Keppel Ltd. 1Q 2024 Business Update Presentation Slides
AFC Iraq Fund (non-US) - Factsheet 31.07.2020
1. AFC IRAQ FUND (NON-US) July 2020
Fund Category Iraq Public Equities
Country Focus Iraq
Subscriptions
Monthly at NAV (five business
days before month end)
Redemptions
Monthly at NAV
90 days notice for Class D
180 days notice for Class E
Benchmark
Rabee Securities RSISX USD
Index (RSISUSD index)
Fund Manager Thomas Hugger
Chief Investment
Officer
Ahmed Tabaqchali
Investment Manager
Asia Frontier Investments
Limited, Hong Kong
Fund Base Currency USD
Minimum Investment USD 10,000
Subsequent Investments USD 1,000
Management Fee
Class D: 1.8% p.a. of NAV
Class E: 1.5% p.a. of NAV
Performance Fee
Class D: 18% p.a. of NAV
appreciation with high
watermark
Class E: 15% p.a. of NAV
appreciation with high
watermark
Fund Domicile Cayman Islands
Launch Date 26 June 2015
Custodian Iraq Depository Centre (IDC)
Auditor EY, Hong Kong
Administrator
Trident Fund Services,
Hong Kong
Legal Advisor Ogier, Hong Kong
Contact Information
Asia Frontier Capital Ltd.
www.asiafrontiercapital.com
Mr. Thomas Hugger
CEO, Asia Frontier Investments Limited
Tel: +852 3904 1015, Fax: +852 3904 1017
th@asiafrontiercapital.com
Mr. Peter de Vries
Marketing Director,
Asia Frontier Investments Limited
Tel: +852 3904 1079, Fax: +852 3904 1017
pdv@asiafrontiercapital.com
Registered Office:
c/o Intertrust Corporate Services (Cayman) Limited
190 Elgin Avenue, George Town
Grand Cayman KY1-9005, Cayman Islands
Hong Kong Office:
Asia Frontier Investments Limited
905, 9th
Floor, Loon Kee Building
267-275 Des Voeux Road Central
Hong Kong
Investment Objective
Achieve long-term capital appreciation by investing in a diversified portfolio of
listed Iraqi equities as well as foreign listed companies that derive the majority of
their business from Iraq.
Fund Manager Comment
The AFC Iraq Fund (Non-US) Class D shares returned +11.4% in June with a
NAV of USD 592.27 outperforming its benchmark, the Rabee Securities RSISX
USD Index (RSISUSD index), which returned +8.2% for the month. Year to date
the RSISUSD was down 6.4% while the fund lost 5.6%.
The market’s rise was led by a revived banking sector, which in turn was driven
by the Bank of Baghdad (BBOB) and the National Bank of Iraq (BNOI). Both
reported very strong first half 2020 results (H1/2020), which were discussed over
Zoom conference calls – a first for listred companies on the Iraq Stock Exchange.
The unaudited results of the two banks highlight different aspects of the recovery
in the banking sector. For BBOB, the gradual recovery continues from the
hangover following the heady expansion during the boom years up to 2014.
Customer deposits for H1/2020 were up 4.1%, following the recoveries of 2.4%
and 5.2% in 2019 and 2018 respectively. Its loan book continues to decline, as it
was down 4.5% in H1/2020, on the back of declines of 7.6% and 4.5% in 2019
and 2018 respectively. The results are consistent with the new management’s
focus over the last few years on addressing the company specific issues and
structural weaknesses that were exposed by the crisis of 2014-2017.
Management’s success can be seen from H1/2020 pre-tax earnings being 6.6%
higher than the full year 2019 pre-tax earnings.
For BNOI, growth continues to accelerate with customer deposits continuing to
increase – up 66.2% in H1/2020, on the back of increases of 32.0% and 2.7% in
2019 and 2018 respectively. The loan book on the other hand was up 26.7% in
H1/2020, following an increase of 119.9% in 2019 versus a contraction of 42.8%
in 2018. Results were driven by management’s focus on growing the bank’s retail
business where BNOI is emerging as a market leader. BNOI’s pre-tax earnings
were 14.6% higher in H1/2020 than those for the whole of 2019. The success of
BNOI’s retail strategy in attracting sticky consumer deposits, and subsequently
growing its retail loan book demonstrates the potential opportunity from banking
adoption in cash dominated Iraq.
As of the end of July 2020, the AFC Iraq Fund was invested in 14 names and held
7.2% in cash. The fund invests in both local and foreign listed companies that have
the majority of their business activities in Iraq. The markets with the largest asset
allocation were Iraq (91.1%), Norway (1.1%), and the UK (0.6%). The sectors
with the largest allocation of assets were financials (51.6%) and communications
(18.1%). The fund's estimated weighted harmonic average trailing 12 months P/E
ratio (only companies with profit) was 14.58x, the estimated weighted harmonic
average P/B ratio was 0.59x and the estimated weighted average portfolio
dividend yield was 5.42%.
592
300
400
500
600
700
800
900
1,000
1,100
Fund Performance (Net)
AFC Iraq Fund USD (Net) Rabee USD Index