Kuwaiti stocks crash to five-year low
The Kuwait Stock Exchange (KSE) crashed to a five-year low on Monday on the back of continued turmoil on the emirate's political scene.
The KSE index closed marginally down at 1,342.5 points, the lowest level since 1995, rounding off a miserable six weeks in which it has lost seven percent.
The index is now down 6.9 percent since the end of 1999 and 52.7 percent on its all-time high in November 1997.
"The problem has to do with the general political and economic factors affecting Kuwait," Gerard Snabian, vice president at Al-Shall Economic Consultants, told AFP.
A host of economic draft bills including privatization and foreign investment are on the agenda of parliament, which reconvened last month.
But analysts say that the threatened grilling of a minister by MPs and the first budgetary surplus in 10 years will inevitably slow reforms and liberalization, citing past examples of parliamentary questioning and high oil income.
Snabian stressed that "the KSE price index is not a good mirror of the bourse," adding that a group of big traders with huge stock holdings were facing cash problems which forced them to sell, thus fueling the prices' downward trend.
Finance Minister Sheikh Ahmad Abdullah al-Sabah said last week that the decline of share prices did not mirror the state of the national economy.
But he admitted that although share prices "were, in the past, deliberately inflated by wrong and unacceptable alliances, they had now returned to normal levels."
Some 87 companies are listed on the KSE, the second largest bourse in the Arab world after the NCFEI in Saudi Arabia.— (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)