KUWAIT CITY: Kuwait stocks revved up on Monday, recovering from the drop seen in the earlier session. The market climbed 42.1 points in volatile trading, led by Zain and Investment Dar. The telecom services provider surged 100 fils on brisk trading while Dar rallied 20 fils. Speculative buying interest in some of the mid and low priced stocks across the sectors also helped the advance. Blue chips mostly sagged as investors booked profit on the prime positions for the second day in a row. Agility shed 20 fils extending its losses while Kuwait Finance House jumped 40 fils. KSE index edged 0.3 percent higher to end at 14,218.2 points amid a decrease in volume turnover. Manufacturing sector pivotal, National Industries Group lost 20 fils and so did NBK after closing in the negative in the earlier session.
See-sawed
Notable among the losers Al Safat Investment Co dropped 40 fils and Mabanee Co closed 20 fils down.
The market sentiments see-sawed throughout the session as modest gains in select positions alternated with profit booking. The index is up 13.68 percent this year, the second best performer in the region.
The sectoral indices swung in both directions. Banking sector rose 0.1 percent led by Kuwait Finance House while investment sector fell 0.1 percent as some of the middle level stocks pulled lower on profit taking. The two sectors makes for the majority of shares traded in the bourse.
Real estate edged 0.2 percent down led by drop in Mabanee Co and some of the low priced scrips while industrial sector remained stagnant. Services climbed 1.5 percent driven by surge in Zain and Burgan Well Drilling Co.
In the bourse related news, Ayaan Leasing Co has declared a 20 percent cash dividend and 25 percent in bonus shares for the year 2007, according the bourse website. Enmaa Real Estate has said that it has posted KD 3 million in last quarter of 2007. Kuwait Gulf Links has won a contract worth KD 4.67 and another one worth KD 2.29 million for services at an oil refinery and its affiliated company.
The shareholders in Kuwait Mobile Telecommunication Co (Zain) gave their approval on Monday to a 125 percent increase in the company's capital to fund future global expansion. The telecom company will raise about KD 1.2 billion ($4.4 billion) by selling 1.42 billion shares to its current shareholders at KD 0.85 ($3.1) per share. Zain had earlier said that it is interested in buying Syria's largest mobile service provider Syriatel, and also had indicated that it does not expect any significant increase in net profit this year.
The volume of shares fell 13.1 percent to 4.76 million after holding above the 500 million mark in the earlier session. The market liquidity had been fairly robust during the month, indicating a slightly bullish undercurrent.
The banking sector rose 3.6 percent helped by spurt in Kuwait Finance House while investment sector tapered over 6 percent as most of the large caps posted thin volumes. Real estate dipped by over a quarter of the previous level and industrials soared 43 percent volume wise. Services dropped 18 percent with most of the blue chips trading thin.
Noor Financial Investment Company is in negotiation with one of the five banks which qualified for the due diligence study to acquire a 67 percent stake in Banque du Caire. The five banks are UK based Standard Chartered Plc, Saudi Arabia's Samba Financial Group, National Bank of Greece SA, Dubai's Mashreq bank and a consortium of Jordan based Arab Bank Group and Saudi Arabia's Arab National Bank. Kuwait International Bank expects its revenue to rise this year after acquiring 40 percent of the takaful insurance company, Chairman Abdul Wahab al Wazan told a local newspaper.
Investments
The lender has declared a 10 percent cash dividend and 10 percent in bonus shares. KIB had bought 10 percent of Safwa Islamic Bank in Syria with share capital of $100 million. Noor Financial and Investment Co and Ikarus Petroleum said on Sunday they were considering investments worth about $220 million in Singapore and India.
The market opened on a choppy note and moved range bound in early trading as investors remained guarded and refrained from taking up fresh positions. It touched the day's high of 14,234.8 points half way into the session as buying picked up in select counters across the sector. The positive mood however was tripped by a moderate bout of profit taking pulling the index lower again. The market continued to slide for the rest of the session but managed to close above the red.
In connection with the correctional drop in the bourse on Monday, which snapped the 5-day winning streak, the traders and brokers had mixed views, according to KUNA. Some of them felt that the fall has come at the right moment and will prove beneficial for the market while others see it as foreboding sign of a larger downtrend to follow. Major players have abandoned their attempt to shore up the market performance and are openly speculating on cheap shares, they stated.
Despite closing up, the market spread was skewed towards the losers. 41 stocks advanced while 41 closed lower. Of the 160 counters active on Tuesday, 57 closed unchanged. 13,148 deals worth KD 273.05 million were transacted -- up 23.1 percent in value terms over previous session.
Top percentage gainer Aref Energy Holding Co, spiked 21.1 percent to settle at KD 0.230 while Jazeera Airways climbed 9.8 percent to stand next. National Company for Consumer Industries shed 9.1 percent, the steepest decliner of the day, while Al Safwa topped the volume with over 55 million shares changing hands.
Agility lost 20 fils to close at KD 1.320 while Zain rallied 100 fils on back of 28.7 million shares. Sultan Center fell 5 fils whereas Wataniya Telecom closed flat. Kuwait Gulf Links took in 5 fils and TWG shed 30 fils to wind up at KD 0.900. NBK dropped 20 fils and both Gulf Bank and CBK did not move from its previous close. Elsewhere in the region, markets closed mixed. The Saudi Al Tadawul All Stocks Index tumbled 99.84 points driven by SABIC and SABB Bank after closing in red in the earlier session. The Dubai Financial Market fell 0.74 percent to end at 5714.23 points led by Emaar and Emirates NBD. Abu Dhabi Securities dipped 1.17 percent dragged by Etisalat and FGB. The scrip fell 1.23 percent and 2.53 percent respectively. US crude touched a new high of $108.21 a barrel, before edging down to trade at $107.93. Analysts say traders are investing in commodities as hedge against the falling dollar.
Speculation
Another factor pushing up prices is last week's decision by oil producers' cartel Opec to keep output unchanged, despite rising demand in China. The oil cartel which pumps more than a third of the world's oil had contended that the current high prices do not reflect market fundamentals and are being driven by speculation. The dollar has been touching new lows against the euro and other key currencies since last summer, and was impacted again on Friday last week by a US employment report showing the labor market at its weakest in five years. The news has prompted traders to seek refuge in commodities, including oil and gold, which are more likely to hold on to their value than the greenback. In Europe, Brent crude hit $104.42 at one point on Monday -- also a record.
© Arab Times 2008
