ALSHALL Weekly Economic Report Volume 29 – Issue 41 – 13th October 2019

1Local Real Estate Foreigners’2 Trading3 Features Comparative4 The5 Weekly Market Holdings in the at Boursa Performance of Performance of September 2019 Kuwaiti Banking September 2019 Selected Stock Markets Sector September 2019

Prepared by Economic Research Unit I ALSHALL Consulting Co. I Tel: + 965 22451535 I Fax: +965 22422619 1 Local Real Estate Market September 2019

The latest released data by the Ministry of Justice -Real Value of investment housing activity scored KD 103.1 Estate Registration and Authentications Department- million, higher by 90.1% from KD 54.2 million in August (after excluding the crafts activity and the coastal strip 2019. Its contribution to total liquidity decreased to 31.4% system) indicate a great increase in real estate market versus 37.6% in August 2019. Monthly trading average liquidity during September 2019 versus August 2019 value of investment housing activity during 12 months liquidity. Total value of contracts and agencies traded scored KD 118.8 million. This means that trading value during September scored KD 328.9 million which was a during September 2019 was lower by -13.2% compared 127.8% increase than its counterpart value in August 2019 with the last 12 months' average. Moreover, its deals which was at KD 144.4 million, also higher by 55.8% increased to 127 deals compared with 67 deals in August when compared with September 2018 liquidity that 2019. Therefore, the average value per deal for investment totalled KD 211.1 million. housing scored KD 812 thousand versus KD 810 thousand in August 2019, representing an increase by 0.3%. Trading during September 2019 was distributed between KD 308.4 million to contracts and about KD 20.5 million Commercial activity trading value increased to KD 75.9 to agencies. Number of real estate deals in this month million or by 313.4%, compared with KD 18.4 million in scored 590 deals of which 560 contracts and 30 agencies. August 2019. Its percentage out of total real estate trading The highest share in real estate deals went to Al Ahmadi value rose to 23.1% in September versus 12.7% in August by 182 deals representing about 30.8% of the 2019. Average value of commercial activity trading in 12 total number of real estate deals. Hawally Governorate months scored about KD 58.5 million. This means that came second with 114 deals representing 19.3%. While total trading value in September was higher by 29.7% than the lowest share went to Al by 42 deals, the last 12 months' average. However, its deals scored 38 representing about 7.1% of the total. deals compared with 46 for August 2019. The average value per deal for September 2019 scored KD 2 million Value of private residential activity scored KD 146.5 versus KD 399 thousand average for August 2019, a million, rising by 108.2% compared with KD 70.3 million 400.5% increase. Moreover, two deals occurred for stores in August 2019. While its contribution percentage activity in September 2019 valued at KD 3.4 million, decreased to 44.5% of the total real estate trading versus compared with 1 deal at KD 1.5 million in August 2019. 48.7% in August 2019. The monthly average value for private residence trading in the last 12 months scored KD When comparing total September 2019 trading with 131.6 million. This means that September trading value September 2018, we note that real estate markets liquidity was higher by 11.3% than the average. The number of increased from KD 211.1 million to KD 328.9 million, a deals for this activity was at 423 deals versus 417 deals in 55.8% rise as mentioned previously. The rise included the August 2019. Accordingly, the average value of private commercial activity by 2272% (compared to one deal that residence activity deal registered at KD 346 thousand occurred in September 2018 valued at KD 3.2 million) and versus KD 324 thousand in August 2019, an increase by private residence activity by 49.3%, while investment 6.8%. housing activity declined by -6.1% compared to their levels in September 2018. 1

If we compare total trading value since the beginning of will continue at the same level for the remainder of the the current year until September 2019 with its 2018 year (3 months), market trading value would amount to counterpart, we note an increase in total real estate KD 3.466 billion, which is KD 165.1 million lower than market liquidity from KD 2.509 billion to KD 2.600 the total for last year, representing a -4.5% decline below billion, a 3.6% growth. If we assume that market liquidity 2018 level which scored KD 3.631 billion.

Deals Distribution According to the of Kuwait

Al Ahmadi 30.8%

Al Jahra Mubarak Al Kabeer 7.1% 17.6% 14.4%

Al Farwaniyah Hawally 10.7% 19.3%

2 Real Estate Transactions Trading Value and the Monthly Traded Average KD Million 250

200

150 131.6

118.8 100

58.5 50

0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2018 2018 2018 2019 2019 2019 2019 2019 2019 2019 2019 2019

Private Investment Commercial

Private Avg. Investment Avg. Commercial Avg.

Value of Real Estate Transaction During the Last 12 Months

KD Million 600

500

400

300

200

100

0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2018 2018 2018 2019 2019 2019 2019 2019 2019 2019 2019 2019

Private Investment Commercial

3 2 Foreigners’ Holdings in the Kuwaiti Banking Sector

The world's stock markets are in a state of extreme value of the sector as of October 9, 2019. This confirms volatility as concerns about the performance of the global what we stated earlier that these investments are going in economy have coincided with a substantial rise in opposite direction to the behavior of local investors so far. sovereign and private debt and the high rise in stock prices The need to publish daily information about them is after a long time of cheap money abundance. As Boursa important because it serves two purposes. Kuwait has become open to foreign indirect investment, we believe it is important that we monitor its behavior The first one is protective as the negative forecasts regarding its investments therein. Under the troubled currently prevailing in the world may result in the situation currently, the follow-up will be repeated at close withdrawal of those hot funds at an inappropriate time. Knowing the matter when it happens and the local periods, perhaps weekly according to our assessment of investor's participation at an early stage might limit it and the performance of world stock markets. We have to point reduce its harm. The second positive purpose is in case of out that all that is published about foreign investment at the stability or even the increase of these investments, the stock market comes from Boursa Kuwait website and knowing that information prevents speculation about the once a week, and only for the banking sector. We believe it withdrawal of foreigners or mitigates the impact of the should be available about all listed companies on a daily basis. rumor climate, which may support the local investor's confidence, which is still weak. Available figures on foreign investments in Kuwaiti banks, and contrary to expectations, indicate that these The world today is competing for a piece of information in investments rose in their absolute value from the lowest terms of the speed of its access and in terms of its point at KD 1311 million achieved on September 18, 2019 significance. Trading information is the easiest and the by 8.07% of the capitalization value of the sector to about need for it to guide the decision making is a crucial KD 1485 million or about 8.74% of the capitalization necessity. We do not see a single reason for publishing it once a week and about only one sector.

Foreigners’ Holdings and Market Cap in Kuwaiti Banks

Market Cap in Kuwaiti Banks Holdings in Kuwaiti Banks 4 3 Trading Features at Boursa Kuwait – September 2019

Kuwait Clearing Company issued its report regarding The last contributor to liquidity is the investment funds “Trading Volume according to Nationality and Category” sector which acquired 7.2% of total value of sold shares for the period from 012019/01/ to 302019/09/ which is (12.2% for the same period of 2018) and 6.3% of total published on the official website of Boursa Kuwait. The value of purchased shares (8.3% for the same period report indicated that individuals still form the largest 2018). The sector sold shares worth KD 446.894 million trading group and their contribution is rising in terms of and purchased shares worth KD 390.453 million, with a selling and purchasing shares. They acquired 44.9% of net trading of selling by KD 56.441 million. total value of sold shares (36.2% for the first 9 months of 2018) and 41% of total value of purchased shares (37.1% Boursa Kuwait still continues to be a local Boursa with for the first 9 months of 2018). Individual investors sold Kuwaiti traders forming the largest trading group. They shares in the amount of KD 2.779 billion and purchased sold shares worth KD 5.230 billion capturing 84.5% of shares in the amount of KD 2.537 billion with a net trading total sold shares (81.5% for the same period of 2018), and of selling, by KD 241.722 million. purchased shares worth KD 4.746 billion acquiring 76.7% of total value of purchased shares (74.8% for the same The second large contributor to market liquidity is the period of 2018). As such, their net trading balance was institutions and companies sector and their purchases -most selling- by KD 483.681 million. declined alongside their sold shares. It acquired 30.4% of total value of purchased shares (34.6% for the same period Percentage share of other investors, out of the total of 2018) and 21.7% of total value of sold shares (28.1% purchased stocks value scored 18.7% (20% for the same for the same period of 2018). The sector purchased shares period of 2018). Purchasing stocks worth KD 1.161 billion worth KD 1.884 billion and sold shares worth KD 1.342 and sold shares worth KD 651.026 million, 10.5% of total billion, becoming the only sector with net trading of sold shares (13.2% for the same period of 2018); thus their buying by KD 542.117 million. net trading value was -the only purchasing- by KD 509.821 million. This means that the other foreign The third contributor is the clients’ accounts (portfolios) investors' confidence in the Boursa is increasing which which captured 26.2% of total value of sold shares (23.4% indicates an increased appetite from outside the GCC for the same period of 2018) and 22.3% of total value of region after the recent reforms. purchased shares (20% for the same period of 2018). This sector sold shares worth KD 1.624 billion and purchased GCC Investors’ share out of total value of sold shares shares worth KD 1.380 billion, with a net trading balance scored 5% (5.3% for the same period of 2018) worth KD of most sold shares by KD 243.954 million. 310.535 million, while value of their purchased shares scored 4.6% (5.2% in the same period of 2018), worth KD 284.395 million. Their net trading was selling by KD 26.140 million.

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Relative distribution among nationalities changed from its Number of active accounts between the end of December predecessor and scored 80.6% for Kuwaitis, 14.6% for 2018 and the end of September 2019 rose by 8.9%, traders from other nationalities, and 4.8% for GCC traders compared with a decline of -23% between end of compared with 78.1%, 16.6% and 5.3% for Kuwaitis, December 2017 and end of September 2018. Number of other nationalities and GCC traders respectively, for the active trading accounts in the end of September 2019 was same period in 2018. This means Boursa Kuwait remained at 15,857 or 4.04% of total accounts, compared to 15,779 local with the major share for the local investors and their accounts in the end of August 2019, i.e. 4.03% of total share is increasing. Still, turnout from traders from outside accounts for the same month, a rise by 0.5% during the GCC region than their GCC counterparts, and the September 2019. majority of the trading is still for individuals.

6 4 Comparative Performance of Selected Stock Markets – September 2019

The performance of September was positive for most September was a Gulf stock market too as Bahraini stock selected markets during which 11 markets achieved gains exchange achieved about -1.1% losses, but it ended the and 3 markets lost. The outcome of the performance for month as the best performing Gulf market since the the nine months of this year was 13 markets gainers beginning of the year by gains of about 13.4%. compared to their price levels since the beginning of the year, while one market lost. September's performance slightly changed the ranking order in the performance of markets since the beginning of The biggest gainer in September was the Japanese market the current year until the end of this month. The French whose index gained 5.1% in one month raising its gains market took the lead among gainers within the sample, by since the beginning of this year to around 8.7% by the end gains of about 20% as mentioned above. Despite the of September. The second biggest gainer was the German negative impact on China because of its trade war with the market with gains of around 4.1% in September, which United States, it remained the third largest gainer since the placed it in the second position in performance since the beginning of the year with gains of about 16.5%. beginning of the year with gains of about 17.7%. The French market was the third biggest gainer by 3.6% which became the best performer since the beginning of the year with its index gaining about 20%.

The German market was in the second place as we mentioned by gains of about 17.7%.

The biggest loser in September was Boursa Kuwait as its index lost about -4.4%, falling from the first to the sixth position and its gains decreased since the beginning of the year to about 11.8% compared to about 17%. Abu Dhabi's market achieved the second biggest losses in September by its index losing -2.1% and its gains since the beginning of the year have fallen from around 5.1% in the end of August to 2.9% by the end of September. The least loser in

7 Performance of Selected Stock Markets during September - 2019 compared to the end of December - 2018

-10% -5% 0% 5% 10% 15% 20% 25%

CAC 40 (France) 20.0% DAX (Germany) 17.7% SSE Composite (China) 16.5%

DJI (USA) 15.4%

Bahrain Bourse 13.4%

Bourse Kuwait (All Share Market Index) 11.8%

FTSE 100 (UK) 10.1%

Dubai Financial Market 9.9%

Nikkei 225 (Japan) 8.7%

BSE SenSex (India) 7.2%

Saudi Stock Exchange 3.4% Abu Dhabi Securities Exchange 2.9% Qatar Exchange 0.7%

Muscat Securities Market -7.1%

Performance of Selected Stock Markets during September 2019

6% 5.1% 4.1% 4% 3.6% 3.6% 2.8% 1.9% 2% 1.3% 0.9% 0.8% 0.7% 0.3% 0%

-1.1% -2% -2.1%

-4%

-6%

-4.4%

DJI (USA) FTSE 100 (UK) Bahrain Bourse DAX (Germany)CAC 40 (France) BSE SenSex (India) Qatar Exchange Nikkei 225 (Japan) Saudi Stock Exchange SSE Composite (China) Dubai Financial Market Muscat Securities Market Abu Dhabi Securities Exchange

Bourse Kuwait (All Share Market Index) 8 5 The Weekly Performance of Boursa Kuwait

The performance of Boursa Kuwait for last week was (value weighted) closed at 496.5 points as of last more active compared to the previous one. Where the Thursday, showing an increase by 6.3 points or by 1.3% traded value, traded volume, number of transactions and compared with its level last week. It remained higher by the general index (AlShall index) increased. AlShall Index 67.5 points or by 15.7% compared with the end of 2018.

The following tables summarize last week’s performance of Boursa Kuwait

Week 41 Week 40 Diff Description 10/10/2019 03/10/2019 %

Working days 5 5

AlShall index (33 Companies) 496.5 490.2 1.3%

Boursa All Share Market Index 5,705.9 5,635.7 1.2%

Value Trade (KD) 117,770,280 75,245,165

Daily average (KD) 23,554,056 15,049,033 56.5%

Volume Trade (Shares) 573,910,353 430,043,944

Daily average (Shares) 114,782,071 86,008,789 33.5%

Transactions 24,941 21,982

Daily average (Transactions) 4,988 4,396 13.5%

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Most Active Sectors & Companies

Description Value Traded % of Total Sectors KD Market

KUWAIT FINANCE HOUSE 21,931,800 18.6%

AHLI UNITED BANK (B.S.C) 15,206,804 12.9%

GULF BANK 13,474,267 11.4%

NATIONAL BANK OF KUWAIT 12,009,051 10.2%

MOBILE TELECOMMUNICATIONS 10,696,241 9.1% COMPANY Total 73,318,162 62.3%

Description Value Traded % of Total

Sectors KD Market

BANKS SECTOR 74,987,190 63.7%

FINANCIAL SERVICES SECTOR 11,739,662 10.0%

TELECOMMUNICATIONS SECTOR 11,058,417 9.4%

INDUSTRIALS SECTOR 9,708,359 8.2%

REAL ESTATE SECTOR 7,182,841 6.1%

Week 41 Week 40 ALSHALL INDEX 10/10/2019 03/10/2019

Increased Value (# of Companies) 13 4

Decreased Value (# of Companies) 12 21

Unchanged Value (# of Companies) 8 8

Total Companies 33 33

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Thu Thu Diff Close Diff Company Name 10/10/2019 03/10/2019 % 2018 %

1 National Bank Of Kuwait 625.0 618.9 1.0 520.4 20.1

2 Gulf Bank 225.9 225.9 0.0 204.8 10.3

3 Commercial Bank Of Kuwait 517.0 516.0 0.2 516.0 0.2

4 Al-Ahli Bank Of Kuwait 195.8 196.4 (0.3) 193.1 1.4

5 Kuwait International Bank 291.5 289.4 0.7 275.1 6.0

6 Ahli United Bank 337.6 331.3 1.9 296.5 13.9

7 Burgan Bank 332.5 336.9 (1.3) 284.8 16.7

8 Kuwait Finance Bank 2,068.6 2,019.8 2.4 1,659.8 24.6

Banking Sector 593.9 587.1 1.2 502.7 18.1

9 Commercial Facilities Company 144.4 144.4 0.0 126.3 14.3

10 International Financial Advisors 159.1 160.6 (0.9) 227.8 (30.2)

11 National Investments Company 156.0 156.0 0.0 103.8 50.3

12 Kuwait Projects Company (Holding) 573.9 573.9 0.0 486.7 17.9

13 Coast Investment & Development Company 44.4 43.5 2.1 45.4 (2.2)

Investment Sector 214.9 214.8 0.0 187.1 14.9

14 Kuwait Insurance Company 70.6 72.5 (2.6) 79.4 (11.1)

15 Gulf Insurance Company 387.8 387.8 0.0 373.5 3.8

16 Al-Ahleia Insurance Company 161.5 161.8 (0.2) 160.3 0.7

17 Warba Insurance Company 51.2 57.3 (10.6) 54.1 (5.4)

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Thu Thu Diff Close Diff Company Name 10/10/2019 03/10/2019 % 2018 %

Insurance Sector 145.7 147.3 (1.1) 147.7 (1.4)

18 Kuwait Real Estate Company 149.8 144.1 4.0 89.0 68.3

19 United Realty Company 122.4 124.4 (1.6) 122.4 0.0

20 National Real Estate Company 217.8 218.6 (0.4) 229.5 (5.1)

21 Salhiaha Real Estate Company 1,332.5 1,336.5 (0.3) 1,332.5 0.0

Real Estate Sector 184.9 184.2 0.4 172.2 7.4

22 The National Industries 202.8 198.3 2.3 141.2 43.6

23 Refrigeration Industries Co 392.0 392.0 0.0 571.3 (31.4)

24 Gulf Cable & Electrical Industries 185.1 185.1 0.0 140.3 31.9

Industrial Sector 186.3 184.4 1.0 177.5 5.0

25 Kuwait National Cinemas 502.2 483.3 3.9 671.0 (25.2)

26 The Public Warehousing Co 3,798.0 3,746.7 1.4 3,579.3 6.1

27 Mobile Telecommunications Co (ZAIN) 971.9 918.9 5.8 662.9 46.6

28 Safat Energy Co 19.0 18.8 1.1 29.9 (36.5)

Services Sector 1,282.5 1,241.4 3.3 1,085.3 18.2

29 Livestock Transport & Trading Co 157.5 157.5 0.0 156.7 0.5

30 Danah Alsafat Foodstuff Company 17.5 26.9 (34.9) 39.0 (55.1)

Food Sector 453.8 454.9 (0.2) 456.1 (0.5)

31 Sharjah Cement Co 254.1 266.6 (4.7) 362.0 (29.8)

32 Gulf Cement Co 223.8 214.1 4.5 273.8 (18.3)

33 Umm Al-Qaiwain Cement Industries 451.8 476.8 (5.2) 489.3 (7.7)

Non Kuwaiti Companies 190.3 191.5 (0.6) 215.0 (11.5)

General Index 496.5 490.2 1.3 429.0 15.7

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