Boursa Kuwait Securities K P S C : Transcript of the Analysts Conference

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Q1-2023

May 04th, 2023

ANALYST CONFERENCE

Q1-2023

Boursa Kuwait Securities Company (K.P.S.C.)

Earnings Briefing

Thursday, 04th May 2023

Edited transcript of Boursa Kuwait Securities Company (K.P.S.C.) earnings conference call that took place on Thursday, 04th May 2023 at 14:00 Kuwait time.

Corporate participants:
Mr. Mohammed Naim Azad Din	−	Chief Financial Officer
Miss. Noura Al Abdulkareem	− Executive Director of Markets Sector
Mr. Fahad Al Besher	−	Investor Relations Director

Chairperson:

Elena Sanchez - EFG Hermes

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ANALYST CONFERENCE

Q1-2023

Elena Sanchez	Good afternoon everyone.
	This is Elena Sanchez and on behalf of EFG Hermes. I would like to welcome you
	all to Boursa Kuwait's Q1 2023 Earnings Webcast. It is a pleasure to have with us
	in the call the following speakers from Boursa Kuwait, Mr Naim Azad Din - Chief
	Financial Officer, Miss Noura Al Abdulkareem - Executive Director of Markets
	Sector, and Mr Fahad Al Besher - Investor Relations Director.
	I would like to hand over the call now to Mr Fahad Al Besher, please go ahead,
	thank you.

Fahad Al Besher	Thank you Elena.
	Good afternoon and welcome all to Boursa Kuwait's first quarter 2023 earnings
	call. Joining us today is our chief financial officer, Mr Naim Azad Din, who will be
	covering the financial highlights and performance of Boursa Kuwait Securities
	Company and its Subsidiaries Interim Condensed Consolidated Financial
	Statements for the first quarter of the year 2023. Miss Noura Al Abdulkareem,
	Head of Markets Sector, will be covering the latest business highlights and
	updates of Boursa Kuwait.
	As of our previous calls, we would like to bring to your attention the disclosure
	on slide two of the presentation with respect to forward-looking statements
	and confidential information. All amounts in the presentations are shown in
	millions of Kuwaiti Dinars, unless stated otherwise and have been rounded to
	simplify the charts. During our presentation we will try not to repeat the
	currency when discussing the specific amount unless that amount is in a
	currency other than Kuwaiti Dinars.
	After we conclude the presentation, we will open the floor for a Q&A session
	which will be heard in the order they were received on the webcast. Please note
	that we can only comment on questions and information that is publicly
	disclosed. This presentation will also be available at our company's website and
	you can also send us some follow-up questions to our designated Investor
	Relations email. Now, I would like to hand over the call to Miss Noura Al
	Abdulkareem, Head of Markets Sector to start the presentation.

Noura Al Abdulkareem Good afternoon everyone and thank you for joining us in our first quarterly earnings conference of the year.

I'm going to talk you through our business and markets updates. The first quarter of this year witnessed a lot of turbulence in terms of market volatility

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ANALYST CONFERENCE

Q1-2023

and external market conditions, including the rising interest rates which affected the performance of the company during this quarter. In terms of our development plans and strategy, we made major strides in finalising the market-wide test for qualified brokers. After 12 tests, we are on track to continue with the launch of the CCP and its associated products by year-end. Boursa Kuwait plans to launch its corporate fixed income and ETF platforms along with the launch of the CCP. We have started talks with current debt issuers to list their securities on the platform, pending the finalisations and approvals of the rules and the by-laws from the regulator.

As for the IPO pipeline, it is still not clear to us if the companies that have consulted with us previously are still on track to continue with their listings given the current market conditions. On the other hand, Boursa Kuwait has officially initiated its market data distribution strategy and we expect to see the data strategy reflected on Boursa Kuwait's financials when it is implemented. After a successful launch of the CCP and the launch of the new products, which are considered major developments in Kuwait's capital markets infrastructure, we will be able to move on to the launch of standardised derivatives like options and futures as part of the fourth phase of the Market Development Program.

Moving to market performance, the trading value has decreased by 36% year on year, to 2.6 billion dinars from 4.1 billion dinars of the same period last year, while traded volumes decreased by 50%. As for the frequency of trades, that decreased by 28%. Although when looking deeper into this figure we noticed that international investors' frequency of trades has increased relative to the overall number, which helped in the increasing the clearing revenue through KCC. As for the market split between the "Premier" segment versus the "Main" segment, the "Premier" market continues to dominate the value traded by 82% of the 2.6 billion as more companies qualify to the "Premier" market as part of the annual market segmentation review.

The following slide shows the various indices performance within Boursa Kuwait, where all indices showed a negative performance when compared to Q1 of 2022. And finally, in terms of investor turnover, Boursa Kuwait saw a 36% increase year on year for the first quarter period in terms of local versus international investors as the first quarter coincided with the MSCI quarterly rebalancing event. As for the split of trade turnover between retail and institutional investors, an increase of 21% was recorded for institutional investors.

Looking deeper into the investor mix we see those institutional investors, both local and international, have increased the most and contributed the most to the turnover activity during Q1 of 2023. To conclude my part of the presentation we had one regulatory de-listing and one voluntary de-listing due to a takeover during the first quarter, along with two regulatory de-listings in

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