AAIB Fixed Income Fund (Gozoor)

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Fact Sheet

December 2013

Investment Objective The fund seeks to maximize returns, and to outperform the short-term interest rates by investing in a broadly diversified portfolio of fixed income securities. Fund Managers Commentary
The yield curve portrayed volatile movement during December influenced by the Central Bank of Egypts decision to pursue its expansionary policy coupled with spiraling inflation figures. Earlier in the month, the yield curve softened by roughly 50bps across all tenures subsequent to the CBEs unexpected move to cut key policy rates. Despite urban inflation hitting the 10.0% mark, the CBE slashed overnight deposit and lending rates for the third consecutive time in 2013, citing that the figure remains within its comfort zone. We believe the CBEs evident aggressive expansionary policy affirms the governments commitment to revive the economy. The Central Agency for Public Mobilization and Statistics (CAPMAS) later released November 2013 inflation figures, which drove the yield curve to expand across all maturities during the last week of December by roughly 35bps. This come as the figure indicated that urban CPI spiraled to an annualized rate of 13.0% up from 10.4% in reported a month earlier. Core inflation, on the other hand, increased 0.8% to reach 11.95% in November. Meanwhile, the interim government announced intentions to inject a second stimulus package worth c.EGP20 billion, taking the total size of funds slated to jump start the economy to roughly EGP50 billion. We are closely monitoring inflation figures as we believe this will likely be a downside to various fiscal and monetary policy decisions being implemented by the government to support the overall economy. On the FX front, the EGP weakened against the USD in December, prompting the CBE to instruct banks to strictly abide to prevailing international market rates in trading non-USD foreign currencies as not to inflate the cross rates, which would consequently inflate the embedded USD/EGP rate. Over the coming period, we expect abundant liquidity in the banking system coupled with in the governments target to enhance GDP growth rate in FY2014 to likely place downward pressure on interest rates over the coming period. We remain well positioned to capitalize on any market movements over the coming period.

Fund Details Fund Type Fund Manager Launch Date Structure Domicile Fund Currency Administrator Custodian Auditors NAV per Certificate* Subscription/Redemption** Management Fee Administration Fee Subscription Fee Redemption Fee Min. Initial Investment Fixed Income Fund AAIM 28/03/2012 Open ended Egypt EGP Nuun Blom Bank KPMG Hazem Hassan EGP 12.18 Daily/Monthly 0.25% 0.25% None None 100 certificates

*As of 31/12/2013 st ** Daily subscription until 2:00 pm and monthly redemption-the 1 Sunday of every monthuntil 12:00 pm throughout AAIB Branches NAV is published weekly in AlMasry Alyoum Newspaper

Duration Distribution

T-bills Movement
16.0 15.0 14.0 13.0 12.0 11.0 10.0

More than 360 days 37%

0-7 Days 18% 8-90 days 9%

181-360 days 29% 91-180 days 7%

Fund Performance (net of fees)

December 2013 1.12% 14.04% 2013 YTD 11.03% 11.03% 2012 N/A N/A Since Inception* 21.80% 11.84%

91 Days

182 Days

273 Days

364 Days

Return Annualized Return

*Since 28/03/2012

About Arab African Investment Management Arab African Investment Management (AAIM), a subsidiary of the Arab African International Bank (AAIB), was established in 2006 with investment management as our area of expertise. AAIM covers different asset classes in effort to enhance investors diversification and investment opportunities through Shield (Equity Fund), Juman (Money Market Fund), and Gozoor (Fixed Income Fund). We also manage tailored portfolios for institutions and high-net-worth individuals. Contact Details Arab African Investment Management 5 Midan Al- Saraya Al Koubra, Garden City 11516, Cairo,Egypt Tel. (202) 27926825/7/9 - Fax (202) 27961879 Website: www.aaim.com.eg Call Center: 19555