Kuwait's index closes higher on Thursday, days before FTSE inclusion

Kuwait’s index made gains on Thursday as investors looked ahead to the stock market joining the FTSE Russell emerging market index next week.

The Kuwaiti premier market index added more than 1 percent during Thursday’s session, before closing 0.77 percent higher. Kuwait’s inclusion into FTSE Russell was first announced in September 2017.  

“Our view on the Kuwait market for the rest of 2018 remains constructive, and we expect the market to finish the year as one of the top performers in the GCC,” Faisal Hasan, chief business development officer at KAMCO, told Zawya by email.

Mobile Telecommunications Company (Zain) gained 1.26 percent on Thursday, Boubyan Bank surged 2.96 percent and Kuwait Finance House gained 2.36 percent, while National Bank of Kuwait edged up 0.12 percent.

All four of these stocks, among eight other stocks, will be added to the FTSE index this year in two phases with each phase adding 50 percent of the stocks’ investability weight. The first tranche will occur on September 24^th and the second tranche on December 24th.

“The initial rally will continue for large cap names included in FTSE’s upgrade, as witnessed year-to-date from the Premier Market Index. However, high quality names outside this list are also likely to see gains over the medium term as well, from more passive and active flows,” KAMCO’s Hasan said.

“We believe the index inclusion can attract institutional flows and trigger re-rating in certain stocks.”

On April 1^st 2018, Kuwait divided its stock market into three segments in an effort to reform its stock market and increase liquidity. The three market segments are the premier market, the main market and the auction market.

Since the market segmentation, the premier market has added 8.43 percent and is on the way to finish the year as one of the top performers amongst its peers in the region.

Despite a weakness in emerging markets and the recent Turkish lira crisis, Kuwait’s index has added so far in September 1.65 percent, while most of its peers in the region have been hit by the recent trade tensions between the United States and China and tracked a retreat in emerging and global equity markets.

Blue chip stocks like Zain and National Bank of Kuwait are now up 11.06 percent and 19.71 percent so far since the start of 2018.

Elsewhere in the region, Dubai’s index added 0.86 percent on Thursday, Abu Dhabi’s index closed flat, the Saudi index was last up 0.5 percent, Oman’s index added 0.23 percent, Bahrain’s index was mainly flat edging up 0.08 percent, while Qatar’s index dropped 0.4 percent and Egypt’s index closed 0.11 percent lower.

(Reporting by Gerard Aoun; Editing by Michael Fahy)

(gerard.aoun@thomsonreuters.com).