JEDDAH/DUBAI: Kuwaiti blue chips extended losses on Monday, bucking a regional rising trend, with analysts blaming political tensions, Agility’s US court indictment and Zain’s takeover saga.
Most other Gulf Arab markets made minor gains, although Dubai’s index claimed its largest one-day rise since Nov. 4, with dollar weakness and a positive start to the European trading week lifting sentiment.
“Volatility in developed markets is quite low ... generally markets have been moving up and down by only a few points and that is being mirrored in the Gulf,” says Keith Edwards, head of asset management at Doha-based investment company The First Investor. “Trading ranges are becoming tighter and tighter.”
Agility fell 5.6 percent, dropping 21 percent since Nov. 16 when a US court indicted the logistics firm for allegedly overcharging the US military.
“There’s a lack of transparency and the company’s management hasn’t said much, so investors are trying to predict what impact the court case might have on earnings,” said a Kuwait-based analyst who asked not to be named.
Zain dropped 1 percent as investors grow increasingly wary about its protracted takeover.
“There are rumors circulating about Zain and investors are getting fed up and losing interest,” says the Kuwait trader. “If the deal does not go through, bank stocks could also be hit because a lot of investors took out loans to buy Zain shares.”
Kuwait Finance House and National Bank of Kuwait fell 1.9 and 3.6 percent respectively.
Kuwait’s index fell 0.4 percent to 6,796 points, taking its losses to 13 percent this year. First Investor’s Edwards said Kuwait’s ongoing political turmoil was in part to blame for this decline.
“The government has been in paralysis for most of the year, so little has been done to support the financial system and one has to wonder how long this can go on for,” he said. “The situation could change overnight and if Kuwait does take action, it could spark a rally.”
In Saudi Arabia, the Tadawul All-Share index (TASI) rose 0.11 percent to 6,291.27 points.
Only three sectors — the Retail, Cement and Telecom & IT — closed negatively with losses of 0.05 percent, 0.87 percent and 0.29 percent respectively. Positive sector movement ranged from 0.04 percent in the Media & Publishing sector to 0.56 percent in the Building & Construction sector, across 12 gaining sectors. Overall market breadth was positive, with 73 advancers and 35 decliners giving an AD ratio of 2.09, the Jeddah-based Financial Transaction House (FTH) said in its daily market commentary on Monday.
Dubai’s index climbed 1.8 percent to 2,112 points, with Emaar Properties rising 2.7 percent and Union Properties surging 4.4 percent to recoup some recent losses. The Abu Dhabi index rose 1.5 percent to 2,908 points.
Qatar’s index ended higher for the fifth session in six, with Industries Qatar adding 1.5 percent to 7,256 points.
Oman’s index ended higher for the first session in three, although foreign funds dumped blue chips. Bank Muscat and Oman Telecommunications Co. (Omantel) dropped 1.6 percent and 0.2 percent respectively. The index rose 0.2 percent to 6,396 points.
— With input from agencies
