Muscat: Kuwait Financial Centre (Markaz) announced a revenue of KD8.77 million during the first half of 2018, an increase of 13.7 per cent on a year-on-year basis. Management fees and commissions increased by 34.3 per cent year-on-year to KD4.26 million, while net profit attributable to shareholders of the parent company was KD2.62 million (earnings per share (EPS) 5 fils per share) for the period ending in the first half of 2018, at a margin of 29.9 per cent.
Manaf A. Alhajeri, CEO of Markaz, said, “Markaz continues to drive each of its business divisions successfully, delivering an overall 13.7 per cent increase in the revenue of the first half of 2018. We continue to build our asset management business with an assets under management (AUM) increase of 6.3 per cent on a year-on-year basis."
"Meanwhile, our income on principal investments delivered revenues of KD4.51 million. On an annualised basis, income returns on principal investments were 6.3 per cent in the first half of 2018. Our asset management fees increased to KD3.44 million and investment banking fees reached KD0.82 million," he added.
The Gulf Cooperation Council stock markets witnessed an upward trend during the first half, with year-to-date returns of 9.9 per cent, as evident by the S&P GCC index. As one of the leading asset managers in the region, Markaz is well positioned to benefit from the healthy performance of the region’s markets. The company's asset management offerings include diverse proprietary and customised investment solutions, and aim to deliver long-term value creation for our investors, and our investment decision-making process is backed by an extensive qualitative and quantitative analysis, and stringent risk management guidelines. This is reflected in the funds’ sustainable performance through the years and across different economic cycles.
In the first half of 2018, Markaz Proprietary portfolio has beaten its strategic index by 151 basis points. International markets are preparing for ongoing interest rate increases that are being implemented by many central banks of major economies. Although this clearly has some implications, primarily for the company's asset management business, Markaz is fully prepared to be responsive in these dynamic financial markets.
International real estate AUM increased by 18 per cent during the quarter, as the US real estate markets continue to strengthen. Our US-based subsidiary, Mar-Gulf, successfully exited three real estate development projects during the first half, with a total value of US$67.10 million. The exited projects included a self-storage project in Los Angeles California, industrial projects in Phoenix, Arizona, and another industrial project in Dallas, Texas. This performance was spread across our three Mar-Gulf managed funds and our core real estate portfolio. Mar-Gulf currently manages seven ongoing projects in the United States and a project in Germany, and Markaz continues to evaluate opportunities in high-growth and supply-constrained metros.
During the first half, Markaz successfully completed several advisory mandates. Flagship assignments year-to-date included the acquisition of 29.5 per cent of HEISCO on behalf of clients, the acquisition of 23.3 per cent of ACICO construction on behalf of clients, a debt settlement for an Emirati bank, and two ongoing high-profile restructuring transactions.
In addition, Markaz successfully completed a KD20 million capital increase of United Projects Company for Aviation Services (UPAC). Markaz has a long-standing investment banking track record of providing high quality independent advice coupled with outstanding execution. The company continues to build on our reputation as a leading regional investment bank servicing not only for corporates within the Middle East and North Africa (Mena), but also for multinationals operating across borders. The total transaction value executed by Markaz up to June 2018 amounted to KD1.24 billion.