Markaz announces KD24.67m net profit for nine months

Mr. Diraar Y. Alghanim, Chairman & Managing Director of Markaz, said, "Our net profit for the nine months ending September 30, 2007 reached KD24.67m, an earning per share of 59 fils; a substantial increase over last year's results of KD1.98m in net profit or 5 fils per share (for the same period). Assets under Management totalled KD1.4bn as of the end of Q3 2007, and our management fees increased by over 25% over last year, and reached KD10.85m."

Asset management

Markaz's local, regional and international funds, investment products, and portfolios continued to perform positively in Q3 2007.

Local and GCC investment

This has been an excellent period for the Kuwait Stock Exchange, the KIC index rose 33.7% during the nine month period ending September 30, 2007. During this period Markaz's Local and GCC Investments have achieved record returns. Markaz's flagship local equity investment fund and winner of two Lipper-Reuters awards for Best Equity Fund in Kuwait for the periods (3 years) and (5 years), "Mumtaz" achieved returns of 50% for the nine month period.

Markaz Gulf Fund which invests in GCC equities, ended the nine month period with a return of 28% YTD, substantially outperforming the MSCI GCC Index, which increased by 17.15% for the same period.

International investment

Markaz international funds and investment products have all outperformed their respective benchmarks since the beginning of the year. Markaz Atlas Diversified Fund achieved a 16.16% return compared with 10.1% for MSCI World Index.

Markaz's recently launched product, Markaz IPO and Pre-IPO Program, achieved a return of 20% for the five months period since its inception. The Program participates in IPOs and Pre- IPOs, focusing predominantly on Emerging Markets.

Markaz's investments in private equity funds achieved a 15.79 % returns for the nine month period ending September 2007.

Markaz has several investment products under establishment, and is in the process of launching an Islamic Money Market Fund.

Investment banking

In corporate finance, Markaz successfully structured and placed a $50m Sukuk Issue for Kuwait Resort Company; it also advised Vending Networks Company on its listing on the Kuwait Stock Exchange. Additionally, Markaz underwrote and managed a 100% capital increase for Kuwait Privatisation Projects Holding Company.

In Oil & Gas, Markaz increased the capital of Kuwait First Transportation Company (KFTC) to KD 15 million. KFTC is a heavy equipment leasing company focused on serving the oil and gas sector in the MENA region.

In real estate, Markaz launched Markaz Real Estate Opportunities Fund, which invests in the development of real estate projects in the MENA region. The Fund has invested in Saudi Arabia, Lebanon, Syria and Qatar. During the third quarter, Markaz underwrote and placed 30% of the capital of Lusail Waterfront Investment Company; a company that acquired 300,000 square metres of sea front land in the Lusail area in Doha, Qatar.

Internationally, Mar-Gulf Management, the US real estate investment arm of Markaz, sold its second fund, Markaz US Retail Realty, for approximately US $245 million, which generated an IRR of 27%. Markaz is in the process of launching its fourth US real estate fund, Markaz Multifamily Real Estate IV, which will selectively invest in the development of apartment properties in the US; the Fund will be a prime beneficiary of the housing and sub-prime crisis in the US.

Regional expansion

Markaz regional expansion efforts are materializing. Last year, Markaz established its Qatar Branch in the Qatar Financial Centre. A representative office in Beirut has been approved by the concerned authorities, and will be established in the 1st Quarter of 2008. Markaz also established a subsidiary company in Saudi Arabia, and opened an office in Riyadh.

Research

During the first nine months of 2007, Markaz has strengthened its activity in publishing researches and analysis themed with the investment sectors relevant to Markaz business. This supports the investment decision making process with a strong base, and a clear vision.

In tune with world class practices in the research industry, Kuwait Financial Centre 'Markaz' has recently launched "MVX", a new innovative index to measure stock market volatility in the emerging markets and GCC region. The model considers many statistical properties of the underlying GCC stock markets in order to calculate the volatility index. Markaz also publishes a monthly research that dwells on asset allocation for GCC stock markets. The research recommends asset allocation to all the GCC stock markets based on a model developed in-house. Historical back-testing during the last five years has yielded consistent out-performance.

Corporate social responsibility

Since the beginning of the year, Markaz was involved in many corporate social responsibility efforts. These causes spanned the social, competitive sports and educational sectors in Kuwait and elsewhere. This reflects the company's commitment to significantly contribute to the society in more than one way.

Kuwait Financial Centre S.A.K. 'Markaz', with total assets under management of over KD 1.4 billion as of September 30, 2007, was established in 1974 and has become one of the leading asset management and investment banking institutions in the Arabian Gulf Region. Markaz was listed on the Kuwait Stock Exchange (KSE) in 1997; and has been awarded a BBB+ corporate rating by Capital Intelligence Ltd.