Kuwaiti market recorded a phenomenal growth of 67.58% in 2005, out-performing the growth of 11.9% in the previous year

Global Investment House – <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Kuwait Stock Exchange Performance – December 2005 –  For the first time in last seven months, Kuwait market lost ground with the Global General Index pulling back by 4.16% for the month of December, following the bull run from June to November. According to the analyst at Global Investment House, the investors were trying to take advantage of the favorable conditions prevailing in the market to book profits at the end of year. However, on a yearly basis the Kuwaiti market has  been exceptional in terms of both growth and trading activity. Overall, the market recorded a phenomenal growth of 67.58% in 2005, out-performing the growth of 11.9% in the previous year. The market cap. of the stock exchange reached KD41.49bn, with five new companies added in the month. Kuwait Stock Exchange price index closed for the month at 11,445.1 points, recording decline of 3.57% over the previous month.

During the year, KSE paved the way to allow the listing and trading of 33 new companies, 5 of which were floated in the month of December. Further, the total number of listings in 2005 surpassed the 2004 record of 18 companies. The volume of shares traded on the bourse in December 2005 declined by 37.78% amounting to 3.54bn shares as compared to the previous month. The aggregate value of shares traded in December declined by 36.83% aggregating to KD2.15bn over the last month. Second time in a row, Kuwait Projects Company (KIPCO) was the leader in terms of both volume and value of shares traded during the month, followed by United Fisheries of Kuwait and Gulfinvest International.  According to reports, KIPCO along with other institutional investors such as Hamad Al-Wazzan Group, Al-Hassawi Group and Fouad Al-Ghanem Group will form a new airline company under the name “National Airline Company” with a capital of KD50mn. As a result of these positive developments, the KIPCO stock appreciated by 17.9% to end the month at 560fils.

Among the sectoral indices, all the sector indices with the exception of the food sector index lost ground during the month. The “Global” Banking Sector Index dropped by 6.26% to end the month at 319.6 points. However, the banking sector has registered hefty yearly gains of 59.93% during the year 2005. Global Industrial sector index was top loser during the month with a substantial drop of 10.84% recorded for the month. According to news, National Industries Group (NIG) along with a consortium of Kuwaiti companies acquired a US$150mn stake or 29.2% in Pakistan's Karachi Electric Supply Corporation (KESC). Despite of this positive news flow, the company was among the top decliners, as it reported a 19.8% decline in December 2005.

Investment sector Index, which registered a phenomenon yearly gains of more than 100% in 2005, saw a monthly decline of 2.18% in December ‘05. The Investment Dar (TID) stock gained some momentum after dropping from the start of the month, followed by the news that the company will launch two new companies in 2006. TID also acquired 22 percent of  Gulf Craft Inc of UAE at AED62mn (US$16.9mn). Even these positive announcements could not break the bearish sentiments prevailing in the market, and as a result the stock price declined by 5.3% to KD1.780.

Kipco Asset Management (KAMCO) hogged the limelight during the month of December by announcing the launch of two private placements during the next two months. KAMCO also announced the formation of a new consulting company, called 'The Advantage Consulting Company'. KAMCO will own 60 per cent, 20 per cent would be owned by Al-Zumorud asset management and 20 percent by Al-Hashem owns the rest. As a result, the stock price appreciated by 6.3% to end the month at  840fils.

The market breadth was clearly favoring the decliners with 105 stocks declining and 41 stocks advancing, while 12 stocks remained unchanged. Out of the 41 advancers during the month, 16 stocks have witnessed double digit growth, led by Kazma Holding Company (+66.1%), Burgan Company for Well Drilling (+33.3%), United Fisheries of Kuwait (+22.8%) and Iraq Holding Company (+21.49%). Out of the four top advancers in the month, three were newly listed companies, signifying strong buying interest in mainly listed stocks from the investors. On the flip side, the major decliners included National Cleaning Company (-27.8%), Al-Mal Investment Company (-23.3%),  Al Madar Finance and Investment Company (-21.6%) and Humansoft Holding Company(-17.7%).

As mentioned earlier, the market added five new companies during the month, with the Burgan Company for Well Drilling getting listed under the service sector, Tameer Real Estate Investment Company under the real estate sector and Kazma Holding Company, Iraq Holding company and Sokuok Holding Company under the investment sector. The total number of listed companies reached 158 at the end of 2005.

We believe that the earnings announcement in the coming months may boost the trading activities and positive macroeconomic numbers coupled with the strong corporate performance will act as a catalyst for the investors to further elevate the market. We believe that after the ‘Eid Holidays’, investors are likely to make fresh allocations in view of the corporates earnings.

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