Kuwait stock market witnessed marginal gains in the month of June-2006, with the benchmark Global General Index registering a monthly gain of 0.36% to end the month at 278.7 points. The market cap weighted index still reported overall YTD loss of 12.97% at the end of 1H-2006. The market cap. of the stock exchange reached KD39.23bn, a monthly increase of 2.65% compared to the previous month. Kuwait Stock Exchange Price Index once again breached the psychological 10,000-point mark during the month, as it ended the month at 10,001.7 points, reporting a monthly drop of 0.82%.
On the macro economic front, the Central Bank of Kuwait (CBK) reported that the country's exports were KD13.14bn in 2005, an increase of 56 percent as compared to the previous year. Oil exports accounted for about KD12.4bn, or 94.4 percent of the total exports, where as the non-oil exports reached KD709mn in 2005 as compared to KD567mn reported in the previous year. The Kuwait Gazette announced the establishment three new real estate companies, Marina-Towers (KD13mn), Al-Qebla Real Estate Company (KD1mn) and Rafco Real Estate International (KD1mn). The companies would operate in ownership and sale of land property, and real estate development locally and abroad.
The broad-based selling sentiment’s was accompanied with increased trading activity as the volume of shares traded saw an increase of 18.55% as compared to the previous month aggregating to 3.64bn shares. On the other hand, value of shares traded also witnessed a substantial monthly increase of 23.76% amounting to KD1.59bn. During the month of June, it was International Investment Group, Gulf Petroleum Investment and Grand Real Estate Company (GRAND) that hogged the limelight as they were the among the top price gainers with heightened trading activity. According to reports, GRAND signed a SR4bn contract (US$1.07bn) for a tourist project in Saudi Arabia. In addition, GRAND will be listed on the Dubai Financial Market (DFM) on July 12th, 2006.
Among the sectoral indices, with the exception of the banking sector, all other sectors have ended the month on a positive note. Interestingly, during the first half of 2006, banking was the only sector to report YTD gains of 3.82% at the end of June-06. On the corporate front, Kuwait Finance House (KFH) announced that it is launching a US$250mn BAITAK fund to invest in Asian real estate. The five-year KFH Asian Real Estate Fund, set up in cooperation with Singapore based Pacific Star Group, is expected to achieve an annual return of 8-10 percent. Moreover, KFH also stated that it had singed a US$20mn contract with a Turkish car fleet management company. Despite the positive news flow, the stock price of KFH declined by 4.7% to reach KD2.04.
Among the other development, Kuwait & Gulf Link Transport Company (KGL) said that it made KD20mn profit from selling a 50 percent stake (100mn shares) in subsidiary KGL Logistic at 315fils per share. Moreover, Kuwait and Gulf Link Ports International (KGL PI) (a subsidiary of Kuwait & Gulf Link Transport Company) signed a US$1bn, 40-year concession agreement to build a major container terminal in Egypt. As a result, the stock price of KGL appreciated by 6.7% to reach KD1.28. On the other hand, index heavy weight, Public Warehousing Company (PWC) announced that the US military renewed a transportation contract worth about US$300mn per year. It is a five-year contract with a total value of US$1.5bn. The stock price of PWC appreciated by 1.1% to KD1.86.
The market breadth was clearly in favor of decliners as 81 stocks reported month declines as compared to only 61 gainers. The major gainers during the month were Gulf Petroleum Investment (+54.8%), Kuwait Lebanese Real Estate Development (+41.0%), Kuwait United Poultry Company (+37.8%) and Kuwait Slaughter House (+30.4%). The biggest losers during the month were Hilal Cement Company (-17.6%), Ajial Real Estate And Entertainment (-17.5%), and Equipment Holding Company (-16.9%).
The market added four new companies during the month, further improving the depth of the market. Kuwait Bahrain International Exchange Co. was listed under the investment sector, National Company for Consumer Industries under the industrial sector, United Project Company under the service sector, while Ahli United Bank got listed under the Non-Kuwaiti sector. So far, 14 new companies have been added to during the first half of 2006, which has increased the total number of listed companies to 172 at the end of Jun-06.
Going forward, we believe there will be stock-specific action as the corporate numbers start flowing in from the second week of July. Moreover, the positive news from the elections, which ends on June 29th is likely to further improve the investor’s sentiment and we will also see increased trading activity on the bourse. (Global Investment House)
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