April 21, 2020
National Investments Company holds its Ordinary General Assembly meeting on 20/04/2020
- We look forward with optimism and confidence to an end to the current crisis and a return to achieving the best results in the coming years.
- Our financial position is strong and solid, and we enjoy high flexibility in facing all circumstances.
- NICs total assets reached KD 214.9 million at the end of last year.
- All sectors have been affected by COVID-19 pandemic… and we must follow a conservative policy.
- The current year is expected to witness many structural changes related to the economy and money at the global and regional levels.
- NICs plan is mainly built on diversifying sources of income, according to mechanisms based on reducing risks.
- The outstanding performance of our investment funds in 2019 reflected the success of our Executive Management in adopting effective, sound and sustainable strategies.
- Our investment products are attractive and promising for every investor looking for a regular and limited-risk profit, even in light of rapid and successive changes.
- NICs plan is based on diversifying sources of income under a conservative policy.
- We have technical sectors and human resources capable of keeping pace with clients aspirations
The annual General Assembly of National Investments Company (NIC) approved distributing nine fils per share or 9% of the capital as cash dividends for the fiscal year (FY) 2019 for the shareholders recorded in the Companys registers in accordance with the dates and rules of entitlement in force.
The Chairman, Mr. Hamad Al-Ameeri, said that last year witnessed great challenges at the local and global level, as the outstanding performance of local and international financial markets during 2019, which reflected positively on the Companys financial results, created a challenge of how to find a balance between profitability and conservatism in investment to reduce any adverse consequences of this optimism of performance. This conservative policy is what was drawn up by the Board of Directors several years ago and is applied by the Executive Management of the company.
Al-Ameeri affirmed in press statements on the sidelines of the General Assembly held yesterday, that in light of these current circumstances, the balance established between expenditures and revenues, and seizing investment opportunities with calculated risks is a must, and this undoubtedly comes in implementation of the strategy set by the Board of Directors that was applied with prudence by the Executive Management, as it created reserves and provisions that will preserve the company in the future, and that we will reap its fruits during this current difficult period experienced by markets and all economic sectors.
He pointed that such investment policies reflect the strength of the companys financial position in facing the conditions and changes in the economic work environment, which makes it able to absorb unstable economic conditions.
Assets and Returns
In respect of financial results, the total assets of the Company amounted to KD 214.901 million at the end of 2019 compared to KD 197.279 million at the end of 2018, an increase of 8.93%. The total equity attributable to the equity holders of the Parent Company increased by 1.91% to KD 180.913 million at the end of 2019 compared to KD 177.526 million at the end of 2018.
He added that the net profit attributable to the shareholders of the Parent Company at the end of 2019 amounted to KD 10.727 million compared to KD 7.365 million at the end of 2018. Total comprehensive income for the year amounted to KD 20.329 million, an increase of 32.6% compared to KD 15.336 million at the end of 2018. Earnings per share stood at 13 fils per share compared to 9 fils per share at the end of 2018.
Al-Ameeri added that all world economies were greatly impacted by the novel coronavirus pandemic (COVID-19), including the Gulf region, as financial markets succumbed great losses, which requires awareness and flexible strategies to deal with the developments.
He added that emerging markets witnessed a sharp decline during the last period, following the health crisis resulting from the outbreak of COVID-19, and the collapse of oil prices, which led Central Banks to reduce interest rates to stimulate effective aggregate demand and support markets.
Chairman Mr. Al-Ameeri also expected that the current year will witness many economic and financial structural changes at the global and regional levels, in conjunction with many economic and financial shocks at the beginning of the year related to the health crisis, as the World Health Organization (WHO) announced the novel coronavirus as a global pandemic after the great spread from the country where it was first diagnosed; China, which is the second largest global engine in the economic field after the United States of America.
Al-Ameeri stressed that the companys plan is mainly based on diversifying sources of income, according to mechanisms based on reducing risks, noting that the companys profitable sectors are the main tributaries of the companys revenues, as they were able to maintain leadership through the outstanding performance of the companys products in 2019.
On the same level, Mr. Fahad Al-Mukhaizim; CEO of National Investments Company, said that the achieved good results and the financial stability experienced by NIC group is the result of the collective efforts made by its team in all its segments.
He affirmed that these reassuring results came as a reflection of a long-term strategy that was subject to research and discussion, and is witnessing continuous updating in line with market developments, pointing out that the developments currently witnessed under the spread of COVID-19 require waiting and not rushing until the vision becomes clear.
In the same context, Al-Mukhaizim praised the role played by the Capital Markets Authority (CMA) and Boursa Kuwait, in keeping pace with the development and modernization of systems in line with the investors long-term vision, in congruence with the currently witnessed changes or that expected in the future.
Al-Mukhaizim said that the companys investment products constitute attractive investment opportunities for every investor looking for a regular profit over a long-term investment horizon, even in light of the rapid and successive changes the world of financial markets is witnessing today.
Performance of Investment Funds
In respect of the performance of investment funds managed by NIC, Al-Mukhaizim said that Al Wataniya Investment Fund, which invests in listed equities on the Boursa Kuwait, and equities of the companies unlisted in Kuwait achieved an excellent return of 19.53% with net asset value of the fund reaching KD 136.9 million.
Mawarid Industrial and Petroleum Services Fund, which invests in Sharia compliant local and Arab equities, achieved during the year a return of 3.94%. Similarly, Zajil Services and Telecommunications Fund, which invests in Sharia compliant local and Arab equities, achieved a competitive return of 10.23%. Al Darij Investment Fund, which invests in Sharia compliant GCC equities, achieved during the year a return of 8.04%. Al Mada Investment Fund, which invests in Sharia compliant GCC equities, achieved during the year a return of 6.06%.
Al- Mukhaizim said: “The excellent performance of our investment funds during 2019 reflects the Executive Managements success in adopting effective and sustainable investment strategies that are capable of applying accurate and rigorous business practices and techniques, and capturing investment opportunities that involve growth potential and outstanding financial returns, making our investment funds outperform their peers in the market.
Al-Mukhaizim added that market conditions since the beginning of this year may have an impact on the path of the funds sector, stressing that the future recovery of markets will undoubtedly lead to a recovery in all sectors, including the funds sector.
In respect of the Investment Banking Sector (“IB”), Al-Mukhaizim said that it aims to deliver high risk-adjusted returns on invested capital. IB is primarily active in two key areas. It is responsible for providing advisory services to clients (M&A, restructuring, valuation, IPO, listing, debt issuance, and the like. In addition, IB is active in investing / managing NICs private equity and alternative investments in the local, regional and international markets.
Al-Mukhaizim added that 2019 was a landmark year for IB at NIC, both for advisory services and alternatives. In the Financial Advisory Services Dept., NIC embarked on 12 new mandates, including: the capital increase of Warba Capital, the Mandatory Tender Offer for Kuwait and Middle East Financial Investment Company (KMEFIC), pre-IPO services to a conglomerate, buy-side advisory services for a financial services company, sell-side services for a food-and-beverage company, and numerous other valuation / strategy assignments. He added, “We intend to build on this strong track record in 2020 and we have started the year with a very strong pipeline of mandates.”
In the Alternative Investments Department, Al-Mukhaizim said that NIC had a number of flagship transactions during 2019. This included leading the consortium that acquired 44% equity stake in Boursa Kuwait. In addition, the department structured its first real estate club deal, which involved acquiring a 117,000 sq.ft. retail building in Manchester (UK) leased to Tesco, generating a cash yield of 9% per year. The Department has also increased its stake in a company specialized in private property business to become a strategic stake, as well as seizing the opportunity to purchase a distinctive stake in a company that operates in the financial services sector.
Al-Mukhaizim said that the Department has exited two legacy investments during the year and sourced offers for several other investments. We intend to continue to build on these achievements in 2020, by exiting other investments and arranging new club deals through our network of partners.
Al-Mukhaizim pointed out that during 2019, focus of the Wealth Management Sector (WMS) was on restructuring the operations of the sector, and to continue to concentrate on making remarkable progress in improving the portfolios of clients and funds unit holders base in compliance with the Capital Markets Authority (CMA) requirements and regulations and its Executive Bylaws.
Al-Mukhaizim said that WMS played a pivotal role in streamlining matters and procedures of the acquisitions and subscriptions performed, including the acquisition of the commercial real estate Tesco by NIC and its clients at a total value of £ 44.5 million. Moreover, NIC acted as Lead Manager and Subscription Agent in the capital increase shares of Warba Capital Holding Company at a total value of KWD 2.8 million. NIC also played an essential role in the mandatory acquisition for Al Thekair General Trading & Contracting Company over Kuwait and the Middle East Financial Investment Company “KMIFIC”. Furthermore, WMS acted as an Investment Advisor on behalf of a customer in order to acquire a controlling stake of the capital of one of the foods company.
Al-Mukhaizim said that in 2019, WMS had the greatest impact in attracting a new and diversified clients base, including government agencies, companies and high net worth individuals, in addition to boosting relationships with existing clients as an essential goal by offering innovative investment products and solutions to achieve their investment goals and aspirations as well as providing them with a window to express their concerns and inquires.
Real Estate Investments
In terms of the Real Estate Investment Sectors performance, Al-Mukhaizim said that it was outstanding. This year, thanks to God, the size of the portfolios managed for third parties increased by 37%, bringing the total number of properties managed by the sector to 70 including commercial, industrial and investment properties.
Al-Mukhaizim said, “Compliance is a multi-dimensional practice with various scopes. In NIC, the function not only focuses on complying with rules and regulations, but we are seeking to abide by the latest best practices and promote highest standards of honesty, transparency, and integrity.
Al-Mukhaizim said added that NIC has developed a set of polices & procedures, controls, check-lists and system-generated reports to control the compliance function all over the organization through a risk-based approach in order to take corrective actions as deemed appropriate.
Anti-Money Laundering (AML)
Al-Mukhaizim said that Anti-Money Laundering and Terrorism Financing Function has a crucial role in NIC in order to protect the Company from any suspicious deals, money laundering or terrorist financing crimes. This is implemented through maintaining and developing an AML program including policies and procedures, AML automated system, screening and blacklist check as well as training the BoD, management and staff on a regular basis.
He added, AML team maintains records of all clients, receives red flags regarding any suspicious deal, has a risk-based categorized methodology of classifying the clients according to different criteria.
Al-Mukhaizim said that the National Investments Company has won five awards, by “Global Finance & Banking Awards” as the best investment company in Kuwait for the second time in a row, and the award for the Best Investment Management Company in the Arab Gulf, as well as the award for the Best Gulf Investment Advisor for the year 2019, and also an award The Fastest Growing Company among the investment companies in Kuwait for the year 2019 from the magazine “International Finance Awards”, the last of which is the award for the Best Asset Manager in Kuwait for the year 2019 from the magazine “Mena Fund Manager” specialized in investment funds in the Middle East and North Africa, and this honor reflects the successful record and outstanding performance of the Company.
At the end of the assembly, the Chairman, Mr. Hamad Al-Ameeri, extended his thanks and appreciation to the Board of Directors, the Executive Management and all employees of the company, for their efforts to continuously strive to achieve this performance and positive growth that is always in line with the strategic plan.
We also ask God Almighty, to protect Kuwait and its people from all evil and harm, asking God Almighty to raise this scourge and to protect and safeguard Kuwait and the whole world from all harm