KUWAIT, 10 April 2005 — The Kuwaiti stock index closed at a new record high at the start of the trading week yesterday as strong first quarter earnings from heavyweight National Bank of Kuwait boosted hopes for a stellar reporting season.
The index tracking the second-biggest Arab market gained 71.60 points, or 0.88 percent, at 8,186.10, putting the gauge of 130 stocks up nearly 28 percent for 2005. The index surged 3 percent in the previous week ended Wednesday April 6.
According to market watcher Bayan Investments, total profits from 129 listed firms rose 15.6 percent to 1.7 billion Kuwaiti dinars ($5.8 billion) in 2004.
But investors now look for a strong first quarter, which is what top bank National Bank of Kuwait (NBK) delivered on Friday as it kick-started what many believe will be another strong financial reporting season in the oil-rich country.
“People are looking for rising profits in the first quarter of 2005 and sure enough NBK was the first of the companies to report very strong profits,” Naser Al-Nafisi, general manager of Al-Joman Center for Economic Consultancy, told Reuters.
NBK surged 60 fils, or 4.41 percent, to 1.420 dinars. The Arab world’s fourth-largest bank said first quarter net rose 39 percent to a record 44.3 million dinars ($152 million). NBK also said it managed a 20-million-dinar bond for Al-Mal Kuwaiti Company. Al-Mal rose 2 fils at 228 fils. Yesterday’s runaway winner was The International Investor, up 7.41 percent at 290 fils, after it said it realized a 4.46-million-dinar profit, to be accounted for in the first quarter, in fees from setting up a credit firm.
Nafisi said Public Warehousing Co. (PWC) and affiliates such as Sultan Center Food boosted the market after news PWC’s board meets Saturday to discuss the logistics firm’s financing plan, which he said could include increasing its capital. PWC shares rose 4.7 percent at 5.500 dinars and Sultan Center added 4.5 percent at 2.320 dinars.
Analysts also attribute the Kuwaiti bourse’s strong performance to high oil prices as the price of tiny Kuwait’s crude last week touched a $49 per barrel record.
The country which controls 10 percent of world oil reserves may post a budget surplus of up to $25 billion in 2005 if high oil prices held until year end, Al-Rai Al-Aam daily reported.
Some 41 stocks gained while 27 lost. Volume eased to 276 million stocks from 288 million shares on Wednesday.
The market index surged 101 percent and 34 percent in 2003 and 2004, respectively. The capitalization of Kuwait’s bourse, second to Saudi Arabia’s, stood at 26.7 billion dinars ($91.3 billion) at the end of last week, National Investments said.
