KAMCO offers 200 million shares of Manafa'e Investment Company for private placement

Manafa'e, a Kuwaiti closed shareholding company (under incorporation) with a capital of KD 20 million (US$ 68.5 million), will operate in accordance with the regulations of the Ministry of Commerce & Industry, and the Central Bank of Kuwait. The company's business activities will be in compliance with Islamic Shari'ah.

Manafa'e will seek a leading position in the field of Islamic financial services by offering innovative investment tools. Its major business activities will be asset management and investment services, real estate investment and financing, financing services, advisory services and corporate finance. The company's activities will be under the supervision of a Shari'ah advisory panel. Manafa'e will appoint a working team of local and international experts in Islamic investment and finance to accelerate the start-up of operations. Initially, Manafa'e will focus its business in the local marketplace, with plans for future expansion into regional markets.

KAMCO has reached agreement with Al-Imtiaz Investment & Financing Company KSCC under which Al-Imtiaz will acquire an equity stake in Manafa'e. KAMCO believes that the strategic partner ship with Al-Imtiaz will support the growth and success of Manafa'e.

Al-Imtiaz is an investment company incorporated with a paid-up capital of KD 36 million (US$ 123.3 million) and specialised in Islamic financial and investment services. Al-Imtiaz enjoys a base of reputable strategic investors of individual and corporate players in the Islamic finance field and is Al-Imtiaz managed by a professional team of experts in Islamic finance. Al-Imtiaz's executive management has a track record that spans the whole region and has played a significant role in developing many local and regional companies.

Studies by KAMCO have shown that market capitalisation of listed Islamic investment companies grew by 134.5 per cent in 2004 to reach KD 1.16 billion (US$ 3.97 billion), representing 28 per cent of market capitalisation for the total investment sector, and 5 per cent of total market capitalisation for the entire Kuwaiti market as at the end of 2004.

The study projections indicate that Manafa'e will post a return on shareholders' equity of around 20 per cent by the end of its fifth year of operation, and an internal rate of return of about 32.5 per cent (based on the current price-to-earning and price-to-book ratios of the Kuwaiti investment sector) during the period from the first year until listing of the company on Kuwait Stock Exchange (KSE), which is expected to take place by the end of the fourth year.

KAMCO believes that investment in Manafa'e represents a good opportunity for its clients, given the large growth opportunities expected in the Islamic investment and financing sectors. In addition, Manafa'e will have a base of strategic shareholders with extensive experience in local and regional markets. The strategic promoters believe that the field of Islamic asset management and financial services is still not fully served and they expect Manafa'e with its targeted capacities to be an added value in serving this field. Moreover, Manaf'e has a clear exit strategy aimed at KSE listing to generate high returns for shareholders.