HSBC Saudi Arabia Limited, Saudi Arabia -

Asset Management

HSBC Amanah Saudi Industrial Companies Equity Fund

The Industrial Sector is the proxy to the market and comprised of more than 40% of the Tadawul All Share Index “TASI”. The Industrial sector provides investors an exposure to the Saudi economy, which is largely driven by petrochemical industry. The positive outlook of oil is expected to continue and hence could provide an attractive opportunity to participate in promising Industrial sector.

Sector Review

The Saudi Industrial Sector witnessed substantial growth in the last years driven by the continuous Government support, which had positive impact on the Saudi Stock Market. The number of companies representing the industrial sector increased to 26 by the end of 2004 with a market cap of more than SAR 555 Billion.

The Saudi Industrial Sector is now the largest among the Saudi sectors in terms of Market Cap representing more than 40% of total market with an increase of more than 16% from Dec 31,2002.

Objective

The Amanah Saudi Industrial Sector Fund aims to provide long-term capital growth through the investment in proxy sector to the market. The Fund will invest in equities that conform to Shariah Guidelines as set by our Shariah Supervisory Committee.

Key Features

Fund Manager	HSBC Saudi Arabia Limited
Type	Open-ended
Currency	SAR
Minimum Investment	SAR 5,000
Valuation day	Every Monday and Wednesday
Cut off Time for Receiving Subscription / Redemption Applications	Before Close of Business on Sunday and Tuesday for Monday and Wednesday Valuation respectively
When Redeemed Funds are Paid to Investor	Two (2) Business days after Valuation Day
Management Fee	1.5% per annum
Launch Price	SAR10

Risk Factors

Higher Risk due to single sector investment approach
High concentration in single stock-SABIC
Low diversification

Shariah Screening Criteria

The Amanah Saudi Industrial Companies Fund will exclude companies with the following characteristics:

Total Debt divided by the trailing 12-month average market capitalization is greater than or equal to 33%. (Total Debt = short term debt + current portion of long term debt + long tern debt)
The sum of cash and interest bearing securities divided by the trailing 12-month average market capitalization is greater than or equal to 33%.
Account Receivables divided by Total Assets is greater than or equal to 45%. (Account Receivables = Current Receivables + Long Term Receivables)