January Kuwait Economic Brief. An update of recent developments in select sectors in Kuwait published by Economic Research at NBK

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1 January Government spending accelerates Oil prices reach three-year highs; in November...Credit growth to close inflation at.% in Nov; consumer at.%...kd Kuwait billion budget spending up; Boursa lifted surplus expected forand FY / by new government oil prices Kuwait Economic Brief An update of recent developments in select sectors in Kuwait published by Economic Research at NBK

2 Kuwait Economic Brief - January Contents Oil markets Market optimism extends into as oil prices trade at three-year highs Monetary developments Credit was on the weaker side in October, with growth at.% y/y Consumer price inflation November inflation inches up to.%, spurred by retail activity Consumer sector Consumer sector on the mend on stronger confidence and spending Real estate 9 Real estate sales volumes eased in November after strong October Stock market Government s formation and oil prices lift Boursa in December

3 Kuwait Economic Brief - January Oil markets Market optimism extends into as oil prices trade at three-year highs > Omar Al-Nakib Senior Economist +9 9, omarnakib@nbk.com Highlights Oil prices continue to trade at three-year highs, with Brent and WTI topping $ and $, respectively, last week; was Brent s best performing year since, with an annual return of %. 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 is limited, with global demand and supply expected to roughly balance, according to the IEA. US crude output tops the 9 year avg. record, reaching 9. mb/d. Oil prices extend positive momentum into 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 $ per barrel (bbl) and $/bbl, respectively. (Chart.) The two crude markers returned % (Brent) and.% (WTI) in, which, in Brent s case, was its best annual performance since. WTI, meanwhile, continues to trade at a discount to Brent that is not far off the two-year high spread of $ that was recorded last September; the higher Brent-WTI price spread of has facilitated record US crude exports to international markets after the forty-year moratorium was lifted in late. (Chart.) Oil prices have been helped in recent weeks by the protests in Iran, the Islamic Republic s most serious since 9, 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 that has been the overriding stimulus for the market s bullishness. Chart : Crude oil prices ($/bbl) Dec- Jun- Dec- Jun- Dec- Jun- Dec- Source: Thomson Reuters Datastream Chart : Brent-WTI spread & US crude oil exports,,,,,, Dec- Jun- Dec- Jun- Dec- Source: Thomson Reuters Datastream, EIA, NBK estimates.. ICE Brent (Front month) NYMEX West Texas Intermediate (WTI, Front month) US crude exports (kb/d, monthly avg., RHS) Brent-WTI spread ($/bbl, monthly avg., LHS) Chart : OPEC crude oil production (mb/d) Average 'call' on OPEC in.. saw OPEC make a successful return to supply management.. OPEC, for its part, is entitled to view 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... 9 % 9 % % 9 % Source: OPEC (secondary sources); Note: figures in charts denote % compliance %.. Nov- Feb- May- Aug- Nov- % % 9 % 9 % % %.. Compliance among the twelve OPEC members subject to production quotas averaged 9.% over the eleven months of for which data is available, a very respectable achievement. Indeed, with OPEC aggregate output declining to. million barrels per day (mb/d) in November, a drop of, b/d after Saudi Arabia, Angola and Venezuela recorded NBK Economic Research, T: (+9) 9, F: (+9) 9, econ@nbk.com, NBK,

4 Kuwait Economic Brief - January slightly lower production, compliance reached a record % in the month. (Chart.) And the results speak for themselves: oil prices are currently ranging % above their -low last June; physical markets have visibly tightened, with oil supply undershooting oil demand in every quarter of, thanks to OPEC/non-OPEC s withdrawal of a combined. mb/d of crude from the markets (Chart ); and OECD crude and petroleum product stocks have declined to within million barrels of OPEC s five-year rolling average target, having been more than million barrels above the target only fifteen months before. (Chart.) Chart : Balance of oil supply & demand (mb/d) Balance/Implied stock change (RHS) Demand (LHS) Supply* (LHS) 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 (+. mb/d in ), 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, $ 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: was the first year since in which near-term prices were higher than longer-term prices, a structure known as backwardation. (Chart.) 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, 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. mb/d from. mb/d in and non-opec supply growth, led by surging US shale production, expected to more than double to. mb/d this year from. mb/d in, the scope for continued stock drawdowns appears limited. Indeed, the International Energy Agency (IEA) projects an average global stock increase of. mb/d in the first half of followed by a roughly equal decrease in the second half of the year. (See Chart.) Emerging as a significant spoiler in the outlook for 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, b/d in, more than double s estimate of 9, b/d. This would contribute more than % of total-non OPEC supply growth in. US crude output reached 9. mb/d at end- and has already surpassed its all-time record of 9. mb/d (yearaverage) set in 9. (Chart.) For OPEC, 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 Q Q Q Q Source: IEA, NBK; * forecast assumes OPEC output at. mb/d in Chart : OECD commercial crude & product stocks (billion barrels) Oct- Jan- Apr- Jul- Oct- Source: IEA Chart : Brent forward curve ($/bbl) 9-Dec- Mar- Mar-9 Mar- Mar- Mar- Source: Bloomberg Chart : US crude oil production & rig counts. Crude oil production (mb/d, LHS), 9. Oil rig count (no. of oil rigs, RHS), 9., 9., 9., 9.,..... Jan- Oct- Jul- Apr- Jan- Source: US Energy Information Administration (EIA), Baker Hughes NBK Economic Research, T: (+9) 9, F: (+9) 9, econ@nbk.com, NBK,

5 Kuwait Economic Brief - January Monetary developments Credit was on the weaker side in October, with growth at.% y/y > Nemr Kanafani Head of Research +9 9, nemrkanafani@nbk.com > Chaker El Mostafa Economist +9 9, chakermostafa@nbk.com Credit was weaker than expected in October, though growth rose to.% y/y on base effects. The month saw total credit contract by KD million. (Chart.) While some of that was from the usual startof-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.% y/y. (Chart.) Personal facilities excluding securities lending added a net KD million during the month, a figure comparable to levels seen in the months before and well above the KD million average recorded thus far in. Business credit (excluding nonbanks) dropped by KD million on the regular start-of-quarter drop in lending for the purchase of securities as well as weakness in some business sectors. (Chart.) Securities lending fell by KD million. Outside that, there were relatively large declines in other sectors (-KD mn) and construction (-KD 9 mn). These were partly offset by gains in industry (+KD mn) and trade (+KD mn). Lending to productive business sectors was weak, though growth remained relatively robust at.% y/y. Productive credit, which excludes real estate and financial sector lending, dropped by KD million during the month. The fading of the large Americana-related settlements made in October 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 million largely on declines in KD time (-KD mn) and foreign currency deposits (-KD mn). Money supply (M) growth slipped slightly to.9% y/y. Government deposits also declined, losing KD million, as growth slowed to.% y/y. (Chart.) The banking system s liquid reserves, or excess liquidity, edged higher in October to.% of bank assets. Bank reserves (cash, deposits with the CBK, and CBK bonds) increased by KD million to KD. billion (Chart ). 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. billion, or an estimated % of GDP. Domestic interest rates in October were little changed from September. The -month interbank rate edged up basis points to settle at.9% (Chart ), though rates have moved higher since. Customer deposit rates were unchanged on the month. 9 Chart : Credit growth Oct- Oct- Oct- Oct- Oct Chart : Credit growth by component - Household debt Business credit (all remaining) - - Non-bank financials - Oct- Oct- Oct- Oct- Oct- - Chart : Money supply growth M M - - Oct- Oct- Oct- Oct- Oct More recently, the Central Bank of Kuwait (CBK) kept the discount rate unchanged following the US Fed s much-anticipated rate hike on 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 NBK Economic Research, T: (+9) 9, F: (+9) 9, econ@nbk.com, NBK,

6 Kuwait Economic Brief - January June. 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.%, 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 -month bills issued on 9 December by bps to %. Chart : Bank reserves (% of bank assets) Table : Monetary indicators -month -month -month Oct- change change change KD mn KD mn % KD mn % KD mn % Total system liquidity (M), Currency in circulation, 9... Private sector deposits, KD deposits, ,. Sight deposits, Savings deposits, Time deposits & CDs 9, Foreign currency deposits, Table : Consolidated bank balance sheets -month -month -month Oct- change change change KD mn KD mn % KD mn % KD mn % Total bank assets, ,. Core liquid assets, , -. Cash and CBK deposits CBK bonds, Time deposits with CBK Public debt instruments, ,. Interbank deposits, Credit facilities, - -..,. Foreign assets, Other assets, Total bank liabilities, - -..,. Total deposits, Private sector deposits, Government deposits, Interbank deposits, Foreign liabilities,..,9. Other liabilities,.. 9. Oct- Oct- Oct- Oct- Oct Chart : Interbank rates (%, -month rates, daily) US Libor M KIBOR M Spread.. Dec- Dec- Dec- Dec- Dec- Source: Thomson Reuters Datastream...9 Chart : Exchange rates USD / KD (LHS) Euro / KD (RHS) Shareholder equity, Dec- Dec- Dec- Dec- Dec- Source: Thomson Reuters Datastream NBK Economic Research, T: (+9) 9, F: (+9) 9, econ@nbk.com, NBK,

7 Kuwait Economic Brief - January Consumer price inflation November inflation inches up to.%, spurred by retail activity > Fatema Akashah Economist +9 9, fatemahakashah@nbk.com > Nemr Kanafani Head of Research +9 9, nemrkanafani@nbk.com Consumer price inflation rose slightly to.% in November, predominantly driven by price rises of some retail goods and services. (Chart.) 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.% year-on-year (y/y) in November. While headline inflation bounced back from a low in September, it is still expected to end well below levels in recent years. We expect inflation to average.% for, down from.% in. Prices in housing services, especially rent, have continued to contract, though the pace has moderated. The housing services subindex reflected the correction in rental rates after a general slowdown in the real estate market in and. Prices in housing services contracted by.% y/y in November, a vast improvement from August s.% y/y decline (Chart ). 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.% y/y, compared to October s.% y/y. The annual change in local food prices in and oscillated around zero, as global food prices remained largely deflationary. With global food price inflation already on the rise, could see higher local food inflation though not before mid-. November s price pick-up was largely driven by a rise in retail goods and services. (Chart.) 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 % 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.% 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.) Keeping pace with October, inflation in services as a whole remained at.% y/y in November. Chart : Consumer price inflation Nov- Nov- Nov- Nov- Nov- Nov- Source: Central Statistical Bureau, NBK estimates - - Chart : Inflation in housing services Source: Central Statistical Bureau Chart : Inflation in food & beverages Source: Central Statistical Bureau General index Core (excl. food & bev.) CPI excl. food & housing - - Nov- Nov- Nov- Nov- Nov- Nov- - - Kuwait prices (LHS) International prices (-month lag, RHS) - Nov- Nov- Nov- Nov- Nov- Nov NBK Economic Research, T: (+9) 9, F: (+9) 9, econ@nbk.com, NBK,

8 Kuwait Economic Brief - January Table : Consumer price inflation (% change) Year-on-year Annual Avg. Oct- Nov- Food & beverages.... Tobacco & cigarettes.... Clothing & footwear.9... Housing services* Furnishing & household maintenance.... Healthcare Transportation Communication..9.. Recreation & culture Education.... Restaurants & hotels....9 Other goods & services.... Core** Chart : Inflation in other sectors Clothing & footwear Furnishings & household maintenance Other goods & services - - Nov- Nov- Nov- Nov- Nov- Nov- Source: Central Statistical Bureau Durable goods.... Semi-durable goods.... Non-durable goods.... Services....9 Services ex-housing...9. Chart : Inflation in services ex. housing Services ex-housing Services General Index.... Source: Central Statistical Bureau, NBK estimates * Updated once every quarter ** Excludes food & beverages; estimated by NBK - - Nov- Jan- Mar- May- Jul- Sep- Nov- Source: Central Statistical Bureau, NBK estimates Chart : Inflation in transportation - - Nov- Nov- Nov- Nov- Nov- Nov- Source: Central Statistical Bureau NBK Economic Research, T: (+9) 9, F: (+9) 9, econ@nbk.com, NBK,

9 Kuwait Economic Brief - January Consumer sector Consumer sector on the mend on stronger confidence and spending > Chaker El Mostafa Economist +9 9, chakermostafa@nbk.com > Nemr Kanafani Head of Research +9 9, nemrkanafani@nbk.com The consumer sector appears to be on the mend, with clear signs of a recovery in Q, following a noticeable slowdown in and H. 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 Q, with growth nearing its pace. Spending growth on credit and debit cards at point-of-sale machines improved to.% year-on-year (y/y) during the third quarter, up from -.% y/y in Q. Growth in total spending including ATM withdrawals, which has been slower, has also been improving, accelerating to.% y/y in Q (Chart ). Chart : Household debt growth Oct- Oct- Oct- Oct- Oct- Durable goods continue to show some weakness, though a turnaround is expected soon. The contraction in car imports has moderated to a % y/y decline during the first nine months of. The Ara consumer confidence index has also hinted at a possible rebound. The durable goods sub-index registered its highest -month average in a year, coming in at 9 in November, up % y/y. (Chart ). Chart : Card transactions Point-of-sale Point-of-sale & ATM Overall consumer confidence has also improved noticeably. The Ara general index registered its sixth consecutive month above, settling at in November and averaging since June, compared to 9 over the same period in. The improvement in consumer confidence appears to be helping household loan growth pick-up steadily in. Growth in personal facilities excluding credit for the purchase of securities has picked up in recent months to average.% y/y between July and October ; this is compared to an average of.% during the first half of. (Chart ). The average monthly gain in such loans also rose to KD 9 million over that same period, well above H s KD million average. Employment growth among Kuwaitis strengthened in Q following some moderation in Q. The number of new civilian jobs among Kuwaitis totaled, in Q, driven by a strong increase in government hires. Growth in employment, however, was steady at % y/y, around the slowest pace it has been in over seven years. The consumer sector is likely to finish 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. - - Q Q Q Q Q 9 Chart : Consumer confidence index Source: Ara Research & Consultancy (index) Actual m average Nov- Nov- Nov- Nov- Nov- 9 NBK Economic Research, T: (+9) 9, F: (+9) 9, econ@nbk.com, NBK,

10 Kuwait Economic Brief - January.. Chart : Kuwaiti civilian job entrants (thousands) Quarterly m average Q Q Q Q Q Source: Public Institute For Social Security (PIFSS), NBK estimates NBK Economic Research, T: (+9) 9, F: (+9) 9, econ@nbk.com, NBK,

11 Kuwait Economic Brief - January Real estate Real estate sales volumes eased in November after strong October > Fatema Akashah Economist +9 9, fatemahakashah@nbk.com > Nemr Kanafani Head of Research +9 9, nemrkanafani@nbk.com Total November real estate sales fell shy of KD million following a strong performance in October; nevertheless, the price trend across all sectors still indicated stabilization. Real estate sales totaled KD. million in November across all sectors (Chart ), on transactions. The figure looks lackluster compared to the prior month s impressive KD.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. Chart : Monthly real estate sales (KD million) Inv Property Sales Resid Property Sales Comm Property Sales The residential sector remained buoyant, supporting overall sales activity in November. Sales totaled KD million, up % year-on-year (y/y) (Chart ). The number of transactions totaled, making up % of all real estate activity for the month. Land purchases made up % of the 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. in November, up from October s.. NBK s residential land price index dipped slightly to. from October s.9. The contraction from a year before eased in the home prices to just -.% y/y; while it widened slightly for residential land prices to -.% y/y, prices remain better than levels witnessed in the first half of (Chart ). Investment property sales slipped after a surge in activity in October. Sales in the sector fell.% y/y to KD. million in November. The investment property sector continues to underperform; in the first eleven months of, average monthly performance was KD. million, down % compared to the same period in (Chart ). 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 in November, up.% y/y (Chart ). The index has been on a recovery trend since it bottomed in September. Commercial sector activity eased after a surge in October, falling below s monthly average (to November) of KD million. Five transactions took place in November, worth a combined KD. million. The volatile sector is down almost % y/y, but November had witnessed a surge in activity that was preceded but a period of quiet (Chart ). The largest sale for November was a commercial building in Al-Qibla that sold for KD. million. Nov- May- Nov- May- Nov- May- Nov- Source: Ministry of Justice Chart : Residential real estate sales Nov- May- Nov- May- Nov- May- Nov- Source: Ministry of Justice, NBK estimates Chart : Residential real estate price indices (index, -month moving average, =) Source: Ministry of Justice, NBK estimates Sales (KD mn, LHS) KD mn, monthly, MMA (RHS) Residential Home Residential Land Nov- Nov- Nov- Nov- Nov- Nov- NBK Economic Research, T: (+9) 9, F: (+9) 9, econ@nbk.com, NBK, 9

12 Kuwait Economic Brief - January Table : Real estate sales Monthly average Nov Sept Oct Nov %m/m %y/y Sales (KD mn) Residential property Investment property Commercial property Number of transactions Residential property Investment property Commercial property Chart : Investment real estate sales Sales (KD mn, LHS) KD mn, monthly, MMA (RHS) Transaction size (KD ) Residential property Investment property Commercial property,,,,, Source: Ministry of Justice Note: Our real estate indexes database comprises, 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, i.e. price index equals. The indexes are not adjusted for seasonality nor for number of business days. They also do not cover the commercial sector. Nov- May- Nov- May- Nov- May- Nov- Source: Ministry of Justice, NBK estimates Chart : Investment building price index (index, -month moving average, =) Nov- Nov- Nov- Nov- Nov- Nov- Source: Ministry of Justice, NBK estimates Chart : Commercial real estate sales (KD million) Sales (KD mn, LHS) KD mn, monthly, MMA (RHS) Nov- May- Nov- May- Nov- May- Nov- Source: Ministry of Justice, NBK estimates NBK Economic Research, T: (+9) 9, F: (+9) 9, econ@nbk.com, NBK,

13 Kuwait Economic Brief - January Stock market Government s formation and oil prices lift Boursa in December > Chaker El Mostafa Economist +9 9, chakermostafa@nbk.com > Nemr Kanafani Head of Research +9 9, nemrkanafani@nbk.com 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 million, to end the month at KD billion. The weighted index added.%, while the price index gained.%, with most sectors up. The largest gainer was the insurance sector, up %, followed by the basic materials and the oil and gas sectors, each up.%. The consumer sector was the worst performer. It continued to contract with both consumer goods and consumer services down.9% and.%, respectively. The average daily traded value declined for a second consecutive month, to settle at KD 9. million in December, down % on the month. Kuwaiti equities were among the best performing in the GCC in, with the price index up.% and the weighted index up a decent.%. The market registered healthy gains throughout most of the year, supported by the minority share buy-out of Americana by UAE investors late in, 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 Q. 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 months, with the -month moving average coming in at.%. Chart : Boursa Kuwait Dec- Mar- Jun- Sep- Dec- Source: Thomson Reuters Datastream, Boursa Kuwait 9 Chart : Regional markets MSCI Kuwait MSCI GCC MSCI Emerging MSCI World (rebased indexes) Source: Thomson Reuters Datastream Value of traded shares (KD mn, LHS) KSE price index (RHS) 9 Dec- Feb- Apr- Jun- Aug- Oct- Dec- Chart : GCC markets & oil Brent Price ($/barrel, LHS) MSCI GCC Total Return Index (RHS) Dec- Mar- Jun- Sep- Dec- Source: Thomson Reuters Datastream NBK Economic Research, T: (+9) 9, F: (+9) 9, econ@nbk.com, NBK,

14 Kuwait Economic Brief - January Chart : Market indexes (rebased indexes) Price index Value weighted 9 9 Dec- Mar- Jun- Sep- Dec- Source: Thomson Reuters Datastream, Boursa Kuwait Chart : Foreign buyers (% y/y, mma) Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Source: Boursa Kuwait Table : Boursa Kuwait performance by sector, December Change % Price Weighted Market % of Trading activity Price to Price index Weighted index index index cap (KD mn) Market (daily avg.) earnings* -Dec -Dec m/m YTD m/m YTD -Dec mn shares mn KD -Dec Total market....,.% Banks ,99 9.%... Basic materials %... Consumer goods %...9 Consumer services %... Financial services ,.9%... Healthcare % Industrials ,.%... Insurance % Oil & gas %.... Real estate ,9.%... Technology % Telecommunications ,.%... Parallel Source: Boursa Kuwait, Thomson Reuters Datastream * PE is calculated using market cap as of month close and latest months trailing earnings. NBK Economic Research, T: (+9) 9, F: (+9) 9, econ@nbk.com, NBK,

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