23 March 2008
KUWAIT: Kuwait Stock Exchange (KSE) managed to rebound on the last trading day of the week after witnessing a dramatic drop on Monday and Tuesday in line with the sudden news of the Kuwaiti government's resignation.
Global" General Index close at 422.53 points, a 0.49 percent decrease this week from last weeks' close. The index's YTD gain reached 11.82 percent since December 31, 2007. On the other hand, Kuwait Stock Exchange (KSE) Price Index gained 185.10 points (+1.30 percent) this week and closed at 14,455.40 points. Market capitalization reached KD64.56 billion. Market breadth was skewed towards decliners with 88 stocks retreating against 68 increasing, while 16 stocks were not traded this week.
Trading activity was lower this week, with only four trading sessions. The stock exchange will be closed on Thursday, March 20 for the occasion of the Prophets Birthday. Volume of shares traded on the bourse were down by 33.32 percent, with 1.52 billion shares exchanged. Meanwhile, value of shares traded dropped by 35.88 percent, aggregating to KD723.24 million. The Investment sector accounted for 36.11 percent of the volume traded this week with 547.59 million shares changing hands and taking its first place in the rank among all other sectors. The same sector topped the value list as well with KD251.44 million traded, accounting for 34.77 percent of the total traded value.
Sector-wise, Global Insurance Index was the major gainer this week, with an increase of 1.94 percent. Four of the insurance companies managed to end its weekly trading with positive performance. Kuwait Insurance Company was the biggest gainer in the sector, adding 7.69 percent and closed at KD0.560.
Global Real Estate Index followed added 0.60 percent. Abyaar Real Estate Development Company was the biggest gainer in the sector, adding 25.53 percent to close at KD0.590. The stock made it to the top gainers list this week and was traded ex-dividend on Monday, March 17, after giving 25 percent bonus shares for its shareholders. Global Investment Index came third with an increase of 0.49 per cent.
Al-Safat Investment Company came on the top gainers list, adding 11.76 percent and closed at KD1.140. All other market sectors ended the week bearish. Global Industrial Index was the biggest loser for the week, shedding 1.29 percent. Gulf Rocks Company came second on the losers list for the week, shedding 10.64 percent. The scrip closed at KD0.840. Global Services Index also retreated by 0.84 percent. Two of the services companies were traded ex-dividend this week. National Mobile Telecommunications Company distributed 50 percent cash dividends and 10 percent bonus shares for its shareholders. The scrip was down by 5.88 percent for the week, closing at KD2.240. United Projects Company also approved 35 percent cash dividend for its share holders. The scrip ended the week up by 5.56 percent, at KD0.380.
Global special indices ended the week with mixed performance. Global Large Cap (Top 10) Index lost 1.18 percent of its value, while Global Small Cap (Low 10) Index was seen down by 0.30 percent compared to its previous week's close. The Sharia compliant, Global Islamic Index was seen up by 0.31 percent.
Looking at companies' trading activity, Aref Energy Holding Company was the biggest gainer for the third week, adding 40 percent to its share price. The scrip closed at KD0.350 with 640,000 shares traded. On the other side, National International Company (Holding) was the biggest loser, shedding 11.39 percent to close at KD0.330 with 140,000 shares traded.
Macroeconomic Environment
Kuwait said this week that it has posted record revenues of KD17 billion ($63.6 billion) in the first 11 months of the current fiscal year, more than double budget estimates. This is the highest revenues ever boasted by the oil-rich state, which sits on about 10 percent of global crude reserves and pumps 2.5mn barrels per day (bpd), thanks to rocketing oil prices. Revenue for the period to the end of February compares with projected income for all of 2007/2008 of KD8.3 billion (about $31 billion) and is 18
.2 percent up on the same period of the previous fiscal year. Oil revenues jumped 17.6 percent to KD16 billion (about $60 billion) over the 11 months. They were more than double the budget estimates of KD7.45 billion (about $28 billion) for the year ending March 31, according to Ministry of Finance figures.
The figures reflect a sharp rise in the price of oil which contributes around 94 percent of total revenue in Kuwait, OPEC's fourth largest producer. Kuwait has adopted a conservative price of $36 a barrel in calculating oil revenues but the price of Kuwaiti oil on Monday, March 17 touched a record high of $98.85 a barrel. The finance ministry said actual spending in the 11-month period was KD6.6 billion ($24.5 billion), well below a budget forecast for the full year of KD11.3 billion (more than $42 billion).
This would leave the actual surplus of KD10.44 billion (more than $39 billion) for the 11 months, against a projected deficit of KD3 billion ($11 billion) for the whole fiscal year. This will be Kuwait's ninth straight year of windfall.
Annual inflation in Kuwait, the only Gulf Arab state to drop its currency peg to the dollar, stayed close to a record in November 2007 at 6.7 percent as rents and food costs remained strong. Housing costs in the world's seventh-largest oil exporter jumped 12.6 percent year on year and were unchanged month-on-month, according to government data received this week. However, annual food cost increase eased to 4.4 percent from 6.08 percent in October, the data showed.
According to analysis of statistics by the Central Bank of Kuwait (CBK) for February, there was slight increase in local banks indices of assets, deposits and loans, an increase of 1.6, 1.4 and 0.5 percent from January, respectively. A KUNA analysis showed assets at KD36.8 billion, up KD600 million or 1.6 percent. Assets value compared to the same month last year came up 33.3 percent, which is a considerable gain and an indicative of the growth seen in the Kuwaiti banking sector.
Oil news
The price of Kuwaiti crude oil went up and almost near the $100-mark with only $1.15 away. The Kuwaiti crude recorded another new high this week reaching $98.85 on Monday (March 17, 2008). A $4.07 increase per barrel from a week earlier. The hike of the price of the national crude was expected by many experts, who foresaw it in light of record rise of prices of the various crudes on the global market, mainly the basket of crudes of the Organization of Petroleum Exporting Countries (OPEC).
OPEC's resolution at its latest ministerial meeting held in Vienna, on maintaining the current output of 29.6mn bpd, clearly contributed in increasing the international oil prices, despite consumer demands to raise the production.
Gulf Investment Corporation (GIC) and Arch Capital Group Ltd announced this week that they have entered into a joint venture agreement to establish Gulf Re, a new specialist re-insurer to be based in the Dubai International Financial Center. GIC and Arch Capital will subscribe to a total of $400 million of capital. The initial paid-up capital of Gulf Re will consist of $200 million, with an additional $200 million to be funded depending on the business needs of the company. Gulf Re will be owned by Arch Capital and GIC equally.
Kuwait's Al-Kharafi Group bought this week shares in Sudan's leading oil company Petrodar Operating Company. The group signed a contract with the Sudapet to buy Thani's shares in Petrodar at a value of $500 million. Budapet Director-General Saleh Jaafar said that the company had agreed to buy Thani's five-percent stake in Petrodar, noting that Al-Kharafi would acquire three percent only while his company would obtain two percent.
In continuance with Global Investment House efforts to introduce sound and innovative investment opportunities to sophisticated investors, we are glad to introduce Al-Ekhlas International Holding Company KSCC "Ekhlas". Ekhlas will operate within the education and educational services sector. It will be able to cater to the incredible growing demand for schools that comes from the population profile in Kuwait which is classified as "Baby boomer". Ekhlas has the option of acquiring and expanding existing schools as well as establish new ones. Operationally, Ekhlas will own, manage and operate schools. The company has a target IRR of 25 percent based on the ambitious business model of the company. The total share capital of "Ekhlas" is KD25 million representing 250 million shares. Global is offering 48 percent (120 million shares) stake in the company at a total price of 105fils per share including 5fils per share as Service Charges and Arranging Fees.
In continuation of Global Investment House coverage on GCC economies, we have come out with our updated GCC Investment Strategy report. The report covers key macroeconomic themes running across the GCC economies, as well as the key investment themes, risks and pressure points on major economic sectors of GCC, such as Oil & Natural Gas, Banking & Finance, Telecom, Real Estate, Cement etc. The GCC region continues to surge ahead with most of the economies registering double-digit nominal growth rates in recent years. The economies in the region have benefited from the higher prevailing oil prices. The region is expected to benefit further from the economic diversification and more attractive investment environment.
KUWAIT: Kuwait Stock Exchange (KSE) managed to rebound on the last trading day of the week after witnessing a dramatic drop on Monday and Tuesday in line with the sudden news of the Kuwaiti government's resignation.
Global" General Index close at 422.53 points, a 0.49 percent decrease this week from last weeks' close. The index's YTD gain reached 11.82 percent since December 31, 2007. On the other hand, Kuwait Stock Exchange (KSE) Price Index gained 185.10 points (+1.30 percent) this week and closed at 14,455.40 points. Market capitalization reached KD64.56 billion. Market breadth was skewed towards decliners with 88 stocks retreating against 68 increasing, while 16 stocks were not traded this week.
Trading activity was lower this week, with only four trading sessions. The stock exchange will be closed on Thursday, March 20 for the occasion of the Prophets Birthday. Volume of shares traded on the bourse were down by 33.32 percent, with 1.52 billion shares exchanged. Meanwhile, value of shares traded dropped by 35.88 percent, aggregating to KD723.24 million. The Investment sector accounted for 36.11 percent of the volume traded this week with 547.59 million shares changing hands and taking its first place in the rank among all other sectors. The same sector topped the value list as well with KD251.44 million traded, accounting for 34.77 percent of the total traded value.
Sector-wise, Global Insurance Index was the major gainer this week, with an increase of 1.94 percent. Four of the insurance companies managed to end its weekly trading with positive performance. Kuwait Insurance Company was the biggest gainer in the sector, adding 7.69 percent and closed at KD0.560.
Global Real Estate Index followed added 0.60 percent. Abyaar Real Estate Development Company was the biggest gainer in the sector, adding 25.53 percent to close at KD0.590. The stock made it to the top gainers list this week and was traded ex-dividend on Monday, March 17, after giving 25 percent bonus shares for its shareholders. Global Investment Index came third with an increase of 0.49 per cent.
Al-Safat Investment Company came on the top gainers list, adding 11.76 percent and closed at KD1.140. All other market sectors ended the week bearish. Global Industrial Index was the biggest loser for the week, shedding 1.29 percent. Gulf Rocks Company came second on the losers list for the week, shedding 10.64 percent. The scrip closed at KD0.840. Global Services Index also retreated by 0.84 percent. Two of the services companies were traded ex-dividend this week. National Mobile Telecommunications Company distributed 50 percent cash dividends and 10 percent bonus shares for its shareholders. The scrip was down by 5.88 percent for the week, closing at KD2.240. United Projects Company also approved 35 percent cash dividend for its share holders. The scrip ended the week up by 5.56 percent, at KD0.380.
Global special indices ended the week with mixed performance. Global Large Cap (Top 10) Index lost 1.18 percent of its value, while Global Small Cap (Low 10) Index was seen down by 0.30 percent compared to its previous week's close. The Sharia compliant, Global Islamic Index was seen up by 0.31 percent.
Looking at companies' trading activity, Aref Energy Holding Company was the biggest gainer for the third week, adding 40 percent to its share price. The scrip closed at KD0.350 with 640,000 shares traded. On the other side, National International Company (Holding) was the biggest loser, shedding 11.39 percent to close at KD0.330 with 140,000 shares traded.
Macroeconomic Environment
Kuwait said this week that it has posted record revenues of KD17 billion ($63.6 billion) in the first 11 months of the current fiscal year, more than double budget estimates. This is the highest revenues ever boasted by the oil-rich state, which sits on about 10 percent of global crude reserves and pumps 2.5mn barrels per day (bpd), thanks to rocketing oil prices. Revenue for the period to the end of February compares with projected income for all of 2007/2008 of KD8.3 billion (about $31 billion) and is 18
.2 percent up on the same period of the previous fiscal year. Oil revenues jumped 17.6 percent to KD16 billion (about $60 billion) over the 11 months. They were more than double the budget estimates of KD7.45 billion (about $28 billion) for the year ending March 31, according to Ministry of Finance figures.
The figures reflect a sharp rise in the price of oil which contributes around 94 percent of total revenue in Kuwait, OPEC's fourth largest producer. Kuwait has adopted a conservative price of $36 a barrel in calculating oil revenues but the price of Kuwaiti oil on Monday, March 17 touched a record high of $98.85 a barrel. The finance ministry said actual spending in the 11-month period was KD6.6 billion ($24.5 billion), well below a budget forecast for the full year of KD11.3 billion (more than $42 billion).
This would leave the actual surplus of KD10.44 billion (more than $39 billion) for the 11 months, against a projected deficit of KD3 billion ($11 billion) for the whole fiscal year. This will be Kuwait's ninth straight year of windfall.
Annual inflation in Kuwait, the only Gulf Arab state to drop its currency peg to the dollar, stayed close to a record in November 2007 at 6.7 percent as rents and food costs remained strong. Housing costs in the world's seventh-largest oil exporter jumped 12.6 percent year on year and were unchanged month-on-month, according to government data received this week. However, annual food cost increase eased to 4.4 percent from 6.08 percent in October, the data showed.
According to analysis of statistics by the Central Bank of Kuwait (CBK) for February, there was slight increase in local banks indices of assets, deposits and loans, an increase of 1.6, 1.4 and 0.5 percent from January, respectively. A KUNA analysis showed assets at KD36.8 billion, up KD600 million or 1.6 percent. Assets value compared to the same month last year came up 33.3 percent, which is a considerable gain and an indicative of the growth seen in the Kuwaiti banking sector.
Oil news
The price of Kuwaiti crude oil went up and almost near the $100-mark with only $1.15 away. The Kuwaiti crude recorded another new high this week reaching $98.85 on Monday (March 17, 2008). A $4.07 increase per barrel from a week earlier. The hike of the price of the national crude was expected by many experts, who foresaw it in light of record rise of prices of the various crudes on the global market, mainly the basket of crudes of the Organization of Petroleum Exporting Countries (OPEC).
OPEC's resolution at its latest ministerial meeting held in Vienna, on maintaining the current output of 29.6mn bpd, clearly contributed in increasing the international oil prices, despite consumer demands to raise the production.
Gulf Investment Corporation (GIC) and Arch Capital Group Ltd announced this week that they have entered into a joint venture agreement to establish Gulf Re, a new specialist re-insurer to be based in the Dubai International Financial Center. GIC and Arch Capital will subscribe to a total of $400 million of capital. The initial paid-up capital of Gulf Re will consist of $200 million, with an additional $200 million to be funded depending on the business needs of the company. Gulf Re will be owned by Arch Capital and GIC equally.
Kuwait's Al-Kharafi Group bought this week shares in Sudan's leading oil company Petrodar Operating Company. The group signed a contract with the Sudapet to buy Thani's shares in Petrodar at a value of $500 million. Budapet Director-General Saleh Jaafar said that the company had agreed to buy Thani's five-percent stake in Petrodar, noting that Al-Kharafi would acquire three percent only while his company would obtain two percent.
In continuance with Global Investment House efforts to introduce sound and innovative investment opportunities to sophisticated investors, we are glad to introduce Al-Ekhlas International Holding Company KSCC "Ekhlas". Ekhlas will operate within the education and educational services sector. It will be able to cater to the incredible growing demand for schools that comes from the population profile in Kuwait which is classified as "Baby boomer". Ekhlas has the option of acquiring and expanding existing schools as well as establish new ones. Operationally, Ekhlas will own, manage and operate schools. The company has a target IRR of 25 percent based on the ambitious business model of the company. The total share capital of "Ekhlas" is KD25 million representing 250 million shares. Global is offering 48 percent (120 million shares) stake in the company at a total price of 105fils per share including 5fils per share as Service Charges and Arranging Fees.
In continuation of Global Investment House coverage on GCC economies, we have come out with our updated GCC Investment Strategy report. The report covers key macroeconomic themes running across the GCC economies, as well as the key investment themes, risks and pressure points on major economic sectors of GCC, such as Oil & Natural Gas, Banking & Finance, Telecom, Real Estate, Cement etc. The GCC region continues to surge ahead with most of the economies registering double-digit nominal growth rates in recent years. The economies in the region have benefited from the higher prevailing oil prices. The region is expected to benefit further from the economic diversification and more attractive investment environment.
© Kuwait Times 2008
