Revenues total KD 12.129b in the first 7 months of FY 2018/19

Dubai stock market biggest loser in November Al-Shall Index

Kuwait Clearing Company (KCC) issued its report regarding “Trading Volume According to Nationality and Category” for the period of 01/01/2018 to 30/11/2018 as published on the official website of Boursa Kuwait. The report indicated that individuals still form the largest trading category despite the drop in their share. They captured 37.4% of total value of sold shares (49.8% for the first 11 months of 2017) and 36.7% of total value of purchased shares (48.8% for the first 11 months of 2017). Individual traders sold shares in the amount of KD 1.430 billion and purchased shares worth KD 1.375 billion with a net sold trading at KD 28.297 million, says Al-Shall Economic Report prepared by Al-Shall Consulting Co headed by Jassem AlSaadoun.

The second largest contributor to the market’s liquidity is the institutions and companies sector which captured 34.1% of total value of purchased shares (21.4% for the same period of 2017) and 27.4% of total value of sold shares (20.9% for the same period of 2017) which are becoming the closest competitor to the individual traders, and their contribution is increasing. This sector purchased shares worth KD 1.280 billion and sold shares worth KD 1.026 billion, making them the only net purchased trading value of KD 253.382 million.

The third contributor to market liquidity is the clients’ accounts (portfolios) sector which captured 23.5% of total value of sold shares (22.4% for the same period of 2017) and 20.9% of total value of purchased shares (20.9% for the same period of 2017). This sector sold shares worth KD 880.037 million and purchased shares worth KD 784.004 million, with a net sold trading value of KD 96.033 million.

The last contributor to liquidity is the investment funds sector which captured 11.7% of total value of sold shares (7.7% for the same period of 2017) and 8.3% of total value of purchased shares (9% for the same period of 2017). This sector sold shares worth KD 439.586 million and purchased shares worth KD 310.534 million, making it the most sector with a net sold trading of KD 129.052 million.

Boursa Kuwait still continues to be a domestic Boursa with more share for Kuwaiti traders being the biggest trading group. They sold shares worth KD 3.045 billion, capturing 81.2% of total sold shares (88.3% for the same period of 2017), and purchased shares worth KD 2.834 billion capturing 75.6% of total value of purchased shares (86.5% for the same period of 2017). Becoming the most selling with a net trading value of KD 211.255 million. This indicates a continuous trend for the local investors to drop their investments in the domestic Boursa.

Percentage share of other investors out of the total purchased shares value, scored 19.1% (9.3% for the same period of 2017), and purchased shares worth KD 715.233 million and sold shares worth KD 485.388 million, 12.9% of total sold shares (8% for the same period of 2017); thus making their trading value the only purchasing with a net purchased of KD 229.844 million. This means that the foreigner investor’s confidence in the domestic Boursa is increasing and the appetite of the investors from outside the Gulf region has grown to invest more in the local Boursa, after the latest promotion regarding the local Boursa, plus some of its companies are listed in foreign indexes.

GCC Investors’ share out of total value of sold shares scored 5.8% (3.6% for the same period of 2017) worth KD 218.589 million, while value of purchased shares scored 5.3% (4.3% for the same period of 2017) worth KD 199.999 million, with the net sold trading value of KD 18.590 million.

The relative distribution among nationalities differed slightly from its predecessor. Kuwaitis occupied 78.4%, other nationalities occupied 16% and GCC traders’ share captured 5.6%, versus 87.4%, 8.6% and 3.9% for Kuwaitis, other nationalities and GCC traders respectively, for the same period of 2017. This means Boursa Kuwait remained domestic with most shares allocated to the local investor but their contribution is heading to a decrease. The non-Kuwaiti investors from outside the GCC outweighed that from within the GCC states, with the dominance of trading for individuals.

Number of active accounts between the end of December 2017 and the end of November 2018 dropped by -23.4%, compared with an increase by 9.6% between

The photo show the Boursa Kuwait trading floor. The market was upbeat during the week.

the end of December 2016 and the end of November 2017. Number of active accounts in the end of November 2018 scored 13,645 accounts or 3.53% of total accounts versus 13,692 accounts in the end of October 2018, 3.55% of total accounts for the same month, a decrease by -0.3% during November 2018.

The Monthly Report of the State’s Financial Administration

Accounts – October 2018

In its monthly follow-up report for the State’s Financial Administration until October 2018 (as published on its website), the Ministry of Finance indicates that total realized revenues until the end of the seventh month of the current Fiscal Year 2018/2019 scored KD 12.129 billion, about 80.4% higher than total estimated revenues for the entire fiscal year in the amount of about KD 15.089 billion.

In details, actual oil revenues until 31/10/2018 scored about KD 11.362 billion, i.e. 85.3% of the estimated oil revenues for the entire current fiscal year in the amount of KD 13.318 billion, or about 93.7% of total collected revenues. The average Kuwaiti oil price for the past part of the year scored US$ 72 per barrel. An amount of KD 766.338 million was collected from non-oil revenues during the same period, a monthly average by KD 109.477 million, while the total estimated amount for the entire year was about KD 1.772 billion. This means that the realized amount, if it continues at the same level, will be less for the entire fiscal year by about KD 457.8 million than the estimated.

Expenditures allocations for the current fiscal year were estimated at about KD 21.5 billion, of which an amount of KD 7.516 billion has been actually spent according to the bulletin until 31/10/2018. An amount of KD 1.486 billion has been obligated and considered as spent, raising the total expenditures – the actual and the obligated – to KD 9.001 billion. The monthly average expenditure is about KD 1.286 billion.

Though the bulletin concludes that the budget achieved at the end of the 7th month of the current fiscal year a KD 3.127 surplus before deducting the 10% of revenues to the interest of the Future Generations Reserve, we publish it without recommending relying on it. The monthly spending average will increase significantly by the end of the fiscal year. The surplus figure by the end of the fiscal year relies mainly on oil prices and production volume in the remaining 5 months of the fiscal year. We expect it to drop to KD 1 billion-KD 1.5 billion with the probability of changing into deficit if oil prices continue at their current low level.

Comparative Performance of Selected Stock Market –

November 2018

The performance of November was negative for the majority of sample market, during which 8 markets out of 14 achieved losses while 6 markets achieved positive performances. As a result of such performance, 6 markets remained in their positions in the positive zone in terms of their performance since the beginning of the year versus their performance in November. This suggests that most of the other markets did not recover completely after October’s negative performance during which most markets achieved high losses.

The biggest loser in November was Dubai stock market which lost in one month -4.2% raising its losses since the beginning of the year from -17.4% in the end of October to -20.8% in the end of November. The second biggest loser was Abu Dhabi market whose index lost -2.7% in November. However, it ended the month as the third biggest gainer since the beginning of the year by 8.4% gains. The third major loser was the Saudi market with -2.6% losses, but it remained as the fourth biggest gainer since the beginning of the year by 6.6%. Followed by the British market with -2.1% losses, then the French and the German markets by -1.8% and -1.7% losses respectively, perhaps as a result of the outcomes of Brexit.

The Indian market was the biggest gainer in November and added about 5.1% to its index. These gains promoted it to the fifth position from position sixth since the beginning of the year by 6.3% gains. The second biggest gainer was the Japanese market whose index gained 2% and contrary to its performance in October when it settled at the bottom of the loser zone. The third biggest gainer was the American market whose index added about 1.7% during November, then the Kuwaiti stock market came next by 1.4% according to Al Shall Index and 1.3% according to the Boursa’s All Share Market Index. According to Al Shall Index, Boursa Kuwait achieved the second position on the gainers list since the beginning of the year by about 10.6%. Bahrain stock market gained 1.1% in November, then Qatar Stock Exchange by 0.6%. Though Qatar was the lowest gainer among other gainers it remained the biggest gainer since the beginning of the year by about 21.6%.

Burgan Bank Financial Results

– 30 September 2018

Burgan Bank announced results of its operations for the first nine months of the current year, which indicate that the bank’s net profit (after tax deductions) scored KD 71.7 million, a rise by KD 14.4 million or by 25.1%, compared with KD 57.3 million in the same period of 2017. The rise in the bank’s net profits is due to the rise in total operating income against a lower rise in total operating expenses. Therefore, the bank’s operating profit rose by KD 23.9 million or by 23.5%, and scored KD 125.7 million compared with KD 101.8 million.

In details, total operating income increased by KD 27.3 million or by 15.2%, and scored KD 206.6 million compared with KD 179.3 million in the same period of 2017. That resulted from rise in item of net interest income by KD 12.63 million or by 10%, and scored KD 138.66 million compared with KD 126.03 million. Items of dividends income and net gain from foreign currencies rose by KD 17.3 million and scored KD 26.2 million compared with KD 8.9 million. While item of net investment income decreased by KD 5.9 million, scoring KD 1.8 million compared with KD 7.7 million.

Total operating expenses increased by a lesser value than the increase in total operating income, by KD 3.3 million or by 4.3% and scored KD 80.9 million compared with KD 77.6 million. Percentage of total operating expenses to total operating income scored 39.2% versus 43.3%. Total provisions rose by KD 8.31 million or by 23.1%, and scored KD 44.26 million compared with KD 35.95 million in the same period of last year. Therefore, the net profit margin rose to 26% compared with 23% in same period of 2017.

The bank’s financial statements indicate that total assets declined by KD 578.3 million or by 7.8%, and scored KD 6.837 billion versus KD 7.415 billion in the end of 2017. It dropped by KD 229.2 million or by 3.2%, if compared with the total assets in the same period of 2017, when it scored KD 7.006 billion. Item of loans and advances portfolio decreased by KD 252.3 million or by 5.7%, and scored KD 4.155 billion (60.8% of total assets) versus KD 4.408 billion (59.4% of total assets) in the end of 2017. It declined by 6.6% or by KD 294.8 million, compared with KD 4.450 billion (63% of total assets). Percentage of total loans and advances to total deposits scored about 74.6% compared with 79.9%. Also, Item of dues from banks and other financial institutions dropped by KD 145.7 million or by 23.1%, and scored KD 486.3 million (7.1% of total assets) compared with the end of 2017 when it scored KD 632 million (8.5% of total assets), dropped by 8% or by KD 42.5 million compared with KD 528.8 million (7.5% of total assets) in the same period of last year. Figures indicate that the bank liabilities (excluding total equity) decreased by KD 605.8 million or by 9.3%, and scored KD 5.942 billion compared with KD 6.548 billion in the end of 2017. If we compare total liabilities with its value in the same period of last year, we will note it dropped by KD 245.6 million or by 4%, as it scored KD 6.187 billion. Percentage of total liabilities to total assets scored 86.9% versus 87.6%.

Results of analyzing financial statements calculated on annual basis indicate that all bank’s profitability indexes rose compared with the same period of 2017. The average return on capital (ROC) rose to 43.4% compared with 36.4%. The average return on equities (ROE) rose to 13.8% versus 10.8%. Likewise, the average return on bank’s assets (ROA) increased to 1.34% versus 1.07%. Earnings per share (EPS) rose to 26.6 fils versus 19.2 fils. (P/E) scored 7.0 times (improved) compared with 13.8 times, due to the rise in EPS by 38.5% against a decrease in the market share price by 29.2% compared with the same period of last year. (P/B) scored 0.6 times compared with 0.9 times in the same period of last year.

The Weekly Performance of

Boursa Kuwait

The performance of Boursa Kuwait for last week was mixed compared to the previous one, where the traded value and the general index increased, while the traded volume and the number of transactions index decreased. Al Shall Index (value weighted) closed at 436.6 points at the closing of last Thursday, showing an increase by 8.8 points or by 2.1% compared with its level last week. Also, it increased by 49.6 points or by 12.8% compared with the end of 2017.

The following tables summarize last week’s performance of Boursa Kuwait.