AAIB Fixed Income Fund (Gozoor)

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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 witnessed a slight downward pressure on T-bills to fall by an average of 0.20%, across all tenures. Long-term debt instruments, on the other hand, rose by roughly 0.15%, while interest rate movements on medium-term maturities were virtually flat during the month. On the economic spectrum, the Monetary Policy Committee (MPC) decided on its second meeting in 2014 to keep key policy rates unchanged as it deemed current overnight lending and deposit rates appropriate given the current outlook on inflation and GDP over the coming period. In reaction, yields on T-bills witnessed an increase by an average of 0.13% during the first auction that took place after the MPC's decision. Meanwhile, the headline CPI increased by 1.42% (m-o-m) in January 2014 after recording a monthly decline of 1.02% in December 2013. Despite the monthly increase, on an annual basis, inflation declined to 11.36% in January 2014 down from 11.66% in December 2013. Annual core inflation also declined to 11.69% in January 2014 down from 11.91% in December 2013. Net International Reserves increased for the second consecutive month to reach USD17.31 billion in February up from USD17.10 billion in January 2014. Despite lower tourism receipts due to the dire security situation and the monthly instalment paid to foreign oil companies, the monthly increase mainly came on the back of upward revaluation in gold reserves by around USD180 million. On the funding front, the Ministry of Finance announced that Saudi Arabia will likely extend USD3.0 billion over the coming period, representing the remaining portion of the previously pledged USD5.0 billion aid package. The aid will be mostly in the form of petroleum products. In addition, the World Bank extended USD4.6 billion to finance 19 major development projects over the short-term. We believe short-term interest rates will likely increase over the coming period as witnessed in the T-bill primary market following the MPC decision. Going forward, we expect interest rates to decline or likely stabilize on the back of the governments efforts to boost economic growth, achieve price stability, and narrow the budget deficit in FY2014. Nevertheless we remain well positioned to capitalize on any market movements over the coming period. T-bills Movement
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Fact Sheet

February 2014

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 12.37 Daily/Monthly 0.25% 0.25% None None 100 certificates

*As of 28/02/2014 ** Daily subscription until 2:00 pm and monthly redemption-the 1st Sunday of every monthuntil 12:00 pm throughout AAIB Branches NAV is published weekly in AlMasry Alyoum Newspaper

Duration Distribution

More than 360 days 36%

0-7 Days 14% 91-180 days 15%

8-90 days 8%

181-360 days 31%

Fund Performance (net of fees)

February 2014 0.76% 10.39% 2014 YTD 1.60 % 10.31% 2013 11.03% 11.03% Since Inception* 23.75% 11.71%

Return Annualized Return

*Since 28/03/2012

91 Days

182 Days

273 Days

364 Days

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