The Kuwait Stock Exchange (KSE) dropped Sunday, January 14, to a new five-year low, in what analysts blamed on "psychological factors" due to political uncertainty in the oil-rich emirate.
The KSE index lost 4.2 points to close at 1,318.2, its lowest level since November 1995. The index has already shed 2.2 percent since the start of 2001, and remains 53.5 percent below its all-time high of November 1997.
"I don't see many economic factors depressing the market. It's psychological. Investors are pessimistic about the political situation in the country," Marwan al-Gharaballi of Global Investment House told AFP. "Political uncertainty, especially the future of the government, has kept big investors away. There are not enough buyers in a market that looks ideal for long-term investors," Gharaballi said.
Since the beginning of 2001, the index has remained below 1,340 points, the lowest level it reached in the previous year.
"I think we are not far away from the 1,300 point" psychological barrier, Gharaballi added.
Rumors, supported by press reports, have been rife in Kuwait about an imminent change in the government that is likely to affect key posts.
The emirate's bourse ended 2000 down 6.5 percent, in a tumultuous 12 months of trading that saw investor confidence hit rock-bottom because of a lack of economic reforms, political uncertainty and parliament-government wrangling. The value of average daily trading, which was more than $100 million in 1997, dropped 31.6 percent in 2000 to $16.9 million, from $24.7 million the previous year.
Some 87 companies are listed on the KSE with capitalization of more than $20 billion, making it the second most capitalized bourse in the Arab world but still almost three times smaller than the NCFEI index in Saudi Arabia. —(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)
