Volume 30 – Issue 33 – 23rd August 2020

dsPrepared by Economic Research Unit – AlShall Consulting Co. – Tel: +965 22451535 – Fax: +965 22422619

1Financial and Monetary Statistics –June 2020

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2Gulf Bank Financial Results – First Half 2020

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3The Weekly Performance of Boursa Kuwait

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1Financial and Monetary Statistics – June 2020

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In its monthly statistical bulletin for June 2020as published on its website, the Central Bankof Kuwait (CBK) stated that the balance oftotal public debt instruments (includingsecurities bonds and transactions since April2016) has decreased by KD 1.500 billioncompared in the end of June 2019, reachingKD 1.472 billion in the end of June 2020,4.1% out of 2020 GDP which is estimated tobe KD 36.2 billion (EIU estimates). Theaverage interest rate (return) on treasurybonds for a one-year term was 1.500%,1.625% for 2 years, 1.750% for 3 years,1.875% for 5 years, 2.000% for 7 years and2.125% for 10 years. Local banks capture100% of the total public debtinstruments (100% in the end of June 2019).

The CBK bulletin states that total creditfacilities for residents offered by local banksin the end of June 2020 scored KD 39.335billion, about 54.2% of total local banks’assets, rising by KD 1.453 billion indicating agrowth rate by 3.8% over its level in June2019. Total personal facilities scored KD16.421 billion or 41.7% out of total creditfacilities (KD 15.976 billion in the end of June2019) and rising by 2.8%.

Total value of installment loans was at KD11.932 billion or 72.7% of the total value ofpersonal facilities. Share of facilities providedfor the purchase of securities scored KD2.635 billion, 16% of total personal facilities.Value of consumer loans amounted to KD1.477 billion. Credit facilities to the real estatesector amounted to KD 9.114 billion or 23.2%

of the total (KD 8.615 billion in the end of June2019). This means that about two-thirds of thecredit facilities went to personal and realestate facilities. Nearly KD 3.707 billion or9.4% went to the trade sector (KD 3.430 billionin the end of June 2019), and KD 2.067 billionor 5.3% went to the industry sector (KD 1.997billion in the end of June 2019), KD 1.970billion or 5% went to the construction sector(KD 2.008 billion in the end of June 2019), andKD 1.117 billion or 2.8% went to the non-bankfinancial institutions (KD 1.159 billion in theend of June 2019).

The bulletin also indicates that total depositsat local banks were at KD 45.022 billion,representing 62.1% of total local banksliabilities, rising by KD 997 million above itsamount in the end of June 2019 at a growthrate of 2.3%, due to the increase in the publicsector deposits by KD 363.1million and alsoan increase in the private sector deposits byKD 633.9 million. About KD 37.749 billion or83.8% belongs to clients of the private sectorin its comprehensive definition includingmajor institutions like the -PublicInstitution for Social Securities- does notinclude the government. About KD 35.354billion were in Kuwaiti Dinars, 93.7% went toprivate sector clients and the equivalent of KD2.395 billion was in foreign currency to privatesector clients.

As for the average interest rate on customerdeposits for a term, both in the Kuwaiti Dinarand the US Dollar compared to the end ofJune 2019, the bulletin states that the in

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ifference in average interest rate is still infavor of the Kuwaiti Dinar in the end of thetwo periods. The difference was at 0.797points for 1-month deposits, 0.824 points for 3months, 0.863 points for 6-month depositsand 0.886 points for 12-month deposits.While that difference in the end of June 2019was at 0.764 points for 1 month deposits,0.727 points for 3-month deposits, 0.738points for 6-month deposits and 0.742 pointsfor 12-month deposits. The monthly averageexchange rate for the Kuwaiti Dinar againstthe US Dollar in June 2020 scored 307.816Kuwaiti Fils for each US Dollar, a rise by1.4% compared with the monthly average forJune 2019 when it scored 303.494 Fils perone US Dollar.

Gulf Bank Financial Results First Half 2020

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Gulf Bank announced its results for the firsthalf of the current year which indicate thatthe bank achieved profits (after taxdeductions) of KD 11.8 million, a decreaseby KD 12.2 million or by 50.9% comparedwith KD 24 million in June 2019. Thisdecline in the bank profits was due to thedecrease in total operating income by ahigher value than the decrease in totaloperating expenses. Therefore, theoperating profit decreased by KD 11.9million and scored KD 43.7 million versusKD 55.6 million.

In details, total operating income scored KD77.2 million indicating a decline by KD 18.4million or by 19.2%, compared with KD 95.6million. This was achieved due to the drop ofall items of the operating income, mostimportantly item of net interest income thatdropped by KD 13.2 million or by 17.7%,reaching KD 61.3 million versus KD 74.5million.

2Total operating expenses of the bank roseby KD 6.4 million or by 16.2%, and scoredKD 33.5 million compared with KD 39.9million in the first half of 2019, due to therise in items of staff expenses and otherexpenses by a total of KD 7 million.Percentage of total operating expenses tototal operating income scored 43.4%compared to 41.8% in the same period oflast year. Total provisions increased by KD866 thousand or by 2.8%, scoring KD 31.4million versus KD 30.5 million. Therefore,the bank's net profit margin dropped to15.2% of total operating income comparedto 25.1% in the first half of 2019.

Financial statements show that the bank’stotal assets decreased by KD 220.1 millionor by 3.5%, reaching KD 6.025 billion versusKD 6.245 billion in the end of 2019. Whiletotal assets increased by KD 14.4 million orby 0.2%, when compared with the sameperiod of 2019 at KD 6.011 billion. Item ofloans and advances to customersdecreased by KD 35.6 million or by 0.8%,and scored KD 4.189 billion (69.5% of totalassets) versus KD 4.225 billion (67.6% oftotal assets) in the end of 2019. While itrose by KD 233.7 million or by 5.9%, whencompared with the same period of 2019when it scored KD 3.955 billion (65.8% oftotal assets). Percentage of total loans andadvances to customers to total deposits andother balances scored 80.2% versus 76.8%.

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Figures indicate that the Bank's liabilities(excluding total equity) decreased by KD155.1 million or by 2.8%, to about KD 5.426billion compared with the end of 2019 whenit reached KD 5.581 billion. However, itincreased by KD 40 million at a 0.7% growthrate, when compared with the first half of2019. Percentage of total liabilities to totalassets scored 90.1% versus 89.6% duringthe same period of the previous year.

Results of analyzing financial statementscalculated on annual basis indicate that allbank profitability indexes decreasedcompared with the same period of 2019.

Average return on assets (ROA) dropped to0.4% versus 0.8%. Average return oncapital (ROC) decreased to 7.7% versus15.7%. Average return on equities (ROE)also declined to 3.7% versus 7.6%. Thebank’s earnings per share (EPS) declined to4 Fils versus 8 Fils. (P/E) scored 26.5 timesversus 18.9 times, as a result of thedecreased EPS by 50% against a lowerdecrease in the market share price by 30%.(P/B) scored 1.1 times compared to 1.5times for the same period of 2019.

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3The Weekly Performanceof Boursa Kuwait

The following tables summarizeLast weeks performance of Boursa Kuwait

The performance of Boursa Kuwait for last week was more active where the traded value, tradedvolume, number of transactions and the general index increased (AlShall index). AlShall Index(value weighted) closed at 458.7 points as of last Wednesday, showing an increase by 6.1 pointsor by 1.3% compared with its level last week. While it remained lower by 94.5 points or by 17.1%compared with the end of 2019.

DescriptionWeek 33 Week 32 Difference

19/08/2020 13/08/2020 %Working days 4 5

AlShall index (33 Companies) 458.7 452.6 1.3%Boursa All Share Market Index 5,213.0 5,126.1 1.7%

Value Trade (KD) 195,838,400 152,869,740Daily average (KD) 48,959,600 30,573,948 60.1%

Volume Trade (Shares) 902,014,186 925,733,955Daily average (Shares) 225,503,547 185,146,791 21.8%

Transactions 44,717 34,052Daily average (Transactions) 11,179 6,810 64.1%

% of TotalValue TradedDescription

MarketKDSectors

27.5%53,938,193SHAMAL AZ-ZOUR AL-OULA POWER AND WATER COMPANY K.S.C.P

13.3%26,094,787 AHLI UNITED BANK (B.S.C)9.8%19,094,405 KUWAIT FINANCE HOUSE7.5%14,614,743 NATIONAL BANK OF KUWAIT7.3%14,217,470 AGILITY PUBLIC WAREHOUSING COMPANY

65.3%127,959,598 Total% of Total Value TradedDescription

MarketKDSectors39.9%78,226,064BANKS SECTOR27.5%53,938,193UTILITIES SECTOR13.8%27,063,031INDUSTRIALS SECTOR8.0%15,640,083FINANCIAL SERVICES SECTOR6.0%11,684,071TELECOMMUNICATIONS SECTOR

Most Active Sectors & Companies

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Week 32Week 33ALSHALL INDEX

13/08/202019/08/2020

19 16 Increased Value (# of Companies)9 11Decreased Value (# of Companies)5 6Unchanged Value (# of Companies)

3333Total Companies

Company Name WED THU DIFF CLOSE DIFF19/08/2020 13/08/2020 % 2019 %

1 National Bank Of Kuwait 574.0 561.2 2.3 706.9 (18.8)2 Gulf Bank 174.7 163.3 7.0 246.2 (29.0)3 Commercial Bank Of Kuwait 530.5 530.5 0.0 545.9 (2.8)4 Al-Ahli Bank Of Kuwait 111.3 110.0 1.2 167.6 (33.6)5 Kuwait International Bank 196.9 193.5 1.8 297.0 (33.7)6 Ahli United Bank 289.5 279.6 3.5 358.5 (19.2)7 Burgan Bank 210.1 200.1 5.0 328.1 (36.0)8 Kuwait Finance Bank 2,061.1 2,050.4 0.5 2,492.0 (17.3)

Banking Sector 541.0 531.0 1.9 668.5 (19.1)9 Commercial Facilities Company 132.8 137.1 (3.1) 156.6 (15.2)

10 International Financial Advisors 92.5 89.8 3.0 160.3 (42.3)11 National Investments Company 137.2 129.6 5.9 173.7 (21.0)12 Kuwait Projects Company (Holding) 395.7 387.9 2.0 566.1 (30.1)13 Coast Investment & Development Co. 45.0 42.9 4.9 54.7 (17.7)

Investment Sector 167.1 165.3 1.1 222.9 (25.0)14 Kuwait Insurance Company 76.1 76.1 0.0 72.8 4.515 Gulf Insurance Company 313.6 330.8 (5.2) 376.4 (16.7)16 Al-Ahleia Insurance Company 151.7 150.2 1.0 160.7 (5.6)17 Warba Insurance Company 66.2 69.5 (4.7) 50.8 30.3

Insurance Sector 134.5 137.4 (2.1) 144.7 (7.0)18 Kuwait Real Estate Company 166.0 157.1 5.7 189.1 (12.2)19 United Realty Company 97.9 97.9 0.0 125.0 (21.7)20 National Real Estate Company 197.0 198.7 (0.9) 253.6 (22.3)21 Salhiaha Real Estate Company 1,647.4 1,615.1 2.0 1,683.8 (2.2)

Real Estate Sector 195.3 191.8 1.8 221.8 (11.9)22 The National Industries 141.2 142.1 (0.6) 215.3 (34.4)23 Refrigeration Industries Co 239.7 250.2 (4.2) 370.8 (35.4)24 Gulf Cable & Electrical Industries 238.2 232.2 2.6 195.0 22.2

Industrial Sector 148.5 149.3 (0.5) 190.3 (22.0)25 Kuwait National Cinemas 407.4 426.8 (4.5) 657.8 (38.1)26 The Public Warehousing Co 3,641.7 3,783.4 (3.7) 4,198.3 (13.3)27 Mobile Telecommunications Co (ZAIN) 1,103.0 1,053.1 4.7 1,134.3 (2.8)28 Safat Energy Co 15.7 16.4 (4.3) 21.3 (26.3)

Services Sector 1,320.6 1,318.7 0.1 1,460.6 (9.6)29 Livestock Transport & Trading Co 155.8 162.5 (4.1) 145.8 6.930 Danah Alsafat Foodstuff Company 10.8 10.8 0.0 14.5 (25.5)

Food Sector 452.6 454.2 (0.4) 450.6 0.431 Sharjah Cement Co 175.8 175.8 0.0 175.8 0.032 Gulf Cement Co 144.8 151.6 (4.5) 221.4 (34.6)33 Umm Al-Qaiwain Cement Industries 490.8 490.8 0.0 490.8 0.0

Non Kuwaiti Companies 168.3 169.5 (0.7) 181.7 (7.4)General Index 458.7 452.6 1.3 553.2 (17.1)

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