EGP Egypt Trust

 
TIDMEGP 
 
 

The Egypt Trust

Interim Management Statementfor the quarter ended 30th June 2011

The Egypt Trust Fund (the "Fund"), is publishing this Interim Management Statement in accordance with DTR 4.3 of the FSA Handbook.

This interim management statement has been produced solely to provide additional information to shareholders as a body to meet the relevant requirements of the UK Listing Authority's Disclosure and Transparency Rules. It should not be relied upon by any other party or for any other purpose.

This interim management statement relates to the period from 1 April 2011 to 30 June 2011, and contains information that covers this period, and up to the date of publication of this interim management statement.

The Fund seeks to achieve medium to long-term capital appreciation through investments, principally in equities, listed on the Egyptian Stock Exchanges (EGX). The Fund's investment strategy is to invest in undervalued assets with a tangible discount to their fair value on a relative basis.

Highlights:

Over the 3 month period from 1 April 2011 to 30 June 2011:

 
 
    -- The Fund's net asset value (NAV) grew by 2.95% to US$27.56 compared to 

a decline of 2.74% in the benchmark index (IFC Investable Egypt in

USD).

 
    -- During the same period the Fund's share price fell by 7.11% to 

US$27.75.

 
    -- By the end of the quarter, the Fund was trading at a +0.7% premium 

compared to a premium of 11.6% at the end of the previous quarter.

The Egyptian stock market remained closed for most of the first quarter on the back of the political turmoil in the country. After the initial plunge, the market began to recover slowly at the start of the second quarter reflecting renewed optimism during the transitional period. However, this optimism was short lived as the Egyptian market fell once more to levels last seen during February 2009 post the global financial crisis.

Understandably, politics continued to dominate market movements during the second quarter and we expect it to continue to do so until the elections which are due to take place during October or November this year.

The Fund increased its net cash position opportunistically during the last quarter and going forward, we expect to continue to maintain a relatively high cash position as part of a defensive portfolio strategy. This is in line with our investment policy of investing in companies that have a strong earnings-generation ability (but are inexpensively priced) identified through a rigorous bottom-up fundamental analysis process. The current environment has lowered visibility and consequently raised investment risk high enough to affect our valuation. We intend to re-invest cash if either the stock(s) fall too far, so that even with heightened risk the investment is "inexpensive" or of course when risks return to "normal" and we have improved visibility.

Long Term Performance (Annualized):

 
                  1-Year   3-Year   5-Year  Inception 
Net Asset Value   -4.47%   -14.48%  +4.79%  +9.29% 
S&P IFCI Egypt    -12.24%  -19.58%  +1.43%  +4.88% 
 
 

Top Ten Holdings:

 
                                             30/6/11  31/12/10 
Orascom Telecom Holding                      5.85%    4.90% 
Egyptian Intl Pharma Industries Co           5.73%    5.59% 
National Société Générale Bank               5.40%    6.60% 
Telecom Egypt                                4.98%    5.92% 
Talaat Moustafa Group Holding                4.19%    4.34% 
Al Arafa Investment & Consulting             4.12% 
Alexandria Mineral Oils (AMOC)               3.85%    3.87% 
Sidi Krir Petrochemicals                     3.65%    3.63% 
EFG-Hermes Holding                           3.35%    4.27% 
Egyptian Co. For Mobile Services - Mobinil   3.24%    3.87% 
 
 

Sector Allocation

 
                         30/06/11  31/12/10 
Financial                16.12%    20.98% 
Telecom                  14.07%    12.89% 
Materials                12.42%    13.36% 
Real Estate              11.17%    15.49% 
Consumer Discretionary   9.6%      7.85% 
Petrochemicals           7.49%     7.51% 
Healthcare               5.73%     6.02% 
Industrial               4.40%     7.18% 
Other                    18.96%    8.72% 
 
 

Material Transactions and Events:

Quarterly redemptions

On 26 April 2011 the Fund announced that valid redemptions requests representing 1,532 shares in the capital of the Fund had been received in accordance with its quarterly redemption facility. These shares were redeemed at a price of US$ 23.99 per share (net of redemption fees).

On 18 July 2011 the Fund announced that valid redemptions requests representing 1,881 shares in the capital of the Fund had been received in accordance with its quarterly redemption facility. These shares were redeemed at a price of US$ 26.70 per share (net of redemption fees).

Future of the Fund

On 19 July 2011, the Fund announced that as part of an ongoing dialogue with the Fund's two largest shareholders, National Bank of Egypt and Banque Misr, each of these investors had indicated to the Board that they wished to seek an exit for their respective investments. The Board confirmed that it is therefore seeking to formulate proposals, which may include a liquidation of the Fund, to be put to shareholders at the earliest opportunity and that a further announcement will be made in due course.

The Board of Directors is not aware of any other significant events or transactions other than those previously disclosed, that have occurred since 1 April 2011 and the date of this interim management statement that would have a material impact on the financial position or performance of the Company.

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