Markaz 'Mumtaz' and Islamic Funds Outperform KIC Index in 2007

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Markaz 'Mumtaz' and Islamic Funds Outperform KIC Index in 2007 29 - Jan - 2008

Solid Performance in 2007 Blue Chip Companies to Lead the Market in 2008 Kuwait Financial Centre “Markaz”, one of the leading investment banking and asset management companies in the Middle East, announced the performance for its local funds in 2007, with Markaz Fund for Excellent Yields 'Mumtaz' and Markaz Islamic Fund outperforming their benchmarks. KIC Index ended 2007 scoring gains of 30.44%, Al-Madar Shari'a Index rose by 25.9% for the same year.Markaz Fund for Excellent Yields 'Mumtaz', a winner of two Lipper – Reuters funds awards, posted 44.4% by end of 2007 outperforming its benchmark by 13.9%. The returns of Markaz Investment & Development Fund "MIDAF" reached 25.6% YTD. Markaz Forsa Financial Fund, a market maker fund that invests in the options market, returned 20.3% for the year 2007. Markaz Islamic Fund posted 34.9% in 2007, outperforming Al-Madar Shari'a Index by 9%. Bader Al-Ghanim, Vice President- Local and GCC Investments at Markaz commented on the year’s performance saying "The Kuwait Stock Exchange performed positively in the last month of 2007 to close the year with good gains, despite the volatility witnessed in Q4 of 2007". Al-Ghanim continued "The weighted and the KIC indexes achieved their best performance in mid October 2007, posting 768.68 and 13,175.2 points respectively, the yearly gains reached 44.6% and 31%. They declined after that to close the year at 715 and 12,558.9 points respectively reducing the yearly gains to 34.5% and 24.7%. Liquidity levels increased by 114% compared to the same period of 2006, as the total traded value during 2007 reached KD 37 billion boosting the average traded volume to 286 million shares with value of KD 150 million". The total market cap of KSE has increased by 40% in 2007 to reach KD 49 billion. The market P/E has also increased to 14.2 times from 12.8 times in 2006. Total profits announced for Kuwaiti listed companies in the first 9 months of the year amounted to KD 3.5 billion, showing an increase of 92% compared to the same period of last year. Al-Ghanim added "Q1 2007 witnessed the largest merging deal in the history of the market, when Qtel bought 51% of Watanya Telecom Companyfor KD 1.075 billion. Whereas MTC played an active role in leading the market in the beginning of Q2, as several GCC investors were trying to purchase influential stakes in the company, following winning the third mobile operator license in Saudi Arabia, and the news of its listing on London Stock Exchange. Al-Ghanim added by saying that 2007 was filled with significant political and economic events. The KSE implemented new listing requirements in January; in March, the government submitted its resignation; in May, the CBK announced that the Kuwaiti Dinar would be de-pegged from the US Dollar , oil prices reached historical records, and a consortium of 61 companies complained publicly about the KSE. Towards the end of 2007, the parliament approved the slashing of the income-tax from 55% to 15%. Various parliamentary questioning of ministers pushed instability higher. "Other important events have taken place in the end of Q2 such as the CBK reduction on government bonds’ yields; closing the subscription to KFH capital increase; the issuance of court judgments on releasing the “neutralization” of Al Khorafi Group’s shares. Furthermore, Agility’s announcement that the company won a huge contract with the US Department of Defense with a consortium, gave additional momentum to the market". On Q3 and Q4 Alghanim said" Trading peaked on 20.9.2007 following NBK’s sale of own treasury shares; the bank also posted a profit of over KD 40 million that was added to its shareholders equity; the value of NBK’s traded shares amounted to KD 246 million, out of the total market trades of KD 346 million". "In Q4 NBK completed its capital increase by 20%. The oversubscription of 245%, representing USD 3,700 million, signifies the availability of liquidity, which negates claims of the negative impact of capital increase transactions on liquidity levels". Al-Ghanim concluded "The trading in 2008 is expected to perform positively but with prudence and more selectivity. This optimism is supported by the projected growth in the leading companies' profits, as well as the endorsement of economic laws that affects the market positively. Such laws began by amending the Taxation Law for foreign investors, but we must not neglect the negative impact of some political issues whether internally or externally". Kuwait Financial Centre S.A.K. 'Markaz', with total assets under management of over KD. 1.4 billion as of 30 September 2007, was established in 1974, and has become one of the leading asset management and investment banking institutions in the Arabian Gulf Region. Markaz was listed on the Kuwait Stock Exchange (KSE) in 1997; and was awarded a BBB+ corporate rating by Capital Intelligence Ltd. -Ends- Photo Caption: Bader Al-Ghanim – Vice President, Local & GCC Investments at Markaz