Chairman’s Message

And Consolidated Financial Statements

Dear Shareholders, 

It is my pleasure to present to you Asiya Capital Investments Company K.S.C.P.'s "Asiya" financial statements for the year 2016. 

Markets were quite volatile in 2016. Oil was a major concern in the first part of the year and the rebound in crude oil prices sparked a risk-on rally in assets worldwide. Markets normalized but then fell hard with the Brexit vote. Surprisingly, markets quickly bounced back shaking off the news. Investors experienced a quiet period up to the US elections. After an initial sell-off, investors applauded Donald Trump's win. His message of lower taxes and a bold infrastructure plan reset expectations of US growth rates and inflation. Thus, the US dollar and the US market rallied hard. With the eyes on the US, the Asian markets were up, but not as much as the US markets. We see a reversal of that in 2017. It is becoming clear that Donald Trump's policies are not as easy to implement as many thought in November of 2016. In addition, the US FED has indicated that rate hikes are coming. We believe the US markets are overextended and a rotation to other markets is likely. We also continue to see oil prices stabilizing around $50 to $60 a barrel. 

2017 will bring changes to the global economy. Nationalism and protectionism are on the rise. Many of the trade friendly bodies and treaties are being forsaken. In a low growth environment, each country is looking to protect jobs and are suspect of trade deals. This is quite acute in the West; however, Asia is still keen on free trade. Since the US pulled out of the trans-pacific partnership, China has stepped up with a competing plan for Asia (Regional Comprehensive Economic Partnership or RCEP). The world's second largest economy still believes free trade is a path to growth. China will continue to normalize its economy by focusing on the private sector. India's government continues to court foreign investment, however, there are new policies that have been launched that add investment uncertainty. A heavy-handed tax policy is threatening to slow foreign investment into the region. Asia should contribute meaningfully to total global growth, but some countries are expected to decelerate. China's economy should slow, which is a good thing as China should focus on more value-added growth. Asian currencies should do better in 2017. We expected a strong dollar, but the USD has appreciated aggressively since mid of 2014 which means some of that is priced in. Economies and markets will do better without political shocks. Brexit can be managed as well as the uncertainty in the US leadership. Over time, Donald Trump will better refine his priorities and the world will adjust accordingly. There may be some volatile times ahead, but we still believe that emerging Asia will offer attractive opportunities on a relative basis. 

During 2016, Asiya embarked on a significant restructuring effort which resulted in streamlining its operations and reducing the overall business complexity. Overall headcount has been reduced from c. 57 to c. 15 along with a significant reduction (c.67 percent) in expense base. With this overhaul almost complete, we are now focusing on certain strategic initiatives to ensure a steady income stream and improved shareholder return. 

In 2016, the Company with authorized and paid-up capital of KD 80 million, recorded a headline loss of KD 1.01 million as compared with the headline loss of KD 27,245/­ for 2015. This resulted in a net loss of KD 9.24 million representing (11.90) fils earnings per share for the year compared to KD 5.46 million net loss and (7.03) fils in earnings per share for the year ended 2015. It generated a return on equity ("ROE") of -11.48 percent for the year as compared to -6.16 percent of the previous year. The general and administrative expenses were KD 3.71 million for 2016 as compared to KD 2.65 million for 2015. Total assets were down to KD 79.77 million at the end of the year from KD 99.62 million in the same period last year, decreasing by 20 percent over the year. Also, we would like to address to our shareholders that as per the Companies Law, the Board of Directors did not benefit from the board membership during the year ended 2016. 

I would also like to convey, on behalf of Asiya Capital Investments Company's Board of Directors, employees and myself, our sincere gratitude and appreciation to H.H. The Emir of Kuwait Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, H.H. The Crown Prince Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah, H.H. The Prime Minister Sheikh Jaber Al­Mubarak Al-Hamad Al-Sabah, as well as to our government for its continued support of Kuwait's national institutions and companies, praying to God Almighty to bestow upon our beloved homeland, blessing of safety, security and prosperity. 

Dari Ali Al-Bader 
Chairman