Economic performance seen to improve through mega projects Kuwait govt planning series of tactical and strategic ventures

KUWAIT CITY, Feb 11, (KUNA): The year 2013 is forecast to witness revival of activity in the economic and investment sectors due to planned launch of mega development projects that would pump liquidity into the finance market, according to Kuwaiti experts. Chairman of the Saudi Holding Projects Group Walid Al-Houti said, in an interview with KUNA conducted as part of a report released by the news agency’s Economic and Petroleum Affairs Department, said the current year would witness “development that would help stumbling companies to step over their predicaments, namely the forecast launch of development ventures and resumption of liquidity pumping by major investors into the finance market.”

The Kuwaiti government is planning a series of tactical and strategic ventures, such as construction of a network of bridges, a metro network, and de-centralization of public services and utilities. In his remarks to KUNA, Al-Houti shed light on economic conditions in 2012, noting that companies’ profits rose from KD 900 million on Sept 30, 2011, to KD 1,100 on Sept 30, 2012. The same year also witnessed rise of surplus in the state budget by $30 billion, with the price of oil soaring to $105 per barrel, compared to the state projection, upon which the budget was set up, of only $65 pb. This in turn resulted in record rise of the state’s reserves to $300 billion. Elaborating, he said price index of Kuwait Stock Exchange (KSE) slightly rose, reaching level of 5,874 points - less than the 6,000-point psychological ceiling witnessed in recent sessions of the national bourse.

Giving opinion on diverse aspects of the national economy, which are generally inter-related, the company chairman called for “strict laws” to regulate state expenditures, which rose from $23 billion to $70 billion in 2012, due to hike in salaries, thus pushing inflation dramatically higher. Mohammad Ramadan, the deputy chairman of the research department of Senyar Capital Company, meanwhile said that most predictions of 2012 were positive regarding the Kuwaiti banks’ allocations related to the financial crisis of 2008. These allotments had been forecast to drop, gradually, thus the year 2013 was expected to be a normal year regarding these allotments.

However, there were extraordinary and huge financial allocations. The year 2012 had also witnessed a series of acquisitions, namely the acquisition by Qtel of more than 40 percent of Wataniya telecom stake.
He hoped that 2013 would “be the year of real development, political stability” with forecast high earnings for the companies listed with KSE, as well as hike of stock prices, whetting the appetite of traders. Meanwhile, Director-General of Mena Consultancy Adnan Al-Dulaimi said performance of the local stock market was mixed, in the second half of 2012, and indices restored the same levels that had existed at start of the year, without major changes. “This signals continuity of speculative operations in addition to lack of improvement of stock prices in general,” he added. Elaborating, he indicated at snags in the process of privatization of the bourse, and affirmed that the forecast development projects would result in shoring up the economy and restoring banks’ financing and lending.

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