kuwait economic brief 2009

7/29/2019 Kuwait Economic Brief 2009

http://slidepdf.com/reader/full/kuwait-economic-brief-2009 1/16

An update of recent developments

in select sectors in Kuwait

published by Economic Research

at NBK

Kuwait Economic Brief

May 2009

Oil prices rm up... Ination

back in single digits



2

Kuwait’s crude oil price and production

Oil Output (left) Oil Price (right)

d o l l a r s p e r b a r r e l

m n b a

r r e l s / d a y

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40

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2.3

2.4

2.5

2.6

2.7

Apr 08 Jul 08 Oct 08 Jan 09 Apr 09

Kuwait stocK eXcHanGe

m i l l i o n K D

i n d e x

Value of Traded Shares (left) KSE Index (right)

4000

7000

10000

13000

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19000

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Apr 08 Jul 08 Oct 08 Jan 09 Apr 09

real estate sales activity

m i l l i o n K D

0 0 0 K D / u n i t

Volume of Sales (left) Average Price (right)

0

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Mar 08 Jun 08 Sep 08 Dec 08 Mar 09

monetary indicators

(year-on-year percent growth)

Money Supply (M2) Credit Facilities

10

15

20

25

30

35

40

Mar 08 Jun 08 Sep 08 Dec 08 Mar 09

o mk...............................................pg 3

Higher crude prices supported by OPEC cuts,

recovery hopes... Kuwait budget likely to see

surplus in FY2009/10…

pb F.......................................pg 5

FY08/09 Spending at 79% of budget, but should

be closer to 95% when final numbers are out…

i..................................................pg 7

December CPI: 9.0% yoy, back in single digits…

Housing inflation declines from 10.2% yoy to

7.5%

m d......................pg 8

Credit growth slow despite pickup in real estate

loans… CBK cuts discount rate 25 bps to

3.5%.

t......................................................pg 9

Kuwait’s trade balance showed a record surplus

in 2008 on the back of higher oil exports.

r e...........................................pg 10

February Real estate sales remained weak

during first quarter of 2009…SBC loans firm.

c eg.............................pg 11

Net loss for 2008.

K sk exhg......................pg 15

KSE rallies in April.

Economic Brief - May 2009



3

Kec price scenarios

)dollars per barrel(

s

l p B c Hgh p

2008 90.4 90.4 90.4

1Q09 41.4 41.4 41.4

FY08/09 78.5 78.5 78.5

2Q09f 45.6 47.9 47.3

3Q09f 43.8 50.8 54.7

4Q09f 41.7 54.6 66.62009f 43.1 48.7 52.5

1Q10f 39.1 58.0 75.6

FY09/10f 42.6 52.8 61.0

Kuwait eXport crude

Future price projections correspond to NBK’s price scenarios.

(dollars per barrel)

20

30

40

50

60

70

80

90

100

110

120

3Q08 4Q08 2Q091Q09 3Q09 4Q09 1Q10

o mk & Bg d

Higher crude prices supported by OPEC cuts,recovery hopes... Kuwait budget likely to see surplusin FY2009/10… Ater luctuating at around $40 per barrel (pb) in the irst

three months o 2009, the price o Kuwait Export Crude(KEC) rose to settle at around the $50 pb mark through April and into May. To some extent, the rise appears tohave been driven by the continued implementation o cutsin crude output announced by the OPEC cartel since lastSeptember, as the organization seeks to compensate orthe steep decline in global oil demand. But the rise hasalso coincided with the return o a degree o optimismsurrounding global economic conditions, including aneasing in the rate o decline o some survey-based activitymeasures, signs o improving health amongst previously-troubled inancial institutions, and a rally in equity markets,all o which suggest that some sort o world economic

recovery could soon be underway. In addition to thesetentative signals, the nine month-long rally in the USdollar appears to have lost momentum, perhaps reducingpressures on crude prices to all in order to stabilize pricesin oreign currency terms.

Benchmark crude prices stabilize around $50 pb,despite storage shortages…Other leading benchmark crude prices, such as Brent,also stabilized at close to the $50 pb mark through April,pushing the discount on KEC against this blend closeto zero or the irst time since 2002. One reason or thenarrowing o spreads is the apparent mounting supply

glut at key global storage acilities. Although this has beena eature o the market or US West Texas Intermediate(WTI) crude or some time, storage shortages have morerecently begun to emerge at Rotterdam in Holland, causingthe issue to eature more heavily on European markets. Inaddition, some analysts point to the continued existenceo relatively high crude uture prices as encouraging theaccumulation o stocks. The price o the December 2010Brent contract, or example, stood at $66 pb on 1st May,some $14 above the spot price. A year ago, the samecontract was trading at a $3 discount to the spot price.

IEA sees global recession, cuts 2009 oil demand

outlook sharply…On the supply side, OPEC continues to implement the

production cuts that it agreed at the end o last year,which aim to reduce the amount o OPEC-11 crude on themarket by 4.2 mbpd rom September 2008 levels. Despitethe best eorts o key producer Saudi Arabia – which has

reduced its own output well below its own quota levelsand by 1.5 mbpd in March alone – overall productionremained 700,000 bpd above target in March. While onthe ace o it the prospect o urther cuts seems bullish orcrude prices, the tensions implied by the ailure o somecountries – notably Iran, Nigeria and Venezuela – to stick to their respective targets could threaten to undermineconidence in OPEC’s ability to deliver on its promisesdown the line, thereby making its strategy o stabilizingprices more diicult to implement. Away rom OPEC,most analysts (OPEC aside) expect non-OPEC productionlevels to drop this year. The IEA, or example, expects a allo 300,000 bpd in non-OPEC output, partly related to the

impact o lower oil prices on the viability o non-subsidizedbiouels projects.

Prices could rise further in 2H09 as market graduallybegins to tighten… Although underlying oil demand is set to remain weak thisyear, a seasonal pick-up over the summer months maymean that the recent build-up in global crude inventoriescould soon pass its peak. The outlook or oil prices couldthereore largely depend upon OPEC’s desire to continueto reign in production even as market conditions tighten. The next clue to this will come at the organization’smeeting in Vienna on May 28th, with some analysts

highlighting the role that the budgetary positions o OPECmember state governments could play in deining theorganization’s determination to provide near-term supportor oil prices. Given the lack o compliance amongst someOPEC members, the most likely scenario could involveOPEC production continuing to register modest declines– perhaps o 100,000 bpd in 2Q09 over 1Q09 levels – butor overall output to remain above oicially targeted levels.With demand rising slightly in 2H 09 (but down 1mbpdor 2009 as a whole), prices would drit gently upwardsthrough the rest o the year. The price o KEC would riseto $55 by 4Q09 and average $53 or FY2009/10 as awhole.




4

Steeper-than expected OPEC/non-OPEC supply cutscould spark bigger price rally…I, on the other hand OPEC were to decide to take moreaggressive action – or i non-OPEC supply were to allby more than expected, perhaps as a result o diicultinancing conditions acing commercial oil companies

– supply could all by an additional 250,000 bpd, settingthe scene or higher prices not just in 2H09 but into 2010,as well. Under this scenario, the price o KEC could beback above $65 pb by the end o this year and above$75 by 1QQ10.

Downside risk to prices from weaker than expecteddemand and OPEC inaction … The downside risk to prices stems mostly rom thepotential or weaker than expected oil demand. I globaldemand were to all by the 1.3 – 1.4 mbpd envisionedby OPEC, the market tightening currently anticipatedor 2H09 would be limited. The price o KEC would slip

to below $40 by 1Q09 and average $43 in FY2009/10. This scenario assumes that OPEC ails to respond tothe weaker demand outlook by invoking deeper cuts inoutput, although in reality, it would seem likely to do so.

Another sizeable budget surplus likely in 2009/10,despite lower oil revenues…With FY2008/09 already passed, none o these scenarioswill have any bearing on the outcome o last year’sbudget numbers, although the inal igures or the yearmay not yet be known or some time. Budget revenuescame in KD 21.2 billion, 67% higher than projected inthe government’s budget, thanks to oil prices averaging

57% above what the government had orecast, at $79pb. Oicially-reported expenditures or the year are slatedat KD 15.0 billion, 79% below budget, but this is likely tobe revised up signiicantly beore the closing accounts areapproved. Based upon previous years, inal expenditurewill come in at around 90-95% o budgeted spending,leaving a iscal surplus or FY2008/09 o KD2.9 to 3.6billion beore payments to the Reserve Fund or FutureGenerations (RFFG). This igure includes exceptionaltransers o KD 5.5 billion to the Public Institution or SocialSecurity.

Based on the above price scenarios, FY2009/10 may yetsee another healthy surplus. Lower oil revenues are likelyto be more than oset by projected cuts in expenditures(over and above the removal o the on-o transerseen last year). Based upon the government’s projectedexpenditure plans, but assuming that spending eventually

comes in 5-10% below the budget numbers, we projectthat Kuwait’s budget balance would come in at betweenKD-0.9 billion (deicit) and KD+4.8 billion (surplus) nextyear (beore payments o 10% o revenues to the RFFG). This is ar better than the government’s own projection o a KD4 billion deicit, though still much lower than some o the spectacular surpluses recorded in recent years.

BudGet Forecast

)million KD, unless otherwise noted(

u a o p s

Fy 2008/09 Fy 2009/10

o l B Hgh d l B Hgh

Bg p c p Bg p c p

Oil Price )USD per barrel( 50.0 78.5 78.5 78.5 35.0 42.6 52.8 61.0

t r 12,680 21,147 21,157 21,177 8,075 10,573 13,652 15,718

Oil Revenues 11,650 19,878 19,878 19,878 6,925 9,423 12,502 14,568

Non-Oil Revenues 1,030 1,269 1,279 1,299 1,150 1,150 1,150 1,150

Expenditures )official( 18,966 18,966 18,966 18,966 12,116 12,116 12,116 12,116

s () -6,286 2,181 2,191 2,211 -4,041 -1,543 1,536 3,602

After RFFG -7,554 67 76 94 -4,849 -2,600 171 2,030

Expenditures )NBK estimate( 18,291 18,021 17,617 11,510 11,268 10,904

s () 2,856 3,136 3,561 -937 2,384 4,813

After RFFG 741 1,020 1,443 -1,994 1,019 3,242



5

pb F

FY08/09 Spending at 79% of budget, but should becloser to 95% when final numbers are out The 12-months ollow up statements or the FY08/09that were recently published reveal a preliminary surplus

o KD 6.1 billion- down 47% rom FY07/08- beore theallocation o 10% o revenues to the Reserve Fund orFuture Generations (RFFG). Still relecting the hike in oilprices or most o the iscal year, revenues increased11.6% rom an already impressive KD 18.9 billion theprevious year. Meanwhile, expenditures doubled rom lastyear’s igure mainly due to the extraordinary transer to thePublic Institution or Social Security (PIFSS), the cost o uel incurred by the Ministry o Electricity and Water (MEW)and other transers.

Demand impacting spending strong last threeyears…

Demand impacting expenditures, those items with amore direct eect on the economy, saw a smaller but stillsigniicant increase o 17%.

Spending averaged 93% of budget last four years…It is very important to note here that, even with 12months o data, these numbers are not the oicial closingnumbers or the iscal year. The latter are due later andtypically, the Ministry o Finance tends to underestimateexpenditure igures in the preliminary statements, andthe closing accounts are usually adjusted signiicantlyupward. Furthermore the year-on-year comparisons maybe altered when we do get the oicials closing igures. For

now, March data (12 months) reveal that total spendingstands at only 79% o budget. However the past ouryears’ closing accounts show inal spending at 93% o budget plans, on average. Thereore; total spending in

revenues and eXpenditures - Fiscal year 2008/09

)million KD(

12 mh

i r chg a / Bg (%)

FY07/08 FY08/09 )mn KD( )%( FY07/08 FY08/09

t r 18,934 21,133 2,199 12 228 167

Oil Revenues 17,719 19,878 2,159 12 238 171

Non-Oil Revenues 1,215 1,254 40 3 140 122

t ex 7,493 15,040 7,547 101 66 79

exg t piFss 6,852 8,765 1,913 28 65 69

Wages and Salaries 1,950 2,131 181 9 74 66

Goods and Services 1,524 2,415 892 59 83 78

Vehicles and Equipment 51 62 10 20 24 34

Projects, Maintenance and Land Purchases 718 945 227 32 35 57

of which: Electricity and Water 388 591 202 52 35 85

Public Works 193 193 0 0 54 50

Misc. Exp. and Transfers 3,250 9,488 6,238 192 71 88

Miscellaneous Expenditures 959 1,041 82 9 72 77

of which: Min. of Defense* 641 728 87 14 67 78

Military Procurement 112 37 -74 -67 81 51

Transfers to Public Institutions 1,242 7,175 5,933 478 69 95

of which: Social Security )PIFSS( 641 6,276 5,634 879 94 99

s (f) 11,441 6,092 -5,349 -47 … …

After RFFG 9,548 3,979 -5,569 -58 … …

* including military salaries.

FY08/09 is likely to see an estimated upward adjustmento 10-20%. When the inal numbers are out, we expect abudget surplus o KD 3.0-4.0 billion.

Even with the recent drop in oil prices, Kuwait ExportCrude still averaged $79.7 per barrel during FY08/09, 6%higher than the previous iscal year. Boosted by high oilprices or most o the iscal year, Kuwait posted KD 19.9billion in oil revenues, 71% higher than budgeted andmore than 12% above last year’s igure. However, with thestart o the new iscal year and the drop in oil prices, weshould see oil revenues at much more modest levels.

Kuwait BudGet

Ex-PIFSS

(%) (%)

Budget Budget Change Change

2008/09 2009/10 2009/10 2009/10

Revenues 12,679 8,075 -36.3%

Oil 11,653 6,925 -40.6%

Non-oil 1,026 1,150 12.1%

Expenditures 18,966 12,116 -36.1% -10.7%

1. Wages & Salaries 3,210 3,476 8.3%

2. Goods & Service 3,077 2,354 -23.5%

3. Transportation & Equipment 179 344 92.2%

4. Projects & Maintenance 1,665 1,265 -24.0%

5. Miscellaneous & Transfers 10,836 4,681 -56.8%

Surplus/Defcit - beore RFFG -6,287 -4,041

Suplemetary appropriations (not inlcuded above)

Allocation to RFFG 1,268 808

Surplus/Defcit - ater RFFG -7.555 -4.849Assumed oil price (KEC) 50 35

Breakeven oil price (KEC) 75 54

Source: Ministry of Finance

*Note: Ex PIFSS shows the change in budget allocations excluding extra-ordinary transfers to PIFSS




6

Non-oil revenues saw a more subdued increase o 3%this year than last year’s remarkable 28%. Most o thisincrease came rom miscellaneous revenues and ees,which were up by almost KD 40 million (11%). Servicecharges rose 3% to reach KD 492 million driven byhealthcare receipts. Income tax revenues rose 16% and

compare poorly to an average rise o 40% in the previousour years. This is mainly due to weaker business activityand subsequent poor corporate proitability. The slump inreal estate relected on property ees and land sales whichdropped 50% and 84% respectively. Custom ees alsodropped more than 34% driven by weaker trade, not tomention reduced or cancelled duties on some ood andconstruction items earlier in 2008.

On the expenditures side, those doubled rom FY07/08but remained at 79% o budget. Based on previous years,we expect spending to be later adjusted up to reach 93%o budget, i history is any guide. (table below)

“Wages and Salaries” rose by 9.3% compared to aprojected 8.3% in the new budget or FY09/10. Spendingon this chapter remains 34% behind budget mainly dueto delayed reporting and should be adjusted up in theclosing accounts. Higher 2008 oil prices and the cost o uel incurred (especially by MEW) remain behind the 59% jump in “Goods and Services”. With oil prices alling, theFY09/10 budget reveals a cut o 24% in this chapter. Thesigniicant increase o 192% in Chapter 5 “Transers andMiscellaneous Expenditures” in FY08/09 is clearly due tothe extraordinary transer to (PIFSS). With the absenceo such a transer in the current iscal year, this chapter

should drop 56%.

Spending on so-called chapter 4, “Projects, Maintenanceand Land Purchases”, rose by 32% rom FY07/08 drivenmainly by spending on (MEW)’s big power and waterprojects. Though showing progress, at 57%, actualspending on this chapter remains well behind budget.Even with the upward adjustments made in the closingstatements, the actual spending to budget rate in thischapter averaged 75% in the past our years. Thereore;we expect FY08/09 to close with a total spending o KD 1.2 billion on “Projects, Maintenance and LandPurchases”.

FY09/10 budget plan allocates KD 1.3 billion or spendingon chapter 4. Even i the current year closes at 100%o budget, which is very unlikely, spending on “Projects,Maintenance and Land Purchases” would see little, i any,growth.

Chapter 4 crucial but still awaiting closing accountsSpending on projects (chapter 4) has always been a maindriver o non-oil sector growth. It is thereore crucial toboost that category in diicult economic times, it tendsto help the economy a year later. Given the modest-to-no-increase expected in actual (versus budgeted)Ch 4 projects spending in 2009, there is reason to beconcerned about the economy in 2010, especially i no changes are made to the current budget law in theatermath o May elections. Recall the tentative natureo the data prior to “closing” numbers and that the slated24% cut in the 09/10 budget will likely be very dierentrom actual spending on the ground.

non-oil Gdp & cH4 spendinG (yoy%)

-60

-40

-20

0

20

40

60

2000 2002 2004 2006 2008e 2010e

0

5

10

15

20

Ch4 Lagged-1-Year (LHS) Non-Oil GDP (RHS)

demand - impactinG eXpenditure, 12 montHs into Fy

0

200

400

600

800

1000

2 0 0 1 / 0

2

2 0 0 2 / 0

3

2 0 0 3 / 0

4

2 0 0 4 / 0

5

2 0 0 5 / 0

6

2 0 0 6 / 0

7

2 0 0 7 / 0

8

2 0 0 8 / 0

9

KD mn

0

5

10

15

20

25

30

%

Capital Expenditure (LHS) % Demand-impacting Expenditure (yoy%, RHS)

spendinG rate

Closing /

12 Months/Budget Budget

Average Average

)04-08( FY08/09 )04-08(

Expenditures 73% 79% 93%

Wages & Salaries 76% 66% 98%

Goods & Services 74% 78% 96%

Transportation & Equipment 30% 34% 60%

Projects, Maintenance & Land Purch. 40% 57% 75%

Miscellaneous & Transfers 81% 88% 97%



7

i

December CPI: 9.0% yoy, back in single digits…Housing inflation declines from 10.2% yoy to 7.5%In December 2008, year-on-year (yoy) inlation inallyreturned to single digits at 9.0%, rom 10.4% in November.

CPI Inlation has been declining or some time and shouldsettle soon around 6% which we believe is the currentunderlying pace (chart 1).

The broad price categories have allen to single-digitinlation, one ater the other, with the latest one: housingcosts. The latter ell rom a high o 16.1% earlier in theyear, was 10.2% in November, and inally ell to 7.5% inDecember 2008, in line with a cooler real estate and rentalmarket. The only two broad categories still above 10% are“ood” and “household goods and services”.

Food price inlation ell rom 12% in November to 11% yoy

in December, a bit more stubborn than other categories. The 1.4% month-on-month jump in December may bepartly due to Eid-al-Adha and end-o-year eects. Weestimate that, typically, December/year-end adds 1% tothe monthly numbers (which are not seasonally adjusted). The trend o ood inlation, like elsewhere however, isdown and should beneit urther rom lower commodityprices world wide.

The other big December jump was in “household goodsand services” up 2% mom, and 18.3% yoy. We cannotblame that increase on year-end eect. That categorysaw the highest inlation last year and will be the last to

get back into single digits. The category carries a 14.7%weight in CPI and was the most impacted by inlation lastyear, with urniture prices leading the charge (up 52% yoyin November). There are many imports in that category andtheir prices have yet to ease because o the strong dinar(in 2008) and because o slower economic conditions.

With December’s data in, 2008 inlation averaged 10.6%or the year, compared to 5.5% in 2007. The well knowstory is, however, that ater rising in 2007 and in the irsthal o 2008, inlation in Kuwait peaked at a record high in August 2008 (11.6% yoy) and then started slowing in thesecond hal o the year. The slowdown should continue

into this year and we expect 2009 inlation to average

close to 6% or the year.

Kuwait cpi inFlation

CPI % CH. YOY CPI % CH. LAST 3-MOS ANNUALIZED

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08

Kuwait cpi inFlation : Food & HousinG (yoy % cH)

Housing (27% of CPI) Food (18% of CPI)

2%

4%

6%

8%

10%

12%

14%

16%

18%

Apr 07 Jun 07 Aug 07 Oct 07 Dec 07 Feb 08 Apr 08 Jun 08 Aug 08 Oct 08 Dec 08

consumer price indeX

CPI

(Basis 2000) %yoy %mom

`Dec 08 Dec 08 Dec 08 Nov 08 Oct 08

Overall Index 135.3 9.0 1.0 0.1 0.4

Food 150.9 11.0 1.4 0.4 0.2

Beverages and Tobacco 154.4 17.8 -2.1 -0.9 0.0

Clothing and Footware 142.8 7.5 0.2 0.6 1.7

Housing Services** 136.5 7.5 1.9 0.0 0.1

Household Goods and Services 129.3 18.3 2.0 0.0 0.6

Transport and Comm. 114.7 2.0 -1.4 0.2 0.3

Education and Medical Care 149.9 6.8 0.3 0.1 0.1

Other Goods and Services 130.5 9.1 0.2 0.3 0.3

** updated every 3 months only




8

m d

Credit growth slow despite pickup in real estateloans… CBK cuts discount rate 25 bps to 3.5%March’s monetary developments ollowed along the lineso February. Private deposits at local banks continue to

expand rapidly thanks to government injections, throughsemi-public institutions. These institutions (such asPIFSS, KPC, etc.) have their accounts classiied as privatedeposits according to the Central Bank o Kuwait (CBK). This eort by the government is aimed at replacing liquiditylost when oreign deposits exited the system back in thesecond hal o 2008. As a result o these rising institutionaldeposits, money supply (M2) shot up 3.4% (m-o-m)in March. Meanwhile, credit growth remained sluggishdespite a pick-up in the real estate sector in the previoustwo months.

On the 14th o April, the CBK cut its discount rate by 25

bps to 3.5%, its lowest level since mid 2004. With thismeasure, the CBK hopes to stimulate credit growth.

Slow credit expansionCredit to residents rose 0.8% (+KD 185 million) in March,coming well below its pace o recent years and pushingy-o-y growth down to a our-year low. Uncertainty andlower conidence are keeping credit demand and growthin check.

For the second straight month, loans to the real estatesector remained the largest and rare growth sector, risingKD 204 mn in March. Real estate data showed a surge in

sales o residential and commercial properties in Februarywhich might have carried over to March. Industrial andconsumer loans (excluding securities inancing) were theonly other two sectors growing in March.

Private deposits buoyed by semi-governmentinstitutionsPrivate resident deposits rose KD 838 million in March,mainly on increased deposits rom semi-governmentinstitutions. Otherwise, cash dividend payments by ourbanks in March, totaling KD 185 million, also helped raisedeposits. Meanwhile, deposits o non-residents droppedKD 223 million, part o the crisis-driven withdrawals by

oreigner accounts. During the irst quarter, deposits o

monetary HiGHliGHts - marcH 2009chg

m 2009 3-h

mn KD % % %

l Bk a 39,583 0.5 0.9 6.3

of which:

Claims on Government 1,795 -10.8 -9.6 0.1

Credit to Residents 24,178 0.8 2.2 13.2

Foreign Assets 8,417 1.4 -4.3 13.1

m s (m2) 24,862 3.4 13.3 21.9

Private Deposits 24,120 3.6 13.5 22.3

Sight Deposits 3,953 -3.5 7.9 -5.7

Savings Deposits 2,665 -2.2 7.1 3.3

KD Time Deposits & CDs 14,421 3.4 9.3 27.2

FC Deposits 3,082 22.7 62.3 90.7

monetary indicators

(year-on-year percent growth)

Money Supply (M2)

KD Resident Deposits Credit Facilities

0

10

20

30

40

Mar-07 Sep-07 Mar-08 Sep-08 Mar-09

residents grew KD 2.9 bn compared with a KD 1.1 bndrop rom non-residents.

System foreign assets dropCBK’s oreign assets dropped KD 146 million in March,their irst drop in seven months. Meanwhile, local banks’net oreign assets rose KD 434 million, ollowing alarge drop in oreign liabilities (both bank and non-bank deposits).

KIBOR continues to fallBanks’ holdings o public debt instruments droppedKD 217 million in March as most o the KD 399 millionrenewed treasury bonds were subscribed by non-banks.

Liquid assets at local banks (incl. local net interbank deposits) dropped KD 46 million in March. Despite thisdrop, banks remain amply liquid. The December cut inCBK reserves to deposits ratio to 18% rom 20% and

the gush o new deposits to banks has greatly loweredpressure on banks’ liquidity. Accordingly, average KIBORell between 43 and 67 bps over the dierent maturitiesin March.

Relative calm in the currency market since mid-March At the end o March through mid-April, the dinar tradedwithin a relatively narrow band compared to previousmonths, mimicking the stability witnessed in internationalcurrency markets.

eXcHanGe rates

Dollar/Dinar (LHS) Euro/Dinar (RHS)

0.33

0.35

0.37

0.39

0.41

0.43

0.26

0.27

0.28

0.29

0.30

0.31

M a y 0 7

A u g 0 7

D e c 0 7

A p r 0 8

A u g 0 8

D e c 0 8

A p r 0 9



9

t

Kuwait’s trade balance showed a record surplus in2008 on the back of higher oil exports According to data released recently by the Central Bank o Kuwait (CBK), Kuwait’s trade surplus rose to KD 16.7

billion in 2008, up 39% rom the previous year, on the back o strong growth in oil exports. Most o the gains in thetrade surplus was achieved during the irst three quarterso the year when oil prices were at their record high.

Oil exports, however, dropped by 41% in the lastquarter of 2008 year on year, reflecting the sharp dropin oil prices.Oil exports, which account or the bulk o total exports,rose by 64% during the irst nine months o 2008compared with the same period a year ago, but droppedby 41% in the last quarter o the year on annual basis.

Overall, oil exports in 2008 were 32% up rom the previousyear, aected mainly by the 38% rise in the price o Kuwaitexport crude (KEC). KEC went rom an average o $66 perbarrel in 2007 to $91 per barrel in 2008. Production rose3.8% to 2.55 million barrel per day in 2008. Oil exports,however, are set to ace a diicult year in 2009 with thecurrent lower oil prices, and the cut in oil production. Thedrop in oil exports will negatively impact government’srevenues in the current iscal year, compared to last year.

Non-oil exports continued their strong growth, rising by18% in 2008 to reach KD 1.16 billion, or 5% o total

exports. 41% o the expansion in non-oil exports camerom exports o ethylene products, 31% rom the rise inre-exports, and 10% rom the exports o manuacturedertilizers. Meanwhile, imports grew by 16% rom theprevious year to reach KD 6.7 billion, or 29% o totalexports. Imports’ growth has been strong in recent years,relecting the strong expansion in economic activity anddomestic demand until the last quarter o 2008.

ForeiGn trade

)KD million(

y

o n-o t B

ex ex ex i t

2002 4272.8 393.4 4666.2 2735.8 1930.5

2003 5663.5 498.5 6162.0 3274.1 2888.0

2004 7861.1 567.0 8428.1 3722.2 4705.8

2005 12392.6 709.0 13101.6 4613.9 8487.7

2006 15429.7 823.2 16252.9 5000.5 11252.4

2007 16780.0 981.9 17761.9 5778.9 11983.0

2008 22200.1 1162.3 23362.4 6688.3 16674.1

non-oil eXports

)KD million(

y

m eh r-

Fz p oh ex t

2002 15.5 191.0 121.2 65.7 393.4

2003 31.6 188.4 153.3 125.2 498.5

2004 41.1 229.0 156.9 140.0 567.0

2005 56.0 311.0 162.0 180.0 709.0

2006 63.5 348.0 143.8 267.9 823.2

2007 76.0 400.0 160.0 345.9 981.9

2008 94.0 473.6 192.8 401.9 1162.3




10

r e

Real estate sales remained weak during first quarter of 2009…SBC loans firmReal estate sales remained weak in March, ollowing anotable jump in February. A total o 386 sales transactions

were registered in March, at a value o KD 89.4 million.Sales volumes ell by 11.6%, while number o transactionsrose by 18.4% rom the previous month. However, salesvolume and number o transactions igures were 67.8%and 55.8% down yoy, respectively.

The drop in March came largely rom a decrease in activityin the commercial property sector with sales alling 56.7%(mom). The monthly decline was rom a high level inFebruary when a couple o large transactions took place..Most o the activity in the real estate market continuedto come rom residential property sales. Number o transactions in residential plots and homes represented

the bulk o real estate sales with 67% o total transactionsin 1Q09. The residential property sector represented 48%

sales activity, residential sector

m i l l i o n K D

0 0 0 K D / u n i t

Sales Volume (left) Average Transaction size

0

50

100

150

200

250

300

0

20

40

60

80

100

120

140

160

180

200

Mar 06 Dec 06 Sep 07 Jun 08 Mar 09

o total sales volume (KD) o real estate. The number o transactions or residential plots in Khairan Pearls and AbuFutaira areas accounted or more than hal o all residentialplots in 1Q09.

In the irst quarter as a whole both sales volume (KD) andthe number o transactions ell, by 21.7% and 20.6%respectively, compared with 4Q08. 1Q09 activity was alsolower than in 1Q08, having allen by 57% in both salesvolume (KD) and number o transactions. However, salesvolume or the commercial sector was more brisk risingby 35% in 1Q09 compared to 4Q08 (perhaps helped byone-time large transactions in February).

Meanwhile, March saw a drop in average prices, were9% lower in apartment’s properties and ell by 2.6% orresidential properties.

real estate sales & scB HousinG loans

mh ag. o n d J Fb m

r e s 2007 2008 2008 2008 2008 2009 2009 2009

Sales Volume )mn KD( 233.5 156.2 94.5 136.6 112.2 78.7 101.2 89.4

Residential Property 128.6 74.8 32.1 64.0 70.8 34.6 45.8 48.2

Apartments 83.6 56.7 40.1 66.0 24.9 32.7 20.5 26.1

Commercial 21.3 24.7 22.3 6.6 16.5 11.4 34.9 15.1

Number of Transactions 773.6 513.8 290 515 460 293 326 386

Residential Property 648.3 381.4 157 341 334 179 237 256

Apartments 117.3 121.3 119 171 111 108 85 119

Commercial 8.0 11.1 14 3 15 6 4 11

Average Transaction Size )000 KD( 301.7 320.3 326 265 244 268 310 232Residential Property 201.6 203.3 204 188 212 193 193 188

Apartments 703.8 477.2 337 386 225 303 241 219

Commercial 2,360 2,563 1,596 2,200 1,100 1,893 8,720 1,373

mh ag. o n d J Fb m

scB Hg l 2007 2008 2008 2008 2008 2009 2009 2009

Number of Approved Loans 378 412 502 404 346 507 420 451

New Construction 146 195 296 211 164 277 236 248

Purchase of Existing Homes 118 89 79 94 49 72 40 49

Additions & Renovations 114 128 127 99 133 158 144 154

Volume of Approved Loans )mn KD( 12.5 15.0 21.9 18.3 14.0 23.5 19.3 19.8

New Construction 5.7 10.2 17.2 13.1 10.2 18.4 15.8 16.4

Purchase of Existing Homes 5.3 3.2 3.3 4.0 2.4 3.5 1.9 2.0

Additions & Renovations 1.5 1.5 1.4 1.1 1.4 1.6 1.5 1.5

Volume of Disbursed Loans )mn KD( 15.1 12.1 12.4 13.0 9.8 12.9 11.7 14.3

New Construction 8.3 7.0 7.4 7.7 6.2 8.0 7.6 9.6

Purchase of Existing Homes 5.2 3.7 3.5 3.7 2.5 3.3 2.6 2.8

Additions & Renovations 1.7 1.5 1.5 1.6 1.2 1.6 1.5 1.9

sales activity, apartments sector

m i l l i o n K D

0 0 0 K D / u n i t

Sales Volume (left) Average Transaction Size

0

200

400

600

800

1,000

1,200

1,400

1,600

0

20

40

60

80

100

120

140

160

180

200

Mar 06 Dec 06 Sep 07 Jun 08 Mar 09



11

The value o loans approved by the Savings and CreditBank (SCB) grew moderately in March, up 7.4% innumber and 3% in value. The number o loans approvedor the construction o new homes rose by 23% m-o-m,

this increase is consistent with the rise in permits issuedor the construction o new homes. During March, permitsissued or construction o new homes rose by 55.7%compared to previous month. SCB approved 451 loansin March, compared to a monthly average o 412 in 2008.Meanwhile, the value o loans disbursed in March roseby a aster 23% rom the previous month to KD 14.3million, the highest since November 2007. However, loanapprovals or 1Q09 as a whole were up 10% and 15.5%in number and value, respectively, compared with 4Q08.Loans rom the SCB are up in recent months and areshowing more lie than the rest o the real estate sector,probably thanks to the distribution o plots o land in mid

2008.

approved and disBursed loans By s&cB

yoy % change in number of approved loans (left)

yoy % change in disbursed loans (right)

-60

-40

-20

0

20

40

60

80

100

120

Mar 07 Sep 07 Mar 08 Sep 08 Mar 09

-40

-30

-20

-10

0

10

20

30

c eg

Real Net loss for 2008Kuwaiti rms listed on the Kuwait Stock exchange suereda loss o KD 40 million in 2008 due to the global economicmeltdown. Fourth quarter losses, led by the nancial sector,

more than oset any gains in the previous three quarters.Only 28 companies reported a prot.

Corporate earnings in 2008 have allen o a cli, in no smallpart due to the contribution o non operating earnings to totalearnings o Kuwaiti companies. The sectors with the mostexposure were investment and industrial due to large equityportolios which incurred heavy losses. In particular, someo the more leveraged companies were hammered severelyas they scrambled to raise capital and avert bankruptcy. Theinvestment and industrial sectors suered losses o KD 840million and KD 376 million respectively in 2008. NationalIndustries and Global Investment House account or a large

share o these losses. Investment company losses areexpected to be revised downward due to a delay in reportingby Dar Investment.

The services sector was the most resilient in 2008. Eventhough prots shrunk by 37% to KD 490M in 2008, thesector now accounts or the largest share o prots on theKSE, boosted primarily by Zain’s earnings. Meanwhile, thebanking sector’s cautious approach as well as declines inasset prices or collateral values prompted them to increasereserve provisions in Q4 08. Gul bank’s KD 376M loss on aderivative position also depressed banks’ earnings in 08.

sector perFormance

(million KD) n pf Gh %

2008 2007 2008

Banking 310 1,035 -70

Investment -840 1,319 ...

Insurance 2 86 -98

Real Estate -36 363 ...

Industrial -376 446 ...

Services 490 781 -37

Food 31 79 -60

Non-Kuwaiti Companies 377 486 -22

t mk -41 4,595 ...

K c -418 4,109 ...

company proFits - 2008

Hgh eg Kd

1. Zain Kuwait 322.0

2. National Bank of Kuwait 255.3

3. Kuwait Finance House 157.0

4. Agility 141.4

5. Commercial Bank 100.7

l eg Kd

1. Gulf Bank -359.5

2. National Industries -282.0

3. Global Investment House -257.6

4. Noor Financial Investment -129.1

5. Al Safwa Group -70.0

corporate earninGs History & GrowtH

(Growth shows change in same-company prots for those reporting this period)

-25%

97%

71%

-101%

-1

0

1

2

3

4

5

6

2005 2006 2007 2008

m i l l i o n K D

Net Prots Growth

sales activity, commercial sector

m i l l i o n K D

0 0 0 K D / u n i t

Sales Volume ( left) Average Transaction Size

0

20

40

60

80

100

120

Mar-06 Dec-06 Sep-07 Jun-08 Mar-09

0

2,000

4,000

6,000

8,000

10,000




12

corporate earninGs - 2009

)thousand KD(

Code Company Name Full Year Growth Fourth Quarter Growth

2008 2007 % 2008 2007 %

Banking

101 National Bank of Kuwait 255,349 273,572 -7 11,657 53,104 -78

102 Gulf Bank -359,516 130,437 … -445,471 25,350 …

103 Commercial Bank 100,730 120,356 -16 -4,203 28,173 …

104 Al-Ahli Bank 46,036 76,041 -39 -24,358 6,005 …

105 Bank of Kuwait & Middle East 51,365 48,179 7 966 9,231 -90

106 Kuwait International Bank 19,800 17,982 10 -13,879 9,428 …

107 Burgan Bank 37,781 74,818 -50 -28,466 14,243 …

108 Kuwait Finance House 156,960 275,266 -43 -63,626 98,395 …

109 Boubyan Bank 1,846 18,562 -90 -17,319 4,846 …

Investment

201 Kuwait Investment Co. -42,089 44,875 … -54,523 7,239 …

202 Commercial Facilities 15,247 36,480 -58 -2,151 7,460 …

203 International Financial Advisors -65,123 80,803 … -74,523 31,821 …

204 National Investments -20,733 58,473 … -63,160 11,635 …

205 Kuwait Investment Projects 24,125 521,692 -95 -59,436 69,564 …

206 Al-Ahlia Investment -47,921 36,414 … -71,504 26,074 …

207 Coast Investment & Development … 25,880 … … -2,861 …

208 The International Investor -28,935 11,649 … -18,345 -4,247 …

209 Securities House -25,612 27,321 … -34,032 -339 …

210 Industrial & Financial Investments … 11,131 … … 2,225 …

211 Securities Group … 34,899 … … 9,516 …

212 International Finance Co. -15,600 8,999 … -17,963 -2,251 …

213 Kuwait Financial Centre -18,784 27,017 … -17,811 2,348 …

214 KMEFIC 3,934 13,262 -70 -4,829 4,151 …

215 International Investment Group -21,489 21,165 … -30,681 4,520 …

216 Aref Investment Group … 61,172 … … 28,687 …

217 Al-Dar Investment … 126,000 … … 3,901 …

218 Al-Aman Investment -6,320 9,001 … -14,190 951 …

219 First Investment Co. 3,226 25,375 -87 -15,119 4,068 …

220 Al-Mal Investment -8,266 4,840 … -5,423 -209 …

221 Gulf Investment House 1,821 14,643 -88 -6,850 3,595 …

222 A'ayan Leasing & Investment Co. 60 24,614 -100 -26,467 8,994 …

223 Bayan Investment Co. 11,187 7,527 49 -15,045 -6,034 …

224 Global Investment House -257,649 91,365 … -360,549 29,474 …

225 Osoul Leasing & Investment Co. … 7,886 … … 760 …

226 GulfInvest -51,803 15,123 … -57,575 4,441 …

227 Kuwait Finance & Investments Co. -25,277 21,789 … -32,605 -1,046 …

228 KIPCO Asset Management Co. 1,110 37,122 -97 -19,543 5,075 …

229 International Leasing & Investment Co. … 19,993 … … 4,205 …

230 Kuwait Invest Co. (Holding) -15,435 13,081 … -23,107 -2,162 …

231 National International Co. (Holding) -7,470 8,394 … -10,873 -150 …

232 Housing Finance 489 8,645 -94 -4,556 3,148 …

233 Al Madar Finance & Investment -12,077 9,041 … -12,245 2,050 …

234 Al-Deera Holding Co. -58,049 22,074 … -43,336 -77 …

235 Al Safat Investment -24,867 24,791 … -50,624 9,779 …

236 Burgan Group Holding -604 483 … -786 19 …

237 EKTTITAB Holding Company -274 9,180 … -16,177 3,069 …

238 Iraq Holding -6,638 1,117 … -11,558 685 …

239 Sokouk Holding -14,939 6,152 … -19,478 591 …

240 Al Madina for Finance & Investment 1,205 20,964 -94 -13,022 3,502 …

241 Noor Financial Investment -129,066 45,350 … -142,089 1,003 …

242 Al Tamdeen Investment 1,818 8,712 -79 -2,277 3,457 …

243 Kuwait Bahrain International Exchange 926 1,065 -13 213 318 -33

244 DAMAC Kuwaiti Holding -11,198 … … -11,999 … …

245 KUWAIT SYRIAN HOLDING -1,400 … … -1,679 … …

Insurance

301 Kuwait Insurance 2,946 13,293 -78 -5,291 439 …

302 Gulf Insurance 3,607 37,666 -90 -7,230 2,253 …

303 Al-Ahlia Insurance -3,816 16,322 … -18,307 3,816 …

304 Warba Insurance 2,424 8,335 -71 307 573 -46

305 Kuwait Re-Insurance -1,116 7,667 … -2,169 2,411 …

306 First Takaful Insurance 263 1,911 -86 -1,125 997 …

307 Wethaq Takaful Insurance Co. -2,639 571 … -1,950 308 …

Real Estate

401 Kuwait Real Estate -46,844 30,253 … -55,429 7,070 …

402 United Real Estate 6,114 10,215 -40 -1,255 3,530 …

403 National Real Estate 18,292 39,021 -53 -2,250 5,514 …

404 Salhia Real Estate -35,495 30,977 … -22,631 17,152 …

405 Pearl of Kuwait Real Estate … 4,271 … … -2,619 …

406 Al-Tamdeen Real Estate 13,593 11,562 18 -21,834 3,102 …



13


)thousand KD(


2008 2007 % 2008 2007 %

407 International Investment Projects … 21,139 … … -3,743 …

408 Ajyal Real Estate Entertainment Co. … 6,655 … … 7 …409 Al-Massaleh Real Estate Co. -3,968 3,070 … -5,834 146 …

410 Arab Real Estate 36 5,655 -99 2,067 589 251

411 Union Real Estate -2,486 4,267 … -3,881 270 …

412 Enma'a Real Estate 6,763 10,131 -33 … 2,667 …

413 Mabanee Co. 6,225 21,751 -71 -9,148 5,176 …

414 Injazzat Real Estate Development 15,326 16,504 -7 850 2,799 -70

415 Jeezan Holding -20,738 14,000 … -18,698 -1,802 …

416 Kuwait Lebanese Real Estate Deve. Co. -18,576 13,506 … … -134 …

417 International Resorts Co. 573 2,233 -74 -5,500 -1,056 …

418 Commercial Real Estate Co. 14,465 44,650 -68 -13,285 17,215 …

419 Sanam Real Estate Co. 115 1,435 -92 -1,910 222 …

420 A'ayan Real Estate Co. 6,878 6,169 11 210 2,703 -92

421 Aqar Real Estate -1,180 1,735 … -1,439 566 …

422 Kuwait Real Estate Holding -1,429 2,236 … -4,712 -907 …

423 Al Mazaya Holding 13,046 24,571 -47 -39,988 3,296 …

424 Al Dar National Real Estate -27,072 1,398 … -22,855 460 …425 Al-Themar International Holding … 20,278 … … 10,954 …

426 Grand Real Estate Projects … 20,756 … … 3,702 …

427 Tijara & Real Estate Investment -3,159 5,706 … -7,161 1,589 …

428 Tameer Real Estate Investment -5,139 649 … -4,346 -226 …

429 Arkan Al-Kuwait Real Estate 2,936 3,531 -17 … 685 …

430 Gulf Horizon Holding … 817 … … 98 …

431 Al-Argan International Real Estate 9,760 9,140 7 2,545 3,287 -23

432 Abyarr Real Estate Development Co. 5,957 16,840 -65 -18,368 4,349 …

433 Munshaat Real Estate Projects Co. 9,675 27,217 -64 4,091 … …

434 First Dubai For Real Estate Development 620 4,525 -86 -33,914 … …

Industrial

501 National Industries -281,963 209,364 … -383,775 1,403 …

502 Kwt Pipes Industries & Oil Services -44,523 14,409 … -33,959 -3,430 …

503 Kuwait Cement 4,312 54,824 -92 -15,844 4,879 …

504 Refrigeration Industries 218 1,070 -80 -287 174 …

505 Gulf Cable & Electrical Industries 3,237 26,912 -88 -20,297 4,078 …506 Heavy Engineering Ind. & Shipbuilding 684 4,842 -86 1,376 -226 …

507 Contracting & Marine Services 861 4,062 -79 -1,193 49 …

508 Kuwait Portland Cemen t -8,625 10,828 … -5,082 -2,708 …

509 Shuaiba Paper Products 203 524 -61 -1,168 285 …

510 Metal & Recycling -5,108 1,427 … -6,735 54 …

511 Kuwait Foundry -3,850 9,299 … -5,476 2,837 …

512 Aerated Concrete Industries 6,531 22,080 -70 -1,720 15,188 …

513 United Industries -11,230 27,937 … -12,991 -701 …

514 Boubyan Petrochemical Co. … 52,630 … … 14,076 …

515 Gulf Glass Manufacturing 1,888 1,118 69 669 -97 …

516 Al-Hilal Cement 684 6,636 -90 -576 204 …

517 Al Kout Industrial Projects Co. 2,596 3,749 -31 -216 759 …

518 Kuwait Packaging Materials Manufac. 1,444 2,046 -29 173 514 -66

519 Kuwait Building Materials Manufac. 245 849 -71 -271 122 …

520 National Industries Co. for Bldg. -9,315 12,577 … -16,406 3,430 …

521 Gulf Rocks Co. 3,034 2,048 48 -215 728 …522 Equipment Holding -9,303 212 … -10,678 906 …

523 Global Holding Group 26,502 57 46,537 12,176 -18 …

524 National Co. for Consumer Industries -160 2,388 … -233 -39 …

525 Kuwait Gypsum Manuf. & Trading 577 702 -18 81 129 -37

526 Qurain Petrochemical Industries -5,623 14,802 … -9,258 3,066 …

527 Salbookh Trading Co. … 1,465 … … … …

528 IKARUS Petroleum Industries -49,210 11,615 … -54,352 … …

Services

601 Kuwait Cinema 4,707 9,081 -48 -5,866 173 …

602 Kuwait Hotels 1,083 1,913 -43 40 308 -87

603 Agility 141,373 153,941 -8 33,566 34,693 -3

604 Kuwait Commercial Markets Complex 7,442 13,807 -46 -11,161 3,319 …

605 Zain Kuwait 322,002 320,455 0 86,838 85,369 2

606 Hasibat Holding Co. 1,515 362 318 -4,635 … …

607 Educational Holding Group 4,074 6,458 -37 2,992 4,602 -35

608 Independent Petroleum Group 5,600 6,725 -17 969 2,145 -55

609 National Cleaning Co. -1,690 532 … -2,952 259 …

610 The Sultan Center -5,426 16,891 … -17,007 -1,336 …

611 Al-Arabi Holding -4,333 1,694 … -4,466 -422 …

612 The Transport Group 2,928 3,556 -18 470 943 -50




14


)thousand KD(


2008 2007 % 2008 2007 %

613 Wataniya 82,429 80,749 2 14,250 21,388 -33

614 Kuwait & Gulf Link Transport Co. -7,986 10,722 … -9,104 2,562 …

615 Kuwait Cable Vision -3,622 1,466 … -2,630 -242 …

616 Automated Systems Co. -511 2,989 … -1,401 -42 …

617 National Petroleum Services Co. 193 1,547 -88 -736 505 …

618 Kuwait Co. For Process Plant Cons.& Cont. 1,761 1,507 17 -420 -33 …

619 Kuwait Slaughter House 145 320 -55 -156 -143 …

620 EYAS for Higher & Technical Education 1,187 2,373 -50 -480 255 …

621 Nibras Holding Co 1,722 644 167 … … …

622 Al Safwa Group -69,952 20,296 … -92,982 765 …

623 Human Soft Holding 342 4,601 -93 708 4,648 -85

624 Kuwait Privatization Project Holding -13,737 8,583 … -21,039 -1,351 …

625 Institute for Private Education … 758 … … 474 …

626 National Slaughter House 0 3 -92 -149 -171 …

627 Aref Energy Holding -3,499 1,038 … -10,135 440 …

628 Safwan Trading & Contracting 1,893 1,666 14 695 422 65

629 Gulf Petroleum Investment -5,402 6,528 … -10,443 2,890 …

630 Gulf Franchising -5,005 1,221 … -7,261 335 …

631 Credit Rating and Collection -1,115 1,333 … -1,838 -116 …

632 National Ranges Co. -27,062 9,003 … -50,141 2,634 …

633 Burgan Co. for Well Drilling … 9,509 … … 2,704 …

634 IFA Hotels & Resorts 37,464 22,821 64 … … …

635 Combined Group Contracting 8,496 8,693 -2 1,807 1,974 -8

636 Jeeran Holding … 4,563 … … 982 …

637 Palms Agro Production 309 1,102 -72 -261 517 …

638 Al-Safat Tec Holding Co. -8,052 3,008 … -11,645 303 …

639 Mushrif Trading & Contracting … -13,793 … … -9,911 …

640 United Projects Group 1,749 8,220 -79 -2,148 451 …

641 Al Abraj Holding 2,725 2,927 -7 … -345 …

642 Aviation Lease & Finance 10,055 9,130 10 … 3,524 …

643 Al-Mowasat Holding … 1,097 … … 244 …

644 Haj & Umrah Services Consortium -19,910 7,853 … -17,090 -609 …

645 Oula Fuel Marketing Company 3,195 4,040 -21 -770 1,029 …

646 Villa Moda Life Style … 723 … … 393 …

647 Future Communications 3,276 2,936 12 914 976 -6

648 Vending Network Company … 1,177 … … 129 …

649 Hayat Communication Co. 2,472 685 261 1,742 403 332

650 Mubarrad Transport Co. 3,400 558 509 90 96 -7

651 Kuwait Resorts Co. 481 4,894 -90 -2,650 2,432 …

652 Advanced Technology Co. 4,918 4,441 11 2,733 1,914 43

653 Yiaco Medical Company 779 2,277 -66 -1,211 … …

654 Jazeera Airways Co. 4,448 2,288 94 2,967 … …

655 Al Sour 3,361 3,119 8 1,062 … …

Food

701 Livestock Trading & Transport -2,618 3,296 … 631 -618 …

702 Danah Alsafat Foodstuff Company -5,219 14,649 … -10,228 -103 …

703 United Poultry -1,718 -1,433 … 298 -1,355 …

704 Kuwait Food Co (Americana) 35,223 54,964 -36 -2,745 11,159 …

705 United Foodstuff Industries 486 1,402 -65 -14 181 …

706 Kout Food Group 5,107 5,828 -12 1,949 5,381 -64

Non Kuwaities

803 Shuaa Capital + … … … … … …

804 Sharjah Cement & Industrial Dev. 21,478 30,954 -31 4,200 12,499 -66

805 Gulf Cement 169 31,225 -99 -14,566 5,412 …

806 Umm Al-Qaiwain Cement Industries 689 8,073 -91 -5,812 915 …

807 Fujairah Cement Industries 14,514 12,778 14 5,102 2,562 99

808 Ras Al-Khaimah for White Cement -6,055 11,878 … -10,046 2,031 …

809 Arab Insurance Group -8,162 6,571 … -5,269 3,669 …

810 United Gulf Bank 59,200 60,300 -2 -33,744 4,340 …

811 Egypt Kuwait Holding 16,787 16,153 4 -5,717 -3,281 …

812 Bahrain Kuwait Insurance 2,708 2,935 -8 133 291 -54

813 Gulf Finance House 80,677 93,449 -14 -230 28,860 …

814 Commercial International Bank 68,603 64,375 7 6,001 19,055 -69

817 Al Khaleej Development 26,254 12,339 113 7,405 1,832 304

818 Ahli United Bank 73,064 82,376 -11 -1,911 17,685 …

819 Bank of Bahrain and Kuwait 20,934 23,218 -10 6,598 4,177 58

820 Ithmaar Bank 6,334 29,359 -78 … … …+ Company has not yet reported results for the most recent period.

++ Company had not reported results for the previous period due to not being listed then.



15

K sk exhg

KSE rallies in April The Kuwait stock exchange (KSE) rallied 12%, to close at7557 in April, moving synchronously with other emergingand developed markets. The rise in global equity prices

which commenced in early March has been resilient thusar. Bullish sentiment has been boosted by better thanorecasted Q1 ‘09 results and central banks’ quantitativeeasing measures to ward o defation. Meanwhile, onthe domestic ront, oil prices reached a ve month high,which reinorced GCC market’s long term undamentals. Advancers (104) outnumbered decliners (34) by a largemargin. Trading activity increased to a daily average o KD134 million, up 97% rom the previous month. The rise involume illustrates an increase in investor condence asmarket jitters have abated, since the start o the nancialcrisis in October 08. On a value-weighted basis, the marketindex rose 10.7% in April.

All sector indices posted monthly gains in April. The bestperormers were industrial, real estate and investmentwith gains o 17.7%, 17.3 and 12.6 respectively. Theout perormance o the companies in these sectors ispredictable, due to the prevalence o equities held on theirbooks. A signicant stock market rally would shore up theirbalance sheets and postpone the need or new nancingas these companies can sell assets at higher prices tosettle any maturing debt.

On April 1, the Kuwait Stock Exchange suspended tradingin shares o 36 companies, mostly investment companies,or ailing to report their nancial results or 2008. By April30, only 7 o the remaining 36 were still suspended. Global

Investment House and Grand Real Estate Company haveresumed trading, while Investment Dar has not, sightingdiculty in valuing its assets as the cause behind thedelay in reporting. Investment Dar has also ocused on arestructuring plan, in consultation with its advisors CreditSuisse, or proposal to its banks and investors. KuwaitStock Exchange GM Saleh Al Falah has reiterated thatthe market will halt trading in rms ailing to report Q1 ‘09results by the deadline which ends on May 15.

Market capitalization rose to KD 31.3 billion at the end o April, up rom KD 28.6 billion one month earlier while theP/E ratio currently stands at 51.2.

Kse perFormance By sector, april 2009

p-

wgh % chg Kse ix mk c. % tg a p

Kse ix p-wgh v-wgh )million KD( mk )daily average( eg +

30-Apr-09 Apr-09 YTD 09 Apr-09 YTD 09 30-Apr-09 30-Apr-09 mn shares mn KD 30-Apr-09

Banking 8980 8.2 -7.9 9.2 -0.8 10,856 34.6% 56.8 35.3 14.5

Investment 6755 12.6 -9.6 12.2 -16.0 3,676 11.7% 199.8 23.0 …

Insurance 2772 9.6 -16.4 9.4 -22.5 318 1.0% 0.2 0.1 …

Real Estate 3242 17.7 -6.0 21.0 -5.0 2,213 7.1% 167.4 16.7 …

Industrial 5505 17.3 8.2 20.5 2.7 2,548 8.1% 39.7 12.9 …

Services 14848 10.4 -3.7 9.1 -0.9 7,487 23.9% 189.6 30.0 14.8

Food 3993 8.6 15.5 8.5 16.9 671 2.1% 10.3 0.9 21.5

Non-Kuwaiti 8492 7.2 7.4 6.2 1.6 3,563 11.4% 62.0 14.9 9.4

t mk 7557 12.0 -2.9 10.7 -2.6 31,332 100.0% 725.9 133.7 51.2

K c 27,769 663.9 118.8

+ Price to earnings )P/E( ratio uses 12-month trailing earnings figure for individual companies

For more information on individual companies please refer to NBK Capital

Kse daily perFormance

m i l l i o n K D

I n d e x

Value of Traded Shares (left) KSE Index (right)

April 2009

0

50

100

150

200

250

6400

6600

6800

7000

7200

7400

7600

7800

3027221914961

reBased perFormance

MSCI Kuwait MSCI GCCMSCI Emerging

0

20

40

60

80

100

120

140

160

180

Apr 09Jul 08Oct 07Jan 07 Apr 06



Head Office

KuwaitNational Bank of Kuwait SAKAbdullah Al-Ahmed StreetP.O. Box 95, Safat 13001Kuwait City, KuwaitTel: +965 2242 2011Fax: +965 2243 1888Telex: 22043-22451 NATBANK

www.nbk.com

International Network

BahrainNational Bank of Kuwait SAKBahrain BranchSeef Tower, Al-Seef District 428P.O. Box 5290, ManamaBahrainTel: +973 17 583 333Fax: +973 17 587 111

JordanNational Bank of Kuwait SAKAmman Branch

Shareef Abdul Hamid Sharaf StP.O. Box 941297Shmeisani, Amman 11194

JordanTel: +962 6 560 8800Fax: +962 6 560 8811

Saudi ArabiaNational Bank of Kuwait SAK

Jeddah BranchAl-Andalus Street, Red Sea PlazaP.O. Box 15385

Jeddah 21444, Saudi ArabiaTel: +966 2 653 8600Fax: +966 2 653 8653

LebanonNational Bank of Kuwait(Lebanon) SALBAC Building

Justinian Street, SanayehP.O. Box 11-5727, Riyad El SolhBeirut 1107 2200, LebanonTel: +961 1 759700Fax: +961 1 747866

IraqCredit Bank of IraqStreet 9, Building 178Sadoon Street, District 102P.O. Box 3420Baghdad, IraqTel: +964 1 7182198/7191944

+964 1 7188406/7171673Fax: +964 1 7170156

EgyptAl Watany Bank of Egypt13 Al Themar StreetGameat Al Dowal AlArabiaFouad Mohie El Din SquareMohandessin, Giza, EgyptTel: +20 233388816/33388817Fax: +20 2 33379302

United Arab EmiratesNational Bank of Kuwait SAKDubai Branch

Sheikh Rashed RoadPort Saeed AreaACICO Business ParkP.O. Box 88867, Dubai UAETel: +971 4 292 9222Fax: +971 4 294 3337

United States of AmericaNational Bank of Kuwait SAKNew York Branch299 Park AvenueNew York, NY 10171USATel: +1 212 303 9800Fax: +1 212 319 8269 United KingdomNational Bank of Kuwait(International) Plc

Head Office13 George StreetLondon W1U 3QJ, UKTel: +44 20 7224 2277Fax: +44 20 7224 2101

National Bank of Kuwait(International) PlcPortman Square Branch7 Portman SquareLondon W1H 6NA, UKTel: +44 20 7224 2277Fax: +44 20 7486 3877

NBK InvestmentManagement Limited

13 George StreetLondon W1U 3QJ, UKTel: +44 20 7224 2288Fax: +44 20 7224 2102

FranceNational Bank of Kuwait(International) PlcParis Branch90 Avenue des Champs-Elysees75008 Paris, FranceTel: +33 1 5659 8600Fax: +33 1 5659 8623

SingaporeNational Bank of Kuwait SAKSingapore Branch

9 Raffles Place #51-01/02Republic PlazaSingapore 048619Tel: +65 6222 5348Fax: +65 6224 5438

VietnamNational Bank of Kuwait SAKVietnam Representative OfficeRoom 2006, Sun Wah Tower115 Nguyen Hue Blvd, District 1Ho Chi Minh CityVietnamTel: +84 8 827 8008Fax: +84 8 827 8009

ChinaNational Bank of Kuwait SAKShanghai Representative OfficeSuite 1003, 10th Floor, Azia Center1233 Lujiazui Ring RoadShanghai 200120ChinaTel: +86 21 6888 1092Fax: +86 21 5047 1011

NBK Capital

KuwaitNBK Capital17th Floor, Dar Al-Awadi BuildingAhmed Al-Jaber Street, SharqP.O. Box 4950, Safat 13050KuwaitTel: +965 2224 6900Fax: +965 2224 6904 United Arab EmiratesNBK Capital Limited

Precinct Building 3, Office 404Dubai International Financial CenterP.O. Box 506506, DubaiUnited Arab EmiratesTel: +971 4 365 2800Fax: +971 4 365 2805

TurkeyNBK CapitalArastima ve Musavirlik ASSUN Plaza, 30th FloorDereboyu Sk. No.24Maslak 34398, Istanbul, TurkeyTel: +90 212 276 5400Fax: +90 212 276 5401

Associates

QatarInternational Bank of Qatar (QSC)Suhaim bin Hamad StreetP.O. Box 2001Doha, QatarTel: +974 447 3700Fax: +974 447 3710

TurkeyTurkish BankValikonagl CAD. 7Nisantasi 34371,Istanbul, Turkey

Tel: +90 212 373 6373Fax: +90 212 225 0353

C i ht N ti E i B i f i bli ti f N ti l B k f K it N t f thi bli ti ©

While every care has been takenin preparing this publication,National Bank of Kuwait acceptsno liability whatsoever for anydirect or consequential lossesarising from its use. Economic Briefis distributed on a complimentaryand discretionary basis to NBKclients and associates. This reportand previous issues can befound in the “Reports” sectionof the National Bank of Kuwait’sweb site. Please visit our website, www.nbk.com, for otherbank publications. For further

information please contactNBK Economic Research at:Tel: (965) 2259 5500Fax: (965) 2224 6973Email: [email protected]

kuwait economic brief 2009

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