Kuwait Financial Centre S.A.K. (Markaz), one of the Middle East's leading investment banking and asset management companies, posted net profit of KD 2.2 million in first half ending June 30, 2009, or earnings per share of 5 fils, compared with KD 9.1 million in net profit and an EPS of 20 fils for the same period last year. Markaz short-term debt totalled KD 4.9 million and total debt reached KD 33.6 million which represents 6 percent and 42 percent of shareholders' equity, respectively. Fee income remains healthy at KD 3.8 million and formed more than 70 percent of total income. Diraar Y. Alghanim, chairman and managing director, said “as Markaz celebrates its 35th year anniversary this August, it continues to innovate and adapt to the challenges of market cycles and financial crises. Markaz has a portfolio of high quality liquid assets, low debt-to-equity ratio and almost zero short-term debt. Additionally, Markaz continues to generate a high fee income as a percentage of equity.” Markaz equity investment products delivered good returns and were among the top performing funds in their respective categories for the period. Mumtaz Fund, Markaz's flagship Kuwait focused fund, achieved a gain of 13.4 percent outperforming the benchmark with considerable margin while Markaz Gulf Fund recorded gains of 12.8 percent for the first half of the year. As for Markaz Islamic Fund, returns were good and up 8.8 percent percent despite provisions taken as a result of exposure to illiquid money market investments. Kuwait market, largely mired by the uncertain political scenario as well as the ailing investment and real estate sectors, made a possible bottom in March and saw steady gains in equity prices. The leading market weighted Index registered gains of 10.4 percent for the 1st half of the year, wiping out accumulated losses for the year; the index posted a 42 percent gain from the bottom of the first half of the year. Other GCC markets in the region also posted noteworthy returns for the period with MSCI GCC posting 16.6 percent return for the first half of the year. All Markaz international products outperformed their benchmarks as of the end of June 2009, owing to opportunistic investing and dynamic asset allocation. Markaz portfolio of private equity investments was down 4.17 percent for H1 2009 due to slow M&A activity. The Emerging Markets Thematic Fund, which invests in a portfolio of globally diversified equities with a focus on select themes, returned 11.04 percent. Atlas Diversified Class, which seeks to obtain consistent returns with low volatility by investing in a portfolio of global securities and financial products returned 7.36 percent beating its respective benchmark by a handsome difference. The ETFs Program which aims to outperform broad market and sector indices by allocating its assets into various Exchange Traded Funds was up 11.11 percent, compared to MSCI world which was up 4.76 percent for the same period.
