Kuwait Financial Centre “Markaz” (KSE: Markaz, Reuters: MARKZ.KW, Bloomberg: MARKAZ:KK) announced revenues of KD 8.77 million during H1 2018, an increase of 13.7% on a y-o-y basis. Management fees and commissions increased by 34.3% y-o-y to KD 4.26 million while Net Profit attributable to shareholders of parent company was KD 2.62 million (EPS 5 Fils per share) for the period ending H1 2018, at a margin of 29.9%.
Mr. Manaf A. Alhajeri, CEO of Markaz, said in a statement, “Markaz continues to drive each of its business divisions successfully delivering an overall 13.7% increase in H1 2018 revenues. We continue to build our asset management business with an AUM increase of 6.3% on a y-o-y basis. Meanwhile, our income on principal investments delivered revenues of KD 4.51 million. On an annualized basis, H1 2018 income returns on principal investments were 6.3%. Our asset management fees increased to KD 3.44 million up and investment banking fees reached KD 0.82 million.
GCC stock markets witnessed an uptrend during H1 with YTD returns of 9.9% as evident of S&P GCC index. As one of the leading asset managers in the region, Markaz is well positioned to benefit from the healthy performance of the region’s markets. Our asset management offerings include diverse proprietary and customized investment solutions, and aim to deliver long-term value creation for our investors, and our investment decision-making process is backed by extensive qualitative and quantitative analysis, and stringent risk management guidelines. This is reflected in our funds’ sustainable performance through the years and across different economic cycles.
In the first half of 2018 Markaz Proprietary portfolio have beaten its strategic index by 151 basis points. International markets are preparing for ongoing interest rate increases that are being implemented by many central banks of major economies. Although this clearly has some implications, primarily for our asset management business, Markaz is fully prepared to be responsive in these dynamic financial markets.
International real estate AUM increased by 18% during the quarter as the US real estate markets continue to strengthen. Our US-based subsidiary, Mar-Gulf, successfully exited three real estate development projects during the first half, with a total value of USD 67.10 million. The exited projects included a self-storage project in Los Angeles California, industrial projects in Phoenix, Arizona and another industrial project in Dallas, Texas. This performance was spread across our 3 Mar-Gulf managed funds and our core real estate portfolio. Mar-Gulf, currently manages 7 ongoing projects in the United States and a project in Germany and Markaz continues to evaluate opportunities in high-growth and supply constrained metros.
During the first half, Markaz successfully completed several advisory mandates. Flagship assignments year-to-date included the acquisition of 29.5% of HEISCO on behalf of clients, the acquisition of 23.3% of ACICO construction on behalf of clients, a debt settlement for an Emirati bank, and two ongoing high-profile restructuring transactions. In addition, Markaz successfully completed a KD 20 million capital increase of United Projects Company for Aviation Services (UPAC). Markaz has a long standing investment banking track record of providing high quality independent advice coupled with outstanding execution. We continue to build on our reputation as a leading regional investment bank servicing not only corporates within MENA but also multinationals operating across borders. Total transaction value executed by Markaz up to June 2018 amounts to KD 1.24 billion.