AAIB Mutual Fund (Shield)

00

Fact Sheet

October 2013

Fund Details
Investment Objective The fund seeks long term capital appreciation by investing in publicly traded Egyptian stocks. Fund Managers Commentary Dear Investor, Positive sentiment prevailed in the local market with several catalysts alleviating, to some extent, investors anxiety regarding Egypts political and economic conditions. The EGX30 Index soared 10.0% during October 2013, as investors awaited the amendments to the constitution to be finished soon, which is viewed as a key pillar towards political stability. The rally was also supported by signs of political stability in light of the governments decision to further relax curfew hours. In the meantime, confidence grew amongst investors after the index broke the psychologically important 6,000 resistance level. Trading volumes advanced to an average of EGP 542.7 million during the month. EGX30 extended its YTD gains to 13.2% by the end of October 2013. On the economic spectrum, net international reserves (NIR) remained almost unchanged during September to stand at USD18.7 billion. Worth mentioning is that Kuwait will allow Egypt to repay the USD2.0 billion central-bank deposits over five years instead of the one-year period previously agreed upon. The UAE signed a USD4.9 billion aid agreement with Egypt in October 2013, of which USD2.9 billion will be received in fresh funds while the remaining balance has already been granted to Egypt. The new funds are grants to implement projects in Egypts investment program. More than USD1 billion will be slated towards Egypt fuel bill, while the remaining funds will be directed towards development projects including the construction of 15 wheat silos with a capacity to store 15,000 metric tons each. However, the UAE stated that the GCC aid will not continue for long and that the Egyptian government should take necessary measures to stimulate economic growth. In the meantime, the government announced that it will boost the fiscal stimulus package to EGP29.7 billion from EGP22.3 billion, and confirmed that the revised stimulus package will not affect the budget deficit target of 10.0% during FY2013/14. The Monetary Policy Committee (MPC) decided to keep the overnight deposit rate and overnight lending rate unchanged at 8.75% and 9.75%, respectively. The discount rate also remained unchanged at 9.25%. This came after annual urban headline inflation climbed to 10.1% in September 2013 after slowing to 9.8% a month earlier.
140

Fund Type Fund Manager Launch Date Structure Domicile Fund Currency Administrator Custodian Auditors NAV per certificate* Subscription/Redemption** Management Fee Performance Fee Administration Fee Custodian Fee Subscription Fee Redemption Fee Min. Initial Investment

Equity Fund AAIM 26 February 1998 Open Ended Egypt EGP AAIB AAIB KPMG Hazem Hassan EGP 113.8 Daily 0.9% 12% above excess return over CB discount rate 1.0% 0.25% None 0.75% 1 certificate

*As of 31/10/2013 ** Daily subscription and redemption until 12 pm throughout AAIB branches NAV is published weekly in Al Masry Al Yom Newspaper

Fund Performance
October 2013 Shield EGX30 6.0% 10.0% 2013 YTD 14.5% 13.2% 28.3% 50.8% -27.1% -49.3% 2012 2011

Shield vs. EGX30*

120 100 80 60

In terms of politics, the transitional road map has been going as planned so far. The 50-member committee is currently reviewing and making amendments to the draft of the constitution and is expected to submit the final draft by 3 December. On the corporate front, Palm Hills Developments decided to increase its paid-in capital through a rights issue, where the company will offer 300 million new shares in the market at EGP2.00/share (par value) plus an issuance premium of EGP0.03/share. Existing shareholders will have the right to either subscribe to the rights issue or sell their subscription right in the market at a price calculated as the difference between the market price before and after the rights issue.

40 20 -

Shield

EGX30

*Performance since 15/10/2008 date at which AAIM started managing the fund

Sector Allocation
Real Estate Consumer Non-Banking Financials Cash & Others Others 0% 4.6% 4.2% 5% 10% 15% 20% 12.0% 10.5% 8.5% 8.2% 7.9% 7.9% 18.2% 17.9%

Top Holdings Company

CIB GTH TMG Holding Sidi Kerir SODIC

Sector
Banks Telecoms Real Estate Petrochemicals Real Estate

Weight
9.7% 9.3% 8.6% 7.0% 5.8%

Key Statistics* Shield

Standard Deviation 16.3% -0.38 0.33 -9.7% 59.6%

Return vs. Volatility * EGX 30

29.4% Return -0.44 N/A -20.9% 56.1% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 0% 10% Shield

Investment Approach Sharpe Ratio**

Information Ratio*** Max. Monthly Loss % Of Positive Months

EGX 30

*Data since 15/10/2008 date at which AAIM started managing the fund **Measures risk adjusted return compared to risk free rate ***Measures risk adjusted return compared to EGX 30

20% 30% Standard Deviation

40%

*Annualized data since 15/10/2008 date at which AAIM started managing the fund

We are value investors. We invest in quality companies we believe are undervalued by the market. In an effort to limit downside risk and maximize upside potential, we typically seek out companies that have strong competitive positions, solid financials, and capable management teams. Our goal is to generate return through stock selection. We seek inefficiencies in the valuation of companies we aim to invest in. Our investment decisions are primarily long term and research driven.

About Arab African Investment Management Arab African Investment Management (AAIM), a subsidiary of the Arab African International Bank (AAIB), was established in 2006 with investment management as our area of expertise. AAIM covers different asset classes in effort to enhance investors di versification and investment opportunities through Shield (Equity Fund), Juman (Money Market Fund), and Gozoor (Fixed Income Fund). We al so manage tailored portfolios for institutions and high-net-worth individuals. Contact Details Arab African Investment Management 5 Midan Al- Saray Al Koubra, Garden City 11516, Cairo,Egypt Tel. (202) 27926825/7/9 - Fax (202) 27961879 Website: www.aaim.com.eg AAIB Call Center: 19555