JEDDAH, 5 January 2006 — For the first time in seven months, the Kuwait stock market lost ground with the Global General Index, falling back by 4.16 percent for December following a bull run from June to November.
According to a report by the Kuwait-based Global Investment House (Global), investors were trying to take advantage of the favorable conditions prevailing in the market to book profits at the end of year. However, on a yearly basis, the Kuwaiti market has been exceptional in terms of both growth and trading activity. Overall, the market recorded phenomenal growth of 67.58 percent in 2005, outperforming 11.9 percent in the previous year. The market capitalization of the stock exchange reached 41.49 billion Kuwaiti dinars, with five new companies added in the month. Kuwait Stock Exchange (KSE) price index closed in December at 11,445.1 points, recording a decline of 3.57 percent over November.
During the year, KSE allowed the listing and trading of 33 new companies, 5 of which were floated in December. Further, the total number of listings in 2005 surpassed the 2004 record of 18 companies. The volume of shares traded in December declined by 37.78 percent amounting to 3.54 billion shares. The aggregate value of shares traded in December declined by 36.83 percent aggregating to KD 2.15 billion over the last month. For the second time in a row, Kuwait Projects Company (KIPCO) was the leader in terms of both volume and value of shares traded during the month, followed by United Fisheries of Kuwait and Gulfinvest International.
According to reports, KIPCO along with other institutional investors such as Hamad Al-Wazzan Group, Al-Hassawi Group and Fouad Al-Ghanem Group will form a new airline company under the name “National Airline Company” with a capital of KD 50 million. As a result of these positive developments, the KIPCO stock appreciated by 17.9 percent to end the month at 560 fils.
The “Global” Banking Index dropped by 6.26 percent in December to 319.6 points. However, the Banking Index registered hefty yearly gains of 59.93 percent during the year 2005. Global Industrial Index was top loser during the month with a drop of 10.84 percent recorded for the month. According to news, National Industries Group (NIG) along with a consortium of Kuwaiti companies acquired a $150 million stake or 29.2 percent in Pakistan’s Karachi Electric Supply Corporation (KESC). Despite the positive news, the company was among the top decliners, as it reported a 19.8 percent fall in December.
Investment sector index, which registered handsome yearly gains of more than 100 percent in 2005, saw a monthly decline of 2.18 percent in December. The Investment Dar (TID) stock gained some momentum after dropping from the start of the month, followed by the news that the company will launch two new companies in 2006. TID also acquired 22 percent of Gulf Craft Inc. of UAE for 62 million dirhams ($16.9 million). Even these positive announcements could not break the bearish sentiments prevailing in the market and as a result, the stock price declined by 5.3 percent to 1.780 dinars.
KIPCO Asset Management (KAMCO) hogged the limelight in December by announcing the launch of two private placements during the next two months. KAMCO also announced the formation of a new consulting company, called “The Advantage Consulting Company”. KAMCO will own 60 percent, 20 percent would be owned by Al-Zumorud asset management and 20 percent by Al-Hashem. As a result, the stock price rose by 6.3 percent to end the month at 840 fils. The market breadth was clearly favoring decliners with 105 stocks declining and 41 stocks advancing, while 12 stocks remained unchanged. Out of the 41 advancers during the month, 16 stocks witnessed double digit growth, led by Kazma Holding Company (+66.1 percent), Burgan Company for Well Drilling (+33.3 percent), United Fisheries of Kuwait (+22.8 percent) and Iraq Holding Company (+21.49 percent). Out of the four top advancers in the month, three were newly listed companies, signifying strong buying interest in mainly listed stocks from the investors. On the flip side, the major decliners included National Cleaning Company (-27.8 percent), Al-Mal Investment Company (-23.3 percent), Al Madar Finance and Investment Company (-21.6 percent) and Humansoft Holding Company(-17.7 percent).
The market added five new companies in December, with the Burgan Company for Well Drilling getting listed under the service sector, Tameer Real Estate Investment Company under the real estate sector and Kazma Holding Company, Iraq Holding Company and Sokuok Holding Company under the investment sector. The total number of listed companies was 158 at the end of 2005.