Global Investment House “ Global” - Kuwait Stock Exchange Market Performance For the Month of March 2009-The month of March was eventful in Kuwait on the political front, making its impact on trading activity on Kuwait Stock Exchange. Starting the month, the market reacted positively to the news regarding debt issue solving and restructuring of troubled big investment companies in Kuwait. Later, the Kuwaiti cabinet submitted its resignation to the emir followed by Kuwait's ruler decision to dissolve the parliament. Kuwait's parliament and the government were at odds over the KD1.5bn (US$5.12bn) bailout package. Accordingly, the dissolution of the parliament allowed the government to pass the long-awaited economic stimulus package of KD1.5bn (US$5bn) rescue plan which was approved on March 26. The market registered a gain of 8.2% as “Global” General Index ended the month at 177.63 points. This followed a decline of 8.8% February-2009. The market capitalization reached KD28.45bn at the end of the month, registering an increase of 8 % as compared to the previous month.
The overall trading activity increased during March-2009 compared to the previous month. Volume of shares traded on the bourse witnessed a monthly gain of 44.7%, aggregating to 8.03bn shares in the month. Value of shares traded on the bourse also witnessed a monthly increase of 20.0%, aggregating to KD1.46bn in the month. National bank of Kuwait (NBK) was the top value leader for the month with 182mn shares changing hands at a value KD183.9mn. Al Safwa Group Company was the top volume leader for the month with 685.5mn shares changing hands at a value KD35.6mn.
The major gainers during the month were Burgan Group Holding Company (113.2%), Al- Massaleh Real Estate Company (89.5%), Al Madar Finance and Investment Co (60.7%), whereas major losers during the month were Manazel Holding Co. (-48.6%), Gulf Insurance Company (-48.1%), Al-Ahleia Insurance Company (-38.6%).
Most of the sectoral indices gained during the month with the exception of the Insurance Index and the Real Estate Index which lost 23% and 2% respectively. In the real estate sector, Manazel Holding Co., which registered the largest decline among listed companies, declined by 48.6%, followed by Tameer Real Estate Investment Company (-38.5%), Al-Mazaya Holding Company (-24%), and First Dubai For Real Estate Development Co.(-22.5%). Al-Mazaya announced its FY08 results, reporting profits of KD13mn, falling by 88% from KD24.6mn reported in 2007. On another hand, First Dubai Real Estate Development Co. recorded profits of KD 619,831 in 2008, compared to a loss of KD 111 in 2007.
Global Banking and Investment Index gained 11.9%, and 8.1% during the month of March respectively, reacting positively to the passing of the government long-awaited bail-out package. The biggest gainer in the banking sector was Burgan Bank, gaining 24.6%. The bank recently announced that it had reached final stages of purchasing stakes of the Gulf Limited Bank in the Bank of Algeria and Gulf and the Baghdad Bank, as part of the bank’s regional expansion policy. Following the deal, Burgan Bank’s would own 60% of the Bank of Algeria and Gulf, and 45.31% in Baghdad Bank. All the banks gained during the month of March except for Al-Ahli Bank of Kuwait, which lost 9%. The bank announced that it has taken preventive measures and additional provisions worth KD42mn to hedge against the domestic effects of the global financial crisis. Al Ahli's operating profit increased by 14% in 2008 to KD72mn and decided to distribute a 20% cash dividend and 5% bonus shares for 2008.
During the month of March-2009, Global Services Index was up by 7.14%. National Cleaning Company was the biggest gainer in the services sector, increasing by 36.2%, followed by Hits Telecom Holding Co. which gained 31.4%. Hits Telecom's board has proposed that dividends shouldn't be distributed for 2008 in light of the current crisis. The company’s 2008 full-year net profit totaled KD1.7mn. On another hand, Zain (MTC) gained 9.4%. The company announced that it is preparing to sell part of Zain Bahrain's shares in an initial public offering, and that it expects to list Zain Iraq by the end of 2010.
Zain's chairman announced that the company is seeking to cut expenses and boost revenues amid the global economic crisis and expects a 30%-increase in its profit in 2009. Also, Zain's shareholders have approved the issue of bearer bonds denominated in the Kuwaiti dinar and worth KD429.7mn and have also approved the planned capital increase. Mobile Telecommunications Co., or Zain Group, said Monday its shareholders have approved a cash dividend payout for 2008 of 50 Kuwaiti fils a share.
The month of March ended on a positive note with the approval of the government’s stimulus plan. We expect that the passing of Kuwait’s long-awaited bail-out package will improve investors’ confidence in the economy which will translate into an increase in trading activity on KSE. However, the market is still waiting for the full year 2008 results of many companies which will have impact on short term direction of markets.
© 2009 Al Bawaba (www.albawaba.com)
