Markaz: Kuwait market sustain positive momentum driven by robust corporate earnings | Kanebridge News
Share Button

Markaz: Kuwait market sustain positive momentum driven by robust corporate earnings

S&P GCC Composite index up by 4.3% in February.

Mon, Mar 4, 2024 5:05pmGrey Clock 4 min

Kuwait Financial Centre “Markaz” released its Monthly Market Review report for the month of February 2024. Kuwait market ended positive during the month as the pickup in the pace of legislative reforms, continued expansion of non-oil activity and robust corporate earnings of major blue-chip stocks supported investor sentiment. Kuwait All Share index rose 2.4% in February, supported by the gains in the banking sector. The Banking index rose 3.1% during the month with Burgan Bank and KFH being the top gainers, rising by 7.8% and 4.9% respectively on the back of positive earnings results for FY 2023. Burgan Bank’s announcement to offer private banking and wealth management services to its high-net-worth individuals drove the stock prices up during the month. KFH recorded net profit of KD 584.5 million for the year ended 2023, an increase of 63.4% y/y. Among Premier Market stocks, Kuwait Projects Company Holding gained the most at 15.6% as the acceptance of a joint bid made by its subsidiary Jordan Kuwait Bank (and Basata Holding) to acquire a 30% stake in Madfoatcom, a leading bill processing and payment provider in Jordan was received well by the company’s shareholders.

Kuwait’s inflation (CPI) rose by 3.3% y/y in January, compared to 3.4% in the previous month. The inflation was primarily driven by the food and beverages prices, which rose 4.8% y/y during the month. Domestic credit growth eased to 1.7% in 2023, down from 7.7% in 2022. However, business and household credit growth are expected to pick up in 2024 following an uptick in project awards in 2023 and expected interest rates cuts in the second half of 2024. Kuwait’s real estate sales gathered pace in January, rising 38% m/m to KD 262 million. However, it has continued to decline, albeit at a softer pace of 5.4% on a y/y basis. Residential sales jumped 46% m/m, while investment sales fell 10% m/m despite an increase in transactions volumes.

GCC equity indices, except Abu Dhabi, Oman and Bahrain, were positive as strong corporate earnings lent support to the markets’ performance. The S&P GCC composite index witnessed an increase of 4.3% for the month. However, escalating regional geopolitical tensions and dampened hopes of early rate cuts by the U.S. Fed weighed down on the investor sentiment. Saudi Arabia and Dubai equity indices gained 7.1% and 3.4% respectively during the month. IMF estimates a 5.5% growth rate for Saudi Arabia in 2025, marking an increase from 4.5% rate projected in October 2023 on the back of the economy’s robustness. Saudi National Bank (SNB) share prices increased by 4.3% during the month following the upbeat 2023 earnings. SNB recorded a net profit of SAR 20.01 billion in 2023, rising 7.7% y/y and higher than average analyst estimates of SAR 19.5 billion. Alinma Bank’s share prices rose by 6.0% during the month driven by strong 2023 earnings and acquisition of Arabian Shield Cooperative Insurance Company’s shares. Alinma Bank purchased 4.58 million shares in Arabian Shield Cooperative Insurance Company from Tokio Marine and Nichido Fire Insurance (TMNF) at a value of SAR 81.02 million. Dubai equity index gains were driven by the strong performance of the real estate sector stocks following their earnings announcements for FY 2023. Emaar Development and Emaar Properties recorded returns of 13.6% and 9.3% respectively during the month. Emaar Development reported a 74% y/y increase in net profit to AED 6.6 billion in 2023 amid strong property sales in Dubai. Emaar Properties reported a 70% y/y surge in net profit to AED 11.6 billion for the year 2023. The Abu Dhabi equity index declined 2.7% driven by the fall in the performance of major blue-chip stocks. First Abu Dhabi Bank’s stock price fell by 6.8% despite 2023 earnings beating market estimates.

The IMF, in its January 2024 regional outlook, has downgraded the projected economic growth in the GCC region for 2024 to 2.7% y/y from 3.7% y/y previously projected in October 2023. The revision reflects voluntary production cuts and the adverse implications of rising geopolitical risks.  Inflation in the GCC region is expected to moderate below 3% in 2024.

Global and U.S. markets ended positive despite sticky inflation and indications from the U.S Fed Chair Jerome Powell that interest a rate cut in March is unlikely. The MSCI World index and S&P 500 indices rose 4.1% and 5.2% respectively in February. U.S inflation increased 3.1% y/y and 0.3% m/m in January owing to higher costs of shelter and healthcare. Technology stocks continued to drive global equity markets during the month as Q4 2023 earnings from Amazon, Meta Platforms, and Apple surprised on the upside. NVIDIA continued to rally as its earnings beat market expectations, with a 769% y/y surge in net profits during the quarter ending December 2023. The MSCI EM index rose by 4.6% for the month, reversing the losses recorded in January. Chinese equities index gained 8.1% on policy support measures, regulatory curb on short selling and quant trading, and state investors’ plans to expand their stock buying.

The yield on the 10-year U.S. Treasury note surged during the month and closed at 4.25%. Yields rose as comments from the U.S Fed Chair that the central bank is not ready to cut rates yet and sticky U.S inflation data caused investors to lower their expectations for potential rate cuts considerably. However, the lower borrowing needs from the U.S. Treasury department placed a cap on the yields and prevented it from rising any further.

Oil price settled at USD 83.62 per barrel, recording a monthly gain of 2.3%. The rise in European diesel demand, tighter oil supply due to ongoing geopolitical conflicts in the Middle East, and OPEC+ decision to keep the production levels unchanged supported oil prices. A slump in U.S. refining activity and disruptions to global trade have tightened diesel supplies in Europe causing the surge in oil prices. However, oil price gains were stunted by the expectations of delayed rate cuts by the U.S Fed and concerns over global oil demand. IEA revised downwards its forecast for oil demand growth in 2024 to 1.2 million barrels per day (bpd), about half of the 2.3 million bpd registered in 2023. The agency has attributed this to muted economic growth in major economies, energy efficiency improvements, growing electric vehicle fleet and fading impact of post pandemic recovery as it nears its closure. Gold prices recorded a marginal gain of 0.3% closing at USD 2,043.2/oz. Natural gas prices plunged by 11.4% during the month owing to warmer U.S. weather lowering the demand for heating fuel.

The indication from the U.S Fed during its scheduled meeting in March regarding the timing of pivot is expected to drive investor sentiment during the month. Additionally, oil price movement and any further escalation in geopolitical tensions is likely to shape GCC markets performance in the next month.



MOST POPULAR

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual

Related Stories
Property
AACCI’s Strategic Vision for Enhancing Australia-Arab Trade Relations
Money
Saudi Arabia’s Aviation Sector Fuels Economic Growth and Job Creation
Money
Preparatory Work for UAE to Oman Hafeet Rail Project Commences at Full Speed
AACCI’s Strategic Vision for Enhancing Australia-Arab Trade Relations

The Australian Arab Chamber of Commerce & Industry (AACCI) is fostering robust trade relations between Australia and Arab countries.

Mon, May 20, 2024 5 min

In an era where global trade and international relationships are more crucial than ever, the Australia Arab Chamber of Commerce & Industry (AACCI) serves as a bridge, for cooperation and growth between Australia and the Arab nations. Led by its Chairman, Mr. Mohamed Hage, the AACCI has taken on projects aimed at strengthening relationships and fostering development across borders.

This exclusive interview explores the initiatives implemented by the AACCI to expand its presence and influence in the region including the significant establishment of a new operational hub in Dubai. We also delve into how the Chamber embraces education through training and research, its participation in major international exhibitions, and its active support for both large corporations and small businesses.

Looking towards tomorrow, Mr. Mohamed shares his vision for broadening AACCI’s reach emphasizing the importance of the on-ground operations and cultural understanding in building business connections.

-Could you elaborate on the Australia Arab Chamber of Commerce & Industry, including its objectives and main areas of focus?

The Australia Arab Chamber of Commerce & Industry (AACCI) plays a fundamental role, in promoting business partnerships and trade between Australia and the 22 Arab countries. As a member of the Union of Arab Chambers affiliated with the Arab League, AACCI focuses on strengthening trade and investment ties, across these countries.

To nurture these connections effectively AACCI has outlined four objectives: facilitating trade and investment activities, certifying documents, educating stakeholders, and offering marketing assistance.

Our initiatives are designed not only to empower trade and investment endeavors but to also ensure engagement with specific sectors that drive these activities. With an understanding of the characteristics, strengths and preferences of each country, AACCI prides itself on its specialized knowledge customized to suit the distinct business environments of these nations.

– As the AACCI approaches its 50th anniversary, what have been some of the key milestones and achievements?

I believe one of AACCI’s accomplishments is the opportunities it has opened up for numerous Australian companies to access markets, in the region. Moreover, the strong bilateral trade relationship that has developed between Australia and the 22 Arab nations over the five decades has led to trade transactions amounting to billions of dollars.

This extensive trade covers industries such as food and beverages, luxury hotels and many more services. Each successive generation, within AACCI has built upon the foundation laid by its predecessors enriching their knowledge base and expanding their range of services.

– How does the AACCI leverage its diverse leadership team to enhance trade and investment opportunities between Australia and the Arab region?

Since taking on the role of chairman, my main focus has been on expanding our presence in the region. This led to the idea of opening an office in Dubai, which symbolizes our dedication to deepening our engagement in that area. We have successfully secured the license to open our first office in Dubai after 50 years, which will serve as a gateway to the GCC and North Africa.

I strongly believe that building two-way trade and investment ties requires more than a degree of business connectivity; it demands having local representatives present in each region. With trends emphasizing strategies the value of face-to-face engagements cannot be overstated.

Setting up offices in the region is essential for the Chamber to truly serve as a link and support system for business activities. Ultimately this expansion will bring benefits to our members and partners by providing them with access, to dynamic markets and diverse prospects.

– Can you discuss the significance of AACCI’s role in cultural and business exchanges between the two regions?

The importance of understanding cultures in our operations cannot be overstated. To address this, we have included a training platform within the Chamber to strengthen our cultural awareness initiatives. This new program offers our members access to modules on our website focusing on global business practices.

Furthermore, we have set up a Center of Excellence specifically dedicated to researching areas like food security and cultural awareness. These research endeavors are essential for promoting knowledge between the two regions.

By combining the resources of the Center of Excellence, our training resources, and the forthcoming local office in Dubai, we’re providing cultural awareness not only in the region but also in Australia. This approach ensures that our members are well equipped and knowledgeable boosting their effectiveness and involvement, in markets.

– What is the objective of your on-ground presence at conferences and events?

Participating in conferences and on ground events is very important for increasing awareness in industries like construction where knowledge of opportunities in the Arab world may not be widespread. When we see projects such as NEOM or notice the construction boom happening in the region it becomes important for organizations like the Chamber of Commerce to highlight these prospects. By taking part in large scale expos such as the Sydney Build Expo we position ourselves at the forefront of these advancements.

Our presence at these events enables interaction giving entrepreneurs a chance to visit our booth engage in discussions and learn more about the region in an approachable and personalized manner. This plays a role in simplifying the process and making opportunities concrete.

– With such a diverse membership base, how does AACCI tailor its services to meet the needs of both large corporations and small startups?

When it comes to discussing business it’s important to grasp how influence and vision come into play. Businesses looking to expand are often motivated by a desire to achieve something whether they are big companies or small enterprises. Small businesses typically aim to raise their brands profile while larger corporations seek recognition and market dominance.

Standing out in this area can be tough mainly because the key driving force is the passion to showcase the brand and products on a platform. This determination serves as a motivator for entrepreneurs.

At the Chamber we make a point of recognizing the needs of both big and small players by understanding each members individual situation. We ensure that every member is well informed about the opportunities and risks that come with expanding. For small businesses, this means being aware of the financial demands, while large businesses are advised on the necessity of both financial and emotional resilience.

– How does AACCI plan to expand or evolve its services in the coming years to further support its members?

The importance of having resources on the ground cannot be emphasized enough. Having local staff is key to establishing connections with the communities we serve. Without a presence in the area staying updated on events and activities becomes quite challenging.

This is why, as I’ve mentioned before, we have established an office in Dubai, staffed with personnel dedicated to supporting our members. This local office will help us effectively bridge the gap between Australia and the Arab world. And our members will benefit from insights and assistance from someone who truly knows the landscape.

In Australia we have equipped offices throughout the country staffed by individuals who play a significant role in our operations. This strong domestic network complements our efforts ensuring that we provide support to our members both locally and globally. This strategic approach is crucial, for nurturing business relationships and fostering continental understanding.

 

MOST POPULAR

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual

0
    Your Cart
    Your cart is emptyReturn to Shop