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Chairman's Message

Dear Shareholders of Coast Investment and Development Co.

May the peace and blessings of Allah be upon you.

03/04/2017

The year 2016 heralded dramatic changes around the globe. From the British exit of the European Union, to the election of Donald Trump in the United States, 2016 was full of unexpected events.

In the UK, even though article 50 is not due to be triggered until March of 2017. The immediate reaction of investors to Brexit was to push the British Pound to a 31-year low against the dollar. The Bank of England also cut interest rates for the first time in seven years as Britain’s economic outlook worsened.

Free trade also retreated in 2016. The proposed TTIP and TPP trade deals, respectively between America and Europe, and America and Asia-Pacific countries, were declared dead in their current form. Donald Trump’s incoming cabinet also has a strong protectionist ideology. Europeans similarly showed little taste for trade deals, especially in France and Germany.

Central banks kept interest rates at ultra-low and even negative levels throughout 2016. Although in the United States, the Federal Reserve raised rates for only the second time since 2006, signaling a potential of sustained economic growth.

Despite the vote to leave, growth in the United Kingdom outpaced the European Union in terms of GDP. America’s steady recovery continued, while Japan faced more economic contraction. China also showed signs of weakening growth throughout the year.

On the labor force, America’s unemployment rate has continued its decline after holding steady for most of the year. In the Euro Area, the unemployment rate however still lingers around 10%. Meanwhile, price inflation approached 2% in the United States. Similarly, in the Euro Area higher oil prices and a stronger dollar pushed inflation figures up. Japan however is still facing the prospects of a damaging deflationary cycle.

Equity markets, particularly in the US had an impressive return. The election of Donald Trump and the anticipated deregulation and tax reform have resulted in a year-end rally. UK equity markets however had low returns to international investors due to the weakening of the Sterling.

Oil prices sank to their lowest level in 12 years in 2016. Saudi Arabia issued government bonds on the international market for the first time, as oil exporting economies continued to fill budget deficits triggered by the low oil price. OPEC eventually agreed to cut output to ease the worldwide glut and lift prices.

A wave of positive sentiment and optimism in the GCC led to gains for most the local markets over the last quarter of 2016. This comes after a year when all the markets recorded steep declines in 2015.

Boursa Kuwait witnessed mixed performance during 2016, with the Price Index up by 2.4%, whereas the weighted Index ended almost flat due to the poor performance of large-cap stocks. Trading activity during the year declined in line with the rest of the GCC markets. Total value traded declined by 27.5% to KWD 2.9bn while volume traded during the year declined by 27% to 30.3bn shares.

Internally, Coast Investment and Development Co, has strived to minimize or eliminate the adverse effects of the events in the region and the rest of the world during 2016. We are pleased to declare that after difficult negotiations and settlements with banks, Coast is now in a very healthy financial position, completely debt free, and without any pending legal liabilities, which in turn will enable the company to rebound and retrieve its position within the Kuwaiti economy . That, itself, had its reflected in positive financial results for the year 2016 financial statements. Thus, we look forward to enhancing that success in the year 2017 onwards through a new strategy based on diversification and spread beyond geographic boundaries. In addition to enhancement and increasing the existing investments portfolio.

On this occasion, I would like to extend my sincere appreciation to the shareholders of the company, the board members and all the staff at Coast for their continued and unwavering support. We remain hopeful that Almighty Allah will continue to bestow more success on Coast in the future.

May Allah protect Kuwait and its people from all evil acts.