Kuwait Economic Brief - Amazon S3 · 2018-01-11 · Kuwait Economic Brief - January 2018 Contents Oil markets 1 Market optimism extends into 2018 as oil prices trade at three-year

Kuwait Economic Brief

January 2018

Government spending accelerates in November...Credit growth to close 2012 at 5.5%...KD 12 billion budget surplus expected for FY 2012/13

An update of recent developments in select sectors in Kuwait published byEconomic Research at NBK

Oil prices reach three-year highs; inflation at 1.5% in Nov; consumer spending up; Boursa Kuwait lifted by new government and oil prices

Kuwait Economic Brief - January 2018

Contents Oil markets 1Market optimism extends into 2018 as oil prices trade at three-year highs

Monetary developments 3Credit was on the weaker side in October, with growth at 4.6% y/y

Consumer price inflation 5November inflation inches up to 1.5%, spurred by retail activity

Consumer sector 7Consumer sector on the mend on stronger confidence and spending

Real estate 9Real estate sales volumes eased in November after strong October

Stock market 11 Government’s formation and oil prices lift Boursa in December

1NBK Economic Research, T: (+965) 22595500, F: (+965) 22246973, [email protected], © 2018 NBK, www.nbk.com


Chart 1: Crude oil prices($/bbl)

Source: Thomson Reuters Datastream

Chart 2: Brent-WTI spread & US crude oil exports

Source: Thomson Reuters Datastream, EIA, NBK estimates

Chart 3: OPEC crude oil production(mb/d)

Source: OPEC (secondary sources); Note: figures in charts denote % compliance

Highlights

• Oil prices continue to trade at three-year highs, with Brent and WTI topping $68 and $62, respectively, last week; 2017 was Brent’s best performing year since 2011, with an annual return of 18%.

• Recent protests in Iran have helped oil sustain its positive momentum; the renewal of the OPEC agreement along with evidence of continued global stock draws have motivated increased investor bullishness.

• But scope for further stock declines in 2018 is limited, with global demand and supply expected to roughly balance, according to the IEA.

• US crude output tops the 1970 year avg. record, reaching 9.78 mb/d.

Oil prices extend positive momentum into 2018

2018 has commenced with oil prices at their highest level in more than three years. Both Brent crude, the international benchmark, and West Texas Intermediate (WTI), the US marker, reached levels last Thursday not seen since December 2014—$68 per barrel (bbl) and $62/bbl, respectively. (Chart 1.) The two crude markers returned 18% (Brent) and 12.5% (WTI) in 2017, which, in Brent’s case, was its best annual performance since 2011. WTI, meanwhile, continues to trade at a discount to Brent that is not far off the two-year high spread of $7 that was recorded last September; the higher Brent-WTI price spread of 2017 has facilitated record US crude exports to international markets after the forty-year moratorium was lifted in late 2015. (Chart 2.)

Oil prices have been helped in recent weeks by the protests in Iran, the Islamic Republic’s most serious since 2009, which has once again re-emphasized the geopolitical risk premium that oil market participants have regularly commanded through the years, and the closure of the Forties pipeline in the North Sea, a key conduit for dated Brent crude. But it is the extension of the OPEC production cut agreement to the end of 2018 that has been the overriding stimulus for the market’s bullishness.

2017 saw OPEC make a successful return to supply management

OPEC, for its part, is entitled to view 2017 with some satisfaction, perhaps even as a watershed year for the fourteen-member group in terms of proactive supply management. By inking a supply cut agreement in one of the most testing and volatile periods in recent times, not only did OPEC confound the critics and naysayers who had long reckoned that the organization’s best days were in the past, but it managed to pull it off with a degree of internal unity, discipline and cooperation (especially with oil producers from outside the group) hitherto unheard of.

Compliance among the twelve OPEC members subject to production quotas averaged 97.4% over the eleven months of 2017 for which data is available, a very respectable achievement. Indeed, with OPEC aggregate output declining to 32.4 million barrels per day (mb/d) in November, a drop of 130,000 b/d after Saudi Arabia, Angola and Venezuela recorded

Oil markets

Market optimism extends into 2018 as oil prices trade at three-year highs

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> Omar Al-NakibSenior Economist

+965 2259 5360, [email protected]

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Chart 4: Balance of oil supply & demand(mb/d)

Source: IEA, NBK; * forecast assumes OPEC output at 32.5 mb/d in 2018

Chart 5: OECD commercial crude & product stocks(billion barrels)

Source: IEA

Chart 6: Brent forward curve($/bbl)

Source: Bloomberg

Chart 7: US crude oil production & rig counts

Source: US Energy Information Administration (EIA), Baker Hughes

slightly lower production, compliance reached a record 120% in the month. (Chart 3.)

And the results speak for themselves: oil prices are currently ranging 50% above their 2017-low last June; physical markets have visibly tightened, with oil supply undershooting oil demand in every quarter of 2017, thanks to OPEC/non-OPEC’s withdrawal of a combined 1.8 mb/d of crude from the markets (Chart 4); and OECD crude and petroleum product stocks have declined to within 100 million barrels of OPEC’s five-year rolling average target, having been more than 337 million barrels above the target only fifteen months before. (Chart 5.)

Of course, in its efforts to rein in a three-and-a-half-year old supply glut, OPEC has been aided by stronger global crude demand growth (+1.5 mb/d in 2017), especially from emerging markets such as China, and a clutch of supply outages, especially among its own members. Libya and Nigeria, for example, have found their efforts to realize sizable output gains hampered by persistent terror attacks on their oil infrastructure, while Venezuela has had to grapple with structurally declining oil production because of cash-flow constraints and chronic underinvestment. Add in some Middle East geopolitical risk to the mix—most recently concerning Iran—and price pressures are firmly on the upside. Indeed, $60 appears to be the new price floor.

In futures markets, investor bullishness has been evident in the record net long positions being staked by hedge funds. The shape of the Brent crude forward curve is also instructive: 2017 was the first year since 2014 in which near-term prices were higher than longer-term prices, a structure known as backwardation. (Chart 6.) Buyers are placing a premium on contracts for immediate delivery rather than contracts for later delivery that would also involve them incurring additional storage costs.

But with global demand and supply expected to roughly balance in 2018, scope for further stock draws is limited

OPEC recognizes that there is little room for complacency this year, however. With demand growth set to decelerate to 1.3 mb/d from 1.5 mb/d in 2017 and non-OPEC supply growth, led by surging US shale production, expected to more than double to 1.6 mb/d this year from 0.6 mb/d in 2017, the scope for continued stock drawdowns appears limited. Indeed, the International Energy Agency (IEA) projects an average global stock increase of 0.2 mb/d in the first half of 2018 followed by a roughly equal decrease in the second half of the year. (See Chart 4.)

Emerging as a significant spoiler in the outlook for 2018 is, of course, US crude production. And here the IEA, not wanting to be caught flat-footed, has revised up its forecast for US output once again. The agency sees growth of 870,000 b/d in 2018, more than double 2017’s estimate of 390,000 b/d. This would contribute more than 75% of total-non OPEC supply growth in 2018. US crude output reached 9.78 mb/d at end-2017 and has already surpassed its all-time record of 9.64 mb/d (year-average) set in 1970. (Chart 7.)

For OPEC, 2018 could shape up to be another important year. Again, much will depend on the group’s ability to capitalize on the prevalent bullish sentiment through its own production-cutting efforts and manage the challenge posed by burgeoning US supply in particular.

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Chart 1: Credit growth(% y/y)

Source: Central Bank of Kuwait

Chart 2: Credit growth by component(% y/y)


Chart 3: Money supply growth(% y/y)


Credit was weaker than expected in October, though growth rose to 4.6% y/y on base effects. The month saw total credit contract by KD 220 million. (Chart 1.) While some of that was from the usual start-of-quarter drop in securities lending, there was additional weakness in some business sectors. Nonetheless, year-on-year (y/y) growth improved as the impact of last year’s Americana-related repayments faded. Private deposits saw a decline on the heels of two strong months.

Household lending was the exception, seeing healthy gains in October. Growth improved slightly to 7.5% y/y. (Chart 2.) Personal facilities excluding securities lending added a net KD 102 million during the month, a figure comparable to levels seen in the months before 2016 and well above the KD 72 million average recorded thus far in 2017.

Business credit (excluding nonbanks) dropped by KD 322 million on the regular start-of-quarter drop in lending for the purchase of securities as well as weakness in some business sectors. (Chart 2.) Securities lending fell by KD 213 million. Outside that, there were relatively large declines in “other sectors” (-KD 88 mn) and construction (-KD 59 mn). These were partly offset by gains in industry (+KD 24 mn) and trade (+KD 15 mn).

Lending to “productive” business sectors was weak, though growth remained relatively robust at 5.7% y/y. Productive credit, which excludes real estate and financial sector lending, dropped by KD 112 million during the month. The fading of the large Americana-related settlements made in October 2016 helped boost growth. Still, growth has been weaker in the last few months following a stronger first half of the year.

Private deposits were off in October following two months of relatively strong gains. Deposits fell by KD 263 million largely on declines in KD time (-KD 142 mn) and foreign currency deposits (-KD 151 mn). Money supply (M2) growth slipped slightly to 1.9% y/y. Government deposits also declined, losing KD 167 million, as growth slowed to 2.4% y/y. (Chart 3.)

The banking system’s liquid reserves, or “excess liquidity”, edged higher in October to 7.0% of bank assets. Bank reserves (cash, deposits with the CBK, and CBK bonds) increased by KD 200 million to KD 4.4 billion (Chart 4). This coincided with the absence of public debt issuance in October. As such, the amount of outstanding domestic public debt instruments (PDIs) dropped to KD 4.77 billion, or an estimated 12% of GDP.

Domestic interest rates in October were little changed from September. The 3-month interbank rate edged up 3 basis points to settle at 1.79% (Chart 5), though rates have moved higher since. Customer deposit rates were unchanged on the month.

More recently, the Central Bank of Kuwait (CBK) kept the discount rate unchanged following the US Fed’s much-anticipated rate hike on 13 December. This was the second time the CBK holds off hiking its key rate during the current Fed cycle of rising rates; it did so also in

Monetary developments

Credit was on the weaker side in October, with growth at 4.6% y/y

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> Nemr KanafaniHead of Research


> Chaker El MostafaEconomist


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June 2017. However, the CBK again indicated it might continue to take steps to push bank deposit rates higher while keeping bank lending rates unchanged. The CBK explained that, in keeping the discount rate at 2.75%, it sought to avoid stifling non-oil growth while continuing to take further action to maintain the dinar’s attractiveness. In this vain, the CBK increased its coupon rate on 3-month bills issued on 19 December by 25 bps to 2%.

Chart 4: Bank reserves(% of bank assets)


Chart 5: Interbank rates(%, 3-month rates, daily)


Chart 6: Exchange rates


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Table 1: Monetary indicators1-month 3-month 12-month

Oct-17 change change change

KD mn KD mn % KD mn % KD mn %

Total system liquidity (M2) 36,320 -244 -0.7 348 1.0 687 1.9

Currency in circulation 1,638 19 1.2 13 0.8 37 2.3

Private sector deposits 34,682 -263 -0.8 334 1.0 650 1.9

KD deposits 32,309 -112 -0.3 249 0.8 1,134 3.6

Sight deposits 8,313 -12 -0.1 -30 -0.4 474 6.0

Savings deposits 4,829 42 0.9 -18 -0.4 179 3.8

Time deposits & CDs 19,168 -142 -0.7 297 1.6 481 2.6

Foreign currency deposits 2,373 -151 -6.0 85 3.7 -484 -16.9


Table 2: Consolidated bank balance sheets1-month 3-month 12-month

Oct-17 change change change

KD mn KD mn % KD mn % KD mn %

Total bank assets 62,663 -468 -0.7 399 0.6 2,614 4.4

Core liquid assets 4,374 206 4.9 -312 -6.7 -1,358 -23.7

Cash and CBK deposits 917 120 15.1 228 33.1 -511 -35.8

CBK bonds 2,622 40 1.6 -560 -17.6 -496 -15.9

Time deposits with CBK 835 45 5.7 20 2.5 -351 -29.6

Public debt instruments 5,028 -196 -3.8 623 14.1 2,044 68.5

Interbank deposits 1,183 -173 -12.7 -120 -9.2 -95 -7.4

Credit facilities 35,603 -220 -0.6 204 0.6 1,552 4.6

Foreign assets 12,527 -61 -0.5 -272 -2.1 116 0.9

Other assets 3,949 -24 -0.6 276 7.5 354 9.9

Total bank liabilities 54,372 -458 -0.8 403 0.7 2,345 4.5

Total deposits 42,700 -608 -1.4 0 0.0 737 1.8

Private sector deposits 34,682 -263 -0.8 334 1.0 650 1.9

Government deposits 6,884 -167 -2.4 -222 -3.1 163 2.4

Interbank deposits 1,135 -178 -13.6 -113 -9.1 -76 -6.3

Foreign liabilities 5,344 84 1.6 144 2.8 1,069 25.0

Other liabilities 6,327 65 1.0 260 4.3 729 13.0

Shareholder equity 8,292 -10 -0.1 -4 -0.1 269 3.4




Consumer price inflation rose slightly to 1.5% in November, predominantly driven by price rises of some retail goods and services. (Chart 1.) Inflation remained subdued recently, held back by the ongoing deflationary pressures in housing rents and a slow pickup in food and beverage prices. However, price activity excluding housing rent, food and energy prices has been stronger, with inflation there rising to 3.4% year-on-year (y/y) in November. While headline inflation bounced back from a low in September 2017, it is still expected to end 2017 well below levels in recent years. We expect inflation to average 1.5% for 2017, down from 3.5% in 2016.

Prices in housing services, especially rent, have continued to contract, though the pace has moderated. The housing services sub-index reflected the correction in rental rates after a general slowdown in the real estate market in 2015 and 2016. Prices in housing services contracted by 0.3% y/y in November, a vast improvement from August’s 2.3% y/y decline (Chart 2). Based on the recovery in real estate sales activity, especially in the residential sector, rental rates are expected to continue to stabilize in the coming months.

Food price inflation is on the mend as global food prices show a steady pick-up. Inflation in local food prices picked up to 0.5% y/y, compared to October’s 0.4% y/y. The annual change in local food prices in 2016 and 2017 oscillated around zero, as global food prices remained largely deflationary. With global food price inflation already on the rise, 2018 could see higher local food inflation though not before mid-2018.

November’s price pick-up was largely driven by a rise in retail goods and services. (Chart 4.) On the back of improved consumer spending, the price of furnishing products, such as carpeting, and services related to household maintenance, has made a noticeable contribution to inflation over the last year. Along with accelerating prices in clothing and footwear and in recreation and culture, there was significant price increase in personal care products. These four sectors, along with transport related costs, contributed to around 85% of the annual price increase in November.

Inflation in services excluding housing has been somewhat higher recently, possibly reflecting a recovery in consumer spending activity. Inflation in services ex-housing remained steady at 3.0% y/y in November. The ongoing easing in transport costs and deflation in some personal care costs were offset by a pickup in consumer expenditure on recreation and spending on cultural activities. Meanwhile, services overall have stabilized on the back of moderating housing-related services. (Chart 5.) Keeping pace with October, inflation in services as a whole remained at 0.8% y/y in November.

Consumer price inflation

November inflation inches up to 1.5%, spurred by retail activity

Chart 1: Consumer price inflation(% y/y)

Source: Central Statistical Bureau, NBK estimates

Chart 2: Inflation in housing services(% y/y)

Source: Central Statistical Bureau

Chart 3: Inflation in food & beverages(% y/y)


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Table 1: Consumer price inflation

(% change) Year-on-year Annual Avg.

Oct-17 Nov-17 2015 2016

Food & beverages 0.4 0.5 3.0 1.7

Tobacco & cigarettes 2.1 2.1 5.6 0.3Clothing & footwear 2.9 3.4 0.3 0.8Housing services* -0.3 -0.3 6.1 6.1Furnishing & household maintenance 3.8 4.0 3.7 2.3

Healthcare 0.9 0.9 1.7 1.2Transportation 1.7 1.9 0.9 4.1Communication 0.8 0.9 0.6 2.0Recreation & culture 5.7 6.3 -0.3 -1.8Education 1.8 1.8 4.8 3.6Restaurants & hotels 3.0 3.0 6.3 6.9Other goods & services 3.8 4.7 2.4 0.8

Core** 1.6 1.7 3.8 3.9

Durable goods 1.3 1.6 2.4 2.5Semi-durable goods 2.4 2.7 1.4 1.1Non-durable goods 4.6 5.5 0.0 0.4Services 0.8 0.8 5.4 4.9

Services ex-housing 3.0 3.0 3.9 2.4

General Index 1.4 1.5 3.7 3.5


* Updated once every quarter

** Excludes food & beverages; estimated by NBK

Chart 4: Inflation in other sectors(% y/y)


Chart 5: Inflation in services ex. housing(% y/y)


Chart 6: Inflation in transportation(% y/y)


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The consumer sector appears to be on the mend, with clear signs of a recovery in 3Q17, following a noticeable slowdown in 2016 and 1H17. The recovery is broad based with strength materializing in card spending, consumer confidence and household credit, though most consumer indicators remain below the double-digit growth of previous years. Nonetheless, employment remains healthy, providing support to the sector.

Consumer spending growth continued to recover in 3Q17, with growth nearing its 2015 pace. Spending growth on credit and debit cards at point-of-sale machines improved to 12.5% year-on-year (y/y) during the third quarter, up from -0.7% y/y in 3Q16. Growth in total spending including ATM withdrawals, which has been slower, has also been improving, accelerating to 8.5% y/y in 3Q17 (Chart 2).

Durable goods continue to show some weakness, though a turn-around is expected soon. The contraction in car imports has moderated to a 5% y/y decline during the first nine months of 2017. The Ara consumer confidence index has also hinted at a possible rebound. The durable goods sub-index registered its highest 3-month average in a year, coming in at 119 in November, up 16% y/y. (Chart 3).

Overall consumer confidence has also improved noticeably. The Ara general index registered its sixth consecutive month above 100, settling at 113 in November and averaging 107 since June 2017, compared to 94 over the same period in 2016.

The improvement in consumer confidence appears to be helping household loan growth pick-up steadily in 2017. Growth in personal facilities excluding credit for the purchase of securities has picked up in recent months to average 7.3% y/y between July and October 2017; this is compared to an average of 6.8% during the first half of 2017. (Chart 1). The average monthly gain in such loans also rose to KD 92 million over that same period, well above 1H17’s KD 58 million average.

Employment growth among Kuwaitis strengthened in 2Q17 following some moderation in 1Q17. The number of new civilian jobs among Kuwaitis totaled 4,200 in 2Q17, driven by a strong increase in government hires. Growth in employment, however, was steady at 2% y/y, around the slowest pace it has been in over seven years.

The consumer sector is likely to finish 2017 on a strong note. The decision to implement more moderate hikes in utility prices and the slow recovery in the real estate market activity, combined with a government commitment to limit its spending cuts, should continue to provide decent support to the consumer sector.

Consumer sector

Consumer sector on the mend on stronger confidence and spending

Chart 1: Household debt growth(% y/y)


Chart 2: Card transactions(% y/y)


Chart 3: Consumer confidence index(index)

Source: Ara Research & Consultancy

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Chart 4: Kuwaiti civilian job entrants(thousands)

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Chart 1: Monthly real estate sales(KD million)

Source: Ministry of Justice

Chart 2: Residential real estate sales

Source: Ministry of Justice, NBK estimates

Chart 3: Residential real estate price indices(index, 3-month moving average, 2010=100)


Total November real estate sales fell shy of KD 150 million following a strong performance in October; nevertheless, the price trend across all sectors still indicated stabilization. Real estate sales totaled KD 147.3 million in November across all sectors (Chart 1), on 301 transactions. The figure looks lackluster compared to the prior month’s impressive KD 216.9 million. Meanwhile, the contraction in prices across the sectors moderated further in November, with the NBK investment building price index breaking into positive territory for the first time in a year and a half.

The residential sector remained buoyant, supporting overall sales activity in November. Sales totaled KD 83 million, up 16% year-on-year (y/y) (Chart 2). The number of transactions totaled 236, making up 78% of all real estate activity for the month. Land purchases made up 28% of the 67 transactions. Regionally, residential plot sales were in line with previous trends, with heavy activity in the Sabah Al-Ahmad coastal area, Funaitees, and Abu Ftaira.

Continued price stabilization in the residential sector reflects steady sales activity. The NBK residential home price index improved to 150.6 in November, up from October’s 150.0. NBK’s residential land price index dipped slightly to 175.5 from October’s 175.9. The contraction from a year before eased in the home prices to just -0.6% y/y; while it widened slightly for residential land prices to -2.4% y/y, prices remain better than levels witnessed in the first half of 2017 (Chart 3).

Investment property sales slipped after a surge in activity in October. Sales in the sector fell 33.6% y/y to KD 38.5 million in November. The investment property sector continues to underperform; in the first eleven months of 2017, average monthly performance was KD 56.5 million, down 18% compared to the same period in 2016 (Chart 4). The outlook for the sector remains positive, however, as oil prices remain elevated and development project awards show positive momentum.

The NBK investment building index breaks into positive annual growth territory for the first time in over a year. The recovery in the index reflects strong gains in September and October; the index rose to 182 in November 2017, up 0.1% y/y (Chart 5). The index has been on a recovery trend since it bottomed in September 2017.

Commercial sector activity eased after a surge in October, falling below 2017’s monthly average (to November) of KD 28 million. Five transactions took place in November, worth a combined KD 25.8 million. The volatile sector is down almost 70% y/y, but November 2016 had witnessed a surge in activity that was preceded but a period of quiet (Chart 6). The largest sale for November 2017 was a commercial building in Al-Qibla that sold for KD 17.6 million.

Real estate

Real estate sales volumes eased in November after strong October

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> Fatema AkashahEconomist




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Residential HomeResidential Land



Table 1: Real estate sales Monthly average 2017 Nov 2017

2015 2016 Sept Oct Nov %m/m %y/y

Sales (KD mn) 253.5 195 144.0 216.9 147.3 -32.1 -30.5

Residential property 113.4 79 68.3 110.3 83.0 -24.7 16.2

Investment property 102.2 68 68.2 60.1 38.5 -36.0 -33.6

Commercial property 37.9 48 7.5 46.5 25.8 -44.5 -68.7

Number of transactions 452 354 292 450 301 -33.1 -17.5

Residential property 323 237 207 357 236 -33.9 -3.3

Investment property 120 108 84 86 60 -30.2 -46.4

Commercial property 8 8 1 7 5 -28.6 -44.4

Transaction size (KD ‘000) 566 547 493.0 482.0 489.3 1.5 -15.7

Residential property 352 332 329.8 308.9 351.6 13.8 20.2

Investment property 882 646 811.8 699.1 641.2 -8.3 24.0

Commercial property 5,185 5,204 7,500 6,644 5,163.0 -22.3 -43.7

Source: Ministry of JusticeNote: Our real estate indexes database comprises 65,000 transactions. Each index combines monthly average prices (per sqm when possible) in select, more active, areas of Kuwait; it is then adjusted for volatility. The indexes are based in 2010, i.e. 2010 price index equals 100. The indexes are not adjusted for seasonality nor for number of business days. They also do not cover the commercial sector.

Chart 4: Investment real estate sales


Chart 5: Investment building price index(index, 3-month moving average, 2010=100)


Chart 6: Commercial real estate sales(KD million)


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Though Kuwait’s equity market shook off November’s jitters, it still suffered from weaker trading activity in December and ended the year lower. The formation of a new government early in the month lent a significant boost to the market, with the recovery in oil prices carrying the momentum forward. Yet, it did little to offset the recent decline in performance and activity, with the market cap growing by a small KD 184 million, to end the month at KD 28 billion.

The weighted index added 0.7%, while the price index gained 3.4%, with most sectors up. The largest gainer was the insurance sector, up 11%, followed by the basic materials and the oil and gas sectors, each up 3.7%. The consumer sector was the worst performer. It continued to contract with both consumer goods and consumer services down 12.9% and 10.2%, respectively. The average daily traded value declined for a second consecutive month, to settle at KD 9.2 million in December, down 41% on the month.

Kuwaiti equities were among the best performing in the GCC in 2017, with the price index up 11.5% and the weighted index up a decent 5.6%. The market registered healthy gains throughout most of the year, supported by the minority share buy-out of Americana by UAE investors late in 2016, its ascension to FTSE Russel’s emerging market index and Omantel’s acquisitions of Zain stock. However, regional developments late in the year weighed on the market in 4Q17. While a rebound in oil prices added some positive momentum around year-end, it was too little to offset the profit taking that happened in the final quarter of the year.

December’s share of foreign buying dropped to its lowest in 8 months, with the 3-month moving average coming in at 13.3%.

Stock market

Government’s formation and oil prices lift Boursa in December

Chart 1: Boursa Kuwait

Source: Thomson Reuters Datastream, Boursa Kuwait

Chart 2: Regional markets(rebased indexes)


Chart 3: GCC markets & oil


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Table 1: Boursa Kuwait performance by sector, December 2017Change %

Price WeightedPrice index Weighted index

Market % of Trading activity Price to

index index cap (KD mn) Market (daily avg.) earnings*

28-Dec 28-Dec m/m YTD m/m YTD 28-Dec mn shares mn KD 28-Dec

Total market 6408 401 3.4 11.5 0.7 5.6 28,016 100.0% 59.4 9.2 14.1

Banks 913 482 4.1 9.0 1.8 12.0 13,939 49.8% 13.7 3.8 14.3

Basic materials 1254 752 1.4 24.8 3.7 33.8 819 2.9% 0.6 0.3 22.6

Consumer goods 822 509 -6.3 -26.9 -12.9 -46.1 790 2.8% 0.5 0.2 10.9

Consumer services 901 448 -2.0 -2.5 -10.2 -0.9 691 2.5% 2.6 0.2 67.5

Financial services 619 408 -2.2 3.7 0.4 -5.2 2,507 8.9% 21.5 1.7 11.3

Healthcare 1511 623 ... 21.4 ... 5.1 237 0.8% ... ... 22.6

Industrials 1839 731 7.9 36.9 1.3 24.3 3,428 12.2% 3.2 0.8 14.0

Insurance 1106 656 10.2 11.2 11.0 9.5 380 1.4% ... ... 10.9

Oil & gas 964 288 2.3 23.4 3.7 7.4 250 0.9% 1.1 ... …

Real estate 933 528 6.2 7.2 0.8 -4.6 2,093 7.5% 12.5 0.7 15.1

Technology 479 253 -4.1 -21.2 0.9 -21.3 36 0.1% ... ... …

Telecommunications 558 326 2.1 -12.2 -1.2 -1.2 2,846 10.2% 3.8 1.5 12.1

Parallel 1011 376 -0.3 -8.2 1.0 -4.2 … … … … …

Source: Boursa Kuwait, Thomson Reuters Datastream* PE is calculated using market cap as of month close and latest 12 months trailing earnings.

Chart 4: Market indexes(rebased indexes)

Source: Thomson Reuters Datastream, Boursa Kuwait

Chart 5: Foreign buyers(% y/y, 3mma)

Source: Boursa Kuwait

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Head Office

KuwaitNational Bank of Kuwait SAKPAbdullah Al-Ahmed StreetP.O. Box 95, Safat 13001Kuwait City, KuwaitTel: +965 2242 2011Fax: +965 2259 5804Telex: 22043-22451 NATBANK

www.nbk.com

International Network BahrainNational Bank of Kuwait SAKPZain BranchZain Tower, Building 401, Road 2806, Seef Area 428, P.O.Box 5290, Manama, Kingdom of BahrainTel: +973 17 155 555Fax: +973 17 104 860

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EgyptNational Bank of Kuwait - EgyptPlot 155, City Center, First Sector 5th Settlement, New Cairo EgyptTel: + 20 2 26149300Fax: + 20 2 26133978

United Arab EmiratesNational Bank of Kuwait SAKPDubai BranchLatifa Tower, Sheikh Zayed RoadP.O. Box. 9293, Dubai UAETel: +971 4 3161600Fax: +971 4 3888588

National Bank of Kuwait SAKPAbu Dhabi BranchSheikh Rashed Bin Saeed Al Maktoom (Old Airport Road)P.O. Box 113567Abu Dhabi, U.A.ETel: +971 2 4199555Fax: +971 2 2222477

United States of AmericaNational Bank of Kuwait SAKPNew York Branch, 299 Park AvenueNew York, NY 10171, USATel: +1 212 303 9800Fax: +1 212 319 8269 United KingdomNational Bank of Kuwait(International) PlcHead Office, 13 George StreetLondon W1U 3QJ, UKTel: +44 20 7224 2277Fax: +44 20 7224 2101

National Bank of Kuwait(International) PlcPortman Square Branch7 Portman SquareLondon W1H 6NA, UKTel: +44 20 7224 2277Fax: +44 20 7486 3877

FranceNational Bank of Kuwait(International) PlcParis Branch90 Avenue des Champs-Elysees75008 Paris, FranceTel: +33 1 5659 8600 Fax: +33 1 5659 8623

SingaporeNational Bank of Kuwait SAKPSingapore Branch9 Raffles Place # 44-01Republic PlazaSingapore 048619Tel: +65 6222 5348Fax: +65 6224 5438

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Associates

TurkeyTurkish BankValikonagl CAD. 7Nisantasi P.O. Box 34371,Istanbul, TurkeyTel: +90 212 373 6373Fax: +90 212 225 0353

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