KSE drops 122 points, closes in red zone at 6,822 points

31/01/2011 00:00 AST

Several major portfolios in the market have took advantage of demonstrations and political turmoil in Egypt in addition to sharp decrease that affected the indices of most financial markets in the region, by deliberate and professional action to pressurize price index of Kuwait Stock Exchange (KSE) to lose altitude by 122 points. The focused selling action to skim profits and changing positions by gathering shares at low prices has dominated Sunday's dealing session, which also resulted in decreasing the weight index by 9.5 points due to heavy selling that targeted heavy weight, operational and leading shares in all sectors of KSE.

Most of technical parameters have witnessed a decrease except of liquidity which increased to the level of 58.8 million Kuwaiti dinars by trading around 381 million shares. Spectators believe that the sharp decline of most sectors is over exaggerated and it is temporary as shares will jump back to their normal prices similar to noticeable increase witnessed by the Saudi market after its record decline seen on Saturday.

Banking sector

The sharp decline in prices of banking shares did not stop a keen action of buying to gather shares of several promising banks including the National Bank of Kuwait (NBK), Kuwait Finance House (KFH) and Kuwait International Bank (KIB). The support of the national portfolio to the banking sector was noticeable and contributed in stabilizing the prices of most shares at this vital sector.

Investment and Real Estate sectors

Market spectators affirmed that the sectors of investments and real estate are the first to react by any major local or international event, these two sectors were the first in losing altitude especially that major portfolios have used these sectors to terrify traders and force them to sell. Source believe that one of these portfolios belong to a local bank in addition to an investment company, which is not enlisted in the market have triggered the selling action in the market to repurchase shares at lower prices. The source added that the selling action is misleading and deliberate because it included promising, operational and weak shares at the same time, however some shares were not affected, such as Kuwait Financial Center, A'ayan Leasing & Investment Company, Kuwait Project Company (Holding), and Mabanee Company.

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Al Watan