The Kuwait Stock Exchange (KSE) on Tuesday, December 26, ended the year down 6.5 percent, in a tumultuous 12 months of trading as investor confidence hit bottom rock, brokers and traders said.
The KSE index closed at 1,348.1 points, up just 0.55 percent on the week, but a massive 52.6 percent below its all-time record in November 1997.
Tuesday was the last day of trading because of the Muslim feast of Eid al-Fitr and New Year holidays. The KSE will reopen on January 2, 2001.
"This has certainly been a very bad year for Kuwaiti shares. It's the worst since 1995," a disgruntled dealer told AFP, as the index was pointing to a five-year low before gaining some 10 points a few minutes before closing.
During the year, the KSE index repeatedly hit new five-year lows and the value of average daily trading fell considerably despite Kuwait's largest fiscal surplus in two decades thanks to high oil prices.
"The bourse situation is very disturbing. It is supposed to increase by five percent annually, but it has been on the decline for the third year in a row," a broker said.
Traders and analysts believe that a lack of economic reforms, political uncertainty and parliament-government wrangling are to blame for the decline.
"Economic reforms have been very slow and unclear. This has made investor confidence almost non-existent," a broker said.
The government's relations with parliament were negatively affected by the November 20 grilling of Housing Minister Adel al-Sebeih, who survived a vote of no-confidence on December 4.
A number of decisions by the government earlier in December, including the establishment of a secondary market and introduction of new investment tools, failed to stimulate the KSE.
Leading Kuwaiti financial experts and businessmen last month called for new legislation to protect small traders and broaden the investor base to help revitalize the sagging KSE.
The experts called for the establishment of an independent body with extensive powers to run the bourse.
Some 87 companies are listed on the KSE with a capitalzsation of more than $20 billion, the second most capitalized bourse in the Arab world after the NCFEI in Saudi Arabia.— (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
