Atmosphere of optimism at the Stock Exchange

<b><font size="4"> as Gulf Bank resumes trade</b></font>

14/04/2009 00:00 AST

Investors at the Kuwait Stock Exchange on Monday expressed optimism regarding the economic situation of the country saying that due to the political calm the country is currently experiencing and the stimulus law the government has approved, stocks appear to be steadily climbing.

"The situation here is to an extent moving towards improvement but it is still unstable and could drop any minute," commented one trader to Al Watan Daily at the Stock Exchange, "The market currently is down by 19 points, however, there are positive aspects such as the decrease of interest rates and the stimulus law."

The trader, who declined to be identified, added that these laws will take time to be implemented efficiently and in two or three months the situation may become even better; "Most of the investors and shareholders are optimistic," he said, "The calm that the country is experiencing due to parliament being dissolved has improved the market. Before there was tension between everyone, the parliament and the government, so nothing was improving. However, now the government took matters into their own hands and passed key laws allowing the market to acquire an atmosphere of anticipation, raising trade."

He furthermore suggested that the concerned departments should create a takaful fund to help young investors that complies with the Islamic system. He advised that only a maximum amount of 10,000 Kuwaiti dinars should be loaned out to help the young investors trade in the market due to the severe loss they experienced in the past; "If the fund is supported by a good number of organizations, such as the Stock Exchange, the Ministry of Finance and private companies in compliance with the Islamic system, then the investors will be able to pay back the loans on time," he explained.

Another trader, who as well declined to be named, was in agreement saying there is somewhat a sense of stability because of the stimulus laws; "The stocks that were under 100 fils have now a potential for rising above that," he observed, "However, the government has to put pressure on the companies that are banned so that they announce their annual results soon because a lot of people are being harmed because of that."

The trader further added that it is unclear what will happen in the future after parliament gets elected again in terms of trade in the Stock Exchange; "In Kuwait politics and economy go hand in hand and it all depends on the relationship the parliament will have with the government," he said.

Regarding Gulf Bank resuming its trade on Tuesday after six months of regaining its strength from the massive loss it has experienced last year, the trader thinks it will be a strong contender among the other banks due to the stimulus package and increase in capital it had acquired.

On his part, one trader was not so optimistic on the economic situation. He said that the companies that are currently banned have caused a lot of havoc for their shareholders than currently perceived and urged them to start announcing their results soon so that the investors can be clear on how every situation is and make good decisions; "Hopefully, because of the new stimulus laws that have passed that may help those companies out, I think they will start announcing their results soon."

Al Watan