MENA Asset Management Survey 2012 - National Bank of Abu Dhabi

Kuwait
Economic Developments
In 2012, real GDP growth is forecast to have decelerated to 6% year-on-year, down
from an estimated 8.2% in 2011. Higher oil prices and output continued to bolster the
country’s current account and budget balances estimated at 44.5% and 30.2% of GDP,
respectively. Growth in pace of non-oil activity is estimated to have picked up to over 5%
in 2012 despite cabinet changes and concerns about the pace of the development plan’s
implementation. Kuwait has consistently run large surpluses in recent years giving the
government the space to launch a four year development plan estimated to amount
to US$ 55 billion in early 2010. The plan which will be key to the pace of non-oil sector
growth envisages private sector involvement through private-public partnerships and
build-operate-transfer projects and targets total spending including private sector to
reach US$ 100 billion for the project. It focuses on investment in health, education, and
infrastructure and has the objective of transforming Kuwait into a regional trade and
financial center.
In 2013, real GDP growth is forecast to slow to 3.9% as oil output is not expected to rise
at the pace that it has in the past two years.
Industry Overview 1
There are 22 banks (11 local - of which 6 are Islamic banks -, 10 branches of foreign
banks, and one specialised bank) and 93 investment companies (down from 100 in June
2010 and 95 in 2011). Out of the total number of investment companies, 50 are sharia
compliant. According to the IMF, “investment sector assets were the equivalent of 64%
of 2011 GDP. Assets under management by these fell 15% in 2011 driven by markets
and redemptions. Investment companies continue to face a difficult environment. 15
listed investment companies have not published financial statements in recent quarters,
or have been suspended or delisted from the Kuwait Stock Exchange”.
1 A detailed survey of the investor profile in Kuwait is provided in “Mutual Funds in
Kuwait: Market Survey of Current Investors and Potential investors of Mutual Funds in
Kuwait”, Institute of Banking Studies, 2007.
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