Global Investment House – Kuwait- KSE Market Performance – January 2008 - Kuwait market ended the month of December in positive zone after reporting losses for the last two consecutive months. “Global” General Index reported a monthly gain of 3.79% as it ended the month of December 2007 at 377.86 points. With this “Global” General Index has reported a yearly gain of 29.95% for 2007. The market capitalization reached KD57.45bn at the end of the month, registering a growth of 4.03% as compared to the previous month. Kuwait Stock Exchange (KSE) Price Index closed at 12,558.9 points, reporting a monthly gain of 4.2% in December-07. As per the Price Index KSE recorded a yearly growth of 24.75% for 2007.
Among the major development for the month was slashing of income tax imposed on commercial institutions operating in the country from 55 percent to 15 percent. The move will help in attracting significant amount of foreign direct investments (FDIs) in the country. As a welcome move for Capital Market the approved bill also exempt profits made by foreign companies from trading in stocks listed on the Kuwait Stock Exchange, whether made directly or through portfolios and investment funds. This will help in attracting significant amount of portfolio investments through foreign institutional investors in the country.
The overall trading activity declined during the month mainly because of Eid holidays. Volume of shares traded on the bourse witnessed a monthly decline of 25.9%, aggregating to 3.78bn shares in the month. On the other hand, value of shares traded on the bourse witnessed a monthly decline of 25.4%, aggregating to KD1.85bn in the month. Al Safwa Group Company was the top volume leader for the month with 397.4mn shares changing hands at a value KD64.07mn.
Market breadth during the month tilted in favor of advancers with 114 advancers and 56 decliners, whereas the prices of 26 stocks remained unchanged. The biggest gainers during the month were Iraq Holding Co. (153.8%), First Dubai Real Estate Development Company (57.14%) and International Finance Co. (41.46%). The biggest decliners during the month were Tamdeen Investment Co. (-15.0%), International Investment Projects (-14.9%) and Mushaat Real Estate Projects Company (-13.33%). During the month National Bank of Kuwait raised its capital through rights issue to increase its capital by 20%. The issue was priced at KD1 per share (premium of 900fils per share and a par value of 100fils per share).
During the month, two new companies were listed in the Regular Market namely First Dubai For Real Estate Development Co (Real Estate sector) and Salbookh Trading Co. (Industrial sector), thereby taking the total number listed companies in Kuwait to 196.
We believe that measures such as slashing of tax on foreign firms by the government would definitely help in increasing country’s scalability amongst GCC peers. Recently, Kuwait has raised its 2007-08 budget surplus forecast to KD6.3bn due to massive oil revenues and lower expenses, latest government data show. Therefore on the back of strong economic fundamentals and reform measures initiated by the government the year ahead can prove to be another good year for the stock market.
