Kuwait extends losses on global economy concerns

05/07/2010 00:00 AST

Kuwait's bourse fell for a third consecutive session yesterday, tracking lower oil prices and international stocks, while most regional indices dropped as investor concerns grew about global recovery prospects. Kuwait's index dropped 1.7 percent to 6,321 points, after falling by a similar margin on Thursday, to its lowest close for more than five years.

Economists recently declared that they fear that despite of the prevailing optimism that the economic crisis might end in the near future, the possibilities that it could worsen also remains as the international economies still did not give a significant sign of a recovery," said Global Investment House in a research note.

All blue-chips contributed to Kuwait's decline. In addition, investors are also pessimistic about second-quarter results, which was seen as a potential catalyst for buying activity.

People are not very optimistic about second-quarter results, especially because many companies are linked to the market's performance," said a Kuwait-based trader. "Given the market's performance this quarter, this is likely to be reflected in the second-quarter results of those companies exposed, which in Kuwait is a big chunk," he said.

Most other markets in the Middle East traded flat to lower, with volumes subdued and little or no market direction. "It's the historical summer thing: traders are more pessimistic, there is more risk aversion than risk takers," said Mohamed Khaled, risk manager at Prime Securities.

Saudi stocks extended their losses, ending lower for a sixth consecutive day, as oil prices continued to weigh on investors' sentiment. Heavyweights Saudi Basic Industries Corp (SABIC) and Samba Financial Group fell 1.2 percent and 2.2 percent respectively.

In Dubai, telecoms firm du fell 3 percent. Du will gain access to the network of rival and market leader Etisalat, creating a new wave of competition in the country, a local newspaper reported on Friday. Qatar stocks retreated for a sixth consecutive session, hitting their lowest level since June 7.

In Egypt, shares in Egyptian brokerage Pioneers Holding fell 7.7 percent after its planned merger with investment bank Beltone Financial fell through. Egypt's index slumped 2.3 percent to 5,896 points. US crude oil fell to a three-week low on Friday as bearish US job data sparked fears of a double dip recession.

Reuters