Rapid intervention plan eyed on Kuwait's stock exchange

KUWAIT CITY - Kuwait Investment Authority asked managers of the national portfolio to develop a short-term intervention plan for Boursa Kuwait – whether to request for injection of more portfolio capital or they have enough liquidity now, reports Al-Rai daily.

Informed sources pointed out that “the past days witnessed a series of contacts with portfolio managers to discuss the future of government intervention and the possibility of increasing liquidity in the stock market. This intervention is still under study to determine its necessity, returns and cost.”

They pointed out that according to initial responses, there is variation in liquidity rates available to managers, but the encouraging aspect is that some of them have more than 10 percent funds ready for investment. This increases the possibility of their intervention and they were asked to prepare scenarios for use of liquidity in the short and medium terms.

They stated the market prices for a large portion of shares are encouraging for portfolio managers in order to abandon the strategy of anticipation in favor of intervention and exploitation of attractive opportunities. This is after many shares recorded sharp decline, some of which reached 20 percent, the added.

Sources explained that increasing the portfolio’s intervention is in line with its policy on profitability and loss, and based on the primary goal behind its establishment – to ensure stability of the stock market.

Technical analyses affirm the market conditions are reassuring. Some prices are low, but general infl uences pushed the stock market to further decline; hence, there is no need to adhere to traditions in handling the portfolio which discharges its contents under the current circumstances.