Kuwait Financial Centre “Markaz” held its ordinary and extraordinary General Assembly meetings on Sunday, 27 March 2022, with a 75.9% attendance. The assembly approved all items of the agendas, including the Board of Directors’ recommendation to distribute cash dividends of 10% per nominal value of the share or 10 fils per share, and bonus shares of 5% per paid capital, in addition to increasing the authorized and issued capital.
Markaz recorded an extraordinary financial performance for 2021, with total revenues soaring from KD 13.16 million over the previous year to KD 30.6 million. The shareholders’ net profit reached KD 14.9 million compared to the shareholders’ net loss of KD 1.72 million in the previous year. The profit per share increased to 31 fils for 2021, where Total Assets under Management recorded an increase for the fifth subsequent quarter, to reach of KD 1.04 billion on December 31, 2021.
Commenting on the results, Markaz’s Chairman, Mr. Diraar Yusuf Alghanim said: “The positive financial results recorded for the year ended 31 December, 2021 are testament to the management’s technical ability to identify local and international investment opportunities that generated these outstanding results, in line with the policies established by the Board of Directors and its committees. The results also reflect the executive management’s dedication, in the midst of a competitive environment.
“Despite the challenges resulting from the COVID-19 pandemic, Markaz continued its trading operations with absolute flexibility, focusing on fulfilling the company’s long-term goals. This was supported by a diverse business model and our extended geographical investments, financial discipline and solid capital structure, to maintain a prominent position that qualifies us to proceed with our development plans in the forthcoming years. Our performance throughout 2021 emphasized our capabilities to provide our clientele with tangible values and further develop our operations, despite the challenging operational conditions.” Alghanim added.
Business Strategy
Alghanim added: “The progressive and rapid development of the market’s dynamics are reshaping the market scene. There is no doubt that companies adjusting to the varying demands and reassessing their strategies accordingly, are bound to benefit from emerging opportunities. That said; strategic planning within Markaz follows a dynamic and organized approach to guarantee a sustainable position within the markets we operate. Moreover; at Markaz, we believe that digital transformation will play a major role in the financial services sector, hence we are working diligently on improving our capacities to be up to the competition in this field. Our utmost goal is to reinforce our current record in order to create shareholder value.”
Outlook
“The recent market changes following the geopolitical fluctuations involving Russia and Ukraine will have a direct and progressive impact on European countries, leading to an increase in inflation levels and the sequential rise of oil prices. That said; it is anticipated that the GCC economies will benefit from these opportunities in 2022, in addition to the restorative initiatives of the GCC governments to promote economic growth and address inflation. Investors also benefited in 2021 from the easing of fiscal and monetary policies. Unlike 2021, its expected that performance in 2022 will be reliant on profit growth. Although the COVID-19 mutations continue to pose a threat, and geopolitical tensions continue to rise, we remain cautiously optimistic at Markaz, and reliant on our sustainable and solid business model. We will continue to explore ideal investment opportunities with the aim of delivering added value to our clients.” Alghanim stated.
Investment Climate
“The support provided by regulatory and supervisory authorities was essential to the recovery and progress of the financial sector, since the procedures imposed in April 2020 by the Central Bank of Kuwait contributed to the stability of the financial system and supported the financial services’ sector, allowing it to overcome the challenges caused by the COVID-19 pandemic. Throughout 2021, the Central Bank of Kuwait launched a series of campaigns, including the ‘Diraya’ campaign, an awareness campaign aimed at educating customers about their banking rights, in addition to the ‘Kafa’a’ initiative, which aims at building highly qualified national cadres and equipping them with the knowledge and skills necessary to develop the banking sector. These initiatives will have a positive impact in the future, as awareness campaigns in the financial sector play an important role in the development of the nation as a whole and the its financial services. The Capital Markets Authority efforts also played a crucial role throughout the years to develop the Kuwaiti Capital Market in line with international standards. Moreover, Boursa Kuwait has developed an Environmental, Social and Governance (ESG) Reporting Guide that aims to support listed companies in determining and adopting best ESG practices and reporting on (ESG) issues, to meet the growing interest in adopting and applying corporate sustainability and sustainable investments in the recent years.” Alghanim concluded.
Mr. Ali Hassan. Khalil, Markaz CEO also commented saying: “2021 was a phenomenal year for global stock markets, which witnessed to date the highest levels of mergers and acquisitions, and IPOs worldwide. This was fueled by the trust and vision of institutions that contributed to these record-breaking results. To that end, Markaz was able to see further growth and an increase in profitability. This performance is a direct result of Markaz’s research-based culture, which leads its decision making and prediction of new trends and the launch of suitable investment products that cater to the various client demands and needs.”
Strategic Campaigns
Khalil added: “In spite of the uncertainties seen over the past year across the markets, Markaz continued to focus on growth, and the review and update of its strategy. Our teams also continued to develop high quality investment products and offer advisory services in the investment banking sector, further supporting it by funding specific deals with the company’s capital, in addition to reinforcing our capabilities in wealth management and raising efficiency levels through digital transformation.”
“We aim at increasing revenues in coming years and increasing assets under management, by offering attractive investment opportunities, setting an innovative operational framework and granting access to client in Kuwait and across the region. Accordingly, Markaz established solid relationships and alliances since inception, in the United States of America, Europe, and the GCC. In turn, Markaz’s client database organically developed, creating the need for innovation and dynamism when catering to the everchanging needs and expectations of these clients, with a focus on risk management. Accordingly, our processes and systems were driven by resilience; the key factor that contributed to Markaz’s competitive ability to manage various asset classes across different countries.” Khalil concluded.
Markaz Continues to Gain the Trust of Financial Experts
In 2021, Markaz received five new prestigious awards in the financial services sector, in the field of asset management and investment banking services, as presented to its clients across the MENA region. These awards recognize Markaz’s innovative practices, sustained growth and positive performance, despite the ramifications brought about by the pandemic, in addition to its geographic presence across 13 countries and last but not least, the trust of its clients.
Among the prominent awards received by Markaz in the previous year, were ‘Best Investment Bank in Kuwait” Kuwait’, “Best Asset Manager in Kuwait” for the ninth consecutive year and the winner of the “MENA Sustainability Award”; as presented by EMEA Finance. Markaz also took home Global Investor’s 2021 “MENA Real Estate Asset Manager of the Year” award, and “Best Investment Bank” for the tenth consecutive year from Global Finance.
A Solid Presence across Markets… Fortified by Experience and Creativity
From an operational perspective, Markaz provided various services in the field of Asset Management and Investment Banking, while ensuring effective communications with all stakeholders through interactive digital solutions.
Equities
In 2021, Markaz managed to execute its investment policy in risk management and encountering variable trends in the regional and global markets, while taking advantage of the post-pandemic recovery phase through asset management strategies. Markaz MIDAF Fund, Forsa Financial Fund, and Markaz Mumtaz Fund each recorded return of 28.3%, 27.6%, and 26.2% respectively. Markaz Islamic Fund, in accordance with provisions of Islamic Sharia, recorded returns of 24.8%.
Reaffirming its leading position in the Capital Markets as a whole, and the Kuwaiti Capital Market in specific, Markaz proceeded to offer its specialized services in market making with the aim of increasing the volume of trading, hence boosting the trading of its clients’ shares in Boursa Kuwait. Throughout 2021, Markaz was Market Maker on the shares of five leading companies within their fields.
International Real Estate
Markaz executed several deals that contributed to the growth of its real estate portfolio. These investments mainly focused on the logistics sector in the USA and Europe, in addition to the residential sector in the USA. Moreover; Markaz succeeded in identifying the ideal time to exit specific deals which contributed to enriching its track record in these markets. One of the key exit deals was the sale of a logistics project to Amazon in Germany.
MENA Real Estate
Occupancy levels in Markaz’s real estate projects in the Kingdom of Saudi Arabia and the United Arab Emirates have exceeded the pre-pandemic levels, which resulted in growth in income from rental deals during the year.
Sales efforts across the main residential properties within the company’s portfolio in the UAE continued with solid and growing momentum in 2021. Markaz’s Real Estate Fund maintained high occupancy and collection levels, by adopting a pragmatic integrated approach to the day-to-day management of assets, despite the effects of the pandemic on some sectors, such as the residential, office and retail sector.
Investment Banking Services
Markaz managed to conclude four deals in the Capital Markets field, including two issuances of second tier bonds of two banks, and two deals for subscription in rights issues. In addition, Markaz executed a range of consultancy deals in the food and beverage, construction, insurance, and technology sectors.
Interactive and Innovative Digital Communications
One of the prominent achievements for Markaz in 2021 was the launch of the new website, as part of its efforts to leverage digital technology to offer best-in-class investment information and opportunities to its clients looking to embark on an investment journey. The new website provides many interactive features, a richer and more dynamic experience for its visitors, through an easy-to-use interface, and advanced technologies that respond to the needs and aspirations of customers and investors in particular, and visitors in general, in accordance with the latest international trends and standards in website design and development.
Human Capacity… One of Markaz’s Key Assets
In the midst of all the challenges witnessed throughout 2021, Markaz’s key priority was the safety of its employees by keeping them informed regarding safety and security measures. The Company was also keen to apply the highest levels of care to protect its people, and no cases of transmission of the Covid-19 virus was recorded inside the offices.
Markaz has always placed special emphasis on its employees, as the cornerstone of the company. In turn, the company seeks to create a work environment centered around their professional and personal growth. The company is characterized by a collaborative environment among teams, recruitment and retention of talent in an environment that ensures the participation of every individual, and provides an equal opportunity for career advancement. Markaz constantly focuses on development and education programs that help develop both its employees and the business. With that said; Markaz led several initiatives as part of its endeavor to enhance its business, improve the work environment and the culture of innovation among its employees. Markaz is committed to equipping its people with the skills and knowledge that enable them to innovate and develop the best investment opportunities for its clients. Various programs and initiatives that contributed to building human capacity within Markaz were launched in 2021. The most prominent of which was the launch of training programs in the field of negotiation, promoting a culture of innovation and effective communication with international experts and consultants.
Community Service
Markaz continuously strives to play a positive role within the communities it operates in. It remains committed to deploying its capabilities to empower the various segments of society, especially with regard to the development and rehabilitation of youth, empowering women, and enhancing human capacities in general, stemming from its CSR strategy built around three main pillars: building human capacity, aligning the business environment with the principles of sustainable development, and promoting good governance in the business environment.
Markaz continued to roll out one of its prominent initiatives; the Markaz Graduate Development Program (MGDP) for 2022, where 10 Kuwaiti graduates were accepted into the program, in an effort to hone their skills, develop their knowledge and support their career paths.
Emerging Trends
The year 2022 began with fluctuations in the performance of the markets as a result of high levels of inflation and interest rates, which contributed to putting some pressure on the future outlook of the markets. However, Markaz is fully qualified to benefit from emerging trends, especially with the high levels of liquidity and the resilience of its financial position. Markaz’s business plan is built around three pillars: growth, efficiency, and digital transformation, and it will continue to maintain and enhance internal controls as one of its priorities, along with financial discipline to achieve sustainable growth and build wealth for its shareholders over the long term.
It is also likely that some of the major trends in the investment sector, such as environment, social and governance (ESG) practices, digital transformation, and relatively new asset classes, will continue to influence investment decisions positively in 2022. With the changing demographics of the investment community, more and more millennial clients and the generation to follow (Generation Z) will place greater priority on important factors such as (ESG), and innovative products that best suit them. It is critical that asset managers have a high degree of flexibility, in order to meet the changing needs of the market. Markaz is committed to providing innovative investment solutions, in line with its vision to be the ideal partner in wealth creation.
