Kuwait stocks at 8yr low as crisis deepens

Kuwait’s bourse closed at eight-year low yesterday as the country’s political crisis weighed on investor sentiment, while other regional indices ended mixed.

Opposition politicians slammed as a “coup” a government drive to change the electoral law in Kuwait ahead of elections expected this year, and vowed to push for a full parliamentary democracy.

Kuwait’s index slipped 0.4% to 5,679 points, its lowest close since August 2004.

The index broke through the support level near 5,680 points, the previous multi-year low hit on January 9.

“Overall, the market outlook is bearish to oversold,” Global Investment House said in a note. Investment strategy for medium-term and long-term investors is to enter the market at levels higher than 5,910 point and 6,050 point, respectively, it added.

Trading volumes lessened as investors interest in the market faded but small-caps suffered declines.

Al Safwa Group Holding dropped 7.7%, Kuwait Real Estate shed 1.1% and Kuwait International Bank slipped 1.6%.

In Saudi Arabia, the index hit a fresh 11-week high, boosted by food stocks, but volumes slumped as investors wind down ahead of the upcoming Eid holiday.

The bourse rose 0.1% to 6,995 points, its highest close since May 29.

The gain is fuelled by food-related companies, with the agriculture and food index rising 2.1%. Dairy firm Almarai climbed 2.4% and Savola Group jumped 2.9%. The conglomerate is at its highest level in at least two years.

However, the number of shares traded on the bourse- just short of 163mn — is the third-lowest of any session in 2012.

Investors are cutting positions as the retail-dominated market closes for a long holiday at the end of the week to mark Eid. Retail investors usually cash-out on holidays, preferring to hold cash over stocks.

Dubai’s measure slipped 0.3% to 1,568 points, down for a fourth session in the last five, as investors booked profits.

Air Arabia lost 3%, logistics firm Aramex dipped 2.2% and Drake and Scull dropped 1.4%.

Abu Dhabi’s index advanced 0.2% to 2,541 points, closing fresh four-month high. First Gulf Bank and Abu Dhabi Commercial Bank gained 1.4 and 0.3% respectively.

Egypt’s benchmark gained 0.2% to 4,971 points, after Qatar’s government decided to deposit $2bn at the Egyptian Central Bank to help support the country’s struggling economy.

The transfer, announced by the Egyptian presidency on Saturday, followed talks in Cairo between Qatar’s emir and Egypt’s new President Mohamed Mursi.

“The market greeted this news positively, although we don’t know the conditions of the deposit and whether there is more to come,” said Osama Mourad, CEO of Arab Finance Brokerage.

Egypt faces a looming balance of payments crisis and unsustainable state borrowing costs, and experts say financial aid is needed urgently to avoid a currency devaluation.

Commercial International Bank gained 0.4% ahead of its results this week and investment bank EFG Hermes dipped 1.4%.

The Oman index climbed 0.2% to 5,473 points, while Bahrain’s measure slipped 0.05% at 1,079 points.