Kuwaiti shares up 2.3 percent on week despite late setback
The Kuwait Stock Exchange (KSE) closed the week Wednesday, March 21, at levels not seen for six months amid active trading boosted by fresh liquidity and renewed investor optimism over economic reforms.
But an announcement by the Kuwait Investment Authority (KIA) announcement Monday that it would sell off more than 100 million shares worth $500 million in Mobile Telecommunications Co. (MTC) triggered a late setback.
The KSE index closed at 1,459 points, up 2.3 percent on the week and 8.23 percent on the year but still 48.5 percent down on its all-time high of November 1997. The index has been rising steadily for weeks, boosted by hundreds of millions of dollars flooding the market, mainly from Kuwait Petroleum Corp. and mutual funds, traders and brokers said.
But it dipped 11 points on Monday's news from the state investment arm, amid criticism that it was an ill-timed move because it would drain the bourse of much-needed cash.
KIA's move signaled the resumption of its disinvestments policy of selling off state holdings in local companies. The policy, which was started in 1995, was suspended in 1998 following the crash of share prices. Value of average daily trading rose sharply to $89.6 million from last week's $55 million, far exceeding the average of less than $20 million over the past three years.
Trading was active throughout the week with trading value peaking at $109.5 million on Tuesday, when the index closed at 1,461.1 points.
The bourse's capitalization has risen sharply over past weeks to just under $23 billion, mainly on the back of an increase in the price of blue chips shares, Bayan Investment Co. said. Dealers are optimistic following the approval by parliament last week of a bill which opens the oil-rich emirate to foreign investors, brokers said.
The bill offers major incentives for foreign investors, including tax holidays and whole ownership of companies. Some 87 companies are listed on the KSE, which has the second largest capitalization in the Arab world after Saudi Arabia's NCFEI index. —(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)