Morgan Stanley

Morgan Stanley Launches Saudi Equity Fund

Jan 7, 2009

Riyadh —

Morgan Stanley Launches Saudi Equity Fund

Fund launch highlights Morgan Stanley Investment Management's commitment to Saudi Arabia and the wider Middle East region

RIYADH, 7 January 2009 - Morgan Stanley Saudi Arabia (MSSA) announced today it has launched the Morgan Stanley Saudi Equity Fund, offering Gulf Cooperation Council (GCC) investors exposure to the Kingdom through investment in Saudi Arabian equities. The launch follows approval by the Capital Markets Authority of the Kingdom of Saudi Arabia in August 2008.

The Fund is an open-ended collective investment scheme domiciled in Saudi Arabia aimed at providing long-term capital appreciation and growth by investing in securities listed and traded on the Tadawul, Saudi Arabia's stock exchange, as well as in securities offered in the course of aninitial public offering in the Kingdom.

"This is another important milestone in the development of Morgan Stanley's business in Saudi Arabia," said Fahad Almubarak, Chairman of MSSA. "KSA continues to be a strategic growth story for Morgan Stanley, and the launch of our first asset management fund investing in the Kingdom underlines the Firm's continued commitment both to the Middle East region as a whole and to the Kingdom of Saudi Arabia in particular."

"We are pleased to be able to offer GCC investors access to the Saudi equity market," said Habib Achkar, CEO of MSSA. "We are seeing increasing demand from clients and investors for actively managed investment vehicles, which provide exposure to the Saudi growth story, and as we see the GCC countries increasingly open their capital markets to foreign investors, we believe now is an opportune moment to be launching this fund."

"As the largest of the GCC countries in terms of financial resources and population, Saudi Arabia exhibits strong market fundamentals," said Farhan Mahmood, CFA, Head of MSIM in Saudi Arabia and Chief Investment Officer of the Fund. "We believe that healthy GDP growth, increasing income levels of a rapidly expanding middle class, under-penetrated consumer markets, strong government spending, and far-reaching structural reform are compelling catalysts for strong and sustainable earnings potential for Saudi companies."

The Fund uses an active investment strategy by integrating top-down sector allocation and bottom-up stock selection with a growth bias. The Fund managers seek under-penetrated and overlooked assets with strong growth prospects and positive price behavior. The managers employ a rigorous research approach that focuses on sector and company specific fundamentals; key value drivers; price and earnings dynamics; management transparency; and sentiment with a contrarian bias. The investment universe includes all stocks listed on the Tadawul.