HGIF Middle East and North Africa Equity Fund

For Investment Professionals only

2

Investment case

3

The MENA region : our view

►

Economic resilience in the current global economic environment and strong long- term growth potential

►

More stable political and regulatory environment, increasingly open to foreign investors

►

Historically low correlations to emerging and global markets

►

Very attractive valuations

4

Background: Positioning Middle East & North Africa

5

MENA universe

Source: MSCI, CIA Factbook 2009, WWW.IMF.org, IMF Middle East and Central Asia Regional Economic Survey May 2009, Factset

UAEOman

Lebanon

Morocco

Egypt

Tunisia

Libya

Jordan

Palestinian Territory

QatarBahrain

Kuwait

Iran

Syria

Iraq

Saudi Arabia

Sudan

Western Sahara

Algeria

MENA % of World

Population (million) 357 5.1%

GDP PPP (US$ billion) 2,262 3.7%

Total Market Capitalisation (US$ billion) 152 0.8%

Number of listed firms on Stock Markets 1,713 -

6

Macroeconomic overview

►

The Middle East is in the process of a structural and economic development that promises to establish the region as a significant player in world markets

►

A large, diverse region with the dynamic, resource-rich economies of the Gulf Cooperation Council (GCC) at its core…

►

… and beyond, the typically more broad-

based, but less wealthy economies of the more populous North African and Western Asian countries

Oil Exporters

Oil Importers MENA

2008 2008 2008

Real Growth (%) 5.4% 6.2% 5.7%

Fiscal Balance (% GDP) 14.0% -5.8% 7.1%

CPI (year avg, %) 15.6% 14.4% 15.2%

Current Account Balance (% GDP)

21.5% -5.0% 15.2%

Total Government Debt (% GDP)

14.8% 64.9% 32.3%

Source: IMF Middle East and central Asia Regional Economic Survey May 2009

7

Why consider MENA now?

8

MENA is expected to grow faster than many Emerging Markets despite the fall in the oil price

Source: Morgan Stanley, April 2009

Real GDP Forecast (%)

-4.0 -3.7

-1.3

2.5

3.7

0.30.8

1.9

3.5

6.4

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

Latam Eastern Europe World MENA Asia

2009E2010E

9

MENA is a diverse region – Oil is not the only source of growth

Source: IMF, UBS April 2009

Oil and Non-oil real GDP growth in oil exporting countries

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

2004 2005 2006 2007 2008 2009E 2010E

Oil sector growth Non-oil sector growth Aggregate growth

Real GDP Growth

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2004 2005 2006 2007 2008 2009E 2010E

Oil exporters Oil importers MENA

10

Low debt after years of high oil prices

►

Low levels of debt and high FX reserves

►

MENA has enjoyed many years of excess liquidity and has a strong

balance sheet today

Gross External Debt / Fx Reserve

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

Chi

na

Thai

land

Mal

aysi

a

Indi

a

Rus

sia

Bra

zil

Kor

ea

Isra

el

Mex

ico

Cze

ch

S. A

fric

a

Chi

le

Indo

nesi

a

Turk

ey

Pola

nd

Kuw

ait

UA

E

Saud

i Ara

bia

Mor

occo

Egyp

t

Om

an

Qat

ar

Source: Morgan Stanley, April 2009

11

Fiscal position strong even after the sharp fall in the oil price

►

Most countries break-even at 40-50$

Fiscal Balance (% of GDP)

-20

-15

-10

-5

0

5

10

15

20

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

MENAOil exportersOil importers

Source: Morgan Stanley, April 2009

12

Rising middleclasses

Employment creation and strong demographic growth

Supportive government

spending policies

GCC growth driven by domestic demand, not just oil exports

Source: HSBC, May 2009. Data refers to GCC countries only.

13

Support for planned capital projects►

High levels of political support

►

Strong ability to self finance

Investment spending and Infrastructure are major themes

►

Huge capital spending projects are underway across the region despite the recent financial crisis

Catch up infrastructure spending required after two decades of underinvestmentNew capacity required to support next phase of economic growth New provision to provide infrastructure appropriate for increased levels of wealthDespite some cancellations, the investment pipeline is still strong and the vast majority of projects are going ahead

Gulf projects: planned spending

Source: HSBC, Citigroup, Halbis estimates, May 2009

The Gulf is overhauling its entire economic base

0

100

200

300

400

500

Saudi Oman Bahrain Qatar Kuwait UAE0%

50%

100%

150%

200%

250%

Cum

ulat

ive

Plan

ned

Spen

ding

$ B

n

%ag

e of

GD

P

Cumulative planned spending projects bn$

% of GDP (RHS)

14

Attractive demographics compared to Developed Markets

Source: UN Population Division, World Population Prospects: The 2006 Revision (2007) – http://esa.un.org, accessed 7th April, 2007

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

500000

1950 2007 2050 Projected

Northern Africa Western Asia Arabian Peninsula

53.5%

44.0% 39.8%

36.4%

39.6%

39.3%

10.1%

16.4%

20.9%

15

Positive demographics

Source: UN Population Division, World Population Prospects: The 2006 Revision (2007) –

http://esa.un.org, accessed 4th

April, 2007

0 5 10 15 20 25 30 35 40

FranceUSA

QatarUAE

KuwaitIsrael

BahrainWorld

LebanonTurkeyTunisia

MoroccoLibya

AlgeriaIran

Saudi ArabiaEgyptOman

JordanSyria

IraqPalestine

Yemen

►

Median Age of the Populations of MENA Countries, the World, the USA and France, 2005

16

MENA Market Capitalisation – US$540 billion

Domestic stock markets coming of age

►

GCC countries are gradually allowing foreign investors into their stock markets

►

Foreign ownership limits are generally being reduced

►

Saudi Arabia is opening up to foreign investors

►

New stock markets have recently been launched in Libya and Syria

Source: Bloomberg, as of May 21st

2009

0 20 40 60 80 100 120 140

Oman

Jordan

Egypt

UAE

Kuwait

Saudi

17

An asset class with a low correlation

Source: Performance Source: Factset. MSCI returns are Net, USD. Data is from July 2005 -

April 2009.

EMEM WorldWorldArabian Arabian ex Saudi ex Saudi ArabiaArabia

UAE Kuwait Qatar Egypt Morocco Jordan

EMEM 1.001.00 0.910.91 0.670.67 0.51 0.49 0.61 0.81 0.43 0.41

WorldWorld 1.001.00 0.690.69 0.52 0.54 0.60 0.75 0.41 0.43

Arabian ex Arabian ex KSAKSA 1.001.00 0.88 0.77 0.787 0.737 0.427 0.60

UAE 1.00 0.47 0.72 0.56 0.24 0.60

Kuwait 1.00 0.39 0.44 0.35 0.41

Qatar 1.00 0.66 0.22 0.51

Egypt 1.00 0.48 0.46

Morocco 1.00 0.28

Jordan 1.00

18

The recent weakness offers an excellent entry point for investors

50

60

70

80

90

100

110

120

130

140

150

160

170

Jun-

05

Sep

-05

Dec

-05

Mar

-06

Jun-

06

Sep

-06

Dec

-06

Mar

-07

Jun-

07

Sep

-07

Dec

-07

Mar

-08

Jun-

08

Sep

-08

Dec

-08

Mar

-09

MSCI Arabian ex-Saudi Index ($)*

+30.0%

-64.0%

Source: Factset. Data as of May 31st 2009

*Includes UAE, Kuwait, Qatar, Oman, Bahrain, Egypt, Morocco, Tunisia, Lebanon and Jordan

19

Attractive valuations

►

Valuations are near historical lows and are very attractive, both in absolute terms and relative to Global Emerging Markets

P/E Ratio - Arabian Markets x Saudi

0

5

10

15

20

25

30

35

Jan-

06

May

-06

Sep

-06

Jan-

07

May

-07

Sep

-07

Jan-

08

May

-08

Sep

-08

Jan-

09

Arabian Markets x Saudi Arabia

1.1x

1.0x

0.7x

0.8x

0.9x

1.0x

1.1x

1.2x

1.3x

1.4x

1.5x

1.6x

1.7x

1.8x

Jul-0

6

Nov

-06

Mar

-07

Jul-0

7

Nov

-07

Mar

-08

Jul-0

8

Nov

-08

Mar

-09

Arabian Mkt P/E Relative to EM

Arabian Mkt P/B Relative to EM

Source: Morgan Stanley, April 2009

20

Strong underlying profitability

►

MENA markets (as measured by the MSCI Arabian markets Index) offer the highest ROEs

across Emerging Markets at attractive valuations

Source: MSCI, Factset

2009 ROE

Trailing P/BV

Arabian Markets * (MENA)

Latam

Emerging Asia MSCI GEM

Higher ROE at lower valuations

1.4x

1.5x

1.6x

1.7x

1.8x

1.9x

2.0x

8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0%

21

Risks

►

Extreme movements in the oil price

►

The MENA region is more sensitive to geo-political risks both within the region and externally

►

Relatively undeveloped financial markets with a higher degree of

intrinsic risk

►

Younger and less established democracies still at the beginning of the reform pattern and with a limited track record of operating in the global economy

22

Model Portfolio Positioning HGIF Middle East and North Africa Fund

23

Portfolio Holdings – HSBC GIF Middle East and North Africa Equity Fund

Universe

Equity in companies listed/based in the following countries: Kuwait, United Arab Emirates, Qatar, Oman, Bahrain, Jordan, Lebanon, Morocco, Egypt, Tunisia

However, the fund may also invest in other MENA countries such as Libya, Syria and Saudi Arabia

Fund Characteristics

Number of stocks: 50-60Maximum exposure to a single security: 10%Market-cap: Not less than US$50m*

* Internal decision for liquidity reason

24

Model portfolio for HSBC GIF Middle East and North Africa Equity Fund

Source: HSBC HALBIS FACTSET 30 August 2009

Country Weight

United Arab Emirates 22%

Egypt 20%

Qatar 15%

Kuwait 13%

Morocco 7%

Oman 7%

Lebanon 5%

Saudi Arabia 5%

Jordan 3%

Tunisia 3%

Sector Weight

Financials 50%

Telecommunications 25%

Industrials 14%

Energy 5%

Consumer 4%

Utilities 2%

Financials 50%

25

Example – Qatar National Bank (Qatar)

►

Investment caseQatar’s largest bank, with strong links to the government

Qatar experiencing continued economic boom, driven by LNG production (IMF expects GDP growth of 18% in 2009 and 16% in 2010)

Strong balance sheet and capital position, well positioned to capture growth opportunities

Strong profitability with ROE in excess of 20%

Trading at attractive valuations

Source: Bloomberg consensus estimates;

Primary listing Qatar P/E (FY 09) 9 x

Market capitalisation USD 9.7 billion Earnings growth (FY 09) 9%

Qatar real GDP growth

0%

5%

10%

15%

20%

2003 2004 2005 2006 2007 2008 2009 2010

Source: IMF, April 2009

FF

26

Example – Poulina (Tunisia)

►

Investment caseLargest Tunisian company with operations as diverse as ceramics, steel products, packaging, real estate and food production

Exposed to growing government spending and foreign direct investment in Tunisia, Algeria and Libya

Strong GDP growth expected in 2009: Tunisia 4.5%, Algeria 2.1%, Libya 5.5%

Successfully listed in August 2008

Source: Halbis, IMF BMI Graph Source: IPO Prospectus Any forecast provided is indicative only and is not guaranteed in any way.

Revenues (TNDm)

0.0

0.5

1.0

1.5

2.0

2006 2007 2008 2009F 2010F

Primary listing Tunisia P/E (FY 09) 12 x

Market capitalisation USD 755 million Earnings growth (FY 09) 25%

27

Example – Galfar Engineering (Oman)

►

Investment caseEngineering and contracting company based in Oman, involved in civil infrastructure projects and oil & gas

More than 90% of Galfar’s order book are government contracts

Healthy order book with no significant cancellations and new government contracts awards expected this year

Potential for margin expansion as raw material prices fall

Source: Halbis estimates; Graph source: company annual reportAny forecast provided is indicative only and is not guaranteed in any way.

Net Income (OMR mln)

0

5

10

15

20

25

30

35

2006 2007 2008 2009F 2010F

Primary listing Oman P/E (FY 09) 7.6 x

Market capitalisation USD 580 million Earnings growth (FY 09) 15%

28

Investment philosophy and process

29

HSBC GIF MENA Equity Investment Team

►

The team was established in December 2007 with the hiring of Andrea Nannini, an experienced Frontier Markets investment professional

►

The team has experienced no personnel turnover since its inception

Name Title Responsibilities Years Experience

Years with Firm

Education/Degree

Andrea Nannini Senior Portfolio Manager

Head of MENA Portfolio Management 10 1 MSc –

Bocconi University; CFA

Andrew Brudenell

Portfolio Manager

MENA Portfolio Management

11 2MSc –

The London School of Economics; CFA

Basak Yavuz Portfolio Manager

MENA Portfolio Management

11 1 BA (2) –

Bosphorus University; CFA

30

Emerging Markets Equities and Fixed Income

Portfolio Managers

Investment Support Support, Risk

Economists

Global Macro Team

Portfolio ManagersAndrea Nannini

Andrew BrudenellBasak Yavuz

Product Specialists

Legal / Compliance / RiskDedicated in-house

expertiseDedicated Client Service

HSBC AccessHSBC brand well-known in

emerging and frontier markets

Global ReachLocal investment teams help mitigate regional risks and

generate ideas

HSBC GIF MENA Equity Investment Resources

Halbis ResourcesOver 70 investment and support resources

HSBC Resources

Dealing

31

Investment Process – Summary

Strategy Development Stock Selection Portfolio Construction Risk Monitoring

Continuous assessment of portfolio positioning

Ensure adherence to regulatory and fund specific guidelines-

Front-end systems-

Client guidelines-

In-house risk limits-

Regulatory guidelines

Output: Portfolio Strategy

Output: Investment Ideas

Output:Client Portfolio

Output:Assessment of

Portfolio Positions

►

Approximately 70% of our process is focused on stock selection; 30% on country selection

Implement Investment ideas

Determine optimal position sizes, based on risk-

Upside to fair value-

Identified inflection points

- Conviction levels

Sell discipline

Global cycle analysis

Development of themes

Country analysis- Local macro- Local politics- Local investor base

Bottom-up fundamental analysis

Development of investment ideas, exploiting themes and value opportunities

32

Investment Process – Bottom-Up Stock Selection

Re-investment opportunities

Sustainability of returns

Industry dynamics

Competitor analysis

Barriers to entry

Growth potential

Acquisition opportunities

Payout ratio

Cash flow and accounting Management Valuation Investment

conclusion

Cash generation

Balance sheet structure

Accounting issues

Track record

Capital allocation

Reward structure

Cashflow modelling

Cross checked with sector relevant valuation models

Key drivers

Key risks

Fair value target

Conviction level

On-the-ground research

Internal screening processes

External sources

HSBC global network

Idea Generation

33

Investment Process – Decision Making Framework

Monthly Bi-Weekly Daily

Emerging Markets monthly meeting

EM Equity

Research

Local EM teams

EMD team

MENA team’s bi-weekly portfolioreview meeting

Review themes and overall strategy

Discuss risk framework and positioning

Review current holdings

Performance review

Daily reports produced

Daily performance

Risk reports

Output: Macro Outlook

Output: Daily Reports

Output: Adjustments to portfolio

Ad-hoc

Interaction across Halbis/HSBC

Local EM equity teams

Private equity

Local senior bank personnel

34

Halbis competitive advantage

►

A dedicated team of investment professionals with extensive experience in managing money in the MENA region

►

A proven investment process, leveraging on the experience from the HSBC New Frontiers fund

►

HSBC’s strong local presence in the Middle East

35

Fund key features

Investment objective

Long term capital growth, investing at least two thirds of its total non cash assets in equity and equity equivalent securities of companies in the Middle East & North Africa region (MENA).

Benchmark

The MSCI Arabian ex Saudi Arabia Total Return Index (Net).

Number of Holdings

Typically the fund will hold around 50 to 60 stocks.

Key Features for HGIF Middle East and North Africa Fund

Fund Name: HSBC Global Investment Funds – Middle East and North Africa

Domicile: LuxembourgStatus: Sub-fund of HSBC Global Investment Funds,

a UCITS SICAVCurrency denomination:

USD

Target launch date:

6 October 2009

Stock limit 10% of NAVCountry Limit: +/- 20% relative to benchmarkSector Limit: UnconstrainedNAV pricing: Daily (Monday to Thursday)Dealing day: Daily (Monday to Thursday)

Fee StructureA (retail) I (Institutional)

Minimum investment: $5,000 $1mManagement fee: 1.50% 0.75%Operating & admin fee: 0.40% 0.30%

Source: HSBC HALBIS 30 April 2009

36

Summary

37

Summary

The HSBC GIF MENA Equity Fund offers …

►

Exposure to the one of the most attractive regions in Emerging Markets with strong economic fundamentals and improving political stability

strong demographics

attractive valuations

low volatility and low correlations with global equity markets

… from a leader in Emerging Markets fund management …

►

HSBC Global Asset Management manages over US$ 69 billion* in Global Emerging Market assets worldwide

►

Managed by an experienced team drawing on HSBC’s presence in 83 countries and territories around the world

*As of end of Junel 2009

Source: HSBC Global Asset Management

38

Team biographies

Andrea Nannini, CFASenior Portfolio Manager

Andrea Nannini joined Halbis in December 2007 as Senior Portfolio Manager with responsibility for Frontier Emerging Markets.

Prior to this, Andrea

spent

8 years as a fund manager at BankInvest

in Copenhagen, with responsibility for Eastern Europe, Middle East and Africa (EMEA). During this period he was lead manager for an Eastern Europe fund and a Frontier Emerging Markets fund, which he had

a key role in developing and launching in 2005. He previously worked as a research analyst at

Banca

Intesa

and RAS Asset Management in Milan. Andrea is a graduate in

economics

from Bocconi

University in Milan and is a CFA charterholder.

Andrew Brudenell, CFAPortfolio Manager Andrew Brudenell joined Halbis’

as the Global Technology, Telecommunications and Industrials analyst in 2007. In 2008, he joined the New Frontiers team. Prior to his joining Halbis, Andrew worked at Scudder Investments in New York as a US

fund manager. He began his investment career at Deutsche Asset Management in 1997. Andrew Brudenell holds an MSc from the London School of Economics and is a CFA Charterholder.

39

Team biographies (cont’d)

Basak Yavuz, CFAPortfolio Manager

Basak Yavuz joined Halbis Capital Management in February 2008 as

part of the New Frontiers team. Basak has over 10 years of experience in Emerging Markets. She has most recently been an analyst at Alliance Bernstein in London, focusing on the energy and materials sector. Basak is a CFA Charterholder.

40

Risks and drawbacks

►

Economies in Emerging Markets generally are heavily dependent upon international trade and, accordingly, have been and may continue to be affected adversely by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been and may continue to be affected adversely by economic conditions in the countries in which they trade

►

Brokerage commissions, custodial services and other costs relating to investment in Emerging Markets generally are more expensive than those relating to investment in more developed markets. Lack of adequate custodial systems in some markets may prevent investment in a given country or may require a sub-fund to accept greater custodial risks in order to invest, although the Custodian will endeavour to minimise such risks through the appointment of correspondents that are international, reputable and creditworthy financial institutions. In addition, such markets have different settlement and clearance procedures. In certain markets there have been times when settlements have been

unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions

41

Risks and drawbacks (cont’d)

►

The inability of a sub-fund to make intended securities purchases due to settlement problems could cause the sub-fund to miss attractive investment opportunities. Inability to dispose of a portfolio security caused by settlement problems could result either in losses to a sub-fund due to subsequent declines in value of the portfolio security or, if a sub-fund has entered into a contract to sell the security, could result in potential liability to the purchaser

►

The risk also exists that an emergency situation may arise in one or more developing markets as a result of which trading of securities may cease or may be substantially curtailed and prices for a sub-fund’s securities in such markets may not be readily available

►

Investors should note that changes in the political climate in Emerging Markets may result in significant shifts in the attitude to the taxation of foreign investors. Such changes may result in changes to legislation, the interpretation of legislation, or

the granting of foreign investors the benefit of tax exemptions or international tax treaties. The

effect of such changes can be retrospective and can (if they occur) have an adverse impact on the investment return of shareholders in any sub-fund so affected

►

The foregoing risk factors do not purport to be a complete explanation of the risks involved in investing in the shares. Prospective investors should read the entire Prospectus and consult with their legal, tax and financial advisors before making any decision to invest in any sub-fund

42

Important information

The contents of this presentation are confidential and may not be reproduced or further distributed to any person or entity, whether in whole or in part, for any purpose.The material contained in this presentation is for information only and does not constitute investment advice or a recommendation to any reader of this material to buy or sell investments. It is intended for investment professionals only and not for distribution to Retail Clients.This presentation is intended for discussion only and shall not be capable of creating any contractual or other legal obligations on the part of HSBC Global Asset Management (UK) Limited or any other HSBC Group company. Care has been taken to ensure the accuracy of this presentation but HSBC Global Asset Management (UK) Limited accepts no responsibility for any errors or omissions contained therein. This presentation and any issues or disputes arising out of or in connection with it (whether such disputes are contractual or non-contractual in nature, such as claims in tort, for breach of statute or regulation or otherwise) shall be governed by and construed in accordance with English law.The HSBC GIF Middle East and North Africa Equity fund is a sub-fund of HSBC Global Investment Funds (HGIF), a Luxembourg domiciled SICAV. The Investment Adviser to the fund is Halbis

Capital Management (UK) Limited. UK based investors in the HGIF funds are advised that they may not be afforded some of the protections conveyed by the provisions of the Financial Services and Markets Act 2000. The shares in HGIF funds have not been and will not be offered for sale or sold in the United States of America, its territories

or possessions and all areas subject to its jurisdiction, or to United States Persons. All applications are made on the basis of the current HGIF Prospectus, Simplified Prospectus and most recent annual and semi-annual reports, which can be obtained upon request free of charge from HSBC Global Asset Management (UK) Limited, 8 Canada Square, London E14 5HQ, UK or the local distributors. There are risks involved with this type of investment. Please refer to the Prospectus for general risk factors and to the Simplified Prospectus for specific risk factors. It is important to remember that the value of investments and any income from them can go down as well as up, and you may not get back the amount originally invested. Where overseas investments are held, the rate of exchange may cause the value of such investments to go down as well as up. Investments in emerging markets are by their nature higher risk and potentially more volatile than those inherent in established

markets. Any performance information shown refers to the past should not be seen as an indication of future returns.The sub-fund invests predominantly in one geographic area, therefore any

decline in the economy of this area may affect the prices and value of the underlying assets. You should view this investment as medium to long term, and should plan to keep it for at least five years. This presentation is issued in the UK by HSBC Global Asset Management (UK) Limited. Authorised and regulated by the Financial Services Authority. Copyright 2009 ©

HSBC Global Asset management (UK) Limited. All Rights Reserved.

17003 –

FP09-0614