Government wants to buy allegiances through new positions … · 2019. 4. 21. · 2 Government...
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1.2% and 1.4% respectively. In oth- er words, the advanced economies growth will remain weak despite all stimulating financial and monetary policies. Even this weak growth is not void of risks like the possibility of reviving the fierce trade war, or major correction in the capital mar- kets or rising lending costs. While it is likely that emerging and developing markets may achieve growth rates relatively by 4.4% this year and 4.8% in 2020, the “MENA” region growth will remain weak in 2019 by 1.5% and will go up to 3.3% in 2020, i.e. it remains below the global economy growth rate. To conclude, global economy growth will remain weak compared to its historical growth rates before 2008. The risks will remain high with its weakness after its crisis exhausted the financial and mon- etary policies sources. Oil countries should be aware that oil prices will not be supported by any global eco- nomic boom at least in the foresee- able future. Therefore, they have no option but to undertake the difficult financial and economic reform and bear its instant costs because the cur- rent level of such costs will be noth- ing compared to the costs of delayed reform. The Weekly Performance of Boursa Kuwait The performance of Boursa Ku- wait for last week was mixed com- pared to the previous one, where the traded value and traded vol- ume decreased, while the general index (Al Shall index) and number of transactions increased. Al Shall Index (value weighted) closed at 502 points as of last Thursday, showing an increase by 4.8 points or by 1% compared with its level last week. While it increased by 73 points or by 17% compared with the end of 2018. that relationship periodically every season. Kuwait’s case in the first quarter of this year is the correct one. Perhaps we might witness a stronger relation between the move- ment of the two variables in the sec- ond quarter of this year in most stock exchanges of the region. Performance of Global Economy In its report for the current month – April –, “IMF” reduced its projec- tions for global economy growth for 2019 by -0.2% to 3.3% instead of 3.5% in its report or last January re- port. The reason is a result of weak- ness indexes for the growth in the main economies like the Eurozone, Latin America, the USA, Britain, Canada and Australia. However, the weakness is temporary after which performance will begin to improve in the second half of the year when the growth rate will rise to 3.6% in 2020. In general, the Fund “IMF” believes that 70% of global econo- mies suffer from signs of weakness that affected its projections contrary to its optimistic projections two years ago when it projected that 75% of global economies witness a noticeable recovery. The report at- tributes the subsequent improvement after the present weakness to contin- ued monetary inducement policies for all the main central banks includ- ing the US Federal Reserve Bank which ceased lifting the interest rate following the example of the Euro- pean Central Bank, the Japanese and the British, in addition to a mixture of Chinese financial and monetary incentives, besides the fading out of the American-Chinese trade war harms. The expected growth varies; it re- mains weak for advanced economies by 1.8% this year, then it drops to 1.7% in the next year during which the USA will excel its peers osten- sibly in the current year by 2.3% anticipated growth due to financial stimulation and tax reductions. But it will return to a rate close to that of the advanced economies by 1.9% in 2020. Some advanced main econo- mies will grow at lower rates than the general growth rate for the advanced economies. The Eurozone will grow at no more than 1.3% and 1.5% in two consecutive years; Japan will grow at 1% and 0.5% in the years respectively, Britain will grow by LOCAL ARAB TIMES, SUNDAY, APRIL 21, 2019 2 Government wants to buy allegiances through new positions Performance of Boursa Kuwait was mixed last week Government Inflation A way from the inflated cost of the government Administration by more than 5 times between 2000 and 2019, the government has been brought up to build parallel appara- tuses to the existing ones for no other reason than escaping from the cost of repairing the incompetent ones. In addition, the government wants to buy allegiances through the new positions. Examples are abundant: The Ministry of Public Works and the Roads Authority, noting that Kuwait’s roads have never been any worse than nowadays, the Ministry of Housing and the Housing Author- ity, higher councils for education, traffic, privatization, investment, petroleum, environment and agricul- ture, etc, most of which are in mis- erable conditions. The bottom line is that establishing about 40 parallel authorities, committees and councils have not been failure only but worse than their predecessors. The end re- sult was jeopardizing the sustain- ability of the public finance as well as the country’s economic sustain- ability and its stability and placed the country’s future in front of real dan- ger, says Al-Shall Economic Report prepared by Al-Shall Consulting Co headed by Jassem Al-Saadoun. Last week, “Al Qabas” newspaper stated that the “Amiri Diwan” would likely reconstruct the “Enter- tainment City” after a preliminary report from the “Touristic Enter- prises Company” – Governmental Company – that it may need 10 years to complete the project, if any and by reverse results to its feasibility at US$ 2 billion. The story is not base- less as the “Amiri Diwan” has re- peatedly carried out similar projects, all the foregoing is wrong. First, it shows the continued bypassing of the incompetence of existing establish- ments by authorizing a parallel entity to do its job. The second error is that the “Amiri Diwan” is not a special- ized body with a sensitive position and has been engulfed by several suspicions. Its real role is supervisory to urge the government to repair its systems but not to inflate them or by- pass them and take over their respon- sibilities. The third error is the huge cost figures regardless of the project executor. The high cost, without cal- culating the real land cost, might be a main cause for the negative financial feasibility of the project. The “Amiri Diwan” denied the story later on but it acknowledged the concern over the inability of the existing execu- tive bodies to complete the project. It directed the government to set up a higher committee to follow up the project and award it to the private sector, which is a return to building new bodies. Other states, in addition to benefit- ting from all humanitarian, histori- cal and contemporary experiences, successful or failing, keep their own experiences as the most important source to remedy the error. But Ku- wait is different. Logically, we sup- port any project with digital goals that should be achieved within a cer- tain time frame. New Kuwait Project which we wish all the success for it is within this context but it still adopts the parallel track approach. We mean establishing a parallel entity at the country borders different from its central system. According to devel- opment experiences, and regardless of all good intentions, the highly likelihood in future is that the mal- function of the center will lead to the failure of the borders – limbs – and not vice versa similar to currencies, the bad ones expel the good ones. If the experiment has to succeed, the development reform action should include the center first and then the limbs. The center, regardless of all reform promises, still goes in the opposite direction and is unable to manage a hospital, an airport or an aviation company. How about a new Kuwait then, and the dismissing of the Board of Trustees of the “Ma- dinat Al-Hareer” (Silk City) and its CEO last week, without any justifica- tion, could be read as an indication for the failure of creating parallel entities and within criteria governed by quotas and an expulsive working environment. Credit Rating According to its report of April 11, 2019, “Fitch Credit Rating Agency” offered Kuwait a good “AA” sover- eign rating with a stable future out- look. This good rating is in favor of Kuwait if it is read with awareness and knowing its intentions. Its main benefit is to reduce the borrowing cost in the international market for both the public and private sectors. The support for this rating is based on Kuwait’s possession of US$ 561 billion in financial reserves including US$ 500 billion for the Future Gen- erations Reserve, foreign assets, and US$ 61 billion value of the general reserve assets. These assets volume, which equals 394% of the Kuwaiti economy, is adequate to assure the report audience who desire to deal with Kuwait financially or commer- cially in the medium term. The report added an additional strength point for Kuwait, namely, the general budget in Kuwait is balanced at US$ 60 per barrel of oil – US$ 75 per barrel ac- cording to the Ministry of Finance. This figure is among the lowest bal- ance averages for oil countries cov- ered by the Agency. The weak points lie in the contin- ued reliance of the Kuwaiti economy on oil, weak governance indicators, weak business climate, geopolitical risks and increasing challenges be- fore the sustainability of the public finance. The government is facing a real challenge of a probable exhaus- tion of the general reserve – its liquid assets, we believe, by 2021 unless oil prices settle at about US$ 80 per bar- rel or the government is able to enact a new public debt law which is weak- ened by the government’s inability to rationalize its expenses and cease its waste and corruption. We however should warn that all credit rating agencies and the “IMF” issue different figures for the parity price of the general budget while the public finance science has a decisive view about what to be classified and what not to be within the general rev- enues. The institutions above do not comply with this opinion, and not even the Ministry of Finance. Rev- enues included with public revenues are those resulting from a sustainable economic activity, the economies which finance their public finance from tax deductions from that activ- ity. We believe that such agencies include oil revenues resulting from selling an exhaustible and unsustain- able asset as well as revenues of sov- ereign investments within the public revenues, this is a wrong mixing. Kuwait should have its own formula to calculate or include what is public revenue similar to Norway. The seri- ous matter is that such (rating) agen- cies exaggerate in reducing the parity price of the budget. Even without cal- culating costs outside the budget read wrongly in Kuwait and lead to im- prudent financial policies, “FITCH” Agency estimated the surplus of FY 2018/2019 by about KD 3.3 billion, while we at “Al Shall” estimate it by half of that figure. Our calculation is also wrong and it will be higher if subjected to the principles of “Public Finance Science”. GCC Stock Markets – First Quarter 2019 We mentioned in more than one report that the most important vari- able in the activity of any stock ex- change is its liquidity and that there is a grace period that differs from one market to another in the liquidity movement upward or downward and prices movement reliance on that. With the openness of most the GCC stock markets to the international in- vestor, we opted to monitor the sea- sonal liquidity movement in each and to monitor the relationship of liquid- ity movement with its stocks prices. Compatibility witnessed in the first quarter’s performance of the current year and some difference between the liquidity movement of the GCC stock markets and the movement of their stocks prices. We attribute the difference to either a relative weak- ness in the liquidity movement or to the grace period between the move- ment of the two variables. The liquid- ity of the GCC stock markets during the first quarter versus the fourth quarter of 2018 was mixed: liquidity went up in three markets and dropped in 4 of them. However, the compat- ibility between the price movement and liquidity occurred only in one case. The highest growth rate in liquid- ity belonged to Boursa Kuwait whose liquidity rose in the first quarter of this year by 59.6% compared with the fourth quarter of 2018. It was the only stock market where price movement and liquidity movement were in agreement. Its index gained 10.6%. The disagreement which we believe it to be temporary belonged to the main winner in the first quarter, liquidity of the Saudi market dropped by -18.9% while its index gained 12.7%. The opposite happened to Qa- tar and Muscat stock markets. Their liquidity rose by 17.7% and 10.9% respectively while the Qatari index lost -1.9% and Muscat lost -7.9%. Other markets achieved contrary re- sults: Bahrain market achieved drop in its liquidity by -26.6% while its index gained 5.7%. Abu Dhabi lost -13.2% in its liquidity while its in- dex gained 3.2%; Dubai market lost Description Week 17 Week 16 Diff 18/04/2019 11/04/2019 % Working days 4 5 AlShall index (33 Companies) 502.0 497.2 1.0% Boursa All Share Market Index 5,806.0 5,742.4 1.1% Value Trade (KD) 187,885,186 200,927,180 Daily average (KD) 37,577,037 40,185,436 -6.5% Volume Trade (Shares) 1,016,745,728 1,064,336,620 Daily average (Shares) 203,349,146 212,867,324 -4.5% Transactions 38,524 38,214 Daily average (Transactions) 7,705 7,643 0.8% Most Active Sectors & Companies Description Value Traded % of Total Companies KD Market National Bank Of Kuwait 28,446,709 15.1% Kuwait Finance House 26,314,456 14.0% Gulf Bank 22,982,692 12.2% Mobile Telecommunications Co. 12,797,186 6.8% Kuwait International Bank 10,110,516 5.4% Total 100,651,558 53.6% Description Value Traded % of Total Sectors KD Market Banks Sector 107,892,997 57.4% Financial Services Sector 34,847,564 18.5% Industrials Sector 15,763,172 8.4% Telecommunications Sector 13,279,316 7.1% Real Estate Sector 11,322,896 6.0% Al Shall Index Week 17 Week 16 18/042019 11/04/2019 Increased Value (# of Companies) 15 14 Decreased Value (# of Companies) 13 14 Unchanged Value (# of Companies) 5 5 Total Companies 33 33 GCC Markets Value (Liquidity) US Dollar % out of the % out of the * Change % in Q4 2018 Q1 2019 total Q4 2018 total Q1 2019 Boursa Kuwait 3,849,723,762 6,145,387,241 5.2% 9.4% 59.6% Qatar Exchange 4,148,098,273 4,883,353,310 5.6% 7.5% 17.7% Muscat Sewc Market 354,276,293 392,625,075 0.5% 0.6% 10.8% Dubai Fin Market 3,178,448,965 3,079,383,994 4.3% 4.7% -3.1% Abu Dhabi Sec Excj 3,738,728,507 3,243,987,970 5.1% 5.0% -13.2% Saudi Stock Exch 58,343,163,391 47,187,283,209 78.9% 72.4% -19.1% Bahrain Bourse 322,838,196 236,932,927 0.44% 0.36% -26.6% Total 73,935,277,387 65,168,953,725 100% 100% -11.9% GCC Stock Markets’ Indexes End of Dec 2018 End of March 2019 % Change Saudi Stock Exchange 7,826.7 8,819.4 12.7% Boursa Kuwait (All Share Market Index) 5,079.6 5,617.8 10.6% Bahrain Bourse 1,337.3 1,413.3 5.7% Dubai Financial Market 2,529.8 2,634.9 4.2% Abu Dhabi Securities Exchange 4,915.1 5,074.7 3.2% Qatar Exchange 10,299.0 10,107.4 -1.9% Muscat Securities Market 4,323.7 3,983.7 -7.9% -3.1% from liquidity while its index gained 4.2%. Despite the big impact for the gen- eral variables like the geopolitical events and instability of oil prices and changes in the business climate as a result of adopting various re- forming financial and economic policies, we believe in the positive relationship between liquidity and prices. Therefore, we shall review Thu Thu Diff Close Diff Company Name 18/04/2019 11/04/2019 % 2016 % 1 National Bank Of Kuwait 618.9 603.4 2.6 520.4 18.9 2 Gulf Bank 251.1 259.2 (3.1) 204.8 22.6 3 Commercial Bank Of Kuwait 583.1 692.5 (15.8) 516.0 13.0 4 Al-Ahli Bank Of Kuwait 216.7 217.4 (0.3) 193.1 12.2 5 Kuwait International Bank 327.3 353.3 (7.4) 275.1 19.0 6 Ahli United Bank 340.7 337.6 0.9 296.5 14.9 7 Burgan Bank 367.8 366.7 0.3 284.8 29.1 8 Kuwait Finance Bank 2,088.2 1,997.0 4.6 1,659.8 25.8 Banking Sector 605.1 599.8 0.9 502.7 20.4 9 Commercial Facilities Company 145.1 143.6 1.0 126.3 14.9 10 International Financial Advisors 211.5 206.7 2.3 227.8 (7.2) 11 National Investments Company 151.0 147.2 2.6 103.8 45.5 12 Kuwait Projects Company (Holding) 531.1 533.5 (0.4) 486.7 9.1 13 Coast Investment & Development Company 58.6 59.2 (1.0) 45.4 Investment Sector 212.3 211.3 0.5 187.1 13.5 14 Kuwait Insurance Company 93.5 93.5 0.0 79.4 17.8 15 Gulf Insurance Company 365.0 379.2 (3.7) 373.5 (2.3) 16 Al-Ahleia Insurance Company 157.7 151.7 4.0 160.3 (1.6) 17 Warba Insurance Company 54.5 55.6 (2.0) 54.1 0.7 Insurance Sector 152.8 153.9 (0.7) 147.7 3.5 18 Kuwait Real Estate Company 122.3 118.3 3.4 89.0 37.4 19 United Realty Company 122.2 125.4 (2.6) 122.4 (0.2) 20 National Real Estate Company 209.4 214.4 (2.3) 229.5 (8.8) 21 Salhiaha Real Estate Company 1,332.5 1,332.5 0.0 1,332.5 0.0 Real Estate Sector 175.8 176.7 (0.5) 172.2 2.1 22 The National Industries 210.0 198.3 5.9 141.2 48.7 23 Refrigeration Industries Co 474.9 468.8 1.3 571.3 (16.9) 24 Gulf Cable & Electrical Industries 156.7 164.7 (4.9) 140.3 11.7 Industrial Sector 195.9 191.6 2.2 177.5 10.4 25 Kuwait National Cinemas 571.2 564.9 1.1 671.0 (14.9) 26 The Public Warehousing Co 4,159.5 4,168.4 (0.2) 3,579.3 16.2 27 Mobile Telecommunications Co (ZAIN) 756.5 712.8 6.1 662.9 14.1 28 Safat Energy Co 27.8 26.2 6.1 29.9 (7.0) Services Sector 1,229.7 1,205.6 2.0 1,085.3 13.3 29 Livestock Transport & Trading Co 165.0 165.0 0.0 156.7 5.3 30 Danah Alsafat Foodstuff Company 35.6 35.0 1.7 39.0 (8.7) Food Sector 457.7 457.6 0.0 456.1 0.4 31 Sharjah Cement Co 333.3 333.3 0.0 362.0 (7.9) 32 Gulf Cement Co 227.4 241.9 (6.0) 273.8 (16.9) 33 Umm Al-Qaiwain Cement Industries 479.0 479.0 0.0 489.3 (2.1) Non Kuwaiti Companies 202.6 205.1 (1.2) 215.0 (5.8) General Index 502.0 497.2 1.0 429.0 17.0 Al-Shall Index From April 11, 2019 to April 18, 2019 Final exams correction: Informed educational sources disclosed that marking of the fi- nal grade 12 exams for academic year 2018/2019 will be done after breaking the fast each day in the month of Ramadan due to the short time between hand- ing over of boxes containing question paper to the control at 1:00pm and the Maghreb prayer, reports Al-Rai daily. The same sources indicated the task is obligatory for all teachers assigned and no excuse will be accepted, noting the correction of exams will be done in the morning on Fridays and Saturdays. ❑ ❑ ❑ Dept to study layouts: The Electronic Licensing Depart- ment at Kuwait Municipality will study the layouts prior to the issuance of e-construction license for the project of Tamdeen Group at 10:00 am on Monday in the headquarters of the group at 360 Mall, reports Al-Anba daily quoting the Pub- lic Relations Department. ❑ ❑ ❑ Ahmadi gov receives officials: Ahmadi Governor Sheikh Fawaz Khalid Al-Hamad Al-Sabah received the Director General of Sabah Al-Ahmed Center for Giftedness and Creativity Dr Omar Al-Bannai, Direc- tor of Giftedness Dr Abdullah Al-Sweed and Public Relations Director Rakan Al-Kadm. Sheikh Sabah expressed satisfaction on the achieve- ments made by the center over the years. He commended the important role played by Kuwait Foundation for the Advance- ment of Sciences (KFAS), indicating KFAS is right to boast especially as HH the Amir Sheikh Sabah Al-Ahmed Al- Jaber Al-Sabah is its chairman of the Board of Directors. ❑ ❑ ❑ Board dissolved: The Board of Trustees of Silk City and Bou- byan Island has been dissolved and the executive chairman has been asked to resign, reports Al- Qabas daily quoting an informed source. He revealed that each of the board members and the execu- tive chairman received letters of gratitude that were sent to their homes. The source indicated that a new board will be formed soon based on the requirements of the major project and the vision of First Deputy Prime Minister and Minister of Defense Sheikh Nasser Sabah Al-Ahmad. ❑ ❑ ❑ Fraudster arrested: The Far- waniya police have taken into custody a 57-year-old Kuwaiti for cheating a number of wid- ows, divorcees and the elderly, reports Al-Anba daily. The suspect was arrested in the suburb of Abdullah Al-Mubarak on the background of two cases filed against him but a security source said more people are likely to file dozens of cases fol- lowing the announcement of the arrest for his illegal practices. According to a security source, two Kuwaitis filed a case at the Farwaniya Police Station that the suspect offered to help them to reduce the amount of their loans after claiming he is working for a very important personality and requested expensive gifts in return from his victims such as phones and others. Investigations showed he was meeting his victims in com- mercial markets and after gifts were received he would just disappear. News in Brief
Transcript of Government wants to buy allegiances through new positions … · 2019. 4. 21. · 2 Government...
1.2% and 1.4% respectively. In oth-er words, the advanced economies growth will remain weak despite all stimulating fi nancial and monetary policies. Even this weak growth is not void of risks like the possibility of reviving the fi erce trade war, or major correction in the capital mar-kets or rising lending costs.
While it is likely that emerging and developing markets may achieve growth rates relatively by 4.4% this year and 4.8% in 2020, the “MENA” region growth will remain weak in 2019 by 1.5% and will go up to 3.3% in 2020, i.e. it remains below the global economy growth rate.
To conclude, global economy growth will remain weak compared to its historical growth rates before 2008. The risks will remain high with its weakness after its crisis exhausted the fi nancial and mon-etary policies sources. Oil countries should be aware that oil prices will not be supported by any global eco-nomic boom at least in the foresee-able future. Therefore, they have no option but to undertake the diffi cult fi nancial and economic reform and bear its instant costs because the cur-rent level of such costs will be noth-ing compared to the costs of delayed reform.
The Weekly Performance of Boursa Kuwait
The performance of Boursa Ku-wait for last week was mixed com-pared to the previous one, where the traded value and traded vol-ume decreased, while the general index (Al Shall index) and number of transactions increased. Al Shall Index (value weighted) closed at 502 points as of last Thursday, showing an increase by 4.8 points or by 1% compared with its level last week. While it increased by 73 points or by 17% compared with the end of 2018.
that relationship periodically every season. Kuwait’s case in the fi rst quarter of this year is the correct
one. Perhaps we might witness a stronger relation between the move-ment of the two variables in the sec-ond quarter of this year in most stock exchanges of the region. Performance of Global Economy
In its report for the current month – April –, “IMF” reduced its projec-tions for global economy growth for 2019 by -0.2% to 3.3% instead of 3.5% in its report or last January re-port. The reason is a result of weak-ness indexes for the growth in the main economies like the Eurozone, Latin America, the USA, Britain, Canada and Australia. However, the weakness is temporary after which performance will begin to improve in the second half of the year when the growth rate will rise to 3.6% in 2020. In general, the Fund “IMF” believes that 70% of global econo-mies suffer from signs of weakness that affected its projections contrary to its optimistic projections two years ago when it projected that 75% of global economies witness a noticeable recovery. The report at-tributes the subsequent improvement after the present weakness to contin-ued monetary inducement policies for all the main central banks includ-ing the US Federal Reserve Bank which ceased lifting the interest rate following the example of the Euro-pean Central Bank, the Japanese and the British, in addition to a mixture of Chinese fi nancial and monetary incentives, besides the fading out of the American-Chinese trade war harms.
The expected growth varies; it re-mains weak for advanced economies by 1.8% this year, then it drops to 1.7% in the next year during which the USA will excel its peers osten-sibly in the current year by 2.3% anticipated growth due to fi nancial stimulation and tax reductions. But it will return to a rate close to that of the advanced economies by 1.9% in 2020. Some advanced main econo-mies will grow at lower rates than the general growth rate for the advanced economies. The Eurozone will grow at no more than 1.3% and 1.5% in two consecutive years; Japan will grow at 1% and 0.5% in the years respectively, Britain will grow by
LOCALARAB TIMES, SUNDAY, APRIL 21, 2019
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Government wants to buy allegiances through new positions
Performance of Boursa Kuwait was mixed last weekGovernment Infl ation
Away from the infl ated cost of the government Administration
by more than 5 times between 2000 and 2019, the government has been brought up to build parallel appara-tuses to the existing ones for no other reason than escaping from the cost of repairing the incompetent ones. In addition, the government wants to buy allegiances through the new positions. Examples are abundant: The Ministry of Public Works and the Roads Authority, noting that Kuwait’s roads have never been any worse than nowadays, the Ministry of Housing and the Housing Author-ity, higher councils for education, traffi c, privatization, investment, petroleum, environment and agricul-ture, etc, most of which are in mis-erable conditions. The bottom line is that establishing about 40 parallel authorities, committees and councils have not been failure only but worse than their predecessors. The end re-sult was jeopardizing the sustain-ability of the public fi nance as well as the country’s economic sustain-ability and its stability and placed the country’s future in front of real dan-ger, says Al-Shall Economic Report prepared by Al-Shall Consulting Co headed by Jassem Al-Saadoun.
Last week, “Al Qabas” newspaper stated that the “Amiri Diwan” would likely reconstruct the “Enter-tainment City” after a preliminary report from the “Touristic Enter-prises Company” – Governmental Company – that it may need 10 years to complete the project, if any and by reverse results to its feasibility at US$ 2 billion. The story is not base-less as the “Amiri Diwan” has re-peatedly carried out similar projects, all the foregoing is wrong. First, it shows the continued bypassing of the incompetence of existing establish-ments by authorizing a parallel entity to do its job. The second error is that the “Amiri Diwan” is not a special-ized body with a sensitive position and has been engulfed by several suspicions. Its real role is supervisory to urge the government to repair its systems but not to infl ate them or by-pass them and take over their respon-sibilities. The third error is the huge cost fi gures regardless of the project executor. The high cost, without cal-culating the real land cost, might be a main cause for the negative fi nancial feasibility of the project. The “Amiri Diwan” denied the story later on but it acknowledged the concern over the inability of the existing execu-tive bodies to complete the project.
It directed the government to set up a higher committee to follow up the project and award it to the private sector, which is a return to building new bodies.
Other states, in addition to benefi t-ting from all humanitarian, histori-cal and contemporary experiences, successful or failing, keep their own experiences as the most important source to remedy the error. But Ku-wait is different. Logically, we sup-port any project with digital goals that should be achieved within a cer-tain time frame. New Kuwait Project which we wish all the success for it is within this context but it still adopts the parallel track approach. We mean establishing a parallel entity at the country borders different from its central system. According to devel-opment experiences, and regardless of all good intentions, the highly likelihood in future is that the mal-function of the center will lead to the failure of the borders – limbs – and not vice versa similar to currencies, the bad ones expel the good ones. If the experiment has to succeed, the development reform action should include the center fi rst and then the limbs. The center, regardless of all reform promises, still goes in the opposite direction and is unable to manage a hospital, an airport or an aviation company. How about a new Kuwait then, and the dismissing of the Board of Trustees of the “Ma-dinat Al-Hareer” (Silk City) and its CEO last week, without any justifi ca-tion, could be read as an indication for the failure of creating parallel entities and within criteria governed by quotas and an expulsive working environment.
Credit RatingAccording to its report of April 11,
2019, “Fitch Credit Rating Agency” offered Kuwait a good “AA” sover-eign rating with a stable future out-look. This good rating is in favor of Kuwait if it is read with awareness and knowing its intentions. Its main benefi t is to reduce the borrowing cost in the international market for both the public and private sectors. The support for this rating is based on Kuwait’s possession of US$ 561 billion in fi nancial reserves including US$ 500 billion for the Future Gen-erations Reserve, foreign assets, and US$ 61 billion value of the general reserve assets. These assets volume, which equals 394% of the Kuwaiti economy, is adequate to assure the report audience who desire to deal with Kuwait fi nancially or commer-cially in the medium term. The report
added an additional strength point for Kuwait, namely, the general budget in Kuwait is balanced at US$ 60 per barrel of oil – US$ 75 per barrel ac-cording to the Ministry of Finance. This fi gure is among the lowest bal-ance averages for oil countries cov-ered by the Agency.
The weak points lie in the contin-ued reliance of the Kuwaiti economy on oil, weak governance indicators, weak business climate, geopolitical risks and increasing challenges be-fore the sustainability of the public fi nance. The government is facing a real challenge of a probable exhaus-tion of the general reserve – its liquid assets, we believe, by 2021 unless oil prices settle at about US$ 80 per bar-rel or the government is able to enact a new public debt law which is weak-ened by the government’s inability to rationalize its expenses and cease its waste and corruption.
We however should warn that all credit rating agencies and the “IMF” issue different fi gures for the parity price of the general budget while the public fi nance science has a decisive view about what to be classifi ed and what not to be within the general rev-enues. The institutions above do not comply with this opinion, and not even the Ministry of Finance. Rev-enues included with public revenues are those resulting from a sustainable economic activity, the economies which fi nance their public fi nance from tax deductions from that activ-ity. We believe that such agencies include oil revenues resulting from selling an exhaustible and unsustain-able asset as well as revenues of sov-ereign investments within the public revenues, this is a wrong mixing. Kuwait should have its own formula to calculate or include what is public revenue similar to Norway. The seri-ous matter is that such (rating) agen-cies exaggerate in reducing the parity price of the budget. Even without cal-culating costs outside the budget read wrongly in Kuwait and lead to im-prudent fi nancial policies, “FITCH” Agency estimated the surplus of FY 2018/2019 by about KD 3.3 billion, while we at “Al Shall” estimate it by half of that fi gure. Our calculation is also wrong and it will be higher if subjected to the principles of “Public Finance Science”. GCC Stock Markets – First Quarter
2019We mentioned in more than one
report that the most important vari-able in the activity of any stock ex-change is its liquidity and that there is a grace period that differs from
one market to another in the liquidity movement upward or downward and prices movement reliance on that.
With the openness of most the GCC stock markets to the international in-vestor, we opted to monitor the sea-sonal liquidity movement in each and to monitor the relationship of liquid-ity movement with its stocks prices.
Compatibility witnessed in the fi rst quarter’s performance of the current year and some difference between the liquidity movement of the GCC stock markets and the movement of their stocks prices. We attribute the difference to either a relative weak-ness in the liquidity movement or to the grace period between the move-ment of the two variables. The liquid-ity of the GCC stock markets during the fi rst quarter versus the fourth quarter of 2018 was mixed: liquidity went up in three markets and dropped in 4 of them. However, the compat-ibility between the price movement and liquidity occurred only in one case.
The highest growth rate in liquid-ity belonged to Boursa Kuwait whose liquidity rose in the fi rst quarter of this year by 59.6% compared with the fourth quarter of 2018. It was the only stock market where price movement and liquidity movement were in agreement. Its index gained 10.6%. The disagreement which we believe it to be temporary belonged to the main winner in the fi rst quarter, liquidity of the Saudi market dropped by -18.9% while its index gained 12.7%. The opposite happened to Qa-tar and Muscat stock markets. Their liquidity rose by 17.7% and 10.9% respectively while the Qatari index lost -1.9% and Muscat lost -7.9%. Other markets achieved contrary re-sults: Bahrain market achieved drop in its liquidity by -26.6% while its index gained 5.7%. Abu Dhabi lost -13.2% in its liquidity while its in-dex gained 3.2%; Dubai market lost
Description Week 17 Week 16 Diff 18/04/2019 11/04/2019 % Working days 4 5 AlShall index (33 Companies) 502.0 497.2 1.0% Boursa All Share Market Index 5,806.0 5,742.4 1.1% Value Trade (KD) 187,885,186 200,927,180 Daily average (KD) 37,577,037 40,185,436 -6.5% Volume Trade (Shares) 1,016,745,728 1,064,336,620 Daily average (Shares) 203,349,146 212,867,324 -4.5% Transactions 38,524 38,214 Daily average (Transactions) 7,705 7,643 0.8%
Most Active Sectors & CompaniesDescription Value Traded % of Total Companies KD Market National Bank Of Kuwait 28,446,709 15.1% Kuwait Finance House 26,314,456 14.0% Gulf Bank 22,982,692 12.2% Mobile Telecommunications Co. 12,797,186 6.8% Kuwait International Bank 10,110,516 5.4% Total 100,651,558 53.6% Description Value Traded % of Total Sectors KD Market Banks Sector 107,892,997 57.4% Financial Services Sector 34,847,564 18.5% Industrials Sector 15,763,172 8.4% Telecommunications Sector 13,279,316 7.1% Real Estate Sector 11,322,896 6.0% Al Shall Index Week 17 Week 16 18/042019 11/04/2019Increased Value (# of Companies) 15 14 Decreased Value (# of Companies) 13 14 Unchanged Value (# of Companies) 5 5 Total Companies 33 33
GCC Markets Value (Liquidity) US Dollar % out of the % out of the * Change % in Q4 2018 Q1 2019 total Q4 2018 total Q1 2019Boursa Kuwait 3,849,723,762 6,145,387,241 5.2% 9.4% 59.6% Qatar Exchange 4,148,098,273 4,883,353,310 5.6% 7.5% 17.7% Muscat Sewc Market 354,276,293 392,625,075 0.5% 0.6% 10.8% Dubai Fin Market 3,178,448,965 3,079,383,994 4.3% 4.7% -3.1% Abu Dhabi Sec Excj 3,738,728,507 3,243,987,970 5.1% 5.0% -13.2% Saudi Stock Exch 58,343,163,391 47,187,283,209 78.9% 72.4% -19.1% Bahrain Bourse 322,838,196 236,932,927 0.44% 0.36% -26.6% Total 73,935,277,387 65,168,953,725 100% 100% -11.9%
GCC Stock Markets’ Indexes End of Dec 2018 End of March 2019 % ChangeSaudi Stock Exchange 7,826.7 8,819.4 12.7% Boursa Kuwait (All Share Market Index) 5,079.6 5,617.8 10.6% Bahrain Bourse 1,337.3 1,413.3 5.7% Dubai Financial Market 2,529.8 2,634.9 4.2% Abu Dhabi Securities Exchange 4,915.1 5,074.7 3.2% Qatar Exchange 10,299.0 10,107.4 -1.9% Muscat Securities Market 4,323.7 3,983.7 -7.9%
-3.1% from liquidity while its index gained 4.2%.
Despite the big impact for the gen-eral variables like the geopolitical events and instability of oil prices and changes in the business climate as a result of adopting various re-forming fi nancial and economic policies, we believe in the positive relationship between liquidity and prices. Therefore, we shall review
Thu Thu Diff Close DiffCompany Name 18/04/2019 11/04/2019 % 2016 %1 National Bank Of Kuwait 618.9 603.4 2.6 520.4 18.9 2 Gulf Bank 251.1 259.2 (3.1) 204.8 22.6 3 Commercial Bank Of Kuwait 583.1 692.5 (15.8) 516.0 13.0 4 Al-Ahli Bank Of Kuwait 216.7 217.4 (0.3) 193.1 12.2 5 Kuwait International Bank 327.3 353.3 (7.4) 275.1 19.0 6 Ahli United Bank 340.7 337.6 0.9 296.5 14.9 7 Burgan Bank 367.8 366.7 0.3 284.8 29.1 8 Kuwait Finance Bank 2,088.2 1,997.0 4.6 1,659.8 25.8 Banking Sector 605.1 599.8 0.9 502.7 20.4 9 Commercial Facilities Company 145.1 143.6 1.0 126.3 14.9 10 International Financial Advisors 211.5 206.7 2.3 227.8 (7.2) 11 National Investments Company 151.0 147.2 2.6 103.8 45.5 12 Kuwait Projects Company (Holding) 531.1 533.5 (0.4) 486.7 9.1 13 Coast Investment & Development Company 58.6 59.2 (1.0) 45.4 Investment Sector 212.3 211.3 0.5 187.1 13.5 14 Kuwait Insurance Company 93.5 93.5 0.0 79.4 17.8 15 Gulf Insurance Company 365.0 379.2 (3.7) 373.5 (2.3) 16 Al-Ahleia Insurance Company 157.7 151.7 4.0 160.3 (1.6) 17 Warba Insurance Company 54.5 55.6 (2.0) 54.1 0.7 Insurance Sector 152.8 153.9 (0.7) 147.7 3.5
18 Kuwait Real Estate Company 122.3 118.3 3.4 89.0 37.4 19 United Realty Company 122.2 125.4 (2.6) 122.4 (0.2) 20 National Real Estate Company 209.4 214.4 (2.3) 229.5 (8.8) 21 Salhiaha Real Estate Company 1,332.5 1,332.5 0.0 1,332.5 0.0 Real Estate Sector 175.8 176.7 (0.5) 172.2 2.1 22 The National Industries 210.0 198.3 5.9 141.2 48.7 23 Refrigeration Industries Co 474.9 468.8 1.3 571.3 (16.9) 24 Gulf Cable & Electrical Industries 156.7 164.7 (4.9) 140.3 11.7 Industrial Sector 195.9 191.6 2.2 177.5 10.4 25 Kuwait National Cinemas 571.2 564.9 1.1 671.0 (14.9) 26 The Public Warehousing Co 4,159.5 4,168.4 (0.2) 3,579.3 16.2 27 Mobile Telecommunications Co (ZAIN) 756.5 712.8 6.1 662.9 14.1 28 Safat Energy Co 27.8 26.2 6.1 29.9 (7.0) Services Sector 1,229.7 1,205.6 2.0 1,085.3 13.3 29 Livestock Transport & Trading Co 165.0 165.0 0.0 156.7 5.3 30 Danah Alsafat Foodstuff Company 35.6 35.0 1.7 39.0 (8.7) Food Sector 457.7 457.6 0.0 456.1 0.4 31 Sharjah Cement Co 333.3 333.3 0.0 362.0 (7.9) 32 Gulf Cement Co 227.4 241.9 (6.0) 273.8 (16.9) 33 Umm Al-Qaiwain Cement Industries 479.0 479.0 0.0 489.3 (2.1) Non Kuwaiti Companies 202.6 205.1 (1.2) 215.0 (5.8) General Index 502.0 497.2 1.0 429.0 17.0
Al-Shall Index From April 11, 2019 to April 18, 2019
Final exams correction: Informed educational sources disclosed that marking of the fi -nal grade 12 exams for academic year 2018/2019 will be done after breaking the fast each day in the month of Ramadan due to the short time between hand-ing over of boxes containing question paper to the control at 1:00pm and the Maghreb prayer, reports Al-Rai daily.
The same sources indicated the task is obligatory for all teachers assigned and no excuse will be accepted, noting the correction of exams will be done in the morning on Fridays and Saturdays.
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Dept to study layouts: The Electronic Licensing Depart-ment at Kuwait Municipality will study the layouts prior to the issuance of e-construction license for the project of Tamdeen Group at 10:00 am on Monday in the headquarters of the group at 360 Mall, reports Al-Anba daily quoting the Pub-lic Relations Department.
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Ahmadi gov receives offi cials: Ahmadi Governor Sheikh Fawaz
Khalid Al-Hamad Al-Sabah received the Director General of Sabah Al-Ahmed Center for Giftedness and Creativity Dr Omar Al-Bannai, Direc-tor of Giftedness Dr Abdullah Al-Sweed and Public Relations Director Rakan Al-Kadm.
Sheikh Sabah expressed satisfaction on the achieve-ments made by the center over the years. He commended the important role played by Kuwait Foundation for the Advance-ment of Sciences (KFAS), indicating KFAS is right to boast especially as HH the Amir Sheikh Sabah Al-Ahmed Al-Jaber Al-Sabah is its chairman of the Board of Directors.
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Board dissolved: The Board of Trustees of Silk City and Bou-byan Island has been dissolved and the executive chairman has been asked to resign, reports Al-Qabas daily quoting an informed source.
He revealed that each of the board members and the execu-tive chairman received letters of gratitude that were sent to their homes.
The source indicated that a new board will be formed soon
based on the requirements of the major project and the vision of First Deputy Prime Minister and Minister of Defense Sheikh Nasser Sabah Al-Ahmad.
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Fraudster arrested: The Far-waniya police have taken into custody a 57-year-old Kuwaiti for cheating a number of wid-ows, divorcees and the elderly, reports Al-Anba daily.
The suspect was arrested in the suburb of Abdullah Al-Mubarak on the background of two cases fi led against him but a security source said more people are likely to fi le dozens of cases fol-lowing the announcement of the arrest for his illegal practices.
According to a security source, two Kuwaitis fi led a case at the Farwaniya Police Station that the suspect offered to help them to reduce the amount of their loans after claiming he is working for a very important personality and requested expensive gifts in return from his victims such as phones and others.
Investigations showed he was meeting his victims in com-mercial markets and after gifts were received he would just disappear.
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