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The third mobile operator Etisalat is closing in with its operations, they are visiting the commercial building in Kuwait to install transmitter for stronger cell coverage. I guess there IPO will launch soon. Many ask if non Kuwaitis can take up shares, i guess it depends on the Article of Association of the Company if it allows non Kuwaitis to buy shares. The thing is due to the huge demand for mobile operators in the regions most will get very minimal shares. I guess the shares would be worth nothing until the stock reaches double digits, such number may take 10 years and more for your investment to become worth while. I guess the smart thing to do is buy the stock but in the names of your kids or for a long term investment, i recommend holding the stock for 15 to 20 years. In such a long wait you would get more stocks through stock options and dividends.

I surly sympathize with people with heavy loans, I too have a loan, but this does not mean we start running after the MP that lies and uses these sleazy approaches to grab peoples attention and to state one day that he has stood for a Kuwaiti cause. Let me explain my point of view: to drop about 1 billion kd worth of loans is an uneconomical nor feasible solution, such would turn the Kuwaiti economy into chaos. Inflation would sky rocket and expenditure will push inflation level even higher and the value of the KD would drop, meaning buying a loaf of bread would cost 0.600 fils instead of the 0.190 fils. The Central Bank of Kuwait would not accept such an insane demand, and the consumers who are not paying regularlyare about 3% of that amount. So there is no reason for creating hope in peoples minds that will never see the light of day. Believe me people, this will never happen, nor taking a loan now thinking that they will pay them off is a smart decision. The only thing that the government could do is to help and advice the next generations so they wont fall in the same trap. Its not the government jobto pay consumers loans that they bought expensive houses, boats, cars and some goats, i’m not kidding there are some expensive goats out there and some buy’m and keep them in their farms, anyways i just hope that people become more attentive to there spending habits and try to save or cash in there loans in a faster way.

I’m honestly pissed off about how many companies through out Kuwait are trying to be Pro Entrepreneurs when they are all the same presenting the same offer. Let me explain the original story: One day some guy in the government woke up and said hey lets help out entrepreneurs in Kuwait establish business by providing them 50% of the funding. So they did and gave the industrial bank of Kuwait a 50 million kd fund for them to finance Kuwaiti entrepreneurs, what happened is the typical Kuwaiti business model of using the money for other purposes and when entrepreneurs apply for financing, they get bombarded with rules, requirements and papers to apply for such a loan. So now after years of failures and mishaps from the Kuwait Industrial bank and  Small Projects Co (Masharee3 esagherah) the same amount of money is being forwarded to Kamco and other small companies like AlRaeda. They all provide the same exact financing and when applying for financing a venture you get to wait ages until they respond back, again and again wasta too is a prerequisite. So what do these companies do with such amounts hanging in there balances (50m) they get interest or use them as Fixed Deposits etc etc you name it. Then back to square one, the entrepreneur benefits nothing! Cant we have a company with a real concern to fund entrepreneurs all the way, angle investors are all over the world but it seems here in Kuwait they only want to benefit one part of the equation. Kamco claims innovation, i cant see any! 

The Internet as simple as it is, is a killer for brick and mortar institution. I’ll rephrase: many business now are cutting down on building and retail branches because most of the job can be done online. Another way to see it is why start a company in Kuwait city where the square meter is really high priced compared to sab7an or thajeej area, your customers are online and do not need to see how prestigious or close you are to them. The question i’m asking here, are we one day going to drop physical retail branches and go online to request for a loan? even finance companies are in the loop too, ie:why go to AL Manar financing company in Kuwait city, find a parking, wait in line, asked to get another document, then back again, fearing the electricity will get cut when in the elevator:P etc etc… cant this all be done on the net. Kuwaiti business are all based on the law supporting such transaction, meaning you have to sign on certain documents manually, and you have to be identified by the employee of the financing company to get financed. So till the day comes that emails in Kuwait are accepted as legitimate papers we wont reach any new level. Back to the banks and financing companies, they exist because we as consumers deposit our salaries/saving (if any:P) and large corporation start up using loans from the same banks comprised from consumers salaries and saving. So banks act as middle men between corporations and consumers, and the middle man takes his cut(bank). So when the Internet comes in and as i said is has a tendency to break down physical barrier into virtual worlds we can visit any time of day. So here comes a website called Zopa.com, it used the Internet into its advantage and took the place of the middle man in our case the bank. Lets say i have extra money would love to lend instead its hanging around the Dana account, and some other guy in Kuwait needs a loan but thinks the interest that banks are charging is high. He can visit Zopa.com request the amount needed, i take up his request as a register lender at Zopa and agree to lend him the loan with a lower interest rate than physical banks and voila, the banks just lost there initiative to become the only middle men. offcourse alot of work is needed to build such a website and ensure that money is returned and not defaulted, but the website itself here is not the care taker of the money exchanging hands, and is only the process or channel to do so in a legal rightful manner. Zopa became the new virtual market, place for lenders and savors. To me its sounds like Zopa is a small termite infestation working slowly at the foundation of banks all over the world:P For such an experience to work in Kuwait is impossible due to our slow, close minded legal system that would never coup with our resoanbly fast business world.  Visit Zopa.com for more info.

Many of my friends and people around me do not really understand how and what are the limits on loans and credit cards in Kuwait. So i’ll explain a bunch of starters stuff that may help you out. Lets say for example that your salary is 600kd, forget about social insurance and social allowance if your Kuwaiti and working in the private sector, if you are and want to add, just include them above your salary (so in my case its 600 plus 240) okay back to the 600kd, to get any kind of instalments like a TV from Alghanim or a consumer loan, what you have to know is that all your instalments together should not pass 50% of your salary. So the max i can get from installments is 300kd half of the 600kd, and another thing, all your total loans should not pass the 70,000kd mark. Thats a Central Bank of Kuwait law. Even your credit cards are included, so if i had a limit of 1000kd and the max percentage that the banks can take in what is called a revolving charge is 8% (meaning on instalments) so in my case here 300kd minus 80kd (8% mutiplyed by 1000kd) which totals to 220kd available for other installments. So lets say i had no previous installments and went into a local bank to get a credit card, my total limit on my C/C must not go over 3700kd, why because 8% mutiplyed by 3700 equals to 296, thats 4 kd away from half of my salary, maybe i sould by a phone with the rest,make a 4kd installment:P You see this law was made due to the excessive amounts that Kuwaitis are taking in loans, once in 1999 i had a customer with a 1200kd salary and when his salary was deposited he only had 20kd in his account!! i’m not kidding he even told me ”what shall i have for dinner today FALAFEL!!”:P Loans in Kuwait are very easy to get, some banks can release a loan in 30 minutes, so we as consumers should be aware of such actions, and undersatnd what is the benefit of a loan or Sony HDTV 52 inch i would love to buy that i could hook up to a Nintendo Wii:P j/k what i have explained above goes for expats too, please let me know if such posts are beneficial to you so i can explain more? I guess the guy who had falafel for dinner that day should read the guide below:P (pic taken from blog.kazumakzak.com)

So you taken the step forward and opened a small restaurant, three years have passed and you have gained more experience in such a field. Now you decided to open another restaurant because you have filtered out all your mistakes from the first one,and even the opening of the second restaurnat was much smoother due to your utilization of well experienced staff and resources. After some time, it seems you figured out the game of the financial world. Now because of your two small restaurants, you can now predict future forecast and demand depending on the food served or location. Now you have decided with great confidence to take a large loan and start a restaurant the size of Al bardony restaurant serving 200 customer at the same time. Because of the learning curve you gained within the past 5 years, now you have entered the business in the big numbers stage. You see its very different to start a restaurant as big as bardony compared to a small one. Even when you have the money to start something big, dont! go small take the baby steps and learn. We all fight time and love to jump ahead but believe me, we cannot! we need to take time and consider our decisions, make mistakes then go forward again. One simple advice, its when you face problems that means that you are making progress. The learning curve gained can never be bought with money, time is the only test. My advise take the small step and if you had the extra money save it for your bigger plans that will come if you believe in your self and most importantly what you feel in your guts! thats the feeling that you must listen to!!

Sometimes i get the feeling Kuwait is on hold, its like we are in a time gap, some respect time and other dont even care. This creates a conflict, will explain; when my Showtime receiver stopped working for no reason, i had to go to ardiyah to fix it. wasted there 2 hours, 1 hour and forty minutes waiting and the other 20 minutes was for re-signaling my card,  which they could have done over the phone. Even when i called the call center at Showtime before i went, he told me nothing about re-signaling the smart card and i had to go to ardiyah. So after the total of 3 hours wasted went back home, installed my Showtime receiver and again no signal. So now i knew what i had to do and even though i hate doing so. I called the Showtime Call center next day and said ”I need somebody to come today and fix my reveiver!!!” as soon as the employee heard my voice saying so he said, in a couple of hours the technician will be at your home, and he did. So i have wasted about 3 hours of my day for nothing. What makes me mad here, is that why do we have to get all noisy and angry to get decent service in this country, till when is the consumer still being disrespected? Then another waste of time is these magazines like Bazzaar,fully loaded plagiarism magazines, and others, that have no real content and real writers behind them. Ask your self one thing, Who the hell is this author that i’m supposed to waste 20minutes of my time reading his article? what makes me sad here is that we do not have real good journalist, searching every day issues and seeking the truth behind stories or leads. When you open the newspapers every day its the same thing, how about finding local stories like who are these kids behind the signals selling toys, what was the real reason for all the fish dying in 2001(6foo7 elasmak). Why is time in Kuwait so disrespected?  picture taken: Bupp.Blogs.com “expressing frustration”… and sorry for not posting on Thursday, was really busy.

 

What many cannot see and understand that when i started my first business which was the networkgaming shop, i was so excited before the opening of my store. I hadspent about 5000kd of my own, another 7000 from my parents. But before one night from the store opening i got really scared and nearly called of the whole thing. I even told my father that i do not want this store anymore and lets cancel everything. My father told me that this is nothing its only money, and what about the experaince i’llgain from the store, and the profits etc… next day came and i was going nuts, but the day passed and i had my first customers (which were mostly my friends) but what i have learned from that store is something that cannot be bought. I have met so many people during my store, dealt with bank accounts and salaries, understood how the government entities work, and how to go around them:P understood how to find good locations and dealing with rent and lease agreements, managing employees and most important managing risk. What i’m trying to say here is that you can never know what is the outcome of any venture you take, unless you take that step. I’ll explain with another example, because of the bad teaching experaince at Kuwait Univercity, i had to take an MBA to satisfy my education thurst, when i decided to go for my MBA, i got the same feeling about my first store. But i took the desicion much faster and with less fear. At the begingwhat i thought that i will gain is only education but when i was done, i made so many friends, met more professional people, got different job offers from my fellow students, and had the benefit of first hand experience from international professionals. Many doors have opened up just because the step i took to complete my MBA. You see we all have great idea’s out there but the only thing we dont do is the first step, when you do take that step other steps become more clearer and you just go forward taking it step by step. I hope what i have posted helps and pushes you closer to your goals.

This may be a confusing post so brace your selves. In Kuwait we use the word privaite and public interchangeably but incorrect. I will not explain them but will point out how incorrect and confusing they are later on the post. They are two kinds of IPO’s in Kuwait, One takes a year (called public by some) to go public or to the KSE and the other three years(called private by some). The difference is that the one that takes a year is proposed by the Amir him self, and called an Amiri decree. an example would be Boubyan Bank, next example maybe the third telecomunications company. This Kind of IPO is for any investor in Kuwait but only for Kuwaiti citizens. This kind of company creates the Civil ID selling freenzy, why because to gain control of the board or to acquire a large amount of shares you have to get as many civil id’s as possible. So the main idea behind the civil id is that they pay lets say 20kd for one id and then make a photo copy of it, and making you sign on the same paper that you will pass on your vote for whom ever the holder of the copyied id.

The other companies that require a 3 year mark to reach the KSE have a different approach, they can be sold to private individuals or can be advertised to all Kuwaitis and non Kuwaitis like the Jazeera Airways IPO. Now here comes the confusing part, some say you canot trade (buy/sell) these stocks before the 3 year mark in souk al jat (Kuwait stock black market). Yes you can but it depends on the company itself, listen closley, i meant read carefully:p Lets say i have created a company today May 19 2007 with 10 million kd capital to be listed in KSE ,  the investors buying the IPO will allways be registered and can only sell there shares buy writing a legal document to the buyer that when the shares are listed they will be transfered in his name(the buyer). Not very safe might i add. The other trick is to buy an already established company, lets say it originally was established before two year and six month, here i can apply for listing in the KSE and wait another six months then get listed. When any company reaches the three year mark we can buy and sell its shares legaly through KSE without the company being listed. I’l explain agian, I have established a company on May 19 2004, today it passed the three year mark and woke up saying i want to list my company in the KSE, i apply for listing, therfore i can trade the shares in souk el jat legaly. I hope i was clear:)

Image taken from Kuwaitinfo.org

Real Estate, one of the safest and profitable markets in Kuwait. Even when investing in bad real estate projects or land, you would atleast get your moneys worth. Before twenty years ago, okay thats to long lets say before 10 years ago, 1997. Who knew what is now called: Salam, Zahraa, Hateen a desert  “jnoob el surra” would become what it is, a crowded fully packed residentail area. Now prices range from 180,000kd to 250,000kd for a 500m squared plot of land. Such land in 1997 was about 15,000kd!!! In ten years time that small plot of land became a gold mine. Many people know exactly what i’m saying right now and may even say that what i’m posting is nothing new, your right! but what we never see is the future vision. So some guy in 1997 saw such an opportunity and bought lands for 40,000kd at that time. and most probably his family members said “waaaih laish sharee eb hal bar” very simple for the nay sayer to say, but that plot of land now costs about one million KD! i’m not a real estate expert and i provided such an example of future investing only, so relate what i said with what you do in your daily life. Plan ahead dont just wait when everything becomes expensive and its too late to invest. Well think about it, there are no signs or green light that shows you the perfect time to invest. So sometimes you have to take risk, most probably its worth it!

Okay so this is my true future vision of the region, i work in an investment company so my example will relate to such a subject. From Dubai to Kuwait and the countries in between are being called emerging markets, many international investors would love to come to Kuwait Stock Exchange and other bourses around the gulf region to invest. So insider trading and non fundamental transaction will shrink very fast. Compliance issues are growing by the day, regional money is folowing into Kuwait by the millions (the Wataniyah buyout). Now Kuwaiti banks are looking for mergers, to go regional and expand. NBK is an example, with acquisitons in Turkey and Egypt. NBK even totaly controls QNB, Qatar National Bank. Such small transactions is the puzzle that bieng put together. So my advice is invest in IPO’s, land in the GCC. A friend just bought Arabia Air shares from Kuwait, he did not even need to go to Dubai. Please ask if you have interest in investing but do not understand what i have said above.