Markaz holds General Assembly meeting

2005 was an outstanding year for Markaz; the Company achieved a record net profit of KD 38.67 million in 2005, an increase of 169% over the previous year's result of KD 14.63 million. This growth in profit is largely attributable to increase in investment income, up by 176% and management fees, up by 96%.

Earnings per share (EPS) reached 98 fils, up 158% from 38 fils in 2004.

Markaz's total equity at the close of 2005 amounted to KD 128.75 million, compared to KD 81.42 million in 2004. The return on equity (ROE) rose to 37% from 19% in 2004.

Markaz's local and GCC investment department continued its great performance for the year of 2005. Markaz's funds have continued to outperform the benchmarks, building up on its reputation of delivering consistent and quality performance to its clients over a long period of time. In 2005, Mumtaz gained 74%, and Midaf closed the year with a gain of 67%, both being benchmarked against the KIC index's performance of 67%. Markaz Islamic fund ended the year at 65% return against the benchmark performance of 60%.

Forsa fund, a derivatives fund with focus on writing options on Kuwaiti stocks, reached KD 124 million in net assets and returned a year end gain of 59%. During 2005, Forsa fund introduced stock options for the first time in the local market on the 28th of March.

Recent product launches include Markaz Gulf Fund in December 2005 and both Atlas Exchange Traded Funds (ETFs) and Atlas Fund of Hedge Funds in September 2005.

Total assets under management increased rapidly from $ 2.86 billion as on 31st December 2004 to $ 4.73 billion as on 31st December 2005. During 2005 Markaz expanded its client base to a much greater degree. Markaz's clients encompass individuals, investment organizations in the public and private sectors, as well as family-owned businesses. International investors have also shown a definite interest for the GCC markets.

In 2005, Markaz was able to selectively execute a number of financial transactions that met investors' expectations, and supported the expansion of the regional capital markets:

• Markaz has originated, arranged, co-structured and participated in the management and placement of the first rated corporate Sukuk for a Kuwaiti company, Commercial Real Estate Company. The USD 100 million Sukuk has 5-year tenure, and is backed by real estate assets; it was rated BBB+ by Capital Intelligence.

• In April, Markaz managed a rights' offering of KD 17.5 million for Independent Petroleum Group ("IPG").

• In June, Markaz managed and underwrote Kuwait Privatization Projects Company's ("KPPC") capital increase. KPPC increased its share capital through issuing 150 million equity shares at a price of 145 Kuwaiti Fils per share. The issue size was KD 21.75 million (USD 74.0 million) and it was placed successfully by Markaz.

Markaz has also performed several financial advisory mandates including valuation of projects, advising corporations on mergers and spin-offs, and assisting public companies in reviewing and developing their strategies in light of the local and regional changes that are taking place.

Going forward, Markaz intends in 2006 to consolidate its role as a prime regional player in investment banking and asset management through the following:

1- Markaz's asset management capabilities will be extended to cover GCC and MENA.

2- Markaz is also strongly committed to participate into the development of the real estate sector, where demographic forces and Government fiscal surpluses offer a sound investment proposition of sustainable growth.

3- Following the success of Forsa fund, Markaz Structured Finance team would be launching more derivatives products, to capitalize on its expertise and benefit from the tremendous untapped growth potential of the derivatives.

4- Finally, Markaz intends to seize the promising private equity opportunities resulting from privatization and increasing willingness of family businesses to be listed, in particular in the Energy sector.