Kuwait Financial Centre (Markaz) posted a net profit of KWD1.2 million and a 2 fils EPS in H1 2012, compared to a profit of KWD750,000 and a 2 fils EPS during the same period of 2011. Total equity grew by 23 per cent compared to the same period of 2011 to KWD155.39 million.
Diraar Alghanim, Chairman and Managing Director of Markaz said: “Despite the ongoing global financial crisis, which commenced in 2008, Markaz successfully honoured all of its financial commitments without any delays, resulting from the prudent and conservative financial management approach Markaz implements.
Markaz management continues to strive for excellence in good governance and responsible management practice, benchmarking those of the best global companies. Our financial management approach coupled with our effective corporate governance has enabled Markaz to maintain a ‘BBB’ credit rating from Capital Intelligence.
“Markaz follows a dynamic investment strategy which enables the firm to identify eligible investment opportunities.
Of these opportunities, advising local companies on restructuring and recapitalisation, as well as the increased demand for Kuwaiti distressed debt by regional and international investors, have been on the rise.
Markaz is constantly on the pursuit of new investment opportunities — which are made after thorough due diligence and risk assessment — spanning across different sectors and industries.”
Manaf Alhajeri, Chief Executive Officer of Markaz said: “Local and regional markets are continuously becoming unstable and highly volatile. As a result of the instability and volatility, the current situation requires market participants to be highly flexible and quick to react towards changes.
Therefore, it is essential for companies to provide up-to-date investment solutions, to keep up with the developments in the market place, as well as maneuver between different asset classes meeting the investors’ requirements. “Liquidity management will enable Markaz to benefit from investment opportunities in various fields with good returns and low risk. Lately the interest for income generating investments has increased in Kuwait and the GCC. Therefore, Markaz intends to expand on this class of investment in addition to the Company’s current promising investments.”
Mena Equities — Trading activity in local Kuwait market remained weak. Possible factors are the increasing volatility on the political front slowing down the Economic development and also affecting the investor confidence.
Kuwait’s banking sector continues to remain vulnerable resulting from its exposure to investment companies and also lack of lending opportunities, which has kept growth in credit to private sector sluggish. The department’s AUM as of June stood close to $2.1 billion of which 44 per cent was of discretionary managed funds and portfolios.
International Investments — After a robust start to the year in the first quarter, markets performed otherwise in the second quarter as fears of another Eurozone recession, sent international indices down for the quarter. Markets were unnerved by the political crisis in Greece and Spain fearing a systemic risk. After long-lasting debates, European Union leaders reached agreements that they hope will restore market confidence in the debt of Eurozone members. Private Equity — Markaz Private Equity Portfolio realized a year-to-date return of 4.65 per cent.
Corporate Finance Advisory — Markaz continues to witness a growing interest in distressed debt of Kuwaiti issuers by regional and international investors and has executed several trades in this space, allowing Markaz to become a market maker for such debt. The firm currently has five assignments and is actively working on creating value for its clients.
Fixed Income — Markaz Fixed Income Fund (MFIF), recorded a YTD return of 1.34 per cent for the Q2 2012 and an absolute return of 3.30 per cent since the fund was launched last year.
Structured Finance — Markaz has been the sole options market maker in the Middle East since 2005. The company continues to develop and stimulate options market as it has many benefits to traders in the Kuwaiti market, especially the derivatives market.