Kuwait market declined during the month of October’2007 and thereby reversed the growth momentum of previous eight months. “Global” General Index reported a monthly decline of 1.55% as it ended the month of October-07 at 387.86 points. The market capitalization reached KD58.47bn at the end of the month, registering a decline of 1.09% as compared to the previous month. Kuwait Stock Exchange (KSE) Price Index closed at 12,767 points, reporting a monthly decline of 0.64% in October-07. “Global” General Index has reported YTD gain of 33.4% by the end of October-07.
The overall trading activity improved during the month. Volume of shares traded on the bourse witnessed a monthly increase of 7.2%, aggregating to 7.73bn shares in the month. On the other hand, value of shares traded on the bourse witnessed a marginal monthly increase of 0.8%, aggregating to KD3.30bn in the month.
Global Non-Kuwaiti Index recorded the highest gain during the month, reporting a monthly increase of 4.20%. Among its component’s, share price of Shuaa Capital increased by 37.7% during the month. Dubai-based Shuaa Capital has informed that it will allow foreigners to own up to 49% stake in the investment bank as it plans to undertake expansion in the region. UAE's economy ministry has approved raising the foreign ownership in Shuaa from the current 40% to 49%, the bank has informed.
Global Banking Sector index increased marginally by 0.08% during the month. Among the sector’s components, the share price of National Bank of Kuwait declined by 0.9% during the month. National Bank of Kuwait reported a net profit of KD220.5mn during the first nine months of 2007 compared to KD190.1mn for the same period last year, an increase of 16%. Commenting on the results, Mr. Ibrahim Dabdoub, Chief Executive Officer of NBK, said that he was pleased with strong financial results and the robust organic growth achieved across all business lines, both domestically and across the region.
Global Services Index recorded the highest decline during the month, reporting a monthly decline of 6.89% due to decline in heavyweight stocks like Zain and Agility. Agility’s share price was down 13.5% during the month to reach KD1.540. Agility has denied media reports that it had signed a deal for a Dubai distribution center with US automaker General Motors Corporation. A local newspaper had announced earlier that Agility agreed to manage a Dubai-based distribution centre for GM cars and spare parts in the Middle East. Similarly Zain’s share price was down 7.9% during the month to reach KD3.960. Zain has informed that it bought a Ghanaian telecom operator for US$120mn. Zain bought about 75 percent of Western Telesystems Ltd. from the Ghanaian government through its Celtel unit, and will list some of its shares on the Ghanaian stock exchange.
Al Safwa Group Company was the top volume leader for the month with 531.9mn shares changing hands at a value KD88.4mn. Iraq Holding Company was among the top volume leaders of the month with 494.1mn shares changing hands at a value KD31.4mn. Iraq Holding Company had sold 20 percent of Bank Baghdad at a value of KD9.2mn, with a net earnings of KD4.0mn.
Kuwait Privatization Projects Holding was also among the top volume leaders of the month with 282.5mn shares changing hands at a value KD66.6mn. The company has stated that it intends to expand in countries like Oman, Tunisia, Jordan, Bahrain and Pakistan and wants to compete for the project of purifying seawater in Tunis under the BOT at a cost of US$300mn. It also submitted a bid for sea water purification project in Amman under the BOT and the privatization of energy distribution companies in Jordan worth KD44mn.
Market breadth during the month was inclined towards decliners with 63 advancers and 101 decliners, whereas the prices of 28 stocks remained unchanged. The biggest gainers during the month were Shuaa Capital (37.7%), Hilal Cement Company (26.3%), and Egypt Kuwait Holding Company (20.7%). The biggest decliners during the month were International Industrial Projects Group (-36.3%), Gulf Rocks Company (-25.9%), and Gulf Horizon Holding Company (-22.3%).
During the month, one new company was listed on KSE namely Abyaar Real Estate Development Company, thereby taking the total number listed companies in Kuwait to 192. The company was established in 2002. As the company is Sharia-compliant, it will also join Global Islamic Index. Chairman of Abyaar Mr. Hesham Al Obeid said that the listing will give Abyaar greater access to capital markets and ease the borrowing process.
Though the market declined during the month of October’2007, we believe that the market will gain in coming months backed by positive macroeconomic environment. However the short-term direction of the market will be dictated by the 3Q-2007 results which have started to come in.
Value Leaders Value Traded (KD)
National Industries Group (Holding) 244,700,450
Al-Madina for Finance & Investment Co. 152,294,600
Zain (MTC) 129,755,440
Ekttitab Holding Company 118,369,700
Boubyan Petrochemical Company 116,847,950
Volume Leaders (Shares) Number of Shares Traded
Al Safwa Group Company 531,900,000
Iraq Holding Company 494,080,000
Ekttitab Holding Company 401,480,000
National Ranges Company 378,180,000
Kuwait Privatization Projects Holding 282,520,000
