Global : Kuwait market registered a monthly gain of 1.35% in June-2008

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Global Investment House – Kuwait – KSE Monthly Performance – July 2008-Kuwait market reported a gain of 1.35% in June-2008 as “Global” General Index ended the month at 395.51 points.  This followed a decline of 2.31% in May-2008. Most of the sector indices gained during the June-2008 led by Real Estate sector index. The market capitalization reached KD62.60bn at the end of the month, registering a gain of 1.75% as compared to the previous month.

The overall trading activity improved during June-2008 compared to the previous month. Volume of shares traded on the bourse witnessed a monthly gain of 6.4%, aggregating to 8.47bn shares in the month. Similarly, value of shares traded on the bourse witnessed a monthly gain of 21.5%, aggregating to KD3.93bn in the month. Agility was the top value leader for the month with 166.6mn shares changing hands at a value KD209.9mn. Al Safwa Group Company was the top volume leader for the month with 607.9mn shares changing hands at a value KD147.7mn.

During the month of June-2008, Global Real Estate Index was up by 7.2%. Among real estate sector components, First Dubai Real Estate Development Company gained 20.4% during June-2008 to reach KD1.180.  First Dubai Real Estate Development Co, a unit of Al Mazaya Holding Co, said it has sold 25 percent of Morina Residence project under construction in Abu Dhabi for AED163mn. Profit on the sale will be determined based on work completion levels according to a statement released by First Dubai.

During the month of June-2008, Global Banking Index was up by 2.1%. Among banking sector components, Commercial Bank of Kuwait gained 4.2% during June-2008 to reach KD1.480. Commercial Bank of Kuwait is considering the acquisition of a 50 percent stake in Iraq's Islamic lender ‘The Tigris and Euphrates Bank for Development and Investment’. This is in line with CoBK's strategy to search for new opportunities in Arab countries and to expand to neighboring countries.

Among other banking sector components, National Bank of Kuwait gained 1.1% during June-2008 to reach KD1.820. National Bank of Kuwait has said that it will provide financing for Zain Iraq's US$1.2bn acquisition of Orascom Telecom Holding's subsidiary in Iraq, Iraqna. Kuwait Finance House gained 3.6% during June-2008 to reach KD2.860. Kuwait Finance House said it will arrange Islamic financing for First Investment Co, or FIC, worth US$300mn to finance FIC's expansion in the Gulf region. KFH has signed a 12-month murabaha financing deal with FIC worth US$100mn that will be followed in the near future by the arranging of a US$200mn sukuk issue.

During the month of June-2008, Global Services Index ended almost flat. Among components of Services Index, Agility lost 1.6% during the month to reach KD1.200. Agility announced that it had signed an agreement to buy a Chinese freight forwarder in a deal worth up to US$30.6mn. Cosa Freight is a full service ocean freight forwarder with offices in six key locations in China and a presence in Hong Kong, USA and Canada. The acquisition will further strengthen Agility’s network capability in China and increase the range of services on offer in major trading and manufacturing centers across the country.

On the macroeconomic front, Kuwait reported that it would increase crude oil production by 300,000 barrels per day in second half of 2009, and it would spend US$55bn on oil projects in the next five years. Minister of Oil, Electricity and Water Mohammad Al-Olaim, speaking to reporters after a meeting with Japanese Minister of Economy, Trade, and Industry Akira Amari, said that Kuwait was capable of opening the taps for more oils. Kuwait has also informed that it supports a call by Saudi Arabia for talks with oil-consuming nations but reiterated its position that high prices are not driven by market fundamentals.

During June’2008, the market was able to reverse its declining trend of previous months. Also the trading activity improved during the month. However the volatility in the international markets continues to impact regional markets including Kuwait. We expect this trend to continue in coming months but the short term movement will be decided by second quarter results.

© 2008 Al Bawaba (www.albawaba.com)