Collateral Stock Rules Unchanged December 25, 2008
Posted by mylastresort in kuwait.Tags: CBK, Intervention
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Kuwaiti banks face unknown punishment if they liquidate stocks held as collateral, in a regulation passed by the Central Bank in October. The rumors that this regulation was reversed was quickly refuted by the CBK governor.
“What is being reported, the rumors on this issue, is completely untrue”
- Shiekh Salem Abdulaziz Al Sabah, Governor
Every regulation generates greater innovation, thus banks have gone around this by asking customers to willfully consent to liquidating their portfolios which, technically, resolves the issue without the unknown penalty. The lack of transparency keeps the public from knowing the ‘punishment’ banks may receive by getting rid of the stocks in their portfolios. The market has fallen over 50% since its peak this year.
The Central Bank has previously stated that it expects some investment companies to run into trouble due to their exposure to the global arena.
Kuwaiti M1 Slows to 11.3% December 24, 2008
Posted by mylastresort in kuwait.Tags: CBK, kuwait, M1
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Kuwaiti M1 Money Supply Slows to 11.3% in November from 13% last month. Various central bank measures were taken to strengthen the local banking system and maintain the flow of lending. The measures include:
- Reducing Discount Rate
- Guaranteeing Deposits
- Raising the Loan-to-Deposit Ratio
- Injecting funds in to the interbank market
Reminder: M1 is the currency in circulation, demand deposits – and other deposits that are similar to demand deposits.
Where is the ‘task force’..? December 22, 2008
Posted by mylastresort in kuwait, sovereign funds.Tags: CBK, kuwait, Task Force
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Kuwait set up a ‘task force’ headed by the Central Bank governor to deal with the current financial turmoil it is experiencing. This task force is composed of ‘the best of the best’. The lack of transparency of the task force and its closely knit group leads some to believe that either, ‘this is big’, or that they really aren’t doing anything.
A college graduate with little or no experience could validate an argument similar to anyone of the members on the task force since the current situation is far more different than any other historical recession the Gulf region has ever experienced. In the current climate such as the one the world is experiencing, no vast knowledge, or experience of past events could generate the ‘correct’ resolution. In simple terms, no one knows what is happening or how to solve it.
It has been over 60 days since the task force was in place and to this moment only the governor has spoken publicly about its progress and as expected always in a positive - “we will…” attitude.
‘The time is now!’ Actions need to precede beaurocratic approvals. I have stated this many times, ’Kuwait can purchase the entire private sector multiple times with its reserves’ and should not wait for the problems to escalate before acting.
The problems facing many in the industry is the lack of transparency involved in the process. Rating agencies cannot accurately measure the risks associated with the country if information is not made public.
CBK: Breaking the Bank September 28, 2008
Posted by mylastresort in analysis, rumors.Tags: Bank of England, Breaking the Bank, CBK, Central Bank of Kuwait, Crisis, economy, George Soros, Hedge fund, investment, Speculators
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Currency speculators have for years been tackling central banks in surprise attacks in an effort to reap large rewards from ‘breaking the bank’.
One of the most memorable events was ‘Black Wednesday’ of 1992 which took the Sterling Pound off of its goals of joining the European Central Bank (ECB). In 1992, currency speculators unexpectedly attacked the Bank of England (BOE) forcing it to alter the strict regulations associated with joining the union. Later, the BOE was not able to conform to the standards set by the ECB forcing it out of the European Union (EU). (more…)
Kuwait inflation in double digits August 31, 2008
Posted by mylastresort in analysis.Tags: banking, CBK, Central Bank, CPI, Econony, inflation, kuwait, National Bank of Kuwait, NBK, Reseach
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Kuwaits year-on-year inflation will remain in double digits despite governments plans and Central Bank intervention. The Central Bank of Kuwait (CBK) clamped down on credit and money growth in a bid to drain excess cashflow resulting from high oil revenues. In January CBK Governor Sheikh Salem Abdulaziz AlSabah warned that high inflation constituted a “national challenge” for the oil-rich emirate.
“Inflation should ease as a result of slower economic growth, lower commodity prices, months of tighter money” [and the dinars appreciation against the dollar]
- National Bank of Kuwait
For the past 4 weeks local banks were suffering from a liquidity crisis pushing rates higher for short term deposits. The currency has appreciated 9% since the government dropped the dinars peg to the US currency in May of 2007. Inflation rose to double digits in February (for the first time) to reach a staggering 10.14%, then dropped slightly in March to 10.1%, lastly hitting 11.1% in May.
“NBK expects to see year-on-year CPI [Consumer Price Index] rates in the seven to eight per cent range from now to year-end and that would put 2008 inflation at 10 per cent for the year, compared to 5.5 per cent in 2007″
- National Bank of Kuwait
A report released by National Bank of Kuwait (NBK) said it expects a slight drop in inflation figures for the rest of the year on the back of falling world food and commodity prices. The report expected a sharp rise in prices in September during the holy month of Ramadan.
The Kuwaiti Banking System & Financial Structure June 24, 2008
Posted by mylastresort in analysis.Tags: ABK, Banking system, CBK, Central Bank of Kuwait, Chart 5, GBK, IBK, Invesment Bank, KIB, KREB, kuwait, NBK, QNB
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Comparisson of KFH expansion to others May 29, 2008
Posted by mylastresort in analysis.Tags: al-Tijari, banking, CBK, Commercial Bank of Kuwait, Competition, Expansion, KFH, Kuwait Finance House
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Kuwait Finance House (KFH) said it plans to add more branches this year. The bank plans to have 50 branches in Kuwait, 113 in Turkey and the rest in Bahrain and Malaysia by year-end. In all, it plans 175 branches by December 31. The bank currently operates 42 branches in Kuwait. The expansion plan is always beneficial to banks as long as they do not pursue the same strategy as Commercial Bank of Kuwait (CBK). al-Tijari has the reputation of having branches EVERYWHERE except for one problem, the company expanded quicker than the employees hiring and training, thus creating a rift between branches and employees. I have on numerous occasions been to branches with two employees and a tea boy! Just for the sake of quantity over quality… The lack of employee awareness and professionalism when working with customers needs to be trained and enhanced in order for banks to be competitive in the Gulf. As the competition grows fierce and the market saturates, greater influence needs to be placed on customer service and employee retention since these are the only two factors that are nonexistent in the Gulf region.
Investment Dar confirms sale offer for Cham Bank May 8, 2008
Posted by mylastresort in analysis, rumors.Tags: Aquisition, CBK, Cham, Cham Bank, Commercial Bank of Kuwait, Investment Dar, Syria
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Following rumors from last week Commercial Bank of Kuwait (CBK) officially announced its offer to boost its stake in Syria’s Cham Bank by buying the Investment Dar shares. On Sunday a newspaper said that Investment Dar had agreed to sell its 12.5% stake in Cham to CBK, which offered 700 lira ($15.32) per share. Commercial Bank of Kuwait already owns 27%.
“These are all speculation. There’s still no fixed price nor details… We have an offer (from CBK) yes… but there’s no price or details yet… Now it is at the studying stage. I expect within two weeks to reach a ground we can decide on… They are very preliminary talks, might happen, might not happen. We might get other offers… but because CBK has the biggest stake (in Cham), they could be more interested.”
CBK calling to free Kuwaiti land May 7, 2008
Posted by mylastresort in analysis.Tags: CBK, Central Bank of Kuwait, Free, Governer, inflation, kuwait, Land, Real Estate, SHEIKH SALEM Abdul-Aziz al-Sabah
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The central bank of Kuwait is urging the government to tackle record inflation by giving away more land
and resisting calls to boost spending since inflation levels jumped to a record of 9.5 percent in January, driven by a 16.1 percent rise in rents and 7.7. percent rise in food costs.
“Monetary tools alone won’t be able to curb inflation… This helps bring down prices of production of goods and providing of services… This helps in lowering the impact of severe fluctuations in prices of major international currencies on local inflation”
- Sheikh Salem Abdul-Aziz al-Sabah, Central Bank of Kuwait Governer
Inorder to lower inflation the government should provide more land, which is almost entirely owned by the state, to businesses and individuals. By permitting the sale of lands, not only will it control the surging inflation, but will also increase health care facilities, decrease road congestion, allow more housing, control prices of housing, among much, much more.
CBK to take over Egyptian Gulf Bank May 5, 2008
Posted by mylastresort in analysis, rumors.Tags: CBK, Commercial Bank of Kuwait, Expansion, kuwait, National Bank of Kuwait, NBK, Takeover
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Rumors have spread that Commercial Bank of Kuwait is planning a takeover bid to take Egyptian Gulf Bank. The information comes at a time when investments in North Africa are expected to continue their remarable returns.
Although it seems that CBK is in the news daily in talks about expansion, its just that investors are betting when and where it will be. The National Bank of Kuwait is taking over the Alwatany Bank of Egypt plus the large share for the Kuwaiti side in the Arab African Internationl Bank.
CBK shares have remained unchanged by the news, investors seem to be awaiting official statements.
