• Kuwait market gained 10.7% in May-2009
Global Investment House – Kuwait – KSE Monthly Performance- During the month of May 2009, the Kuwait Stock Exchange (KSE) continued its bullish trend for the third consecutive month (m-o-m change) encouraged by positive sentiment towards global economy and increased oil prices. The market remained buoyant for the month as all the sectoral indices ended the month in positive territory. On the economy front, the Central Bank of Kuwait (CBK) announced cutting its benchmark discount rate by 50 basis points to 3 percent effective Thursday, May 14. CBK governor said that a planned 50 basis point interest rate cut was designed to reduce the cost of funding to help encourage growth in non-oil sectors. The market registered a gain of 10.7% as “Global” General Index ended the month at 213.78 points. This followed with a gain of 8.8% in April-2009 while on a YTD basis the index return turned positive with a gain of 3.6%. The market capitalization reached KD34.7bn (US$ 119.2bn) at the end of the month, registering an increase of 10.7% as compared to the previous month.
The overall trading activity increased during May-2009 compared to the previous month. Volume of shares traded on the bourse grew by 11.4%, aggregating to 17.8bn shares in the month. Value of shares traded on the bourse also witnessed a monthly increase of 4.0%, aggregating to KD3.1bn in the month. Gulf Finance House was the top value leader for the month with 840.4mn shares changing hands at a value KD945.1mn. Al Safwa Group Company was the top volume leader for the month with 1,557mn shares changing hands at a value KD108.2mn.
The major gainers during the month were Grand Real Estate Projects (106.2%), Danah Al Safat Foodstuff Co. (78.4%), AREF Investment Group (76.3%), whereas major losers during the month were Kuwait & Middle East Financial Invest Company (-21.4%), Al Kout Industrial Projects Co. (-16.7%), Mubarrad Transport Co. (-13.1%).
All the sectoral indices gained during the month with three sectoral indices, namely, Services, Food and Real Estate Indices gained more than 10% during the month. The Services Index achieved the highest gain of 19.7%, while the Banking Index registering the lowest gain of 7.2%. Among the top gainers in the Services sector, Al Safat Tech Group gained 58.2%, followed by Kuwait Cable Vision Company (56.9%), Combined Group Contracting Co. (54.1%). Kuwait Cable Vision Company announced that in June the company will held its AGM and EGM to approve the 66.99% rights issue. In the banking sector, Gulf bank was the top loser for the month with a decline of 9% while Kuwait Finance House gained the most with a gain of 14.0%.
Global Investment Index gained 9.4% during the month of May. The stock of AREF Investment Group was the highest gainer in the sector with a m-o-m gain of 76.3% to close at KD0.208. According to reports, Kuwait's AREF Energy Holding Company and its parent company AREF Investment Group are close to selling their joint stake in a non-listed company, and AREF Energy Holding Company is expected to book a profit of nearly KD15mn (US$51.7mn) on the divestment. Among the other major gainers in the sector were Global Investment House and Al Safat Investment Co. which gained 54.8% and 40.6% respectively during the month of May.
During the month of May-2009, Global Food Index was the second highest gainer among sectoral indices, with a gain of 16.0% for the month. The sector gain was led by Danah Al Safat Foodstuff Co. with a gain of 78.4% which was followed by Livestock Transport & Trading Co. with an increase of 23.1% for the month.
The Global Real Estate Index gained 11.7% during the month. The sector gain was led by Grand Real Estate which was the highest gainer in the market during the month. This was followed by Mabanee Co. and Investors Holding Group Co., in the sector, both gained 32% each for the month. In case of Grand Real Estate, the trading in the company’s stocks has been resumed on the Kuwait Stock Exchange as well as on the Dubai Financial Market from May 19, 2009, after the company released its financial statements for the first quarter ended March 31, 2009.
It seems that the market is on a recovery path taking cue from other regional markets. The increase of oil prices is another major supporting factor driving recovery in the market. The proactive step of further cut in the discount rate will help in gaining confidence into local economy and will translate into an increase in trading activity on KSE. On the back of all such positive developments the market is likely to remain in firm zone.
