ShareKUWAIT: The National Investments Company’s Board of Directors approved the company’s consolidated financial statements for the financial year ending Dec 31, 2023, where its financial and operational performance recorded growth, thanks to its successful strategic vision and diversification aimed at providing sustainable returns and maximizing shareholder value. This contributed to achieving financial profits amounting to KD 4.1 million at 5 fils per share during the financial year ending Dec 31, 2023, despite the challenges and negative performance of the markets and the local and global economy in general during 2023.
Solid financial position
NIC Chairman Bader Nasser Al-Kharafi said that the company maintained its profits during 2023 despite the challenges reflected in the performance of the local, regional, and global capital markets. These challenges and difficulties guided the company’s selections for defensive stocks, which helped face the rapid global changes this year.
The National Investments Company maintained its solid financial position and ability to achieve growth rates during 2023. We have started the year with a positive outlook while maintaining operations through implementing a range of mergers and acquisitions, sales and restructuring operations, and various advisory services. Positive results accompanied this despite the adverse capital markets fluctuations, both in Kuwait and the region, thanks to the leading position achieved by NIC being one of the largest investment companies in Kuwait and the area for several decades, which led to notable successes, ability to overcome crises on local, regional, and global levels, and preserve the interests of its clients efficiently and transparently.
Regarding Boursa Kuwait’s performance, Al-Kharafi mentioned that it had ended its trading for 2023 with a decline in its indices, as the General Market index declined by 6.5 percent, Premier Market by 7.9 percent, and Main Market by 0.5 percent.
It is worth noting that the October trading coincided with the “Al-Aqsa Flood,” which increased the intensity of selling pressures. This was directly reflected in the performance of stocks and indices, as the general market index recorded a decline of 5.2 percent during October, and the first market index for the same period decreased by 5.1 percent, their worst monthly performance since June 2020.
Boursa Kuwait’s negative performance during 2023 was driven by a few undesirable data that harmed investors, including the high interest rates, the tight US monetary policy, and some sectors affected by the interest rate hike, such as the real estate, industrial, and financial sectors. Another factor was the growing fear of a recession for the global economy, not to mention the recent regional geopolitical tensions; all these factors have harmed the stock market’s performance in general.
As for the November and December trading, they witnessed a noticeable recovery due to the state of relative satisfaction experienced by all financial markets, whether regional or global, after the decision of the US Federal Reserve to fix the interest rate for the third time in a row during its meeting in early November, which created a state of optimism and satisfaction among investors as an indication of the end of the end of the monetary tightening policy pursued by global central banks since early last year. In November, the General Market index rose by 1.9 percent and the Premier Market index by 2.1 percent; this positive state continued in December, supported by the continued selective buying and the desire to reconstitute new investment positions towards the end of the year.
Performance indicators
Al-Kharafi reviewed NIC’s financial indicators during the past year and mentioned that the company’s total assets amounted to KD 249.3 million by the end of 2023, and the fiduciary assets under management reached approximately KD 1.05 billion. The total shareholders’ equity of the parent company amounted to KD 173.3 million.
Despite the change in interest rates on both regional and global levels, which led to a negative reflection in the performance of the GCC market indices, reaching 6.5 percent in Kuwait, 6.2 percent in Abu Dhabi, and 7.1 percent in Oman, the company maintained a net financial profit, achieving annual profits and significant growth in all fundamental financial indicators. He also highlighted the positive profitability indicators and return on average assets and average shareholders’ equity, improving asset quality indicators and maintaining reasonable cost and revenue ratios simultaneously, as the company achieved a KD 4.1 million profits, 5 fils per share, for the financial year ended Dec 31, 2023, comparing to KD 8.7 million and 11 fils per share on Dec 31, 2022.
NIC’s Board of Directors agreed on a distribution of cash dividends at the rate of 15 percent of the nominal value per share, ie, 15 fils per share for the fiscal year ending in 2023, which confirms the solidity and strength of NIC’s financial position. This recommendation is subject to the approval of the company’s general assembly. Al-Kharafi shed light on the prudent strategy followed by NIC in reducing risks, capitalization levels, and strong liquidity and that the company is taking proactive steps in creating new paths to enhance its leading position by making a sustainable impact and expanding the scope of services within the various sectors and markets. To achieve that, NIC maintains an innovative approach and the highest levels of efficiency in dealing with various economic crises and challenges, and therefore, achieves excellence in serving customers and shareholders and attaining lasting positive change for them, appreciating their confidence and continuous support for NIC.
A year full of achievements
Testimony on the company’s position: In a special awards ceremony in London, Euromoney awarded NIC the Best Wealth Management Company in Kuwait Award for 2023 in the (Best for Ultra) High Net Worth Individuals in Kuwait category. This award is one of the most critical regional awards in the financial sector, a prestigious and pioneering achievement that enhances the company’s position, product quality, and leadership in Kuwait.
To conclude, Al-Kharafi emphasized the strength of the main operational elements that enhance the company’s performance and the quality of its work, a solid foundation on which to base growth plans during the current year. He also praised the Board of Directors’ support and the executive management’s efforts characterized by high professionalism. He also appreciated the sincere efforts of the management and all employees who stand behind every single success achieved.
Environmental, Social, and Governance Criteria
Under NIC’s prudent strategy and wise vision in highlighting its role in social responsibility to achieve a positive mental image of the company in society by adhering to this role and working to raise awareness of its importance as part of the company’s annual program. The company has supported national sustainability because of the local and global interest in ‘sustainability’ and environmental, social, and governance (ESG). It has become a critical driver for promoting opportunities to establish a sustainable approach by adopting a proactive responsibility in several areas, as the sustainability report will be launched this year.
Highlighting its role in the field of Corporate Social Responsibility, which is translated into supporting many initiatives, programs, and events in collaboration with ‘Creative Confidence,’ NIC also played the strategic supporter role in the “SHIFT” program, designed specifically for newly graduated Kuwaiti women to enhance their skills and capabilities, and qualify them to enter the investment labor market in the local markets and the region.
In support of sports-related activities, NIC has also offered a platinum sponsorship for the BNK Padel tournament to encourage and develop sports culture within society. Also, during the holy month of Ramadan, the company supported the Kuwait Food and Relief Bank, providing Eid Al-Fitr clothing for needy families.
A positive work environment
Through its future vision and strategic plans, NIC has continued to support its human resources as a critical pillar in all its achievements and to provide diverse ideas and outputs based on creativity and innovation, which significantly affect the company’s productivity, through training academies and specialized programs that help refine their scientific and practical skills and increase their expertise for their benefit and create a positive and healthy work environment for employees through social and recreational initiatives and activities.
Successful deals and positive results
Fahad Abdulrahman Al-Mukhaizim, Board Member and Chief Executive Officer of The National Investments Company, said that the financial results achieved by the company during the year 2023 confirm its commitment to innovation, sustainability, and operational excellence, which reflect the company’s efforts in enhancing the efficiency and maintain the solid position.
This reflected positively towards enhancement and maintaining the assets managed by the company by attracting investments in multiple investment portfolios and the company’s various investment opportunities with distinctive value and very stimulating figures during the year 2023 through new clients and by attracting a broad segment of investors in multiple portfolios by an additional percentage of more than 22 percent on the number of investment portfolios for new clients from individuals, local companies and foreign investors, which witnessed more demand for investment funds managed by the company, in addition to providing several distinguished services to our clients in different areas of planning to protect global real estate assets.
Al-Mukhaizim also pointed to the successes achieved by NIC, thanks to the company’s extensive network and strategic vision in attracting investments and advisory services. The company started the year 2023 with a robust set of investment operations that included mergers, acquisitions, and capital increases and managed to handle many private placements and qualitative consultations on Boursa Kuwait.
The value of the deals until the end of 2023 amounted to approximately $400 million, which was represented in pioneering deals, including the sale of the largest and most successful deals in the education sector in Kuwait; it represents a milestone and a key milestone for the investment advisory and investment services business market. In addition to the second partial purchase in Kuwait on behalf of Al-Rawasi Kuwait Holding Company in the capital of Al-Rasiyat Holding Company KPSC listed in Boursa Kuwait and completing the acquisition of Aleid Foods Company through a cash capital increase and strategic financing. The company also succeeded in subscribing to the shares of the capital increase of Alrai Media Group.
In addition, the company successfully obtained a non-binding letter of intent from a strategic investor for one of our clients in the oil and gas sector within the Kuwaiti market. The transaction was completed at the beginning of this year. These transactions reinforce our role as trusted financial advisors in Kuwait.
Moreover, the team has a substantial list of promising deals, with management actively working on several IPOs for companies in the automotive, financial services, and services sectors. Regarding mergers and acquisitions, we are working on several operations for companies in the food sector in Kuwait.
In a dynamic market environment, the Alternative Investment Management team has succeeded in adopting strategic investments within the real estate sector by partnering with several local and foreign real estate professionals, where it has invested in the development and leasing of various projects, including a residential real estate project in the United States of America and the renovation, leasing, and sale of three Class I warehouses in France.
In addition to leasing properties to one of the leading food sectors in Europe, the management has also worked in collaboration with subsidiaries and associates to improve their financial performance and create added value for these companies through asset restructuring and exit deals. In addition to an influential market share for advisory and investment services which made the National Investments Company a pioneer and distinguished in this field.
This strategy has increased liquidity for these companies, resulting in the distribution of financial surpluses to shareholders. This approach is expected to continue in the coming years.
Al-Mukhaizim praised the supervisory authorities’ role in overseeing investment operations and deals, mainly the Capital Markets Authority and the Competition Protection Agency, for helping them complete transactions smoothly and transparently and for their efforts to ensure fair competition among companies operating in the local market.
NIC’s funds achieved outstanding returns in 2023; thanks to the company’s active strategic approach, it has achieved the optimal and best possible returns for clients in the long term by reducing the risks involved in the stock markets, Zajil Services and Telecommunications Fund, which aims to achieve the highest possible return by investing mainly in the services and telecommunications sectors by the provisions of Islamic Sharia, achieved an excellent positive return, also the Mawarid Industrial and Petroleum Fund, which invests in the shares of local and Arab companies compliant with Islamic Sharia.
In 2023, the Financial Instruments Management team succeeded in signing a Market Maker service agreement with three companies listed on Boursa Kuwait, including companies that we have maintained as part of the Premier Market, bringing the number of businesses that our company offers the role of Market Maker on its shares to 12 companies, which makes our company the third largest investment company that provides market maker service on Boursa Kuwait.
Al-Mukhaizim stressed that NIC could face difficulties, meet challenges in the investment sector, and move forward to achieve more positive and distinguished achievements according to its prudent strategy, financial policy, and the wise and highly professional management of its team.
Innovative digital products
Al-Mukhaizim added that NIC always strives for technological excellence, modernizes the IT infrastructure, and enhances cybersecurity measures to protect the company’s data and customers, which raised the level of preventive security of the system and compliance with international standards and became a solid and reliable base for all parties involved.
Al-Mukhaizim concluded by confirming that The National Investments Company will continue its constructive successes during 2024, focusing on achieving sustainable growth, expanding digital capabilities, and effectively contributing to enhancing all paths of economic development and providing the best services to satisfy the company’s customers and shareholders.
He acknowledged and appreciated the Board of Directors and the company’s employees for their efforts and contributions to achieve its objectives while applying its plans and strategic policy. He has also expressed his gratitude to all customers and shareholders for their confidence, wishing everyone success.
