BUSINESS
Tuesday, February 16, 2010
23
GCC fund managers favoring Saudi Arabia: Markaz study KUWAIT: A recently published report by Kuwait Financial Centre “Markaz”, which aims to analyze the performance of equity funds across the region, states that, GCC markets swung between gains and losses throughout the year; the first quarter showed lingering losses from the previous year, while the second and third quarters produced significant gains as markets rallied on the back of recovering commodity prices and a global market rally. The fourth quarter saw a reversal of fortunes as GCC markets turned south led by Dubai sentiment. MSCI GCC lost 8% in the fourth quarter bringing the annual gain to 18%. The quarter’s best performance was from MSCI Saudi Arabia which limited its loss to 1%, bringing full year gain to 33%, which was the second best performance in 2009 (MSCI Indices). The worst performer for 4Q09 was MSCI Kuwait, which lost 19% bringing the full year decline to 11.7%. AUM’s ended the year at $12bn representing an institutionalization rate (AUM/Mcap) of almost 2%. Both Saudi Arabia and Kuwait saw their AUM decline in the fourth quarter by 3% and 10%, respectively. Fund managers favored Saudi Arabia throughout the year, allocating between 36% and 42% of assets to the Kingdom in 2009 (Table 3). Confidence in the Kuwait market
Markets lost in Q4 2009
declined dramatically, from 20% in June to 11% in December; the same can be said for the UAE, where managers allocated 17% of their assets in September before cutting exposure to 10% in December. Exposure to equities increased throughout the year as managers took advantage of a second and third quarter rally; allocation was at 87% in December from a low of 70% in March whereas Cash began the year with 28% of manager assets steadi-
ly declining to 12% by December. Saudi Arabia equity funds Saudi Arabia’s Tadawul All-Share Index (TASI) lost 3.17% in 4Q09, bringing the full year gain to 27%, the highest among GCC markets. Banks & Financials lost 9% in the quarter while Petrochemicals and Energy gained 5% and 8.8%, respectively. Liquidity in the Saudi market was down by 35% for the year, with Value Traded at $338 bn. In December, fund managers
decreased allocation to cash to 1.5% (on an asset weighted basis) and held 98% of assets in equities. AUM’s were flat in the final quarter of the year at $4.7bn after expanding by 6.5% in the third quarter and 14% in 2Q09. Kuwait Equity Funds The Kuwait market faltered again in the final quarter of the year, losing 10% in 4Q09 after declining 3.25% in the third quarter. Losses were led by the Investment,
Banking, and Industrial sectors. AUM’s declined 10% to $3.75 bn in 4Q09. Kuwait Financial Centre “Markaz” was the top equity fund manager with an AUM of $752 mn, representing a 20% market share. Qatar Equity Funds Qatar’s Doha Securities Market (DSM) saw two consecutive quarters of gains; 33% in 2Q09 and 14% in 3Q09, however, the trend reversed in 4Q09 with the market recording a loss of 6.14%. This brought the Doha Exchange to a flat close with a gain of just 1%. All sector indices saw quarterly losses, the largest of which was in Banking & Financials, down 7.71% in 4Q09. Liquidity was down on the Doha Exchange, with value traded ending the year at $26 bn, an annual decline of 46%. AUM’s for Qatari equity funds decreased 7% in 4Q09 to $155 mn.
Other GCC Equity Funds UAE Equity Funds - Dubai (DFM) underperformed the Abu Dhabi Exchange (ADX) for the quarter, losing 17.68% versus a loss of 12% for the ADX. Full year gain on the DFM was 10% versus 14.79% for the ADX. The DFM’s loss was led by the Investments & Financials sector which was down 26% in 4Q09. Abu Dhabi’s quarterly loss was led by the Real Estate and Construction sectors which were down 24% and 21.5%, respectively, in 4Q09. Liquidity in the UAE was down; value traded on the ADX was down 77% in 2009 to $18.9 bn while the same on the DFM contracted by 24% to $47.6 bn. AUM’s for UAE equity funds contracted 11% in 4Q09 to $611mn. Oman Equity Funds - The Muscat Securities Market (MSM) lost 3% in 4Q09 after clock-
ing in substantial gains in the second and third quarter of 22% and 17%, respectively. The market ended the year with a 17% return, i.e. the second best performer within the GCC. AUM’s for Omani equity funds were flat at $65mn for 4Q09. The majority of Omani funds underperformed the index in the fourth quarter. Bahrain Equity Funds The Bahrain Exchange showed another year of losses, closing out 2009 with a decline of 19%. In the fourth quarter, the index was down 6% making it the fourth consecutive quarterly loss. Sectoral returns were mixed, from a high of 12% for Hotels & Tourism to a low of -8% for the Investment index. SICO Selected Securities Fund outperformed the benchmark, MSCI Bahrain index, which lost 13.4% in 4Q09. Bahrain AUM’s were at $9mn in 4Q09.
Deal to help airline boost profitability, facilitate growth
Jazeera Airways acquires Sahaab Aircraft Leasing Co for KD 25.6m KUWAIT: Jazeera Airways yesterday announced it has fully acquired Sahaab Aircraft Leasing Co. (Sahaab), a private aircraft leasing firm established in late 2008, for KD25.6 million. The acquisition gives Jazeera Airways a plat-
DUBAI: Georgian PM Nikoloz Gilauri receives a memento from DIFC Governor Humaid Al-Tayer.
Georgia PM visits DIFC DUBAI: Nikoloz Gilauri, the Prime Minister of Georgia visited the Dubai International Financial Centre (DIFC) and held discussions with senior officials there. Ahmed Humaid Al-Tayer, Governor of the Dubai International Financial Centre received him at DIFC. Accompanying the Prime Minister was a highlevel Georgian delegation that included Alexander Khetaguri, Minister of Energy; and Ekaterine Meiering-Mikadze, Ambassador of Georgia to GCC. The delegation held discussions on a wide range of economic issues, including opportunities for cooperation between the UAE and Georgia, with senior DIFC officials. Ahmed Humaid Al Tayer said: “The changing global economy has greatly increased the scope for cooperative ties between Georgia and the UAE. Our discussions with the Georgian Prime
Minister gave us a chance to explore mutual interests and complementarities between the financial industries of our two countries. Our meeting also gave us an opportunity to share ideas on how both of our countries could contribute to the process of revitalizing the global economy.” Abdulla Mohammed Al-Awar, CEO of the DIFC Authority said: “As DIFC enters a new phase of development, we seek to reach out to promising new financial markets that offer opportunities for mutual cooperation. We are very keen to explore new linkages with the Georgian financial services industry. The visit of the Georgian Prime Minister gave us a chance to discuss ways of initiating new financial industry ties with Georgia.” Following the discussions, the Georgian delegation was taken on a tour of the DIFC financial district. The Georgian delegation, headed by the Prime Minister, is on a state visit to the UAE.
Wataniya releases New Blackberry: Bold 9700 KUWAIT: Devoted to providing its customers with the latest and updated service, Wataniya Telecom announces the release of the new Blackberry Bold 9700 (Onyx). The Bold 9700 is the latest Blackberry device available in the market and is now sold at all of Wataniya stores! In recent months, there has been a wide spread in the use of the Blackberry in Kuwait, and at Wataniya Telecom all prepaid and postpaid customers ranging have been able to enjoy the practicality and luxury of owning a Blackberry device along with the Wataniya Blackberry service. For those who already have a Blackberry it is time to spoil yourself and upgrade your smart phone to Bold 9700 and enjoy its new features: touch sensitive keypad, 3G enabled, Wi-Fi, 3.2 megapixel cameras, GPS and lots more. And for those who do not own a Blackberry yet it is time to for you to enter the wonderful world of Blackberry and be part of it! “With the latest Blackberry Bold now available in all Wataniya stores, we are making sure our customers are up to date and are not missing out on anything. We will continue to offer them the premium products because after all, they are our
main priority,” Scott Gegenheimer, GM&CEO explained. Today you have the opportunity to keep in touch with all your friends, have access to your email 24/7, and enjoy the wide range of social networking applications (Facebook, MSN messenger, Yahoo etc...) all available to you with
Wataniya’s Blackberry service and devices. In order to purchase the Bold 9700, customers should buy one of Wataniya rate plans. Because Wataniya invests in servicing both its post paid and pre paid customer base, now there are different rate plans available for everyone to choose from.
Scott Gegenheimer, GM&CEO
Sahaab currently owns a fleet of nine Airbus A320s that were purchased and leased back to Jazeera Airways, and will continue to operate as a fully-owned subsidiary of the airline catering not only to Jazeera Airways but also other airlines, both regionally and globally. Sahaab will have a minimum fleet of 38 Airbus A320s by 2016 based on confirmed orders with the manufacturer. Sahaab was founded by the group of investors who established Jazeera Airways with the backup of a group of leading international financial institutions including DVB Bank, Natixis, and National Bank of Kuwait. Sahaab posted earnings of KD2.2 million in 2009; and projects earnings to reach KD4.6 million in 2010. The acquisition brings the following benefits to Jazeera
form to pursue strategic vertical integration initiatives lined up for 2010 and 2011 that include an airline acquisition and access to global leasing markets.
Jazeera Airways Chairman Marwan Boodai
Airways: • Predictable revenue streams for the airline through leasing arm • Immediate earnings and return contribution to Jazeera Airways • Stronger shareholders’ equity capitalization expected to reach over KD50 million • New stand-alone regional leasing platform Jazeera Airways Chairman Marwan Boodai said: “As we implement our strategy to build Jazeera Airways into one of the leading regional airlines in the Middle East, this acquisition is the first in a series of vertical integration initiatives planned for 2010 and 2011 to drive growth and profitability for the airline through acquisitions, infrastructure investments, and strategic partnerships. “This acquisition is instantly accretive to Jazeera
Airways, will immediately boost shareholder return on equity, and give our shareholders access to steady revenue streams as well as access to the global aircraft leasing industry, which is expected to experience longterm growth. As a result of this acquisition, Jazeera Airways will now be even more strongly capitalized to pursue its strategic aspirations, regardless of any prevailing market environment.” The acquisition, expected to be completed prior to March 31, 2010, will enable Jazeera Airways to consolidate Sahaab’s earnings beginning from January 1, 2010, adding an expected KD1.2 million in earnings in the first quarter of 2010. Funding will be completed through a rights issue in Q3 to existing shareholders, following customary government approvals.
LG helps greenize kitchens Industry’s biggest capacity bottom freezer helps ‘greenize’ modern kitchen KUWAIT: LG Electronics (LG), the world’s leading innovator of home appliances, highlighted their commitment to “greenizing” customers’ kitchens through innovations such as its Linear Compressor and Light Wave Technology at the MAISON & OBJET living design exhibition (January). Chief among the company’s “eco-chic” range was the newly-launched 385-liter bottom freezer, which offers the industry’s biggest capacity in a standard size and raises the bar for green technology. The new bottom freezer’s enhanced efficiency is underpinned by LG’s unique Linear Compressor technology, which provides customers with a fresher, more naturefriendly way to store food through improvements in energy efficiency, space and accessibility. The Linear Compressor also helps the new bottom freezer achieve an A++ rating for energy consumption, meaning lower electricity bills for consumers. LG’s commitment to promoting a greener way of life was the centerpiece of its appearance at MAISON & OBJET. LG’s refrigerators with Linear Compressor technology - which includes the bottom freezer - were selected as best examples of “ecochic” products by MAISON & OBJET in recognition of their stylish and environmentally friendly innovations and designs. With this, LG is in a unique position to define for the industry what it means to be “eco-chic”. For LG, green products aren’t just about energy savings and economic benefits. Green also means making improvements in functionality and customers’ lifestyles. LG’s Linear Compressor reduces energy consumption by streamlining mechanical operations to circulate refrigerant without unnecessary rotating or reciprocating motions. Compared with an average refrigerator, which emits around 336KG of CO2 per year, LG’s Linear Compressor provides energy savings of up to 20 percent annually, or the equivalent of planting 24 pine trees. Fewer friction points (one instead of the four in a conventional compressor)
work to significantly reduce noise levels while also enhancing durability, allowing LG to offer a 10 year warranty on refrigerators utilizing the Linear Compressor. On average, LG refrigerators are more effective in maintaining a constant inner temperature than conventional models with the same large capacity, thus helping keep food fresher longer. The compressor’s slow speeds-maintained even under maximum cooling conditions - also make for quieter operation. Along with its Linear Compressor technology, LG showed its commitment to green technology with such innovations as the Inverter DirectDrive(tm), Light Wave Technology and the KOMPRESSOR. All of these technologies make for more efficient products, providing savings in space, energy usage and in the amount of time spent on housework. “Helping people lead more eco-friendly lives has been a focus for many consumer electronics companies,” said H.S Paik, President of LG Electronics Gulf FZE. “At LG, we’re focusing on the concept of eco-
chic lifestyle because we believe the home is where green innovation must start. LG engineers are constantly thinking of the importance of energy efficiency and they’ve worked this philosophy into all our core technologies and products. Our new bottom freezer showcased in the MAISON & OBJET is an example of what results from this higher level of thinking.” In addition to energy efficiency, the industry’s largest capacity of 385 liters in a standard two-meter-tall bottom freezer fits perfectly into European kitchens, occupying minimal space and enabling customers to cut back on trips to the supermarket. The two-tone finish of the new bottom freezer adds a modern, simple, sophisticated look to the kitchen and seamlessly matches with other appliances. At the show, LG also presented its vision of an eco-friendly urban life facilitated by LG’s range of built-in appliances. LG’s built-in appliances focus on providing a total solution for those who want to lead eco-friendly lifestyles by applying the company’s green innovations including steam
LG built-in appliances
LG Bottom Freezer technology, Light Wave and the Linear Compressor. LG integrates features in its built-in appliances to offer a safer and more hygienic kitchen work area. Some of these enhancements include oven doors that remains cool to the touch, a visual cooking zone on LG’s induction hob, a smart filter in the range hood and a frostless indirect cooling system in LG’s refrigerators. Cleaning features include UV sterilization and dual wash on LG dishwashers and an easy-toclean interior in its microwave ovens. LG’s built-in refrigerators also provide enhanced efficiency through proprietary Linear Compressor technology and includes an Opti Temp Zone(tm) which helps keep food fresher longer. The refrigerator allows consumers to store more food thanks to two extra shelves made available through the inclusion of a door-mounted ice maker. Overall, LG’s built-in kitchen package can make consumers’ lives more comfortable, convenient and eco-friendly.