Amwal on outlook for 2015 (“Al Sharq”)

January 2015

Walid Al Darie

Chief Executive Officer, said the "funds" Fahmi twig asset management company to market size in diameter of between 5 to 10 billion riyals, and that "money" manages total assets of $ 400 million through three funds in Qatar, the Gulf and Turkey.

He said, "twig" during a press conference held Aleomn Monday, in the presence of Mullah Mohammed Deputy visions, Ava Boran head of asset management that the decline in oil price is not a crisis, it is the entrance of economic reform, pointing out that the various economic Parties optimistic general economic situation in the country.

He pointed out that the fear of falling oil prices in global markets is not justified especially that Qatar has a great potential and reserves allow it to continue to implement their projects, saying: "I do not mean lower oil prices for the government to reduce spending on projects related to the organization of the World Cup and others associated with this event." .

He predicted twig continue the pace of current spending despite a drop in oil prices, with the exception of that on capital which could be affected, pointing to the possibility of tighter controls on spending in the coming period without reduction of them.

CEO of funds and added that the decline in oil prices to below $ 50 a barrel may cause the small country's budget deficit in the next fiscal year.

In the same context stressed not affected corporate earnings decline in oil prices in the near term with the exception of the profits directly affected companies such as chemicals and oil services.

He said that domestic consumption stocks like banks will not see any short-term effect on the level of profits, but if the oil price remains at current levels, it means spending more conservative and therefore a decrease in demand for loans.

He said that shares of petrochemical companies will be the most directly affected because they get raw materials cheap so the decline in selling prices lead to lower profits and declining profit is likely to be higher than the revenue decline at a rate due to the fixed costs, he said, adding: "For example, The 10% drop in the prices of products Qatar Industries Company lead to a decrease of 24% in profits. "

He guessed that hover oil prices around $ 70 a barrel and that the current price can not be considered fair for several reasons, including the cost of shale oil extraction in the United States is not low and is estimated at USD at 75 a barrel, and that part of the decline in the price of oil is due to the American currency's strength and that the analysis in the long term moderate dollar indicates that the price of oil is less than the average in the long run.

He pointed out that the governor of funds company outperformed the Qatar Exchange Rate Securities at a rate of 49% of the index during the past four years, saying that Qatar Gate Fund consistently won the best Qatari fund and that only Qatari fund, which outperformed the index during the 8 years, stressing that "funds "manages equity and balanced portfolios across the GCC countries and Turkey.

He said the company invests only in companies that would like to keep, he said, adding: "We are not trading shares of companies that do not know the quality of their trade".

He pointed out that the company only buys shares in companies with reasonable valuation and avoid to high assessments, noting that the company manages risk by not betting on things you do not know and can not predict.

He said that during the major economic stages, such as where we are now, we feel that the right choice for shares of major importance, while the decline in the price of oil would have a negative impact on some stocks is likely to have a positive impact on others, because of the major changes of the situation Economic.

He added: "We see there is likely to be more volatility than in the past. On the basis of the sector, and we believe will be a negative impact mostly of chemicals and oil services, while it will be the least affected in the core and transport, health care and consumer industries."