(MENAFN - Arab Times) Kuwait Financial Centre 'Markaz' (KSE: Markaz, Reuters: MARKZ.KW, Bloomberg: MARKAZ: KK) announced a net profit of KD 2.82 million for the first quarter ending March 31, 2012, a net profit of 6 fils per share as compared with a KD 748,000 loss during the same period last year.
This positive result came on the back of positive performances in the markets. Markaz's investments witnessed strong growth, especially in the MENA real estate sector, as a result of their well poised allocation to benefit from the favorable market conditions in the GCC and International markets.
Markaz liquidity remains healthy providing Markaz with the ability to access opportunities. Our net debt stands at KD 32 million, or 36 percent of our shareholders' equity. Our total shareholders' equity has reached KD 87.7 million at the end of the quarter a net increase of 4.2 percent from year end 2011, and our assets under management reached KD 888 million, a net increase of 6 percent from year end 2011.
Markaz Chairman and MD, Diraar Y. Alghanim said "Markaz profit has grown because of its high quality assets and strong financial standing. Markaz positive results in the first quarter reflect its diverse base of assets and high solvency. In addition, available credit channels give Markaz the required flexibility to change its assets distribution, enabling the company to capitalize from the volatile investment environment."
Alghanim added, "In the local arena, the investment sector remains the main source of finance for grand projects and institutions through its ability to develop and manage various financial tools such as equity, bonds, Sukuk and mezzanine. We hope the current dialogue between public and private institutions will improve the various sectors of the State's economy."
Manaf Alhajeri, Chief Executive Officer at Markaz said "Several investment opportunities arose during the first quarter in a number of markets, such as the real estate market, the debt market and distressed debt market despite the recurring economic turbulence in the region of and the world. The main challenge for the Kuwaiti economy is to achieve sustainability and diversity of channels. This requires joint efforts by the government and the public sector to mobilize the concentration of liquidity from the weak channels to real productive projects that benefit all economic sectors."
Asset Management
Mena Equities
For the first quarter of 2012, Markaz flagship Kuwait focused funds Mumtaz and MIDAF closed with a gain of 3.9 percent and 1.8 percent respectively against an increase of 2.8 percent on their KIC Index benchmark. Markaz Islamic fund, focused on the Kuwait market, closed the quarter with a gain of 2.9 percent against an increase of 1.9 percent in its benchmark Al-Madar Index while our another Kuwait focused Forsa Fund, the only derivatives fund in the region returned 26.percent for the quarter. Our MENA focused Markaz Arabian Fund NAV gained 10.6 percent YTD against a gain of 15.9 percent in the benchmark S&P Pan Arab Composite Index.
International Investments
In the first quarter of this year, Atlas Diversified Class, investing in a portfolio of global funds, had a robust performance of 10.14 percent outperforming its benchmark by 84 basis points. Atlas Emerging Market Thematic Class Fund, which invests in a portfolio of Emerging Markets equity funds focusing on selected themes, grew 7.19 percent in Q1. Atlas ETFs Program, which allocates its assets into various Exchange Traded Funds globally increased 9.14 percent in the same period.
Private Equity
Following Q4 2011, the Private Equity market continued to show a slowdown globally. Aggregate buyout deals fell by 17 percent in North America, 21 percent in Europe, and 27 percent in Asia and the rest of the world. As of Q1 2012, Markaz Private Equity Portfolio realized a year-to-date return of 3.28 percent.
Investment Banking
Corporate Finance Advisory
Markaz executed several trades in distressed debt of Kuwaiti issuers, allowing the company to become a market maker for such debt.
Consistent with the market environment, Markaz continues to build strong capabilities in distressed debt transactions, restructuring advisory services (either representing creditors or corporations), liquidating non-core assets for Markaz clients, and raising fresh cap (debt and/or equity) for local corporations. Markaz currently has five assignments in the various activities described above.
Fixed Income
Markaz Fixed Income fund (MFIF), recorded a return of 1.34 percent during Q1 2012, and an absolute return of 3.30 percent since the fund's inception last year. As at the end of Q1 2012, the average credit rating of the MFIF's holdings was "A" with an average maturity of three years, while the average yield to maturity was 7.59 percent and the average coupon rate was 5.92 percent. MFIF's assets are allocated across the GCC and across various sectors.
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..
Mena Real Estate
Markaz Real Estate Fund
Markaz Real Estate Fund 'MREF" reached its maximum capital allowed of KD 50 million (par value) in March 2012 at that point we were able to secure CMA approval to increase the maximum capital of the fund to KD 100 million (renewed par value). "MREF" received additional subscriptions totaling KD 5.4 millions in Q1 2012 and deployed KD 9.5 millions in acquisition of new properties raising its portfolio of properties to 34. On the financial side, the fund continued to make steady monthly cash distributions to its investors.
Aradi Development investment
We are focusing our efforts toward the exit of the second of the two investments (Al Bandariah) in KSA Eastern province after completion and exit of the first investment (Al Nimr) during 2012.
KSA Residential investment
Markaz is proceeding with the development of 54 residential villas in Al Khobar KSA. Markaz team initiated the marketing and sales campaign in time with the completion of the mock-up and first four units in November 2011. Up to end of Q1 2012 we have sold 5 villas and expect to complete the sale of the developed villas by the end of 2012, and aims to generate 30 percent gross returns.
US Real Estate
In order to capitalize on the prevalent distress in the real estate debt markets, Markaz continues to grow its US distressed debt activity, seeking to invest in non-performing and sub-performing commercial mortgages in the US. During the first quarter of this year, Markaz added two additional transactions to our portfolio, bringing the total number of distressed debt acquisition to 13.
Oil and Gas
Markaz Energy Fund
Markaz manages "Markaz Energy Fund" (MEF) which invests in a diversified portfolio within the oil & gas sector. MEF's positive performance in the first quarter is attributed to the following:
n A partial reversal of the previous impairment of MEF's investment in Kosan Crisplant;
n Gains in the local and international equities as well as the fixed income portfolios;
n Record production and profits during Q1 2012 made by Kuwait Energy Company, one of MEF's investments operating in the exploration and production segment.
First Equilease
First Equilease (previously Kuwait First Transportation Company), a company that leases equipment primarily to contractors in the energy sector, has both Markaz and MEF as investors and has achieved 31.3% return on investment since inception. First Equilease continued to implement its expansion plans during Q1 2012.
National Real Estate Company reported that Board of Directors approved its interim financial statements for the first quarter ending March 31, 2012 dated May 15, 2012.
Particulars (3 months ending) March 31, 2012 March 31, 2011
Profit (loss) (KD) 2,163,164 886,034
EPS (fils) 2.79 1.14
Total current assets 44,199,700 53,190,203
Total assets 501,477,835 536,514,478
Total current liabilities 87,638,937 87,249,713
Total liabilities 312,403,510 305,852,342
Total shareholders' equity 189,074,325 230,662,136
The total revenue from transactions with related parties is worth KD 1,588,469.
Total expenses from transactions with related parties amounts to KD 30,804.
The Sultan Center Food Company obtained on May 15, 2012 the approval of the Board of Directors on its financial statements for the first quarter ending March 31, 2012.
Particulars (3 months ending) March 31, 2012 March 31, 2011
Profit (loss) (KD) 754,743 (2,918,708)
EPS (fils) 1.34 (5.17)
Total current assets 41,242,404 51,517,537
Total assets 281,227,125 314,183,860
Total current liabilities 217,227,061 210,517,482
Total liabilities 241,580,280 242,152,832
Total shareholders' equity 39,646,845 72,031,028
Total expenses from transactions with related parties amounts to KD 375,901.
Kuwait and Middle East Financial Investment Company (KMEFIC) obtained on May 15, 2012 the approval of the Capital Market Authority (CMA) on its financial statements for the Q1 - 2012.
Particulars (3 months ending) March 31, 2012 March 31, 2011
Profit (loss) (KD) 34,807 (1,42,959)
Earnings per share (fils) 0.13 (4.76)
Total current assets 22,917,345 24,963,694
Total assets 53,953,078 62,970,484
Total current liabilities 1,659,420 26,291,199
Total liabilities 29,449,834 27,600,721
Total shareholders' equity 22,898,223 33,588,487
The total revenue from transactions with related parties is worth KD 15,427.
Total expenses from transactions with related parties amounts to KD (214,474).
Board of Directors of Kuwait Pipes Industries and Oil Services Company met on May 15, 2012 and approved its financial statements for the Q1 " 2012.
Particulars (3 months ending) March 31, 2012 March 31, 2011
Profit (loss) (KD) (989,000) (4,706,761)
Earnings per share (fils) (4.39) (20.90)
Total current assets 141,504,735 180,391,521
Total assets 209,089,151 249,860,047
Total current liabilities 135,136,470 155,163,730
Total liabilities 186,637,641 220,139,329
Total shareholders' equity 20,564,463 27,254,472
The total revenue from transactions with related parties is worth KD 941,068.
Kuwait Stock Exchange announced that the Livestock Transport and Trading Company reported that the Board of Directors met onKu May 14, 2012 and approved the interim financial statements for the Q1 " 2012.
Particulars (3 months ending) March 31, 2012 March 31, 2011
Profit (loss) (KD) 1,395,280 (1,423,074)
EPS (fils) 6.66 (6.76)
Total current assets 36,487,961 36,515,464
Total assets 48,092,000 50,862,515
Total current liabilities 3,177,597 3,373,561
Total current liabilities 5,065,025 5,078,344
Total shareholders' equity 43,026,975 45,784,171
Total expenses from transactions with related parties amounts to KD 22,284
