Kuwait Economic Brief - National Bank of Kuwait
Kuwait Economic Brief - National Bank of Kuwait
Kuwait Economic Brief - National Bank of Kuwait
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
June 2010<br />
<strong>Kuwait</strong>: 3.0% growth this year, all<br />
eyes on government projects...<br />
An update <strong>of</strong> recent developments<br />
in select sectors in <strong>Kuwait</strong><br />
published by <strong>Economic</strong> Research<br />
at NBK<br />
<strong>Kuwait</strong> <strong>Economic</strong> <strong>Brief</strong>
<strong>Economic</strong> <strong>Brief</strong> - June 2010
<strong>Economic</strong> <strong>Brief</strong> - June 2010<br />
Introduction...........................................Page 4<br />
<strong>Kuwait</strong>: 3.0% growth this year, all eyes on<br />
government projects<br />
Oil Market...............................................Page 6<br />
Crude prices fall sharply on global financial<br />
turmoil... <strong>Kuwait</strong> could see a KD6 bn budget<br />
surplus in FY10/11…<br />
Public Finance.......................................Page 8<br />
FY09/10 preliminary accounts: Stronger capital<br />
spending… Large KD 6.0 bn surplus expected<br />
Monetary Developments....................Page 10<br />
April credit picks up mildly, led by a small<br />
advance in the “productive” sectors<br />
Real Estate...........................................Page 11<br />
Slight increase in real estate sales during April,<br />
led by commercial and appartments sales.<br />
Corporate Earnings.............................Page 13<br />
Improved pr<strong>of</strong>its in the first quarter<br />
<strong>Kuwait</strong> Stock Exchange......................Page 17<br />
Hurt by deteriorating international markets.<br />
<strong>Kuwait</strong>’s crude oil price and production<br />
2.30<br />
90<br />
2.28<br />
80<br />
mn barrels/day<br />
2.26<br />
70<br />
2.24<br />
60<br />
2.22<br />
50<br />
2.20<br />
40<br />
May-09 Aug-09 Nov-09 Feb-10 May-10<br />
Oil Output (left)<br />
Oil Price (right)<br />
monetary indicators<br />
(y/y percent growth)<br />
25<br />
20<br />
15<br />
10<br />
5<br />
0<br />
Apr-09 Jul-09 Oct-09 Jan-10 Apr-10<br />
Money Supply (M2)<br />
Credit Facilities<br />
dollars per barrel<br />
<strong>Kuwait</strong>’s Population & Labor Force...Page 18<br />
2009: surge in private sector <strong>Kuwait</strong>i<br />
employment…<br />
Real estate sales activity<br />
1200<br />
150<br />
Balance <strong>of</strong> Payments..........................Page 20<br />
Large drop in current account surplus limited<br />
the accumulation <strong>of</strong> foreign assets in 2009 …<br />
Higher surplus projected this year<br />
number<br />
1000<br />
800<br />
600<br />
400<br />
100<br />
50<br />
0<br />
% y/y<br />
200<br />
-50<br />
0<br />
2007 2008 2009 2010<br />
Sales Volume (LHS)<br />
Sales values (RHS)<br />
-100<br />
KUWAIT STOCK EXCHANGE<br />
200<br />
9000<br />
150<br />
8000<br />
million KD<br />
100<br />
7000<br />
6000<br />
index<br />
50<br />
5000<br />
0<br />
May-09 Aug-09 Nov-09 Feb-10 May-10<br />
4000<br />
Value <strong>of</strong> Traded Shares (left)<br />
KSE Index (right)<br />
3
<strong>Economic</strong> <strong>Brief</strong> - June 2010<br />
<strong>Kuwait</strong>: 3.0% growth this year, all eyes on government<br />
projects<br />
<strong>Kuwait</strong>’s economy is improving and set to grow 3.0%<br />
in real terms this year. Most sectors are steady and/or<br />
improving:<br />
- the consumer sector which had been the steadier<br />
through last year’s weakness is still holding up well.<br />
- the real estate sector is showing improvement in recent<br />
months and is returning to levels <strong>of</strong> activity not seen<br />
since 2007-08, except in commercial real estate, where<br />
oversupply is weighing on the sector.<br />
- the so-called “productive” sectors (trade, industry,<br />
construction, etc) are finally and tentatively showing signs<br />
<strong>of</strong> life, after a protracted period <strong>of</strong> stagnation. It is no<br />
surprise that these sectors were the most impacted by the<br />
crisis/weakness <strong>of</strong> 2008-09.<br />
- the oil sector is recovering along with world demand, and<br />
is expected to grow 1.4% this year in real terms.<br />
- the non-oil sector should grow 4.0% this year, to yield<br />
the 3.0% overall performance we project.<br />
Data for the first few months <strong>of</strong> this year support this view<br />
<strong>of</strong> gradual improvement, and we expect the 2010 pace<br />
<strong>of</strong> growth to accelerate toward a 4-5% clip by 2011-12,<br />
depending on the government’s ability to deliver on large<br />
plans and projects in coming months.<br />
The world economy which had looked stable for some<br />
time is now again raising concerns around Greece, and<br />
other over indebted states and their macroeconomic<br />
impact on Europe and beyond. Now, the GCC economies<br />
have little direct exposure to Greek debt or Greek banks,<br />
and similarly for other distressed borrowers (Portugal,<br />
Spain, etc). However, we have seen in recent weeks that<br />
these remote events have pressured oil/energy prices and<br />
stock markets worldwide. Oil prices are still around USD<br />
70 pb and the <strong>Kuwait</strong> stock market is still up slightly on a<br />
year-to-date basis, even after the severe correction <strong>of</strong> the<br />
last two weeks.<br />
The Consumer<br />
Consumer confidence (ARA index) is back near its best<br />
levels <strong>of</strong> 2009 following a dip in the third quarter. The<br />
improvement <strong>of</strong> the past few months coincided with the<br />
passage <strong>of</strong> the 5-year plan and other legislation. There<br />
has also been, until very recently at least, better world<br />
economic news and the announcement <strong>of</strong> Zain going<br />
through with the sale <strong>of</strong> its African assets.<br />
Better sentiment is reflected in plans to purchase durables<br />
(chart 1) and continued spending and borrowing by<br />
consumers (chart 2). Consumer debt did slow in April<br />
for special reasons, but the trend should remain steady,<br />
supported by a moderate growth outlook and expectations<br />
<strong>of</strong> improvement next year.<br />
Investors<br />
Similar improved sentiment is witnessed on the investor<br />
side. The stock market (KSE) did have a good run prior<br />
to the last (Greece/Europe related) correction. Investors<br />
did put some money to work in the market as well as in<br />
real estate investment/apartments property, in search <strong>of</strong><br />
yield (chart 3). Sales have returned to pre-crisis volumes<br />
for residential and investment property. The commercial<br />
side <strong>of</strong> real estate still lags, in particular the <strong>of</strong>fice building<br />
segment where oversupply remains a problem.<br />
Business<br />
More generally business sentiment has also been on a<br />
steady improvement in the last few quarters (Dunn and<br />
Bradstreet (chart 4)), again perhaps in part thanks to the<br />
improved world economy and to anticipation related to<br />
the 5-year plan. The business sector is <strong>of</strong> course more<br />
sensitive to the economic cycle than the consumer, and<br />
the business slowdown was marked during the recession<br />
<strong>of</strong> 2009.<br />
Business or corporate loans, which did slow significantly<br />
last year (chart 1), have stabilized in recent months. They<br />
may be about to recover the rest <strong>of</strong> this year. April data<br />
did show better business lending activity. For example,<br />
lending to trade/industry/construction (together) was up<br />
CONSUMER CONFIDENCE INDEX (ARA)<br />
personal facilities vs corporate credit (%y/y)<br />
120<br />
160<br />
40<br />
40<br />
115<br />
150<br />
35<br />
35<br />
110<br />
140<br />
30<br />
30<br />
105<br />
130<br />
25<br />
25<br />
100<br />
120<br />
20<br />
20<br />
95<br />
110<br />
15<br />
15<br />
90<br />
100<br />
10<br />
10<br />
85<br />
90<br />
5<br />
5<br />
80<br />
80<br />
Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10<br />
Consumer confidence index (LHS) Durable Goods (RHS)<br />
0<br />
0<br />
Apr-07<br />
-5<br />
Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10<br />
-5<br />
Personal Facilities Excluding Securities (LHS) Corporate (Ind., Trd & Const)
KD 60 million in April, matching its best performance <strong>of</strong><br />
the past 7 months.<br />
Inflation<br />
Inflation has dwindled over the course <strong>of</strong> 2009 from a high<br />
<strong>of</strong> 11.6% y/y (Aug 2008) to 2.1% in December 2009 (chart<br />
5). The most recent data, January 2010, show a rate <strong>of</strong><br />
2.8% y/y. With the economy and commodity prices rising,<br />
we expect that inflation will average 4.2% this year, almost<br />
the same as last year. This would be near the average <strong>of</strong><br />
the past few years and, by itself, should not prompt any<br />
policy changes.<br />
Budget and government finances<br />
The preliminary budget numbers for FY 2009/10 show a<br />
surplus <strong>of</strong> KD 8.2 billion. We expect that number will be<br />
revised, close to KD 6.0 billion, when the final accounts<br />
are released. It would be the 12th consecutive surplus<br />
and would leave the state’s finances in superb shape,<br />
giving it flexibility and latitude to stand behind the projects<br />
<strong>of</strong> the 5-year plan. (One half <strong>of</strong> the KD 31 billion worth <strong>of</strong><br />
projects for the next 4 years is expected to be financed by<br />
the public sector.)<br />
though, the speed <strong>of</strong> execution on the government’s<br />
projects remains crucial. Of the major projects, the Sabiya<br />
power plant, Jaber el Ahmad Hospital, and the Jahra<br />
motor way were awarded in 4Q2009, worth a total <strong>of</strong> KD<br />
948 million (USD 3.3 billion). More similar projects are in<br />
the process <strong>of</strong> being tendered and awarded this year. This<br />
type <strong>of</strong> spending will affect the economy once financed,<br />
and the project actually started. The money will <strong>of</strong> course<br />
be spent and enter the economy over time. These large<br />
projects are multi-year projects. Nonetheless as more<br />
<strong>of</strong> the projects, large and small, in the 5-year plan are<br />
tendered, awarded, financed, etc. the more they will add<br />
to growth and the sooner we will get to the 5% or better<br />
GDP growth rate expected beyond 2010.<br />
Government and conclusion<br />
Official action continues apace. After passage the 5-year<br />
plan and the Capital Markets Authority law, we now have<br />
the new privatization law. For growth the next few years<br />
real estate sales (3-mos avg. mmkd)<br />
140<br />
120<br />
40<br />
35<br />
100<br />
30<br />
25<br />
80<br />
20<br />
60<br />
15<br />
40<br />
10<br />
20<br />
5<br />
0<br />
0<br />
Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10<br />
Residential (LHS) Apartments (LHS) Commercial (RHS)<br />
consumer price index (%y/y)<br />
20<br />
18<br />
20<br />
18<br />
16<br />
16<br />
14<br />
14<br />
12<br />
12<br />
10<br />
10<br />
8<br />
8<br />
6<br />
6<br />
4<br />
4<br />
2<br />
2<br />
0<br />
0<br />
Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10<br />
CPI<br />
Housing (27% <strong>of</strong> CPI)<br />
business confidence index (d&B)<br />
data on the kuwaiti economy<br />
70<br />
60<br />
50<br />
40<br />
30<br />
20<br />
10<br />
0<br />
-10<br />
-20<br />
Sales<br />
Volume<br />
Net Pr<strong>of</strong>its<br />
New Orders<br />
Received<br />
Level Of<br />
Selling<br />
Prices<br />
Level <strong>of</strong><br />
Stocks<br />
3Q09 4Q09 1Q10 2Q10<br />
Number <strong>of</strong><br />
Employees<br />
Variable 2008 2009e 2010f<br />
Economy<br />
Nominal GDP KD bn 39.8 31.1 35.0<br />
Nominal GDP % y/y 22.0 -22.0 13.0<br />
Real GDP % y/y 3.0 -3.3 3.0<br />
Hydrocarbon % y/y 1.7 -10.0 1.4<br />
Non-Hydrocarbon % y/y 4.0 1.4 4.0<br />
Budget balance % GDP 19.7 19.0 9.0<br />
Current account % GDP 43.7 25.9 37.2<br />
Prices<br />
Crude oil prices 1 USD 97.2 61.6 70<br />
Consumer prices % y/y 10.6 4.0 4.2<br />
Source: CBK, NBK/ThomsonReuters Ecowin; forecasts are NBK<br />
1<br />
Brent crude
<strong>Economic</strong> <strong>Brief</strong> - June 2010<br />
Oil Market & Budget Developments<br />
Crude prices fall sharply on global financial turmoil...<br />
<strong>Kuwait</strong> could see a KD6 bn budget surplus in<br />
FY10/11…<br />
Flight to US dollar may have assisted crude sell-<strong>of</strong>f…<br />
Crude oil prices fell sharply in May, posting their biggest<br />
correction since the crash <strong>of</strong> 2008. The price <strong>of</strong> <strong>Kuwait</strong><br />
Export Crude (KEC) fell some USD 18 from a peak <strong>of</strong> USD<br />
84.3 per barrel (pb) in early May to a low <strong>of</strong> USD 66.0 pb<br />
on May 26th, its lowest since September last year. Some<br />
<strong>of</strong> these losses were quickly reversed, however, with the<br />
price bouncing back above USD 70 by the end <strong>of</strong> the<br />
month.<br />
The catalyst for the fall was intensifying fears over<br />
the escalating debt burden <strong>of</strong> various governments<br />
– especially in Europe – and the associated risks <strong>of</strong> both<br />
economic relapse and financial turmoil. Such fears also<br />
helped generate a sharp rise in the US dollar – a traditional<br />
safe haven. The trade-weighted dollar index leapt 4%<br />
in the first three weeks <strong>of</strong> May to its highest level in ten<br />
months. A rising dollar tends to put downward pressure<br />
on crude prices.<br />
Deepwater oil spill could continue through August…<br />
This crisis atmosphere played out alongside growing<br />
concern about the impact <strong>of</strong> the oil spill at BP’s Deepwater<br />
Horizon operations in the Gulf <strong>of</strong> Mexico. Although<br />
estimates <strong>of</strong> the size <strong>of</strong> the spill differ greatly, the US<br />
government puts the volume <strong>of</strong> leaking oil at 12,000-<br />
19,000 barrels per day (bpd). While the immediate focus<br />
<strong>of</strong> attention is on the calamitous environmental fallout<br />
<strong>of</strong> the spill – which it is now thought could last until<br />
August - some observers have identified the crisis as a<br />
potential obstacle for plans to expand US <strong>of</strong>fshore drilling<br />
operations.<br />
…but no visible impact on crude prices so far…<br />
So far, the impact <strong>of</strong> the oil spill has been felt more on BP’s<br />
share price – which has fallen by one-quarter - than on<br />
crude oil prices, probably because the quantities <strong>of</strong> oil lost<br />
are relatively small. The price <strong>of</strong> West Texas Intermediate<br />
(WTI) crude fell by even more than KEC in May – a peakto-trough<br />
drop <strong>of</strong> USD 21 – while the year-end 2012<br />
futures contract price fell by USD 18 to USD 58 pb.<br />
Analysts see solid rise in global oil demand in 2010…<br />
Analysts continue to tweak their forecasts for 2010 global<br />
oil demand growth, though most agree that this year<br />
will see a solid increase. The Centre for Global Energy<br />
Studies (CGES) has revised up its forecast for demand<br />
growth by 0.2 mbpd, to a strong 1.8 mbpd (2.1%). It<br />
brushed <strong>of</strong>f the impact <strong>of</strong> the European debt crisis on the<br />
global economy (though acknowledging the rising risk <strong>of</strong><br />
a further slump). The International Energy Agency (IEA),<br />
meanwhile, sees oil demand growth <strong>of</strong> 1.6 mbpd, slightly<br />
lower than last month, owing to their adoption <strong>of</strong> a higher<br />
oil price assumption. Although not extreme, these figures<br />
are at the stronger end <strong>of</strong> forecasts. OPEC, for example,<br />
expects more sedate growth <strong>of</strong> 1 mbpd this year, thanks<br />
to what it sees as vulnerabilities relating to the withdrawal<br />
<strong>of</strong> government stimulus packages. As in previous months,<br />
non-OECD countries are expected to account for most <strong>of</strong><br />
– if not all - the increase in demand.<br />
OPEC sees output rise; plays down drop in oil<br />
prices…<br />
Crude output <strong>of</strong> the OPEC-11 (i.e. excluding Iraq) continued<br />
its steady rise in April, increasing by 58,000 bpd on the<br />
month, to 26.905 mbpd. Overall production stands nearly<br />
2.1 mbpd above its <strong>of</strong>ficial quota levels. Both Nigeria and<br />
Iran – already producing well in excess <strong>of</strong> their <strong>of</strong>ficial<br />
targets - saw month-on-month increases <strong>of</strong> around<br />
25,000 bpd. Although OPEC representatives played<br />
down the sharp May fall in prices, the drop may move the<br />
cartel to try and restrain any further creeping production<br />
increases. For now at least, <strong>of</strong>ficials have declared that the<br />
organization has no plans to discuss output levels before<br />
the next scheduled gathering in October. If it remains at<br />
current levels, OPEC crude output should average around<br />
0.6 mbpd higher this year than in 2009.<br />
Solid gains in both demand and supply seen in<br />
2010…<br />
Although both the demand and supply <strong>of</strong> oil are expected to<br />
see decent sized gains this year, there remain considerable<br />
kuwait export crude<br />
(dollars per barrel)<br />
95<br />
90<br />
85<br />
80<br />
75<br />
70<br />
65<br />
60<br />
55<br />
50<br />
4Q09 1Q10 2Q10 3Q10 4Q10 1Q11<br />
Future price projections correspond to NBK’s price scenarios.<br />
KEC PRICE SCENARIOS<br />
(dollars per barrel)<br />
Scenario<br />
Low Price Base Case High Price<br />
2009 60.4 60.4 60.4<br />
1Q10 74.4 74.4 74.4<br />
FY09/10 68.6 68.6 68.6<br />
2Q10f 74.7 76.8 77.7<br />
3Q10f 67.6 75.9 80.8<br />
4Q10f 58.0 74.6 87.0<br />
2010f 68.7 75.4 80.0<br />
1Q11f 57.0 73.9 89.2<br />
FY10/11f 64.3 75.3 83.7
isks on both sides. On the demand side, problems in the<br />
Euro zone could – even without a ‘double dip’ recession<br />
– generate enough uncertainty to significantly downgrade<br />
global demand. There are also concerns about the<br />
possibility <strong>of</strong> an abrupt slowdown in Chinese economic<br />
growth, which could be <strong>of</strong> even greater significance for<br />
oil prices. On the supply side, meanwhile, the main risk<br />
could be that the solid increases expected in both non-<br />
OPEC crude (+0.6 mbpd) and OPEC natural gas liquids<br />
(+0.6 mbpd) disappoint, as they have sometimes done in<br />
the past.<br />
…which could leave prices range bound…<br />
Assuming that neither <strong>of</strong> these events occurs, increases<br />
in demand and supply – at around 1.8 mbpd - may turn<br />
out to be broadly <strong>of</strong>fsetting, implying no great changes<br />
in market fundamentals for the year as a whole. In that<br />
case, prices might remain more or less range bound, at<br />
between USD 70-75 pb, dipping slightly in 2H10 as the<br />
big year-on-year gains in demand fall away. The price <strong>of</strong><br />
KEC would average USD75 for FY2010/11.<br />
KD 6bn budget surplus possible in FY10/11…<br />
The While the government’s spending plans have not<br />
yet been finalized, the above scenarios could yield the<br />
<strong>Kuwait</strong>i government another large fiscal surplus this fiscal<br />
year. Total revenues would be between 15% lower and<br />
16% higher than our estimates for FY2009/10. Public<br />
spending, on the other hand, could rise by between 26-<br />
48% this year, partly due to big increases in spending<br />
under the 5-year development plan and partly due to a<br />
large transfer to the Public Institute for Social Security.<br />
Based upon these assumptions, the government’s budget<br />
position for FY2010/11 would end-up between balance<br />
and a surplus <strong>of</strong> KD 6.3 billion. This comes on top <strong>of</strong> what<br />
may have been a KD 7 billion surplus in FY2009/10 (<strong>of</strong>ficial<br />
figures are not yet available).<br />
Weaker global economic growth could send prices<br />
lower…<br />
Under a s<strong>of</strong>ter global economy scenario, demand growth<br />
could come in some 0.3 mbpd lower than expected, at<br />
1.5 mbpd. Unless OPEC withdraws some supplies from<br />
the market, prices would tumble to below USD 60 pb at<br />
the end <strong>of</strong> this year – and perhaps lower still in 1Q11. For<br />
FY2010/11 as a whole, they average USD 64.<br />
Upside risk to prices if non-OPEC supply increases<br />
fail to materialize…<br />
But should the anticipated sizeable increase in non-OPEC<br />
oil supply fail to materialise – leaving output 0.2 mbpd<br />
lower - crude prices would quickly recover from their<br />
recent stumble and push on towards the USD 90 pb mark<br />
by early next year. The price <strong>of</strong> KEC would average USD<br />
84 pb in FY2010/11.<br />
BUDGET FORECAST<br />
(million KD, unless otherwise noted)<br />
Under Alternative Oil Price Scenarios<br />
FY 2009/10 FY 2010/11<br />
Official Low Base High Possible Low Base High<br />
Budget Price Case Price Budget Price Case Price<br />
Oil Price ($/barrel) 35.0 68.6 68.6 68.6 43.0 64.3 75.3 83.7<br />
Total Revenues 8,075 17,998 17,998 17,998 9,719 15,358 18,019 20,868<br />
Oil Revenues 6,925 16,848 16,848 16,848 8,617 14,256 16,917 19,766<br />
Non-Oil Revenues 1,150 1,150 1,150 1,150 1,102 1,102 1,102 1,102<br />
Expenditures (<strong>of</strong>ficial) 12,116 12,116 12,116 12,116 16,162 16,162 16,162 16,162<br />
Surplus (deficit) -4,041 5,882 5,882 5,882 -6,443 -804 1,857 4,706<br />
After RFFG -4,849 4,083 4,083 4,083 -7,415 -2,339 55 2,619<br />
Expenditures (NBK estimate) 11,150 11,207 10,904 15,354 14,950 14,546<br />
Surplus (deficit), NBK estimate 6,488 6,791 7,094 5 3,069 6,322<br />
After RFFG 4,688 4,991 5,294 -1,531 1,267 4,236
<strong>Economic</strong> <strong>Brief</strong> - June 2010<br />
Public Finance<br />
FY09/10 preliminary accounts: Stronger capital<br />
spending… Large KD 6.0 bn surplus expected<br />
The 12-month follow up statement for the fiscal year<br />
2009/10 (FY09/10) reveals a preliminary surplus <strong>of</strong> KD 8.2<br />
billion (bn), compared to the KD 4 bn deficit projected in<br />
the budget. We expect the final number to be near KD 6.0<br />
billion when the closing accounts are released very soon.<br />
The surplus would be the 11th consecutive surplus for <strong>Kuwait</strong>.<br />
Total revenues reached KD 17.9 bn, more than double the<br />
amount expected, thanks to higher than assumed oil prices.<br />
At KD 9.7 billion, preliminary expenditures were 81%<br />
<strong>of</strong> budgeted, versus a historical average <strong>of</strong> 74%, indicating<br />
better reporting and/or faster disbursement by government<br />
agencies. Though total reported expenditures were<br />
down 35% from a year ago, the drop reflects the absence<br />
<strong>of</strong> an extra-ordinary transfer to the social security fund<br />
that amounted to KD 5.5 bn in the previous fiscal year.<br />
Excluding this transfer, and all other transfers and spending<br />
categories that do not affect domestic demand, such<br />
as spending on military hardware and the cost <strong>of</strong> fuel used<br />
in power generation, demand-impacting expenditures<br />
saw a significant increase <strong>of</strong> 18% (y/y). These expenditures,<br />
which have more impact on economic growth, represented<br />
roughly two thirds <strong>of</strong> the total. The final accounts<br />
are likely to reveal significantly different figures since most<br />
categories <strong>of</strong> expenditure are typically revised higher when<br />
the closing figures are released.<br />
The price <strong>of</strong> <strong>Kuwait</strong> Export Crude (KEC) averaged USD<br />
68.3 pb during FY2009/10, well ahead <strong>of</strong> the USD 35 pb<br />
number assumed in the budget. As a result, oil revenues<br />
came at 243% <strong>of</strong> the amount budgeted, reaching KD 16.8<br />
bn. Compared to FY2008/09, however, oil revenues were<br />
down 15.2% as oil prices and production fell last year.<br />
These revenues, which reflect only the value <strong>of</strong> crude oil<br />
produced, represented 94% <strong>of</strong> total revenues, in line with<br />
the previous 5 years.<br />
Reflecting the slump in economic activity last year, non-oil<br />
revenues were also down, 14.3% y/y. By the end <strong>of</strong> 2009<br />
(3QFY2009/10), however, these revenues had been down<br />
26%. The apparent “improvement” in non-oil revenues in<br />
the first quarter <strong>of</strong> 2010 may indicate improving business<br />
conditions, especially in the real estate market. For the<br />
whole fiscal year, “income tax revenues” (-23%) were hit<br />
by lower proceeds from corporate income taxes (-42%).<br />
“Property fees” fell 9.3%, reflecting waning real estate activity<br />
last year.<br />
In contrast, “Service charges”, more related to consumer<br />
activity, ended the fiscal year up 11%. We know the consumer<br />
sector held out relatively well throughout the slowdown.<br />
The major contributor to the drop in non-oil revenues<br />
was “miscellaneous revenues and fees”, down 44%.<br />
demand-impacting expenditureS (12 months into fy)<br />
KDmn<br />
1,200<br />
1,000<br />
800<br />
600<br />
400<br />
200<br />
0<br />
2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10<br />
Capital Expenditure (LHS)<br />
80<br />
70<br />
60<br />
50<br />
40<br />
30<br />
%<br />
Capital Expenditures/Budgeted (% RHS)<br />
REVENUES AND EXPENDITURES - FISCAL YEAR 2009/10 - 12-MONTH COMPARISON<br />
(million KD)<br />
12 Months<br />
Interim Report Budget Change Actual / Budget (%)<br />
FY08/09 FY09/10 08/09 09/10 (%) FY09/10 Historical*<br />
Total Revenues 21,133 17,925 12,679 8,074 -15 222 228<br />
Oil Revenues 19,878 16,848 11,653 6,924 -15 243 245<br />
Non-Oil Revenues 1,254 1,077 1,026 1,150 14 94 124<br />
Total Expenditures 15,040 9,747 18,966 12,115 -35 80 74<br />
Excluding Transfer to PIFSS 8,765 9,030 12,656 11,377 3 79 69<br />
Wages and Salaries 2,131 2,669 3,210 3,476 25 77 74<br />
Goods and Services 2,415 2,071 3,077 2,354 -14 88 75<br />
Vehicles and Equipment 62 174 179 344 182 51 31<br />
Projects, Maintenance and Land Purchases 945 989 1,665 1,265 5 78 43<br />
<strong>of</strong> which: Electricity and Water 591 584 699 560 -1 104 59<br />
Public Works 193 266 385 371 38 72 56<br />
Misc. Exp. and Transfers 9,488 3,844 10,836 4,676 -59 82 82<br />
Miscellaneous Expenditures 1,041 1,254 1,345 1,354 20 93 82<br />
Transfers to Public Institutions 7,175 1,691 7,537 1,925 -76 88 85<br />
<strong>of</strong> which: Social Security (PIFSS) 6,276 717 6,310 738 -89 97 96<br />
Surplus (deficit) 6,092 8,178 -6,287 -4,041 34 ... ...<br />
After RFFG 3,979 6,386 -7,555 -4,848 60 ... ...<br />
* 5-year average
In fact, excluding those, non-oil revenues would have been<br />
flat.<br />
Spending on “development projects, maintenance, and<br />
land purchases” was running faster than usual and contributed<br />
to the stronger spending picture. Despite being cut<br />
24% in the budget, “Chapter 4” expenditures were actually<br />
up 4.7% y/y (KD 989 million). More importantly, they were<br />
running at 78% <strong>of</strong> the amount budgeted compared to their<br />
43% average <strong>of</strong> the past five years. We expect the closing<br />
accounts to show an even higher spending rate as this<br />
chapter receives the largest adjustments in relative terms.<br />
Capital spending is set to grow further in FY10/11 as the<br />
government has budgeted KD 2.1 bn (perhaps more) for<br />
this chapter (+66%) and has reiterated its dedication and<br />
commitment to development projects and their execution.<br />
“Wages and salaries” saw the largest increase in spending<br />
this year, up 25% y/y (to KD 2.7 bn).<br />
In conclusion, much higher-than-expected revenues and<br />
lower-than-projected expenditures led to a KD 8.2 bn surplus<br />
in FY2009/10, before allocations <strong>of</strong> 10% <strong>of</strong> revenues<br />
to the Reserve Fund for Future Generations (RFFG). However,<br />
we reiterate that the <strong>of</strong>ficial closing numbers for the<br />
fiscal year are due soon and are likely to show upward revisions<br />
to spending. We could end up with a surplus close to<br />
KD 6 bn, or 19% <strong>of</strong> our estimate <strong>of</strong> 2009 GDP.<br />
demand-impacting expenditureS (12 months into fy)<br />
12<br />
30<br />
10<br />
25<br />
8<br />
20<br />
KDbn<br />
6<br />
15<br />
%<br />
4<br />
10<br />
2<br />
5<br />
0<br />
0<br />
2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10<br />
Other<br />
Capital Serv. & Eqpt. Total Salaries<br />
Growth in demand-impacting spending (RHS)<br />
NON-OIL REVENUES - FISCAL YEAR 2009/10 - 12-MONTH COMPARISON<br />
(million KD)<br />
12 Months<br />
Interim Report Budget Change Actual / Budget (%)<br />
FY08/09 FY09/10 08/09 09/10 (%) FY09/10 Historical *<br />
Non-Oil Revenues 1,254 1,077 1,026 1,150 -14 94 124<br />
Income & Pr<strong>of</strong>it Taxes 122 94 114 109 -23 87 137<br />
Property Transfer Fees 10 9 14 16 -9 58 112<br />
Customs Taxes and Fees 215 191 209 230 -11 83 122<br />
Service Charges 493 547 581 633 11 87 95<br />
Law Enforcement and Justice 50 67 56 62 33 107 113<br />
Education and Culture 3 3 5 4 -8 75 100<br />
Healthcare 63 68 63 87 8 78 110<br />
Housing and Public Facilities 41 47 38 43 14 108 112<br />
Water and Electricity 103 120 179 191 16 63 72<br />
Transportation and Communication 164 173 176 176 6 98 98<br />
Fiscal Stamp Fees 68 70 63 68 3 103 115<br />
Miscellaneous Revenues 411 231 104 159 -44 145 296<br />
* 5-year average
<strong>Economic</strong> <strong>Brief</strong> - June 2010<br />
Monetary Developments<br />
April credit picks up mildly, led by a small advance in<br />
the “productive” sectors<br />
April credit got a small boost from loans to the industrial<br />
sector. This <strong>of</strong>fset sluggishness in lending to the real estate<br />
sector and a drop in personal facilities. Meanwhile, private<br />
deposits in foreign currencies fell considerably in April. As<br />
a result, money supply (M2) fell KD 293 million (-1.1%) in<br />
April, pushing year on year (y/y) growth down to 1.7%.<br />
Credit shows some form after a 4- month slump<br />
Outstanding credit extended to residents rose KD 47<br />
million m/m (+0.2%) in April, breaking a four month slump<br />
that saw credit fall a combined KD 25 million. April’s upturn<br />
pushed up y/y growth to 4.5% from 3.9% in March, the<br />
first improvement in that rate in ten months.<br />
The bulk <strong>of</strong> the increase in April came from increasing<br />
loans to the industrial sector, up KD 68 million, and<br />
unclassified loans, up KD 51 million. Some <strong>of</strong> this increase<br />
in lending could have fallen under the umbrella <strong>of</strong> the<br />
financial stability law.<br />
remaining maturities fell between 1 and 3 bps. Rates<br />
averaged 1.08%, 1.29%, 1.52%, and 1.77%, for the 1, 3,<br />
6, and 12-month maturities, respectively.<br />
Comfortable liquidity in system<br />
Total bank assets fell KD 40 million in April. <strong>Bank</strong>s’ liquid<br />
assets (including net interbank deposits) also fell KD 72<br />
million, reducing its ratio to total assets 20 bps to 11.3%.<br />
Despite the drop in liquid assets, banks remained very<br />
comfortably liquid as average KIBOR (<strong>Kuwait</strong> interbank<br />
<strong>of</strong>fer rate) remained close to its lows during the month.<br />
Dinar strengthens versus Euro<br />
Since November <strong>of</strong> last year, the dinar has been gaining<br />
steadily vis-à-vis the Euro, reflecting the growing trouble in<br />
the Euro Zone. This trend only accelerated since the start<br />
<strong>of</strong> April, leading to an 8% appreciation <strong>of</strong> the dinar to the<br />
Euro by mid May. Meanwhile, the dinar is holding relatively<br />
steady against the dollar.<br />
Meanwhile, personal facilities (excluding loans for the<br />
purchase <strong>of</strong> securities) were flat in April, following a gain <strong>of</strong><br />
KD 86 million in March. Personal loans for the purchase <strong>of</strong><br />
securities fell KD 54 million, the fifth consecutive decline.<br />
Other sectors were either flat or down slightly.<br />
Resident deposits in foreign currency fall<br />
considerably<br />
Private resident deposits fell KD 314 million in April, due<br />
to a KD 383 million drop in foreign currency deposits.<br />
<strong>Bank</strong>s had adopted a relaxed attitude towards the<br />
building <strong>of</strong> deposits, which should explain the large<br />
drop in y/y deposits growth over the previous months<br />
as the system remains comfortably liquid and incoming<br />
funds linked to the Zain deal are expected to add further<br />
liquidity. However, it is also possible that individuals and<br />
businesses have experienced growing aversion in April to<br />
holding funds in foreign currencies amid volatile markets.<br />
Meanwhile, interest rates changes were somewhat mixed<br />
in April. Average rates <strong>of</strong>fered on 1-month KD private<br />
deposits rose 1 basis point in April, while rates on<br />
monetary indicators<br />
(year-on-year percent growth)<br />
40<br />
30<br />
20<br />
10<br />
0<br />
Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10<br />
Money Supply (M2) KD Resident Deposits Credit Facilities<br />
MONETARY HIGHLIGHTS - APRIL 2010<br />
Change<br />
Apr 2010 mom 3-mnth yoy<br />
mn KD % % %<br />
exchange rates<br />
0.32<br />
0.31<br />
0.45<br />
0.43<br />
Local <strong>Bank</strong> Assets 40,545 -0.1 1.0 3.2<br />
<strong>of</strong> which:<br />
Claims on Government 1,892 1.5 -1.6 -16.5<br />
Credit to Residents 25,176 0.2 0.3 4.5<br />
Foreign Assets 7,157 -1.5 -0.7 -14.2<br />
Money Supply (M2) 25,345 -1.1 0.8 1.7<br />
Private Deposits 24,521 -1.3 0.7 1.5<br />
KD Sight Deposits 4,539 2.1 7.8 14.5<br />
KD Savings Deposits 2,962 0.9 6.6 10.9<br />
KD Time Deposits & CDs 14,846 -0.3 1.3 4.1<br />
FC Deposits 2,175 -15.0 -19.9 -33.3<br />
0.30<br />
0.41<br />
0.29<br />
0.39<br />
0.28<br />
0.37<br />
0.27<br />
0.35<br />
0.26<br />
0.33<br />
Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10<br />
Dollar/Dinar (LHS)<br />
Euro/Dinar (RHS)<br />
10
Real Estate<br />
Slight increase in real estate sales during April, led by<br />
commercial and apartments sales<br />
The value <strong>of</strong> real estate sales increased slightly in April.<br />
A total <strong>of</strong> KD 96.7 million worth <strong>of</strong> transactions was<br />
registered, up by 8% from March. Year on year, sales fell<br />
by 42.6% in number and by 53% value. The rise in the<br />
value <strong>of</strong> sales was led by the commercial sector, which<br />
surged by 51%. Sales <strong>of</strong> apartments also rose by 13%,<br />
while residential sales dropped by 8%.<br />
More detailed data from the Ministry <strong>of</strong> Justice (MoJ,<br />
not shown in the tables) reveal that more than half <strong>of</strong><br />
all residential sector transactions were accounted for by<br />
sales <strong>of</strong> existing homes, rather than new plots. Meanwhile,<br />
two areas that are among the most active markets for<br />
privately held vacant plots, Abu Futaira and Ishbilya, both<br />
represented 58% <strong>of</strong> the total traded vacant residential<br />
plots. Despite the fact that these areas are relatively far<br />
sales activity, residential sector<br />
from <strong>Kuwait</strong> City, there has been an increased interest in<br />
them, perhaps due to the completion <strong>of</strong> infrastructure.<br />
Real estate sales have fallen significantly thus far in 2009,<br />
with the average value <strong>of</strong> sales during the first four months<br />
<strong>of</strong> the year 56% lower than the same period last year. The<br />
number <strong>of</strong> transactions was also 54% lower. Most <strong>of</strong> the<br />
decline in sales during the period occurred in residential<br />
property with their sales values and transactions down by<br />
62% and 63%, respectively.<br />
The apartments sector was also weaker, with the average<br />
<strong>of</strong> monthly sales values dropping by 62%. Meanwhile,<br />
the average transaction size rose 19.7% for commercial<br />
property, but declined by 57% for apartments.<br />
The number <strong>of</strong> Savings and Credit <strong>Bank</strong> (SCB) loans<br />
approved increased moderately by 2% to 460 in April over<br />
sales activity, apartments sector<br />
1000<br />
250<br />
200<br />
250<br />
number<br />
900<br />
800<br />
700<br />
600<br />
500<br />
400<br />
300<br />
200<br />
100<br />
0<br />
2007 2008 2009 2010<br />
Sales Volume (LHS)<br />
Sales values (RHS)<br />
200<br />
150<br />
100<br />
50<br />
% y/y<br />
0<br />
-50<br />
-100<br />
number<br />
180<br />
160<br />
140<br />
120<br />
100<br />
80<br />
60<br />
40<br />
20<br />
0<br />
2007 2008 2009 2010<br />
Sales Volume (LHS)<br />
Sales Value (RHS)<br />
200<br />
150<br />
100<br />
50<br />
0<br />
-50<br />
-100<br />
% y/y<br />
REAL ESTATE SALES & SCB HOUSING LOANS<br />
Monthly Avg. Feb Mar Apr % %<br />
Real Estate Sales 2008 2009 2010 2010 2010 M/M Y/Y<br />
Sales Values (mn KD) 156.2 108.7 99.5 205.8 177.2 -13.9 83.3<br />
Residential Property 74.8 55.5 53.0 141.6 97.4 -31.2 119.3<br />
Apartments 56.7 36.9 42.6 49.6 69.8 40.8 136.9<br />
Commercial 24.7 16.3 3.9 14.6 9.9 -32.1 -56.4<br />
Number <strong>of</strong> Transactions 514 382 383 760 744 -2.1 135.4<br />
Residential Property 381 277 255 598 558 -6.7 141.6<br />
Apartments 121 100 124 154 168 9.1 121.1<br />
Commercial 11 6 4 8 18 125.0 100.0<br />
Average Transaction Size (000 KD) 320.3 281.2 259.7 270.8 238.1 -12.1 -22.2<br />
Residential Property 203.3 199.3 207.6 236.8 174.6 -26.3 -9.2<br />
Apartments 477.2 373.3 343.8 321.9 415.5 29.1 7.2<br />
Commercial 2563.4 2880.6 972.5 1830.0 552.2 -69.8 -78.2<br />
Monthly Avg. Feb Mar Apr % %<br />
SCB Housing Loans 2008 2009 2010 2010 2010 M/ M Y/Y<br />
Value <strong>of</strong> Approved Loans (mn KD) 15.0 13.5 7.6 9.0 10.2 13.3 -42.5<br />
New Construction 10.2 8.0 2.6 3.1 3.1 -1.8 -71.6<br />
Purchase <strong>of</strong> Existing Homes 3.2 3.9 3.3 4.4 5.3 20.0 9.6<br />
Additions & Renovations 1.5 1.6 1.7 1.4 1.8 26.0 -10.8<br />
Number <strong>of</strong> Approved Loans 412 371 274 309 345 11.7 -25.0<br />
New Construction 195 126 50 60 53 -11.7 -68.6<br />
Purchase <strong>of</strong> Existing Homes 89 77 68 92 112 21.7 24.4<br />
Additions & Renovations 128 167 156 157 180 14.6 -10.4<br />
Value <strong>of</strong> Disbursed Loans (mn KD) 12.1 12.8 11.8 16.3 13.4 -18.1 -10.5<br />
New Construction 7.0 7.8 6.5 7.6 7.4 -3.2 -26.5<br />
Purchase <strong>of</strong> Existing Homes 3.6 3.3 3.7 6.8 4.2 -38.8 36.2<br />
Additions & Renovations 1.5 1.6 1.5 1.9 1.8 -2.8 -1.7<br />
11
<strong>Economic</strong> <strong>Brief</strong> - June 2010<br />
March, though the value <strong>of</strong> loans approved by the bank was<br />
down by 10.7%. Compared with March, approved loans<br />
for purchasing existing homes rose sharply, with number<br />
and value increasing by 84% and 146%, respectively. This<br />
increase is consistent with MoJ data showing a jump in<br />
purchases <strong>of</strong> existing homes during the month. Approved<br />
loans during the first four months <strong>of</strong> 2009 were up 158%<br />
in value and 43% in number compared with the same<br />
period last year.<br />
Meanwhile, the SCB disbursed KD 15 million in loans<br />
during April, 4% more than the previous month, though<br />
the year-to-date average was up by 12% compared to a<br />
year before.<br />
SALES ACTIVITY, COMMERCIAL SECTOR<br />
approved and disbursed loans by s&cb<br />
25<br />
600<br />
600<br />
250<br />
20<br />
500<br />
400<br />
550<br />
500<br />
200<br />
150<br />
number<br />
15<br />
10<br />
5<br />
300<br />
200<br />
100<br />
0<br />
-100<br />
% y/y<br />
number<br />
450<br />
400<br />
350<br />
300<br />
250<br />
100<br />
50<br />
0<br />
-50<br />
% y/y<br />
0<br />
2007 2008 2009 2010<br />
-200<br />
200<br />
2007 2008 2009 2010<br />
-100<br />
Sales Volume (LHS)<br />
Sales Value (RHS)<br />
Volume <strong>of</strong> loans (LHS)<br />
Value <strong>of</strong> loans (RHS)<br />
12
Corporate Earnings<br />
Improved pr<strong>of</strong>its in the first quarter<br />
Reported earnings for 199 listed companies stood at<br />
KD 411 million in 1Q10. Again, several companies failed<br />
to announce their results before the mandated deadline<br />
and trading on their shares was subsequently halted.<br />
Combined earnings <strong>of</strong> 168 companies that were listed<br />
in 2009 (same-company earnings) amounted to KD 372<br />
million, a remarkable 206% above last year’s first quarter.<br />
While results <strong>of</strong> <strong>Kuwait</strong> Stock Exchange listed companies<br />
improved markedly compared to the same period last year,<br />
they remain well below pre-crisis levels.<br />
Of the companies that announced first quarter results, 125<br />
reported pr<strong>of</strong>its while 52 suffered negative earnings. <strong>Bank</strong>s<br />
were the best performing sector accounting for 32% <strong>of</strong> total<br />
pr<strong>of</strong>its. <strong>Kuwait</strong>’s two largest banks, <strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong><br />
(NBK) and <strong>Kuwait</strong> Finance House (KFH), were among the<br />
top five performers with the former making up 19% <strong>of</strong> total<br />
earnings.<br />
“Real estate” was by far the worst performer in terms<br />
<strong>of</strong> year-on-year growth. At KD 11.1 million <strong>of</strong> aggregate<br />
earnings, the sector is down 63% on the year, reflecting<br />
the continued slowdown in the property market.<br />
While “Investment” was the only sector that posted a loss<br />
overall, the magnitude <strong>of</strong> the loss shrank considerably<br />
compared to large losses endured in the same period<br />
last year. Global Investment House, one <strong>of</strong> the country’s<br />
biggest investment companies (by assets), still tops the<br />
worst performers list with losses <strong>of</strong> KD 14.2 million. The<br />
company managed, however, to trim losses by 80% yearon-year.<br />
Pr<strong>of</strong>its for “Insurance” and “Food” also recorded two <strong>of</strong><br />
the best year-on-year growth rates while pr<strong>of</strong>its for listed<br />
“Non-<strong>Kuwait</strong>i” companies were almost flat.<br />
Though in second place with aggregate reported earnings<br />
slightly above KD 100 million, “Services” was one <strong>of</strong> only<br />
two sectors posting negative growth.<br />
Two <strong>of</strong> the sector’s biggest companies by market cap,<br />
Zain and Agility, were down 32% and 52%, respectively.<br />
Nevertheless, Zain remained one <strong>of</strong> the top performers.<br />
The sector is the second largest contributor to total pr<strong>of</strong>its<br />
accounting for over a quarter <strong>of</strong> total earnings.<br />
CORPORATE Earnings history<br />
(this period)<br />
3,000<br />
2,500<br />
2,000<br />
million KD<br />
1,500<br />
1,000<br />
500<br />
0<br />
1Q07 1Q08 1Q09 1Q10<br />
Net Pr<strong>of</strong>its<br />
SECTOR PERFORMANCE<br />
(million KD) Net Pr<strong>of</strong>its Growth %<br />
Q1 2010 Q1 2009 Q12010<br />
<strong>Bank</strong>ing 132 130 1<br />
Investment -1 -176 ...<br />
Insurance 11 -1 ...<br />
Real Estate 11 30 -63<br />
Industrial 61 -41 ...<br />
Services 101 133 -24<br />
Food 19 7 158<br />
Non-<strong>Kuwait</strong>i Companies 39 39 2<br />
Total Market 372 122 302<br />
<strong>Kuwait</strong>i Companies 333 83 206<br />
COMPANY PROFITS - Q1 2010<br />
Highest Earnings<br />
million KD<br />
1. <strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong> 76.3<br />
2. Zain 51.5<br />
3. <strong>National</strong> Industries 41.3<br />
4. <strong>Kuwait</strong> Finance House 30.9<br />
5. Commercial International <strong>Bank</strong> (EGP) 27.9<br />
Lowest Earnings<br />
million KD<br />
1. Global Investment House -14.2<br />
2. <strong>Kuwait</strong> Business Town Real Estate -7.4<br />
3. IKARUS Petroleum Industries -6.5<br />
4. Qurain Petrochemical Industries -5.5<br />
5. IFA Hotels & Resorts -4.6<br />
13
<strong>Economic</strong> <strong>Brief</strong> - June 2010<br />
CORPORATE EARNINGS - 1Q 2010<br />
(thousand KD)<br />
Code Company Name First Quarter Growth<br />
2010 2009 %<br />
<strong>Bank</strong>ing<br />
101 <strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong> 76,260 63,525 20<br />
102 Gulf <strong>Bank</strong> 524 1,593 -67<br />
103 Commercial <strong>Bank</strong> -1,414 3,139 …<br />
104 Al-Ahli <strong>Bank</strong> 15,283 15,116 1<br />
105 Ahli United <strong>Bank</strong> 6,244 10,220 -39<br />
106 <strong>Kuwait</strong> International <strong>Bank</strong> 291 -2,204 …<br />
107 Burgan <strong>Bank</strong> 1,874 11,345 -83<br />
108 <strong>Kuwait</strong> Finance House 30,905 39,294 -21<br />
109 Boubyan <strong>Bank</strong> 1,620 -11,699 …<br />
Investment<br />
201 <strong>Kuwait</strong> Investment Co. 5,988 2,819 112<br />
202 Commercial Facilities 5,283 -3,822 …<br />
203 International Financial Advisors -3,372 -5,861 …<br />
204 <strong>National</strong> Investments 3,456 -3,856 …<br />
205 <strong>Kuwait</strong> Projects Company (Holding) 4,722 9,200 -49<br />
206 Al-Ahlia Investment … -5,956 …<br />
207 Coast Investment & Development 5,414 -12,817 …<br />
208 The International Investor … -2,138 …<br />
209 Securities House … -6,461 …<br />
210 Industrial & Financial Investments -161 -2,005 …<br />
211 Securities Group … … …<br />
212 International Finance Co. -947 -1,476 …<br />
213 <strong>Kuwait</strong> Financial Centre 3,721 -3,365 …<br />
214 KMEFIC -1,718 103 …<br />
215 International Investment Group … -8,079 …<br />
216 Aref Investment Group -4,464 -17,550 …<br />
217 Al-Dar Investment … … …<br />
218 Al-Aman Investment 1,509 -5,668 …<br />
219 First Investment Co. -2,128 -3,203 …<br />
220 Al-Mal Investment -1,405 -961 …<br />
221 Gulf Investment House -1,232 … …<br />
222 A’ayan Leasing & Investment Co. … -12,553 …<br />
223 Bayan Investment Co. -1,862 -6,324 …<br />
224 Global Investment House -14,173 -69,518 …<br />
225 Osoul Leasing & Investment Co. -251 … …<br />
226 GulfInvest … -3,641 …<br />
227 <strong>Kuwait</strong> Finance & Investments Co. 1,095 -6,090 …<br />
228 KIPCO Asset Management Co. 1,023 252 306<br />
229 International Leasing & Investment Co. … … …<br />
230 <strong>Kuwait</strong> Invest Co. (Holding) 131 -3,685 …<br />
231 <strong>National</strong> International Co. (Holding) 153 -1,927 …<br />
232 Housing Finance 30 -6,696 …<br />
233 Al Madar Finance & Investment -3,224 … …<br />
234 Al-Deera Holding Co. -1,331 -5,691 …<br />
235 Al Safat Investment 1,231 -1,959 …<br />
236 Al Salam Group Holding Company -314 … …<br />
237 EKTTITAB Holding Company -335 -2,475 …<br />
238 Al Qurain Holding Company -2,588 -3,433 …<br />
239 Sokouk Holding -588 1,749 …<br />
240 Al Madina for Finance & Investment -181 … …<br />
241 Noor Financial Investment 658 -16,858 …<br />
242 Al Tamdeen Investment 3,334 2,097 59<br />
243 <strong>Kuwait</strong> Bahrain International Exchange 241 207 16<br />
244 DAMAC <strong>Kuwait</strong>i Holding 1,535 -5,737 …<br />
245 <strong>Kuwait</strong> Syrian Holding 350 -325 …<br />
246 Strategia Investment co. -27 -1,040 …<br />
247 <strong>Kuwait</strong> China Investment Co. 1,073 … …<br />
248 Manafae Investment Co. 24 … …<br />
249 Gulf North Africa Holding Co. 509 … …<br />
250 Amwal International Investment Co. 143 … …<br />
251 Al-Masar Leasing & Investment Co. K.S.C … … …<br />
Insurance<br />
301 <strong>Kuwait</strong> Insurance 2,500 -5,952 …<br />
302 Gulf Insurance 2,568 2,287 12<br />
303 Al-Ahlia Insurance 2,413 2,724 -11<br />
304 Warba Insurance 1,975 1,501 32<br />
305 <strong>Kuwait</strong> Re-Insurance 558 -190 …<br />
306 First Takaful Insurance 28 48 -42<br />
307 Wethaq Takaful Insurance Co. 788 -1,000 …<br />
Real Estate<br />
401 <strong>Kuwait</strong> Real Estate 975 1,183 -18<br />
402 United Real Estate 2,394 -3,786 …<br />
403 <strong>National</strong> Real Estate 5,982 5,739 4<br />
404 Salhia Real Estate 2,528 165 1,434<br />
14
CORPORATE EARNINGS - 1Q 2010<br />
(thousand KD)<br />
Code Company Name First Quarter Growth<br />
2010 2009 %<br />
405 Pearl <strong>of</strong> <strong>Kuwait</strong> Real Estate - … …<br />
406 Al-Tamdeen Real Estate 2,059 1,099 87<br />
408 Ajyal Real Estate Entertainment Co. 34 -4,537 …<br />
409 Al-Massaleh Real Estate Co. 217 -430 …<br />
410 Arab Real Estate -2,758 80 …<br />
411 Union Real Estate 315 277 14<br />
412 Enma’a Real Estate - 382 …<br />
413 Mabanee Co. 5,251 4,776 10<br />
414 Injazzat Real Estate Development 3 1,373 -100<br />
415 Jeezan Holding -50 -84 …<br />
416 Investors Holding Group - 285 …<br />
417 International Resorts Co. -488 -132 …<br />
418 Commercial Real Estate Co. 2,851 7,169 -60<br />
419 Sanam Real Estate Co. 215 -224 …<br />
420 A’ayan Real Estate Co. 274 1,536 -82<br />
421 Aqar Real Estate 47 34 36<br />
422 <strong>Kuwait</strong> Real Estate Holding 146 -415 …<br />
423 Al Mazaya Holding 2,120 5,051 -58<br />
424 Al Dar <strong>National</strong> Real Estate -1,130 … …<br />
425 Al-Themar International Holding - … …<br />
426 Grand Real Estate Projects - 244 …<br />
427 Tijara & Real Estate Investment 40 -835 …<br />
428 Tameer Real Estate Investment -314 -600 …<br />
429 Arkan Al-<strong>Kuwait</strong> Real Estate - 417 …<br />
430 Safat Global Holding - … …<br />
431 Al-Argan International Real Estate 341 811 -58<br />
432 Abyarr Real Estate Development Co. -911 3,300 …<br />
433 Munshaat Real Estate Projects Co. -3,434 570 …<br />
434 First Dubai For Real Estate Development 1,235 7,047 -82<br />
435 <strong>Kuwait</strong> Business Town real estate -7,420 370 …<br />
436 Manazel Holding Co. -524 -1,140 …<br />
437 Real Estate Asset Managemnet Co - Ream 163 … …<br />
438 Mena Real Estate Co. - … …<br />
439 Al Mudon International Real Estate 4 … …<br />
Industrial<br />
501 <strong>National</strong> Industries 41,322 -36,610 …<br />
502 Kwt Pipes Industries & Oil Services - -7,021 …<br />
503 <strong>Kuwait</strong> Cement 13,928 -8,939 …<br />
504 Refrigeration Industries 134 -192 …<br />
505 Gulf Cable & Electrical Industries - 6,365 …<br />
506 Heavy Engineering Ind. & Shipbuilding -754 1,005 …<br />
507 Contracting & Marine Services -332 1,225 …<br />
508 <strong>Kuwait</strong> Portland Cement 4,308 2,045 111<br />
509 Shuaiba Paper Products 103 283 -64<br />
510 Metal & Recycling 119 67 77<br />
511 <strong>Kuwait</strong> Foundry 492 557 -12<br />
512 Aerated Concrete Industries 663 2,146 -69<br />
513 United Industries 2,991 -201 …<br />
514 Boubyan Petrochemical Co. - … …<br />
515 Gulf Glass Manufacturing - 880 …<br />
516 Al-Hilal Cement 799 -599 …<br />
517 Al Kout Industrial Projects Co. - 787 …<br />
518 <strong>Kuwait</strong> Packaging Materials Manufac. -64 402 …<br />
519 <strong>Kuwait</strong> Building Materials Manufac. - 245 …<br />
520 <strong>National</strong> Industries Co. for Bldg. 9,024 -6,811 …<br />
521 Gulf Rocks Co. - 352 …<br />
522 Equipment Holding 1,295 -656 …<br />
523 Mena Holding -306 501 …<br />
524 <strong>National</strong> Co. for Consumer Industries -47 … …<br />
525 <strong>Kuwait</strong> Gypsum Manuf. & Trading -12 126 …<br />
526 Qurain Petrochemical Industries -5,538 8,789 …<br />
527 Salbookh Trading Co. -319 -839 …<br />
528 IKARUS Petroleum Industries -6,490 -4,437 …<br />
Services<br />
601 <strong>Kuwait</strong> Cinema 1,604 576 178<br />
602 <strong>Kuwait</strong> Hotels 353 736 -52<br />
603 Agility 17,588 36,952 -52<br />
604 <strong>Kuwait</strong> Commercial Markets Complex -1,609 -699 …<br />
605 Zain <strong>Kuwait</strong> 51,542 75,728 -32<br />
606 Al Safat Energy Holding Company 504 … …<br />
607 Educational Holding Group - … …<br />
608 Independent Petroleum Group 1,792 1,482 21<br />
609 <strong>National</strong> Cleaning Co. 310 -402 …<br />
610 The Sultan Center 2,571 2,198 17<br />
611 Al-Arabi Holding 175 106 65<br />
15
<strong>Economic</strong> <strong>Brief</strong> - June 2010<br />
CORPORATE EARNINGS - 1Q 2010<br />
(thousand KD)<br />
Code Company Name First Quarter Growth<br />
2010 2009 %<br />
612 City Group Company 642 3,382 -81<br />
613 Wataniya 16,206 15,306 6<br />
614 <strong>Kuwait</strong> & Gulf Link Transport Co. 1,906 1,282 49<br />
615 <strong>Kuwait</strong> Cable Vision -107 -382 …<br />
616 Automated Systems Co. 433 444 -3<br />
617 <strong>National</strong> Petroleum Services Co. 293 252 16<br />
618 <strong>Kuwait</strong> Co. For Process Plant Cons.& Cont. 1,004 642 56<br />
619 <strong>Kuwait</strong> Slaughter House 134 111 21<br />
620 EYAS for Higher & Technical Education - … …<br />
621 Nibras Holding Co 53 193 -73<br />
622 Al Safwa Group 2,058 -2,509 …<br />
623 Human S<strong>of</strong>t Holding -10 13 …<br />
624 <strong>Kuwait</strong> Privatization Project Holding 1,008 -2,628 …<br />
625 Nafais Holding Company -737 … …<br />
626 <strong>National</strong> Slaughter House 37 24 55<br />
627 Aref Energy Holding 13,347 … …<br />
628 Safwan Trading & Contracting 366 336 9<br />
629 Gulf Petroleum Investment -819 -1,569 …<br />
630 Gulf Franchising -282 -1,527 …<br />
631 Credit Rating and Collection 23 25 -9<br />
632 <strong>National</strong> Ranges Co. -951 … …<br />
633 Burgan Co. for Well Drilling - … …<br />
634 IFA Hotels & Resorts -4,570 … …<br />
635 Combined Group Contracting 2,400 2,739 -12<br />
636 Jeeran Holding - … …<br />
637 Palms Agro Production 361 447 -19<br />
638 Al-Safat Tec Holding Co. 626 46 1,264<br />
639 Mushrif Trading & Contracting 377 … …<br />
640 United Projects Group 1,354 1,309 3<br />
641 Al Abraj Holding - -2,087 …<br />
642 Aviation Lease & Finance - … …<br />
643 Al-Mowasat Holding 127 201 -37<br />
644 Mashaer Holding Company 605 832 -27<br />
645 Oula Fuel Marketing Company 927 786 18<br />
646 Villa Moda Life Style - … …<br />
647 Future Communications 633 612 3<br />
648 Network Holding Company - … …<br />
649 Hayat Communication Co. -344 -122 …<br />
650 Mubarrad Transport Co. -114 -593 …<br />
651 <strong>Kuwait</strong> Resorts Co. 9 -949 …<br />
652 Advanced Technology Co. 1,112 901 23<br />
653 Yiaco Medical Company 1,794 1,781 1<br />
654 Jazeera Airways Co. -4,499 -982 …<br />
655 Al Sour 1,313 520 153<br />
656 Wataniya Airways -3,074 -2,710 …<br />
657 Future Kid 30 -160 …<br />
658 KGL Logistics Company 1,979 -160 …<br />
659 Al-Nawadi Holding C0. (K.S.C.Holding) … … …<br />
Food<br />
701 Livestock Trading & Transport 1,059 4,196 -75<br />
702 Danah Alsafat Foodstuff Company 2,303 -420 …<br />
703 United Poultry 306 -34 …<br />
704 <strong>Kuwait</strong> Food Co (Americana) 13,870 3,230 329<br />
705 United Foodstuff Industries 135 155 -13<br />
706 Kout Food Group 913 80 1,045<br />
Non <strong>Kuwait</strong>ies<br />
804 Sharjah Cement & Industrial Dev. 1,866 4,109 -55<br />
805 Gulf Cement 4,525 -918 …<br />
806 Umm Al-Qaiwain Cement Industries 1,314 -1,344 …<br />
807 Fujairah Cement Industries 17 3,906 -100<br />
808 Ras Al-Khaimah for White Cement 1,690 1,029 64<br />
809 Arab Insurance Group 1,301 427 205<br />
810 United Gulf <strong>Bank</strong> 2,166 2,671 -19<br />
811 Egypt <strong>Kuwait</strong> Holding 9,429 9,103 4<br />
812 Bahrain <strong>Kuwait</strong> Insurance 1,001 1,182 -15<br />
813 Gulf Finance House -2,164 -10,839 …<br />
814 Commercial International <strong>Bank</strong> 27,850 … …<br />
817 Inovest -1,440 3,158 …<br />
818 Ahli United <strong>Bank</strong> 18,696 25,053 -25<br />
820 Ithmaar <strong>Bank</strong> 962 1,100 -13<br />
16
<strong>Kuwait</strong> Stock Exchange<br />
Hurt by deteriorating international markets<br />
May was a bad month for equity markets globally and<br />
the <strong>Kuwait</strong> Stock Exchange (KSE) was far from immune.<br />
Like other regional markets, the KSE was hit by the global<br />
turmoil, suffering major losses. The price index was down<br />
more than 8% on the month, falling below its level at the<br />
beginning <strong>of</strong> the year by more than 4%. The market index<br />
ended the month at 6700, less than 300 points above the<br />
market bottom in Mar08. On a value weighted basis, while<br />
the market was down almost 7% in May, it maintained<br />
modest gains made since the beginning <strong>of</strong> the year. The<br />
market shed almost KD 3.5 billion <strong>of</strong> its capitalization<br />
during the month (to KD 31 billion).<br />
The market decline was accompanied by a sharp drop in<br />
market liquidity, which hit a record low. Average daily value<br />
traded was KD 34.5 million in May, 50% lower than the<br />
previous month. Going forward, traders anticipate a boost<br />
in market liquidity and a shift in sentiment because <strong>of</strong> an<br />
extraordinary Zain dividend payout related to the sale <strong>of</strong> its<br />
African assets.<br />
suspended from trading and further eroded sentiment.<br />
Delay concerns in Zain’s anticipated dividend payout also<br />
weighed on the market, as had Tamdeen’s postponed sale<br />
<strong>of</strong> its shares in Bahrain-based Ahli United <strong>Bank</strong> shares.<br />
Market “talk” <strong>of</strong> KIA selling its 24.6% stake in Zain was an<br />
added negative. Meanwhile, positive news from the recent<br />
passing <strong>of</strong> a number <strong>of</strong> long-awaited laws appeared to<br />
have little impact on market sentiment.<br />
The KSE had moved higher following the announcement <strong>of</strong><br />
the EU’s 750 billion euro rescue package for Greece in the<br />
middle <strong>of</strong> May, only to be hit again by news <strong>of</strong> the collapse<br />
<strong>of</strong> a Spanish bank and a downgrade <strong>of</strong> Spain’s sovereign<br />
debt (by Fitch). Falling oil prices and a tense political scene<br />
further exacerbated market concerns.<br />
Indexes for all sectors were down on the month.<br />
“Investment” and “Non-<strong>Kuwait</strong>i” companies were the<br />
worst performers, dropping 11.2% and 9.4%, respectively.<br />
“<strong>Bank</strong>s” fared the best losing a smaller 5.3% in May.<br />
With market sentiment already weak, the impact <strong>of</strong> the<br />
wave <strong>of</strong> negative news from Europe (Greece, Spain, the<br />
Euro etc) was pronounced. Delays in 1Q10 earnings<br />
announcements led to a number <strong>of</strong> companies being<br />
kse Daily performance<br />
REBASED performance<br />
100<br />
7400<br />
140<br />
90<br />
80<br />
70<br />
7200<br />
120<br />
100<br />
million KD<br />
60<br />
50<br />
40<br />
7000<br />
index<br />
80<br />
60<br />
30<br />
20<br />
10<br />
6800<br />
40<br />
20<br />
0<br />
2<br />
5 10 13 18<br />
May 2010<br />
Value <strong>of</strong> Traded Shares (left)<br />
23 26 31<br />
KSE Index (right)<br />
6600<br />
0<br />
May-07<br />
Feb-08<br />
MSCI Emerging<br />
Nov-08<br />
MSCI <strong>Kuwait</strong><br />
Aug-09<br />
MSCI GCC<br />
May-10<br />
KSE PERFORMANCE BY SECTOR, may 2010<br />
Price- % Change in KSE Index Market Cap. % <strong>of</strong> Trading Activity Price to<br />
KSE Index Price-Weighted Value-Weighted (million KD) Market (daily average) Earnings +<br />
31-May-10 May-10 YTD 09 May-10 YTD 09 31-May-10 31-May-10 mn shares mn KD 31-May-10<br />
<strong>Bank</strong>ing 8764 -5.4 5.0 -5.3 8.7 11011 35.7% 16.8 9.5 17<br />
Investment 5011 -11.2 -10.6 -11.8 -12.2 2826 9.2% 49.9 6.0 ...<br />
Insurance 2436 -6.2 -15.7 -3.3 -11.5 288 0.9% 0.1 0.0 15<br />
Real Estate 2459 -7.4 -12.0 -10.5 -13.7 1733 5.6% 27.7 2.0 ...<br />
Industrial 5317 -7.5 -2.2 -9.1 4.3 2650 8.6% 14.7 4.0 11<br />
Services 14723 -8.3 0.2 -3.4 15.3 9532 30.9% 40.1 10.8 17<br />
Food 4686 -3.1 11.9 -5.3 3.6 736 2.4% 0.5 0.1 12<br />
Non-<strong>Kuwait</strong>i 6853 -9.4 -6.4 -12.2 1.9 2109 6.8% 35.8 2.2 15<br />
Total Market 6700 -8.2 -4.4 -6.6 5.5 30885 100.0% 185.6 34.5 15<br />
<strong>Kuwait</strong>i Companies 28776<br />
Source: <strong>Kuwait</strong> Stock Exchange and Zawya.<br />
Note: * PE is calculated using market cap as <strong>of</strong> month close and 12 months trailing earnings, ending Q12010.<br />
17
<strong>Economic</strong> <strong>Brief</strong> - June 2010<br />
<strong>Kuwait</strong>’s Population & Labor Force<br />
2009: surge in private sector <strong>Kuwait</strong>i employment…<br />
Population continues modest expansion in 2009…<br />
<strong>Kuwait</strong>’s population reached 3.48 million at the end <strong>of</strong><br />
2009 according to the Public Authority for Civil Information<br />
(PACI). The population grew by 1.3% on the year. The<br />
number <strong>of</strong> <strong>Kuwait</strong>i nationals continued to increase but at<br />
a slower rate than the average <strong>of</strong> the previous five years.<br />
The number <strong>of</strong> non-<strong>Kuwait</strong>i residents increased by 0.5%.<br />
There were 1.11 million <strong>Kuwait</strong>is, or 32% <strong>of</strong> the total population.<br />
The slow growth <strong>of</strong> <strong>Kuwait</strong>’s population since 2008 was<br />
caused in large part by the much slower growth <strong>of</strong> the<br />
expatriate population, due to the fallout from the economic<br />
crisis. The number <strong>of</strong> expatriates grew only 11,700<br />
in 2009, versus an average yearly gain <strong>of</strong> 109,000 in the<br />
years 2001-08. Nearly 1.2 million people were added to<br />
<strong>Kuwait</strong>’s population over the last ten years, <strong>of</strong> which 73%<br />
were expatriates, reflecting the strong economy <strong>of</strong> the<br />
boom years.<br />
<strong>Kuwait</strong>’s total adult population (over 20 years <strong>of</strong> age)<br />
reached 2.25 million, 65% <strong>of</strong> the total population. For <strong>Kuwait</strong>is,<br />
the data show that 49% are under 20-years old.<br />
Also the <strong>Kuwait</strong>i population splits almost evenly into men<br />
and women at 51%-49%.<br />
Total labor force numbers edge upwards…<br />
In 2009, labor force growth in <strong>Kuwait</strong> remained weak, with<br />
the number increasing by a small 0.3% to reach 2.1 million.<br />
For expatriate workers, the numbers were up in the<br />
public and domestic (household) sectors, while they fell<br />
slightly in the private sector.<br />
The number <strong>of</strong> employed <strong>Kuwait</strong>is rose by over 19,000<br />
compared with 15,000 in 2008. Nearly 60% <strong>of</strong> these jobs<br />
were in the private sector with <strong>Kuwait</strong>is employed in the<br />
sector reaching 68,200. Thus in 2009, 20% <strong>of</strong> <strong>Kuwait</strong>is<br />
worked in the private sector, up from 18% in 2008 and<br />
16% in 2007.<br />
The rising private sector share is partly the result <strong>of</strong> the<br />
<strong>National</strong> Labor Support law <strong>of</strong> 2000. The law provides Ku-<br />
waitis working in the private sector with the same benefits<br />
available in the public sector. Of course, the expansion <strong>of</strong><br />
the private sector during the boom years was also a helping<br />
factor.<br />
The services industry employs more than 66% <strong>of</strong> <strong>Kuwait</strong>’s<br />
labor force. Most <strong>of</strong> it is in the community, social and personal<br />
services sector, which includes the government/<br />
public sector. Services also accounted for 71% <strong>of</strong> the net<br />
ABSOLUTE CHANGE IN KWT’S LABOR FORCE (DEC 08-09)<br />
(in 000)<br />
13<br />
10<br />
7<br />
4<br />
1<br />
-2<br />
-5<br />
-8<br />
-11<br />
Agric & Fish.<br />
Mining<br />
Manufact.<br />
Utilities<br />
POPULATION (END YEAR)<br />
Non-<strong>Kuwait</strong>i<br />
Population (‘000)<br />
Construction<br />
<strong>Kuwait</strong>i Non-<strong>Kuwait</strong>i Total <strong>Kuwait</strong>i<br />
Non-<br />
<strong>Kuwait</strong>i<br />
% Growth<br />
Total<br />
1999 812.3 1,442.7 2,255.0 3.3 -2.8 -0.7<br />
2000 841.8 1,375.5 2,217.3 3.6 -4.7 -1.7<br />
2001 870.3 1,438.8 2,309.1 3.4 4.6 4.1<br />
2002 898.3 1,521.6 2,419.9 3.2 5.8 4.8<br />
2003 927.7 1,619.0 2,546.7 3.3 6.4 5.2<br />
2004 956.2 1,797.4 2,753.7 3.1 11.0 8.1<br />
2005 992.2 1,999.0 2,991.2 3.8 11.2 8.6<br />
2006 1,023.3 2,159.6 3,183.0 3.1 8.0 6.4<br />
2007 1,054.6 2,345.0 3,399.6 3.1 8.6 6.8<br />
2008 1,087.6 2,354.3 3,441.8 3.1 0.4 1.2<br />
2009 1,118.9 2,366.0 3,484.9 2.9 0.5 1.3<br />
Trade & Hosp.<br />
<strong>Kuwait</strong>i<br />
Source: Public Authority for Civil Information (www.paci.gov.kw).<br />
Trans. & Comns.<br />
Fin. RE & Bus.Serv.<br />
Soc. & Pers. Serv.<br />
15<br />
12<br />
9<br />
GROWTH IN KUWAIT’S POPULATION, % (END YEAR(<br />
LABOR FORCE BY SECTOR (END YEAR)<br />
(in thousands)<br />
Public<br />
Sector<br />
<strong>Kuwait</strong>i<br />
Private<br />
Sector<br />
Total<br />
Public<br />
Sector<br />
Non-<strong>Kuwait</strong>i<br />
Private<br />
Sector<br />
Domestic<br />
Sector<br />
Total<br />
6<br />
3<br />
0<br />
-3<br />
-6<br />
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009<br />
<strong>Kuwait</strong>is Non-<strong>Kuwait</strong>is Total<br />
2005 276.1 31.9 308.2 93.4 911.4 478.7 1,483.4<br />
2006 241.3 42.4 283.7 96.9 1,010.5 501.0 1,608.4<br />
2007 255.3 49.1 304.4 103.7 1,104.5 544.3 1,752.5<br />
2008 262.7 57.0 319.7 111.8 1,120.6 501.1 1,733.5<br />
2009 270.6 68.2 338.8 114.8 1,086.0 519.3 1,720.1<br />
Source: Public Authority for Civil Information (www.paci.gov.kw).<br />
18
increase in jobs during 2009. The wholesale and retail<br />
trade and restaurant sector is another major employer accounting<br />
for over 15% <strong>of</strong> the country’s labor force.<br />
to rise further as the trend continues and as it is reinforced<br />
by upcoming measures mentioned in the current 5-year<br />
economic plan.<br />
The construction and industrial sectors, 8% and 7% <strong>of</strong> the<br />
labor force, respectively, are the sectors most heavily reliant<br />
on expatriate labor; 95% <strong>of</strong> workers in the construction<br />
sector are non-<strong>Kuwait</strong>i. The number <strong>of</strong> non-<strong>Kuwait</strong>is<br />
working in the construction sector fell by 2% in 2008 and<br />
4% in 2009. This trend appears to be a result primarily <strong>of</strong><br />
a contracting construction sector with many new projects<br />
on hold. Companies seem to have reduced their staff.<br />
Crude oil production and manufacturing, including refining,<br />
employ 8% <strong>of</strong> nationals in the workforce. The electricity,<br />
water and gas (‘Utilities’) industries mainly employ <strong>Kuwait</strong>i<br />
nationals, who represent 83% <strong>of</strong> the workforce in this sector.<br />
Meanwhile, 37% <strong>of</strong> the expatriate labor force works in the<br />
community, social and personal services sector. These<br />
total over 649,000 non-<strong>Kuwait</strong>is and include household<br />
workers, drivers, and unskilled domestic labor. More than<br />
308,000 expatriates are employed in trade and hospitality<br />
sector, down 1% from 2008. The number <strong>of</strong> expatriates<br />
employed in the financial and business services sector<br />
also fell by 2%, and this sector now employs 89,000 non-<br />
<strong>Kuwait</strong>is. Meanwhile, the construction sector employs 9%<br />
<strong>of</strong> the total expatriate labor force, down 4% from the previous<br />
year. Almost 113,000 non-<strong>Kuwait</strong>is work in the manufacturing<br />
industry, including refining.<br />
A breakdown <strong>of</strong> the top ten largest jobs by pr<strong>of</strong>essions<br />
shows that the biggest gains by <strong>Kuwait</strong>is, 88% <strong>of</strong> total<br />
net gains, were in clerical and secretarial positions, which<br />
represent one-third <strong>of</strong> all jobs held by <strong>Kuwait</strong>is.<br />
In conclusion, the <strong>Kuwait</strong>i national population is still growing<br />
near its 3% trend rate. On the employment side, private<br />
sector employment <strong>of</strong> <strong>Kuwait</strong>is continues apace. The current<br />
20% share <strong>of</strong> <strong>Kuwait</strong>is in the private sector is bound<br />
LABOR FORCE BY ECONOMIC SECTOR<br />
(Dec 2009)<br />
Labor Force (in ‘000) Annual growth (%)<br />
Kwti<br />
Non-<br />
Kwti<br />
Total<br />
Kwti<br />
Non-<br />
Kwti<br />
Total<br />
Agriculture & Fishing 0.3 38 38 6.9 6.3 6.3<br />
Industry 24 113 137 8.1 -2.3 -0.6<br />
Mining & Quarrying 5 2 6 9.4 2.2 7.4<br />
Manufacturing (incl. refining) 9 109 118 7.6 -2.2 -1.5<br />
Electricity, Water & Gas 10 2 12 8.0 -8.5 4.8<br />
Construction 8 161 170 22.4 -3.5 -2.5<br />
Services 285 1,105 1,390 3.9 -1.2 -0.2<br />
Trade & Restaurants 11 308 320 13.0 -1.4 -1.0<br />
Transport & Communication 9 58 67 7.3 3.7 4.2<br />
Fin. & Bus. Services 18 89 107 14.3 -2.0 0.4<br />
Com., Soc. & Pers. Services 247 649 896 2.7 -1.5 -0.4<br />
Other 34 325 359 3.5 3.2 3.2<br />
Total 351 1,742 2,093 4.5 -0.6 0.2<br />
OCCUPATION PROFILE OF 10 LARGEST JOBS (END YEAR)<br />
Annual change<br />
(Levels in ‘000) (‘000) (%)<br />
2007 2008 2009 2009 2008 2009<br />
<strong>Kuwait</strong>is (000)<br />
Clerks and Secretaries 95 104 120 16 9.5 15.4<br />
Government Executives 44 45 46 1 2.3 2.2<br />
Teachers 37 36 36 0 -2.7 0.0<br />
Engineers 19 20 21 1 5.3 5.0<br />
Police & Security personnel 14 14 13 -1 0.0 -7.1<br />
Technicians 8 9 9 0 12.5 0.0<br />
Doctors and Vaterinarians 8 8 9 1 0.0 12.5<br />
Cashiers / book keepers 7 7 8 1 0.0 14.3<br />
Managers 4 5 5 0 25.0 0.0<br />
Statisticians and System Analysts 3 4 4 0 33.3 0.0<br />
Others 85 84 81 -3 -1.2 -3.6<br />
Total 324 336 352 16 3.7 4.8<br />
Non-<strong>Kuwait</strong>is (000)<br />
Domestic Household 391 328 334 6 -16.1 1.8<br />
Unskilled laborers 341 317 300 -17 -7.0 -5.4<br />
Drivers 231 228 224 -4 -1.3 -1.8<br />
Sales 60 64 65 1 6.7 1.6<br />
Electricians and Electonics 52 58 56 -2 11.5 -3.4<br />
Office supervisors 41 47 49 2 14.6 4.3<br />
Clerks 36 38 38 0 5.6 0.0<br />
Engineers 36 37 37 0 2.8 0.0<br />
Construction builders 33 32 28 -4 -3.0 -12.5<br />
Teachers 24 24 25 1 0.0 4.2<br />
Others 523 579 584 5 10.7 0.9<br />
Total 1,768 1,752 1,740 -12 -0.9 -0.7<br />
19
<strong>Economic</strong> <strong>Brief</strong> - June 2010<br />
Balance <strong>of</strong> Payments<br />
Large drop in current account surplus limited the<br />
accumulation <strong>of</strong> foreign assets in 2009 … Higher<br />
surplus projected this year<br />
The impact <strong>of</strong> the global financial crisis on the <strong>Kuwait</strong>i<br />
economy is well evident in the recently-released balance<br />
<strong>of</strong> payments figures for 2009. The current account<br />
surplus dropped by 50% in 2009 on the back <strong>of</strong> lower<br />
oil prices, reduced oil production, and lower returns on<br />
the country’s investments abroad. The impact <strong>of</strong> the<br />
domestic economic slowdown was also visible in the 20%<br />
drop in merchandise imports. Overall, <strong>Kuwait</strong> continued<br />
to accumulate foreign assets, though at a much slower<br />
pace than in the previous four years. With the ongoing<br />
recovery in the global economy and financial markets,<br />
however, 2009 may prove to be the low point for <strong>Kuwait</strong>’s<br />
external position. We project a substantial improvement in<br />
the current account surplus this year and possibly further<br />
improvements over the medium term.<br />
Current Account<br />
According to preliminary data released by the Central<br />
<strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong> (CBK), the current account surplus shrank<br />
from KD 16.2 billion (40.7% <strong>of</strong> GDP) in 2008 to KD 8.1<br />
billion (25.9% <strong>of</strong> GDP) in 2009. In the case <strong>of</strong> <strong>Kuwait</strong>, the<br />
trade balance and investment income remain the major<br />
determinants <strong>of</strong> the current account position. The former<br />
item was responsible for 94% <strong>of</strong> the drop in the current<br />
account surplus in 2009, while investment income was<br />
responsible for the remaining 6%. Meanwhile, the services<br />
and the current transfer accounts recorded modest<br />
changes from last year.<br />
Sharp deterioration in trade balance triggered by<br />
lower oil exports<br />
At KD 9.6 billion in 2009, the trade balance surplus was<br />
down 45% from its peak level in 2008. Falling exports<br />
drove the deterioration. Oil exports were down 40% in<br />
2009, compared to a 32% increase in the previous year.<br />
Indeed, this was the first drop in oil exports since 2002,<br />
and is attributed to two major factors. Firstly, the price <strong>of</strong><br />
<strong>Kuwait</strong> export crude (KEC) oil averaged USD 60 per barrel<br />
in 2009, 33% lower than its level in the previous year.<br />
Secondly, oil production dropped by 11% in 2009 as a<br />
result <strong>of</strong> <strong>Kuwait</strong>’s adherence to OPEC quota cuts. So far in<br />
2010, the price <strong>of</strong> KEC has held above USD 75 per barrel<br />
which supports an improved exports outlook.<br />
Non-oil exports, however, saw more satisfactory<br />
performance in 2009 despite the weak external<br />
environment. Non-oil exports were down by only 9%<br />
from the previous year, primarily from a drop in re-export<br />
activity. Other exports, comprising fertilizers and ethylene<br />
products were little changed.<br />
Imports, on the other hand, which are usually reflect overall<br />
domestic activity, declined by 20% in 2009. Besides the<br />
slowdown in domestic demand, a significant portion <strong>of</strong> the<br />
drop in imports may be attributed to declining international<br />
prices <strong>of</strong> raw materials and finished commodities as a<br />
result <strong>of</strong> the global recession.<br />
Lower deficit in service account despite rising<br />
spending on travel abroad<br />
The services account deficit fell 6.3% in 2009 to KD -961<br />
million. This account suffers from a persistent travel/<br />
tourism deficit. At KD 2.1 billion in 2009, outflows for<br />
travel services were up 5.2% from 2008, and accounted<br />
for 55% <strong>of</strong> total payments for all services provided by<br />
non-residents. On the other hand, the drop in oil prices<br />
and imports has reduced payments on transportation<br />
services by 18.1% to KD 1 billion after rising by 21% in<br />
2008. Net government outflows for services were also<br />
down by 16.6%.<br />
Investment income suffers for the second consecutive<br />
year<br />
Lower returns on <strong>Kuwait</strong>’s massive foreign assets were<br />
the second major contributor to the drop in the current<br />
account surplus. Investment income declined for the<br />
second year in row, dropping by 17.3% to KD 2.4 billion.<br />
Indeed, this outcome was anticipated given the worsening<br />
global economic and financial scene since late 2008, and<br />
given low interest rates. The government’s income was<br />
responsible for 60% <strong>of</strong> the drop in investment income, yet<br />
its share in <strong>Kuwait</strong>’s total investment income rose to 87%<br />
from 82% in the prior year.<br />
CURRENT ACCOUNT<br />
Million KD<br />
% growth<br />
2007 2008 2009 2008 2009<br />
Current Account 11,987 16,195 8,065 35 -50<br />
1 - Balance on goods 12,338 17,206 9,555 39.5 -44.5<br />
Merchandise exports 17,771 23,373 14,471 31.5 -38.1<br />
Oil exports 16,780 22,200 13,398 32.3 -39.6<br />
Merchandise imports -5,433 -6,167 -4,916 13.5 -20.3<br />
2 - Services (net) -902 -1,026 -961 13.7 -6.3<br />
3 - Investment income (net) 3,523 2,888 2,387 -18.0 -17.3<br />
4 - Current transfers (net) -2,971 -2,874 -2,916 -3.3 1.5<br />
Billion KD<br />
CURRENT ACCOUNT<br />
20<br />
50<br />
18<br />
16<br />
40<br />
14<br />
12<br />
30<br />
10<br />
8<br />
20<br />
6<br />
4<br />
10<br />
2<br />
0<br />
0<br />
2005 2006 2007 2008 2009E 2010F 2011F 2012F<br />
Current account balance (LHS) Percentage <strong>of</strong> GDP (RHS)<br />
Percentage<br />
20
Local banks were the only sector to see a significant<br />
improvement in investment income, from KD 161 million<br />
in 2008 to a record KD 191 million in 2009, while growth<br />
in investment companies’ income was more modest at<br />
5.5%. On the other hand, other private sector companies<br />
saw a sharp drop in their income for the second year in<br />
row, reaching almost zero in 2009, down from KD 136<br />
million achieved in the previous year, and KD 741 million<br />
in 2007.<br />
Workers’ remittances continues their upward trend<br />
The «current transfers» account - which consists basically<br />
<strong>of</strong> worker remittances and government assistance to other<br />
countries - saw its deficit rising slightly to KD 2.9 billion.<br />
Worker remittances rose by only 2.8%, and accounted<br />
for 98% <strong>of</strong> current outflows. This result reflects the weak<br />
growth <strong>of</strong> 2.6% in the number <strong>of</strong> expatriates in <strong>Kuwait</strong><br />
in 2009. It is worth mentioning that the CBK changed<br />
the methodology used in estimating worker remittances<br />
in 2009. As a result, the size <strong>of</strong> remittances has almost<br />
doubled from the previous estimates. To avoid a break<br />
in the series, the CBK revised its previous estimates for<br />
remittances for the years 2007 and 2008.<br />
Capital and financial account<br />
After peaking in 2008, capital account inflows shrank by<br />
36% in 2009 to KD 298 million on the back <strong>of</strong> lower flows<br />
to the government by the UN Compensation Commission<br />
(UNCC). Net capital inflows received by the government<br />
amounted to KD 311 million, down from KD 475 million in<br />
the prior year. Meanwhile, private capital flows continued<br />
their downtrend that started in 2006, and recorded a<br />
modest net outflow.<br />
Net financial outflows dropped by 45%<br />
The 2009 financial account reflects the impact <strong>of</strong> the<br />
financial crisis. At KD 7.5 billion, the financial account<br />
deficit was roughly halved on the year. The government’s<br />
policy <strong>of</strong> injecting liquidity in the financial sector caused<br />
a sharp drop in the balance <strong>of</strong> portfolio investments<br />
abroad, following 15 consecutive annual increases in<br />
these assets.<br />
Net increase in banks’ portfolio investments abroad<br />
Portfolio investments, the chief contributor to the financial<br />
account deficit, recorded their first net inflows in 15 years.<br />
From a net outflow <strong>of</strong> KD 7.6 billion in 2008, portfolio<br />
investments saw KD 2.2 billion net inflows in 2009. This<br />
switch in the portfolio position likely reflects the massive<br />
injection <strong>of</strong> liquidity locally, from government and quasigovernment<br />
entities. Government portfolio investment<br />
abroad was down by KD 1.8 billion in 2009. This new<br />
trend may come to an end this year given the ongoing<br />
recovery in global financial markets and the ample liquidity<br />
in the <strong>Kuwait</strong>i banking system.<br />
Investment companies also showed similar behavior,<br />
moving from a net outflow <strong>of</strong> KD 795 million (investments<br />
abroad) in 2007 to a net inflows <strong>of</strong> KD 14 million and KD<br />
667 million in 2008 and 2009, respectively. On the other<br />
hand, local banks continued their accumulation <strong>of</strong> portfolio<br />
investments abroad, though at a substantially slower pace<br />
than in the previous two years. This may be due to the<br />
comfortable levels <strong>of</strong> liquidity at local banks following the<br />
injection <strong>of</strong> liquidity by the government.<br />
Higher FDI outflows while inflows remain minimal<br />
Direct investments saw a net outflow <strong>of</strong> KD 2.6 billion,<br />
15.2% larger than in the prior year. The government was<br />
the largest source <strong>of</strong> this increase, as the government<br />
sector’s direct investment rose by 18.8% to KD 2.4 billion.<br />
Investment companies also added a KD 370 million to<br />
their foreign direct investment abroad. Meanwhile, flows <strong>of</strong><br />
foreign direct investment into <strong>Kuwait</strong> remained insignificant<br />
(KD 23 million). This indicates that the reduction in tax rates<br />
imposed on foreign investments which was introduced in<br />
December 2007 had virtually no positive effect. If <strong>Kuwait</strong><br />
intends to attract higher volumes <strong>of</strong> FDI, it may need to<br />
take further steps to make the investment environment<br />
more lucrative and friendlier to foreign investors.<br />
Foreign banks reduce their currency and deposits in<br />
<strong>Kuwait</strong><br />
Outflows associated with other investments, which<br />
comprise mainly trade credit, loans, and currency and<br />
deposits increased substantially in 2009. The net figure<br />
was 86% higher than the prior year, reaching KD 7.1<br />
billion. The government was responsible for 97% <strong>of</strong> the<br />
increase in these outflows; especially in the form <strong>of</strong> trade<br />
credit which reached KD 592 million in 2009 compared<br />
SUMMARY OF FOREIGN TRADE (KD MILLION)<br />
net investment income (kd million)<br />
9000<br />
113<br />
110<br />
4000<br />
7500<br />
6000<br />
4500<br />
3000<br />
89<br />
51<br />
41<br />
59<br />
67<br />
74<br />
3000<br />
2000<br />
1000<br />
1500<br />
0<br />
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09<br />
0<br />
-1000<br />
2005 2006 2007 2008 2009<br />
Oil exports Imports Non-oil exports Oil prices in USD<br />
General govt. Local banks Central <strong>Bank</strong> <strong>of</strong> Kwt Invt. Co’s Other sectors<br />
21
<strong>Economic</strong> <strong>Brief</strong> - June 2010<br />
to KD 928 million inflows in the previous year. In addition,<br />
the government continued in 2009 the accumulation<br />
<strong>of</strong> foreign assets in the form <strong>of</strong> currency and deposits<br />
abroad, as well as extending more loans to non-residents.<br />
This reflects the cautious approach adopted by the<br />
government during the global financial crisis by focusing<br />
on lower risk investments.<br />
account and the capital and financial account - which<br />
amounted to KD 1 billion - was reflected in higher outflows<br />
from the “other (net)” item.<br />
Local banks recorded KD 1.2 billion net outflows in 2009,<br />
KD 395 million lower than the previous year. This was<br />
the result <strong>of</strong> KD 1.8 decline in local banks’ currency and<br />
deposits abroad, and a KD 2.7 billion decrease in foreign<br />
banks’ deposits at <strong>Kuwait</strong>i banks.<br />
Financial flows by sector<br />
Government sector outflows declined by 48% in 2009<br />
to KD 6.4 billion, accounting for 85% <strong>of</strong> total outflows.<br />
At KD 1.3 billion, local banks were the second major<br />
source <strong>of</strong> outflows. Meanwhile, net investment outflows<br />
by investment companies were modest at a mere KD 63<br />
million.<br />
CBK reserves rose by KD 1.1 billion in 2009 compared<br />
with a KD 172 million increase seen the prior year.<br />
Meanwhile, the “other (net)” item which accounts for errors<br />
and omissions in the balance <strong>of</strong> payments transactions<br />
recorded a KD 0.2 billion net inflow, the smallest since<br />
2005. This figure could reflect unregistered private capital<br />
inflows.<br />
Appendix: Revisions to balance <strong>of</strong> payments<br />
accounts<br />
The 2008 current account surplus was revised downward<br />
by KD 1.2 billion due to an increase in workers’ remittances<br />
abroad and overseas transportation payments by KD 1.3<br />
billion and KD 53 million, respectively. This was partially<br />
<strong>of</strong>fset by upward revisions in investment income and<br />
current transfers <strong>of</strong> KD 168 million and KD 47 million,<br />
respectively.<br />
Meanwhile, the capital and financial account deficit was<br />
reduced by KD 2.2 billion, including downward revisions<br />
in the trade credit and portfolio investment outflows <strong>of</strong><br />
KD 1.7 billion and KD 444 million, respectively. Direct<br />
investment abroad was also revised downward by KD 117<br />
million. The difference between the revisions in the current<br />
FINANCIAL FLOW (KD MILLION)<br />
2005 2006 2007 2008 2009<br />
Financial Account (Net) -9,567 -14,382 -9,812 -13,602 -7,495<br />
General government -6,405 -11,308 -9,704 -12,199 -6,392<br />
Local <strong>Bank</strong>s -93 -553 805 -2,060 -1,295<br />
Central <strong>Bank</strong> <strong>of</strong> Kwt 76 27 14 -45 -33<br />
Investment Co’s -250 -705 -594 101 -63<br />
Other sectors -2,895 -1,845 -334 599 287<br />
other investment by sector (kd million)<br />
5000<br />
2000<br />
-1000<br />
2005 2006 2007 2008 2009<br />
-4000<br />
-7000<br />
-10000<br />
General govt. Local banks Invt. Co’s Other sectors Central <strong>Bank</strong> <strong>of</strong> Kwt<br />
CAPITAL AND FINANCIAL ACCOUNT<br />
Million KD<br />
% change<br />
2007 2008 2009 2008 2009<br />
portfolio investment by sector (kd million)<br />
5000<br />
2000<br />
Capital Account 423 465 298 10 -36<br />
Financial Account -9,812 -13,602 -7,495 39 -45<br />
FDI (net) -2,749 -2,218 -2,554 -19 15<br />
Portfolio investment (net) -9,920 -7,557 2,187 -24 -129<br />
Other investments (net) 2,857 -3,827 -7,128 -234 86<br />
-1000<br />
-4000<br />
-7000<br />
-10000<br />
2005 2006 2007 2008 2009<br />
General govt. Local banks Invt. Co’s Other sectors<br />
22
Head Office<br />
International Network<br />
<strong>Kuwait</strong><br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong> SAK<br />
Abdullah Al-Ahmed Street<br />
P.O. Box 95, Safat 13001<br />
<strong>Kuwait</strong> City, <strong>Kuwait</strong><br />
Tel: +965 2242 2011<br />
Fax: +965 2243 1888<br />
Telex: 22043-22451 NATBANK<br />
www.nbk.com<br />
While every care has been taken<br />
in preparing this publication,<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong> accepts<br />
no liability whatsoever for any<br />
direct or consequential losses<br />
arising from its use. <strong>Economic</strong> <strong>Brief</strong><br />
is distributed on a complimentary<br />
and discretionary basis to NBK<br />
clients and associates. This report<br />
and previous issues can be<br />
found in the “Reports” section<br />
<strong>of</strong> the <strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong>’s<br />
web site. Please visit our web<br />
site, www.nbk.com, for other<br />
bank publications. For further<br />
information please contact<br />
NBK <strong>Economic</strong> Research at:<br />
Tel: (965) 2259 5500<br />
Fax: (965) 2224 6973<br />
Email: econ@nbk.com<br />
Bahrain<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong> SAK<br />
Bahrain Branch<br />
Seef Tower, Al-Seef District 428<br />
P.O. Box 5290, Manama<br />
Bahrain<br />
Tel: +973 17 583 333<br />
Fax: +973 17 587 111<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong><br />
Bahrain Branch (H.O)<br />
GB Corp Tower<br />
Block 346, Road 4626<br />
Building 1411<br />
P.O. Box 5290, Manama<br />
Kingdom <strong>of</strong> Bahrain<br />
Tel: +973 17 155 555<br />
Fax: +973 17 104 860<br />
Jordan<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong> SAK<br />
Amman Branch<br />
Shareef Abdul Hamid Sharaf St<br />
P.O. Box 941297<br />
Shmeisani, Amman 11194<br />
Jordan<br />
Tel: +962 6 560 8800<br />
Fax: +962 6 560 8811<br />
Saudi Arabia<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong> SAK<br />
Jeddah Branch<br />
Al-Andalus Street, Red Sea Plaza<br />
P.O. Box 15385<br />
Jeddah 21444, Saudi Arabia<br />
Tel: +966 2 653 8600<br />
Fax: +966 2 653 8653<br />
Lebanon<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong><br />
(Lebanon) SAL<br />
BAC Building<br />
Justinian Street, Sanayeh<br />
P.O. Box 11-5727, Riyad El Solh<br />
Beirut 1107 2200, Lebanon<br />
Tel: +961 1 759700<br />
Fax: +961 1 747866<br />
Iraq<br />
Credit <strong>Bank</strong> <strong>of</strong> Iraq<br />
Street 9, Building 178<br />
Sadoon Street, District 102<br />
P.O. Box 3420<br />
Baghdad, Iraq<br />
Tel: +964 1 7182198/7191944<br />
+964 1 7188406/7171673<br />
Fax: +964 1 7170156<br />
Egypt<br />
Al Watany <strong>Bank</strong> <strong>of</strong> Egypt<br />
13 Al Themar Street<br />
Gameat Al Dowal AlArabia<br />
Fouad Mohie El Din Square<br />
Mohandessin, Giza, Egypt<br />
Tel: +20 2<br />
33388816/33388817<br />
Fax: +20 2 33379302<br />
United Arab Emirates<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong> SAK<br />
Dubai Branch<br />
Sheikh Rashed Road<br />
Port Saeed Area<br />
ACICO Business Park<br />
P.O. Box 88867, Dubai UAE<br />
Tel: +971 4 292 9222<br />
Fax: +971 4 294 3337<br />
United States <strong>of</strong> America<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong> SAK<br />
New York Branch<br />
299 Park Avenue<br />
New York, NY 10171<br />
USA<br />
Tel: +1 212 303 9800<br />
Fax: +1 212 319 8269<br />
United Kingdom<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong><br />
(International) Plc<br />
Head Office<br />
13 George Street<br />
London W1U 3QJ, UK<br />
Tel: +44 20 7224 2277<br />
Fax: +44 20 7224 2101<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong><br />
(International) Plc<br />
Portman Square Branch<br />
7 Portman Square<br />
London W1H 6NA, UK<br />
Tel: +44 20 7224 2277<br />
Fax: +44 20 7486 3877<br />
France<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong><br />
(International) Plc<br />
Paris Branch<br />
90 Avenue des Champs-Elysees<br />
75008 Paris, France<br />
Tel: +33 1 5659 8600<br />
Fax: +33 1 5659 8623<br />
Singapore<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong> SAK<br />
Singapore Branch<br />
9 Raffles Place #51-01/02<br />
Republic Plaza<br />
Singapore 048619<br />
Tel: +65 6222 5348<br />
Fax: +65 6224 5438<br />
Vietnam<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong> SAK<br />
Vietnam Representative Office<br />
Room 2006, Sun Wah Tower<br />
115 Nguyen Hue Blvd, District 1<br />
Ho Chi Minh City<br />
Vietnam<br />
Tel: +84 8 3827 8008<br />
Fax: +84 8 3827 8009<br />
China<br />
<strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong> SAK<br />
Shanghai Representative Office<br />
Suite 1003, 10th Floor, Azia Center<br />
1233 Lujiazui Ring Road<br />
Shanghai 200120<br />
China<br />
Tel: +86 21 6888 1092<br />
Fax: +86 21 5047 1011<br />
NBK Capital<br />
<strong>Kuwait</strong><br />
NBK Capital<br />
38th Floor, Arraya II Building<br />
Shuhada’a Street, Sharq<br />
P.O. Box 4950, Safat 13050<br />
<strong>Kuwait</strong><br />
Tel: +965 2224 6900<br />
Fax: +965 2224 6904<br />
United Arab Emirates<br />
NBK Capital Limited<br />
Precinct Building 3, Office 404<br />
Dubai International Financial Center<br />
P.O. Box 506506, Dubai<br />
United Arab Emirates<br />
Tel: +971 4 365 2800<br />
Fax: +971 4 365 2805<br />
Turkey<br />
NBK Capital<br />
Arastima ve Musavirlik AS<br />
SUN Plaza, 30th Floor<br />
Dereboyu Sk. No.24<br />
Maslak 34398, Istanbul, Turkey<br />
Tel: +90 212 276 5400<br />
Fax: +90 212 276 5401<br />
Associates<br />
Qatar<br />
International <strong>Bank</strong> <strong>of</strong> Qatar (QSC)<br />
Suhaim bin Hamad Street<br />
P.O. Box 2001<br />
Doha, Qatar<br />
Tel: +974 447 3700<br />
Fax: +974 447 3710<br />
Turkey<br />
Turkish <strong>Bank</strong><br />
Valikonagl CAD. 7<br />
Nisantasi 34371,<br />
Istanbul, Turkey<br />
Tel: +90 212 373 6373<br />
Fax: +90 212 225 0353<br />
Copyright Notice. <strong>Economic</strong> <strong>Brief</strong> is a publication <strong>of</strong> <strong>National</strong> <strong>Bank</strong> <strong>of</strong> <strong>Kuwait</strong>. No part <strong>of</strong> this publication ©<br />
.may be reproduced or duplicated without the prior consent <strong>of</strong> NBK