Gulf Investment Fund (GIF) has posted its annual results for the 12 months to 30 June 2022. During the period under review, its share price increased by 22% while its NAV rose by 15.4%. Over the year, GIF paid 4.93 cents of dividends which equates to 4% of the NAV at 30 June 2021. This is in line with the enhanced dividend policy the board introduced in April 2021. Ongoing Charges fell to 1.67% from 1.89% in the previous year.
Since shareholders approved bi-annual tender offers, the company has carried out two tender offers which, in aggregate saw the buy-back and cancellation of 5,214,956 shares. As a result, the number of shares in issue as at the end of June has fallen to 41,105,216.
[Details of the next tender offer are expected shortly, but with the shares now trading at a small premium, it seems to us as though it is not really needed. It may be, as was recently the case with AVI Japan Opportunities, that the board is able to dispense with it.]
During the second half of the financial year the company’s shares were trading at a premium to NAV so the board also decided to apply to the London Stock Exchange for a listing facility of 2,700,000 ordinary shares. As at the end of June no shares had been issued under this facility but it remains in place.
The chairman says that changes in oil and gas prices will continue to benefit Gulf Cooperation Council (GCC) economies, as countries deal with budget challenges. The geopolitics of the region bring economic uncertainty as does the situation with Iran. However, the board continues to view the future of the fund with confidence expecting healthy growth in the region as a whole, as the developing non-hydrocarbon sector in several GCC countries helps to balance their economies.
Statement from the chair:
“I took over as chairman on 1 January 2022 from Nick Wilson who provided careful and effective stewardship of the company over the last years.
“GIF remains the only London-listed investment company focussed solely on the Gulf Cooperation Council economies. These states now represent 7.77 % of the MSCI Emerging index, up from 1.20% of MSCI in June 2017. While global investors generally are underweight Qatar, Kuwait, and Saudi, the GCC weighting in EM indexes should increase as IPOs join the market and governments carry out stake sales, as well as higher foreign ownership limits in Qatar.
“The GCC is now much more than just a hydrocarbon story. There are compelling reasons why the strong long-term outperformance of the company and performance of the region will attract a wider investor audience.”
GIF : Gulf Investment Fund enjoys positive results despite energy volatility and budget challenges