Kuwait Stock Exchange market performance for the month of November 2008

Published December 1st, 2008 - 12:29 GMT

Global Investment House – Kuwait – KSE Monthly Performance for the month of November 2008 - During the first half of November, Kazuwait market continued its downward journey. However there were early signs of market stabilizing during the second half of the month which was a combination of positive developments at home and gains in international and regional markets. Kuwait market reported a decline of 6.5% in November-2008 as “Global” General Index ended the month at 248.57 points.  This followed a decline of 19.8% in October-2008.  No sector was spared during the month with Industrial and Real Estate sectors bearing the maximum brunt. The market capitalization reached KD39.89bn at the end of the month, registering a decline of 6.5% as compared to the previous month.

 

In an important development which can have a significant positive impact on KSE, Kuwait's finance minister said that a fund to boost the slumping stock market will be introduced before the Islamic Eid holiday. Mustafa Al Shamali said that the fund will be launched as per a mechanism, however didn’t give a value for the fund but according to previous reports, the fund would be worth billions of dinars. Kuwait Cabinet, which approved the launch of the long-term investment fund, assigned Kuwait Investment Authority, the sovereign wealth fund, to set up the fund in partnership with government institutions. The country's sovereign wealth fund, the Kuwait Investment Authority, will anchor plans to buy up to 10% of the value of stocks traded on the Kuwait Stock Exchange as part of the bailout.

 

In an unexpected move, a Kuwaiti court ordered on Thursday, November 13 morning to immediately halt all trading on the Kuwait Stock Exchange. The shutdown followed protests by investors seeking emergency measures to protect their holdings after the bourse fell significantly since the beginning of the year. The court case was filed by lawyers Khalid Al-Awadhi and Walid Al-Hadlaq on October 8 against the prime minister, the minister of commerce and industry and chairman of the KSE committee, and head of KSE, in their official capacities. They demanded trade halted till measures are taken to check losses at the exchange. However the legal case concerning the call for suspension of action at the Kuwait Stock Exchange (KSE) was postponed upon decision of the Court of First Instance presided by Chief Justice Najib Al-Majid. The trading was resumed at the bourse on Monday, November 17 by virtue of an appeal and a following court ruling a day before.

 

The overall trading activity declined during November-2008 compared to the previous month. Volume of shares traded on the bourse witnessed a monthly decline of 16.3%, aggregating to 6.02bn shares in the month. Similarly, value of shares traded on the bourse witnessed a monthly decline of 41.7%, aggregating to KD1.79bn in the month. KFH was the top value leader for the month with 131.5mn shares changing hands at a value KD210.3mn. Al Safwa Group Company was the top volume leader for the month with 498.7mn shares changing hands at a value KD33.3mn.

 

The major gainers during the month were Al Jazeera Airways Co. (57.4%), Hits Telecom Holding Co (47.8%), Hajj & Umrah Services Consortium (Mashaer )(37.0%),  whereas major losers during the month were Damac Kuwaiti Holding Co. (-69.3%), The Investment Dar (-62.1%), Al-Abraj Holding Company (-56.2%).

 

During the month of November-2008, Global Industrial Index was down by 15.7% whereas Global Real Estate Index was down by 14.2%. Global Investment Index was the third largest decliner during the month. Among Investment sector components, Global Investment House lost 15.5% during November-2008 to reach KD0.410. Global Investment House announced the successful completion of a KD50mn bond issue. The bond was rated ‘A-’ by Capital Intelligence Rating Agency and ‘BBB’ by Fitch Ratings. Chairperson and Managing Director of Global, Maha Al-Ghunaim said that the primary objective of the issue is for general corporate purposes and lengthens the maturity of the liabilities.

 

Global Banking Index recovered the most during the second half of the month as it was down by only 1.5% for the entire month. Among Banking sector components, Kuwait Finance House (KFH) lost 5.4% during November-2008 to reach KD1.760. A unit of KFH has signed an initial agreement to develop real estate projects worth up to US$10bn in Russia’s Tatarstan region, an official said. Turkapital, owned by Islamic lender KFH, signed a memorandum of understanding with a state-run Tatar company to develop commercial and residential projects worth US$6-10bn and covering 200 hectares (494 acres). Turkapital official Fawaz Al-Issa said that the company, set up in 2007 by KFH with a capital of US$150mn to invest in emerging markets, was also looking at infrastructure projects in Tatarstan.

 

During the month of November-2008, Global Services Index was down by 1.6%. Among Services sector components, Zain lost 5.2% during November-2008 to reach KD1.100. Zain announced its plans to make four to five acquisitions worth up to US$4bn before 2010 after a global credit crisis depressed asset prices for telecom firms. Zain would seek to expand in Africa and the Middle East by buying majority stakes in companies or acquiring licenses, Chief Executive Saad Al-Barrak said. The third-largest Arab telecom firm, which already operates in 22 countries, was looking at opportunities in South Africa, Rwanda, Mozambique, Cote D’Ivoire, Mali, Zimbabwe, Yemen and Syria, Barrak said. Zain also plans to spend US$2.5bn in 2009 on general capital spending and upgrading networks, down from US$3bn this year, Barrak said.

 

Kuwait market has reacted positively to steps like setting up long-term investment fund by KIA and revamped monetary policy by CBK etc. The rally in the international markets as well as neighboring regional markets also proved to be beneficial for the market. We are seeing signs of improvement in investors’ sentiments as a climate of political uncertainty in Kuwait did not have much adverse impact on the market. Though Kuwait market has shown early signs of getting into stable phase, it is very premature to rule out any further decline.

 

Value Leaders (KD)

 

 

Kuwait Finance House

210,307,300

 

National Bank of Kuwait

207,702,350

 

Zain (MTC)

192,540,200

 

Gulf Finance House

127,557,525

 

The Public Warehousing Company (Agility)

60,945,950

 

 

Volume Leaders

 

Al Safwa Group Company

498,720,000

Ekttitab Holding Company

366,460,000

Gulf Finance House

306,020,000

Al-Madina for Finance & Investment Co.

247,320,000

Abyaar Real Estate Development Co.

197,120,000


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