Kuwaiti shares surge to two-year high amid rising optimism on economy

Published June 7th, 2001 - 02:00 GMT

The Kuwait Stock Exchange (KSE) on Wednesday, June 6, surged through the 1,600-point psychological ceiling for the first time in two years, sustaining a healthy upward run over the past two months, brokers said. 


The KSE index closed the week Wednesday at 1,600.9 points, up 1.6 percent on the week and 18.7 percent on the year, though it is still down 43.5 percent on its all-time high of November 1997. 


The index has been rising steadily for the past two months, boosted by hundreds of millions of dollars flooding into the market, mainly from Kuwait Petroleum Corp., mutual funds and compensation from Iraq. 


"The general outlook is excellent. We have a healthy budget, stable oil prices, low interest rates and cashflow from Iraqi compensation," Sami al-Hasawi of Kuwait Finance Center told AFP. 


"There is plenty of liquidity and limited investment avenues. So most of the money goes to the bourse," he added. 


Wednesday's average trading value topped 23.5 million dinars (77 million dollars), a level not seen in several years. 


"But watch out for August and September. This level will double because all the factors are promising, and level of optimism is very high," Hasawi said. 


He said mutual funds were playing an important role in the bourse and that five or six more funds, with a capital exceeding 800 million dollars, were in the pipeline. The first will start operation later this month. 


Ahmad Mahmud of Al-Waseet Brokerage predicted tha the KSE index would reach between 1,800 and 2,000 points by the end of the year. 


"With the kind of optimism we have, and the amount of cash coming into the market, the bourse will continue to rise. More and more small traders are returning to the market," Mahmud said. 


Some 87 companies are listed on the KSE, which has a capitalization of more than 23 billion dollars, making it the second largest in the Arab world after Saudi Arabia's NCFEI index. — (AFP) 


© Agence France Presse 


© 2001 Mena Report (www.menareport.com)

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