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SGAM Oasis Middle East and North Africa

Societe Generale Asset Management is launching a new fund titled "SGAM Oasis Middle East & North Africa Fund’. The launching (IPO) date is scheduled 1 Oct 2007. The trading date will be on 16 November 2007. It is investable using cash and SRS.

This region is expected to be benefited from high oil prices. According to National Bank of Kuwait, the current account surpluses represent 29% of GDP for countries of the Gulf Cooperation Council in 2006. However, there is more to the region than oil. It is estimated that the upcoming government investment programs scheduled from 2007 to 2011 worth US$1.5 trillion. Most importantly, the region exhibits low correlation to the world markets.

Mark Krombas, the lead fund manager indicated that the new fund registered in Singapore, will mirror Societe General Arab fund which is registered with Luxembourg. The Arab fund has delivered annualised return of 41.94%p.a. since Nov 2002. The average P/E for the Arab fund is around 13X and the dividend for the holding is 3.8%.

The MENA markets are characterized by low foreign ownership, volatile retail driven markets, lack of research and relationships with the key investment bank. Nonetheless, having some exposure in this market will add diversification benefits to one’s investment portfolio.