Zain developments shape KSE's positive performance in September

18/10/2010 00:00 AST

Kuwait Projects Company (KIPCO) Asset Management Company (KAMCO) prepared a report containing research that analyzes the performance of the Kuwait Stock Exchange (KSE) during September 2010 in addition to assessing the latest key economic and market developments and their effect on the performance of the stock market.

Positive developments surrounding Zain Telecommunication Network Company and its effect on boosting liquidity in the stock market coupled with Kuwait Projects Company. Holding completion of its 39.2 percent stake sale in Gulf Investment Corporation (GIC) and Burgan Bank's successful issuance of its first international subordinated bond worth 400 million US dollars, which was 3.5 times oversubscribed at close, shaped the positive performance of the market during the month. Also, National Bank of Kuwait (NBK) witnessed its share price rally 8.7 percent to 1.5 Kuwaiti dinars over stock accumulation preceding the start of the subscription period of its 10 percent capital increase and over speculations that the bank would record healthy profits by being the advisor for the proposed deal between Zain and Etisalat.

Led by gains recorded on the heavyweight Services sector which witnessed its market cap surge 10 percent, the KSE Weighted and KAMCO TRW Indices continued its previous month positive trend to gain 6.92 percent and 5.05 percent, respectively and end as the third best performing market amongst its peers in the Gulf Cooperation Council (GCC) region during September. During the month, Zain witnessed its share price surge 13.3 percent to KD 1.360 mainly on the back of Emirates Telecommunication Corporation Etisalat preliminary conditional offer to buy 46 percent stake in Zain. Another market heavyweight, Agility, witnessed its share price rally 19.5 percent to 520 Kuwaiti fils over a positive report by a US Judge that favored the logistics firm over alleged fraud charges and its announcement that the US Defense Logistics Agency has extended a warehousing and distribution contract worth $25 million by six months.

The Banking sector continued its previous month positive trend and witnessed its market cap gain 5.3 percent mainly over the Government's decision to finance part of its KD 30 billion development plan through local banks coupled with positive ratings by international agencies and expectations of healthy third quarter (Q3) -10 profits. Also, mainly on the back of Etisalat's offer, gains recorded in all of Al-Kharafi Group's related listed equities too shaped the market performance during the month. Gains reported during the month pushed the KSE Weighted Index and KAMCO TRW Index year-to-date gains to jump to 20.8 percent and 14.4 percent, thereby ending as the best performing market relative to its peers in the GCC region.

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Al Watan