE markets. For any further questions on ADB, please do not hesitate to call our toll-free line (800-DEAL) or our online web-platform www.adbtrade.com, which provides a safe and secure way to manage and trade your portfolio.

ADCB Brokerage:ADCB Brokerage, a new unit created in 2009, was established to service a unique, yet natural client requirement of providing access to the regional and global equity and fixed income markets.This new unit provides access to the regional equity markets, namely in KSA, Egypt, Qatar, Kuwait, Oman, Bahrain, Jordan, Morocco and Europe. Furthermore, as our client’s needs evolved so did ADCB Brokerage, with the introduction and facilitation of access to the OTC Bond and Sukuk

markets, traditionally only for the institutional players in the region. Today, ADCB Brokerage is actively handling bonds for retail, HNW and corporate clients seeking to gain exposure to the Global Bond and Sukuk markets.

To find out more or to assist in any client requirements in either equity or fixed income markets, please contact us via email on: [email protected] or by calling us 02 697 3382 or 02 697 3658

AUGUST 2010 ISSUE 8


PAGE 12

Performance Review



TRENDS

PERFORMANCE REVIEW

INVESTINGTODAY

PRODUCTSPOTLIGHT

AUGUST 2010

Shari’ah Compliant

Fund House Performances

Funds Currency NAV 1M 3M 6M 12M 36M 12M VolatilityEquity Funds M&G GLOBAL LEADERS-$-A-ACC USD 7.42 7.54% (7.60%) (1.85%) 8.32% (33.63%) 17.32% BNP PARIBAS ISLAMIC-EQY OPTIMISER-$-C-ACC USD 1,130.86 6.31% (4.44%) (1.38%) 5.80% (13.75%) 14.13% SCHRODER INTL EMERG MKTS-$-A-ACC USD 11.99 8.12% (3.07%) 4.72% 16.63% (7.56%) 20.85% M&G AMERICAN FUND-$-A-ACC USD 8.16 6.61% (9.80%) 0.28% 11.57% (22.51%) 17.15% SCHRODER INTL EURO EQT-A ACC EUR 19.25 7.42% (0.52%) 1.37% 9.56% (31.57%) 17.00% JPMORGAN F-JF PAC EQ-A-A$ USD 12.24 6.90% (4.23%) 3.47% 8.70% (20.31%) 14.85% SCHRODER INTL BRIC-$-A-ACC USD 191.54 6.80% (2.70%) 4.21% 15.73% (6.47%) 19.79% CAAM ISLAMIC BRIC QUANT FUND-$-C-ACC USD 190.58 6.23% (3.36%) 6.47% 19.03% N/A 20.61% AL-NOKHITHA FUND-ACC AED 3.83 1.59% (13.63%) (0.92%) (6.05%) (63.30%) 32.36% ADCB-MSCI UAE INDEX FUND-ACC AED 3.97 4.27% (15.36%) (2.55%) (9.70%) (60.23%) 39.59%ADCB-MSCI ARABIAN MKT $-ID-ACC USD 5.19 3.37% (10.15%) 3.47% 1.63% N/A 17.95% FRANKLIN INDIA FUND $-AAC USD 24.09 3.08% (0.82%) 11.84% 29.31% 15.15% 17.01% FIDELITY LATIN AMERICA FUND $-A USD 42.57 8.74% 0.35% 12.62% 32.95% 10.97% 24.13% TEMPLETON EMERG MKTS SMALLER CO A$-ACC USD 7.67 6.97% (3.64%) 7.72% 27.20% N/A 15.94% GLOBAL THEMATIC RESEARCH PORTFOLIO $-A USD 14.36 8.62% (4.77%) 4.13% 8.21% (16.90%) 20.21% Fixed Income BNY MELLON GL-GLOBAL BOND-$A USD 2.06 3.43% 4.70% 3.87% 8.76% 19.98% 8.12% ING (L) RENTA-EM MK DB LC-XC USD 55.14 4.41% (1.04%) 1.92% 5.17% 10.92% 7.59% SCHRODER INTL GL CORP BD-AAC USD 8.49 1.31% 1.43% 3.54% 10.55% 20.60% 1.95% Commodities DB PLATINUM-COMMODITY $-R1C USD 18,695.62 2.84% (6.83%) (2.71%) (0.86%) 9.69% 15.49% BLACKROCK WORLD GOLD FUND USD 51.18 (4.16%) (2.72%) 13.26% 24.46% 25.78% 25.91% JPMORGAN F-GLB NAT RE-$-A-ACC$ USD 15.31 5.59% (7.77%) 5.30% 23.77% (24.10%) 22.23% Real Estate HENDERSON HOR-G PROP EQTY $-A2 USD 12.18 8.36% (3.72%) 10.13% 25.96% (24.49%) 19.80% Hedge JPM INV-HIGH STAT MAR N-A$H USD 152.44 (0.14%) (2.26%) (3.57%) (5.46%) N/A 2.30% GATEWAY U.S. EQUITY FUND $-IA USD 107.17 3.40% (2.78%) 0.71% 3.44% (8.73%) 7.05% Balanced FIDELITY MULTI-ASSET NAVIGATOR FUND $-A-ACC USD 9.99 4.84% (3.06%) 1.86% 7.91% (0.45%) 12.03% Index MSCI WORLD USD 1,124.83 8.02% (6.15%) 0.47% 7.66% (28.16%) 17.29% MSCI EM USD 991.41 8.00% (2.81%) 6.19% 17.46% (10.91%) 18.99% S&P Global REIT Index USD 119.96 9.99% (2.30%) 10.85% 31.12% (35.13%) 21.46% S&P GSCI Official Close Index USD 4,252.64 5.63% (7.92%) 1.83% (0.55%) (32.84%) 19.64% US Cash Indices LIBOR Total Return USD 175.42 0.05% 0.12% 0.18% 0.34% 6.93% 0.04% MSCI UAE USD 290.93 4.91% (14.71%) (2.46%) (12.31%) (50.52%) 34.57%

ISSUE 8

Disclosures:

This document is for information and illustrative purposes only; it is in no way an offer or solicitation to buy or sell any investment products, but only information being provided. ADCB will not be held liable for any information provided in this document which is stated to have been obtained from third party sources. This information may be based on assumptions or market conditions and may change without notice.

The information in this report was prepared by employees of ADCB and is current as of the date of the report. The information contained herein has been obtained from sources that they believe to be reliable, but ADCB does not guarantee its accuracy, adequacy, completeness, reliability, or timeliness, and will not be held liable for any investment decisions made based on this information. Moreover, ADCB is not responsible for any errors or omissions or for the results obtained from the use of such information. All information and estimates

included in this report are subject to change without notice. ADCB will furnish, upon request, available investment information supporting this recommendation. This report is intended for qualified customers of ADCB.

Past performance does not guarantee future results. Investment products are not bank deposits and are not guaranteed by ADCB. They are subject to investment risks, including possible loss of principal amount invested. Please refer to ADCB Terms and Conditions for Investment Services.

You may not redistribute this report without explicit permission from ADCB.

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