Non-Direct Investments – Quoted Equities

Non-Direct Investments – Quoted Equities

 Specific Investment Guidelines

 

The Specific Investment Guidelines for this class of investment, supplementary to the General Investment Guidelines given above, are as follows:

 

1.         The Company will not purchase, otherwise acquire or control for its own account, more than 10% of the issued share capital of a quoted Company under this asset category.

 

2.         Quoted equity investments outside the Arab world will normally be undertaken through third party managed vehicles rather than directly unless approved by the Board Investment Committee.

 

3.         Quoted equity investments will be closely monitored with respect to risk. Two primary measures of risk will be used in this respect:

 

·        First, the price of each individual investment asset will be monitored in comparison to its weighted average cost for the year, adjusting for dividends or other corporate actions. A 15% loss will trigger an automatic meeting of the Board Investment Committee, which will determine a specific course of action. In the event that the position is maintained and the loss increases to 30%, this will trigger an automatic meeting of the Board of Directors, which will in its turn determine a specific course of action, including any stop loss limits if applicable. Minutes will be taken of all decisions made for the record. The average cost price, for assets already on the books at the start of any financial year, will be taken as the price at which the asset was valued at the end of the previous year.

 

·        Second, each investment will be monitored with respect to the overall loss exposure by comparison to Shareholders’ Equity, to determine the absolute risk of the investment position. The profit and loss calculation for each investment will take into account any dividends received or other valuation impacts from other corporate actions. A loss representing 0.25% of Shareholders’ Equity will trigger an automatic meeting of the Board Investment Committee, which will determine a specific course of action. In the event that the position is maintained and the loss increases to 0.50% of Shareholders’ Equity, this will trigger an automatic meeting of the Board of Directors, which will in its turn determine a specific course of action, including any stop loss limits if applicable. Minutes will be taken of all decisions made for the record.

 

 

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