The Kuwait Stock Exchange (KSE) closed the week Wednesday, April 4, 2.2 percent down after the government froze a plan to sell $500 million worth of shares in Mobile Telecommunications Co. (MTC).
Amid low trading, the KSE index shed 31.9 points to close at 1,430.9 points, still up 6.1 percent on the year but 49.5 percent down on its all-time high of November 1997.
"There have been some profit-taking sales that pushed the price index down, but the main negative effect came from government-parliament confrontation over privatization," Sami Al-Hasawi of Kuwait Finance Center told AFP.
The government said Saturday that it had put on hold a proposed plan to sell more than 100 million MTC shares worth $500 million after opposition from parliament.
The Kuwait Investment Authority (KIA), the state investment arm that holds a 49 percent stake in MTC, said it wanted to explain the objectives of the sale to parliament's finance and economic committee.
"The parliament's move is political and not economic. It has affected the level of confidence in the bourse, leading the index to drop," said Hasawi.
The KIA's decision to sell the MTC shares had signaled the resumption of its disinvestments policy of selling off state holdings in local companies. The policy, which was started in 1995, was suspended in 1998 following the crash of share prices.
Value of average daily trading dropped to $39.8 million, almost half of last week's $71.5 million. The bourse's capitalization has risen sharply over past weeks to just under $24 billion, mainly on the back of an increase in the price of blue chips shares, Bayan Investment Co. said.
Some 87 companies are listed on the KSE, which has the second largest capitalization in the Arab world after Saudi Arabia's NCFEI index. — (AFP, Kuwait City)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)