NBK’s FY09 earnings announcement in yesterday’s trading session helped lift market sentiment towards large caps,. Many big names including KFH rose after the news as it gave a positive indication of overall earnings. KFH followed NBK and announced their earnings today, only to disappoint with a 24% decrease to KD 118.741 million (52 fils) in 2009 compared to KD 156.959 million (68.1 fils) in 2008. Fourth quarter net profit was KD 12.4 million compared with a loss of KD 63.6 million a year earlier. The result fell short of the KD 19 million profit EFG-Hermes had expected.  However, total assets and liabilities increased by approxmatly 7%, while equity didnt increase by much.

Kuwait Finance House (KFH) posted Book value per share is KD0.540 and the stock is trading at Price/Book of 2x, same as NBK. Kuwait and the GCC P/B average is 1.8x and 1.4x respectivly. KFH will distribute 25fils and bonus shares of 8%, which gives the stock a yield of 2.3%. NBK announced yesterday a 45fils distribution which yields 4.1%.

In my post KFH a Bit Overvalued a year ago, I tried to forecast FY09’s BVPS. After doing the math I calculated the BVPS to be KD0.5 and gave a price target to the stock of KD1.000.