Regional expansion in five new markets, EPS of 65 fils, growth of 400% Kuwait Financial Centre S.A.K, one of the leading investment banking and asset management institutions in the Middle East, reported its financial results for the year 2007. Net profit reached KD 27.03 million, an earning per share of 65 fils; a 405% increase over last year’s results of KD 5.35 million in net profit. Assets under Management totalled KD 1.3 billion, Return on Average Equity reached 22.82% and Return on Average Assets was 16.36%. On this occasion Mr. Diraar Y. Alghanim, Chairman & Managing Director said "Markaz has achieved a robust performance, this was portrayed in a series of successful activities making 2007 one of the best years in the history of the company.
Our business development plans have been met with success as most of our Local, GCC, and International Investments and funds outperformed their respective benchmarks including Real Estate funds. Markaz launched several new investment products and underwent regional expansions. Our initiatives in investment banking were also successful". Mr. Alghanim concluded "While we are approaching our thirty fifth anniversary, our efforts are geared to meet the highest industry standards utilizing a research driven strategy to sustain our position as one of the leading investment and financial services institutions in the region". Markaz unrealized investment profit for the year ending in 31 December 2007 increased to KD 4.56 million compared to unrealized loss of KD 7.64 million in 2006; management fees increased by over 38% over last year, attaining KD 15.70 Million. Markaz's investment products accomplished a superior performance in 2007; most of which ended the year outperforming their respective benchmarks on local, GCC, and international levels. Markaz's local investment funds likewise achieved a record performance in 2007. Markaz Fund for Excellent Yields 'Mumtaz', a winner of two Lipper – Reuters funds awards, posted 44.4% by end of 2007 outperforming the benchmark KIC index which posted 30.44%. Markaz Gulf Fund, became one of the best performers in its class, achieving returns in excess of 48% for the year 2007. It outperformed MSCI GCC Index which posted 44.8% in 2007. On the international level, Markaz IPO and Pre-IPO Program, which was launched in May 2007, posted a return in excess of 23% for 2007. The Program participates in IPOs and Pre- IPOs, focusing predominantly on Emerging Markets. Atlas Diversified Fund achieved a return of 17.90% against its benchmark which posted 10.67%. Markaz successfully structured and placed a US$ 50 Million Sukuk Issue for Kuwait Resort Company; it also listed Vending Networks Company on the Kuwait Stock Exchange. Additionally, Markaz underwrote and managed a 100% capital increase for Kuwait Privatisation Projects Holding Company which provided the company with over KD 60 million in equity financing. In Structured Finance, Markaz continues to be the only market maker for Options at the Kuwait Stock Exchange, and increased the number of stock covered in the Options Market at the Kuwait Stock Exchange from 40 (2006) to 55 (2007). The Options market witnessed a significant increase in trading activity in the year 2007. A total of 20,985 contracts were traded in 2007 with an underlying value of KD 550,025,761 as compared to 12,333 contracts with an underlying value of 322,880,657, last year. Markaz is planning to expand its products range to include put options, index options, and to allow investors to write options through the market maker. During 2007 and as part of its efforts in diversifying its asset classes to minimize/control risks, Markaz has focused on developing its real estate activities and has shown a vigorous growth in local, regional and international real estate investments. Markaz Real Estate Fund, an income generating and Shari'ah Compliant Fund which invests in real estate properties within the state of Kuwait, became the best performing in its class, achieving returns in excess of 19% for the year 2007. The Fund adopted a new investment strategy and was extended for an additional five year term. In Q1 2007, Markaz launched Markaz Real Estate Opportunities Fund, which invests in the development of real estate projects in the MENA region. The Fund commenced its activities by underwriting and placing 30% of the Capital of Lusail Waterfront Investment Company. On the infrastructure front, Markaz pursued projects mainly in the power, water and transportation sectors and signed several MOUs with partners and developers to bid for projects being offered throughout the region. In International Real estate, Markaz announced that it is in the final stages of closing Markaz U.S. Multifamily Realty Investment Unit IV "The Fund", a US$ 67.2 million Shari'ah Compliant Fund that will selectively invest in excess of US$ 200 million in the development of high quality apartment properties in the US. In 2007, the company sold BBK US Retail Realty Investment Unit II, a portfolio of retail properties, for approximately US $245 million to a commingled fund delivering a gross IRR of 27%. In Oil & Gas, Markaz increased the capital of Kuwait First Transportation Company (KFTC) to KD 15 million. KFTC has engaged in financing of heavy equipment, leasing activities primarily for equipment in Oil and Gas construction projects, and has entered into its first equipment leasing transaction worth US$97 million with the Consolidated Contractors International Company (CCC) through its Bahraini subsidiary, Maleq Leasing Company B.S.C. It is worth mentioning that Markaz is one of KFTC's Founders in which Markaz Energy Fund owns a major stake. Additionally, Markaz Energy Fund, has capitalized on the encouraging market conditions featured in attractive valuations of energy stocks by investing in listed energy stocks in the GCC and international markets. The investments made were weighted towards the drilling and petrochemical segments amongst others. The Fund has taken a strategic stake in Independent Petroleum Group S.A.K. (IPG). Emanating from its belief in the importance of actual and permanent presence in targeted markets, Markaz has established Markaz Real Estate Investment Company, a fully owned subsidiary of Markaz based in Riyadh. The company debuted its activities by announcing the construction of a hotel in the Saudi capital in partnership with Local Partners. Markaz has also established Markaz Real Estate Development Company, a fully owned subsidiary of Markaz based in Amman, to proceed in executing several real estate projects in the Kingdom.Markaz is in the process of opening an office in the Algerian capital and a representative office in Beirut. In December 2007 Markaz organised a closed door panel discussion on the future of global growth and the challenges faced by GCC countries. Apart from senior executives of Markaz, the panel comprised senior executives drawn from Mckinsey, Standard Chartered Bank, Credit Agricole, Investec, OPEC, Qatar Financial Centre Regulatory Authority, Beltone Financial, MIBC, & Ask Investment Managers (India). During 2007, Markaz has strengthened its activity in publishing researches and analysis themed with the investment sectors relevant to Markaz business. This supports the investment decision-making process with a strong base, and a clear vision. Markaz launched in 2007 new research concepts, such as "MVX", a new innovative index to measure stock market volatility in the emerging markets and GCC region, and Markaz GCC Asset Allocation, a monthly research that recommends asset allocation on all the GCC stock markets based on an in-house developed model. ### About Kuwait Financial Centre "Markaz" Kuwait Financial Centre S.A.K 'Markaz', with total assets under management of over KD 1.3 billion, as of end of December 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 recently awarded a BBB+ corporate rating by Capital Intelligence Ltd. -Ends- Photo Caption: Mr. Diraar Y. Alghanim, Chairman & Managing Director of Markaz.