Daily Brief Financials: Burgan Bank, First Pacific Co, CVC Credit Partners European Opportunities, Damac Properties Dubai Co, Malayan Banking and more

• Burgan Bank is the second-largest commercial bank in Kuwait, with total assets of USD 24 billion as of December 2016, and it is the fourth largest bank in the country in terms of its locally based banking assets.
• Kuwait Projects Co. (KIPCO), a preeminent Kuwaiti investment holding company controlled by the ruling family of Kuwait, owns 64.88% of Burgan Bank and has historically been supportive.
• Thanks to its operations in Turkey, Iraq, Algeria, and Tunisia, the bank enjoys a geographically welldiversified revenue base. The Kuwaiti operations represented 59% of its revenues, while those in Turkey and Algeria accounted for 21% and 12% of revenues respectively.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Evergrande
2. Vedanta Resources
3. Sino-Ocean Group
4. Lippo Karawaci
5. Japfa Comfeed Indonesia

and more…

FY22 was the first year since its inception that CVC Income & Growth (CVC IG) saw a negative NAV total return (TR). Its euro and sterling share classes produced NAV total negative returns of c 8.3% and 6.8%, respectively, which compares with 3.3% and 1.9% negative TRs by the Credit Suisse Western European Leveraged Loan Index (CS WELLI) in euro and sterling terms, respectively. This was primarily the result of downward mark-to-market valuation adjustments (resulting in unrealised losses for CVC IG), driven by price declines in the European loan market amid higher risk aversion. Meanwhile, defaults in the European loan market remained low at 0.4% in 2022, based on the Morningstar European Leveraged Loan Index (with no defaults in CVC IG’s portfolio). Subsequently, European loan markets rebounded strongly in January and February 2023, leading to 6.7% and 6.9% returns for CVC IG’s euro and sterling share classes, respectively (therefore allowing CVC IG to almost fully recoup the 2022 loss).

• Established in 2002 by current Chairman Hussein Sajwani based on a predecessor company founded in 1992, Damac Real Estate Development Company (Damac) is a property developer focused primarily on the high-end residential segment (apartments and villas).
• Since inception, the company has delivered approximately 17,900 units as of 31 December 2016, of which 90% were in Dubai.
• Of the company’s roughly 44,000 units currently in progress (and 62 million square feet development pipeline) and in planning stages, roughly 96% are in the UAE with the remainder in Jordan, Saudi Arabia, Qatar, Jordan, Bahrain, Lebanon and Iraq.

• 1H18 net profit of MYR3.83bn grew 14% yoy, driven by higher interest income growth and continued cost management. Interim dividend of 25 sen consisting of 15 sen cash portion and 10 sen electable portion.
• Group gross impaired loans ratio picked up in 2Q largely due to deterioration in Singapore corporate book (classified Hyflux group exposure of MYR1.95bn as impaired and provisioned ~RM315.1mn in 2Q).
• Fair value reduced to MYR11 implying 1.6x p/b. FY18 targets were maintained. Focus ahead on continued costs controls and margins after taking cautious approach on liquidity in 1H.