Kuwait’s benchmark stock index rose to the highest in more than a month on bets that the gauge’s decline to an eight-year low earlier this month was overdone.
Agility (AGLTY), the Kuwaiti storage and logistic company, and Islamic lender Boubyan Bank KSC (BOUBYAN) rose the most in two weeks. National Mobile Telecommunications Co. (NMTC), also known as Wataniya Telecom, closed at the highest in four and a half years after parent Qatar Telecom (QTEL) QSC made a cash offer for all of the company it didn’t already own. The Kuwait Stock Exchange index rose 0.9 percent to 5,839.45, its highest close since July 22. The gauge fell to its lowest in eight years on Aug. 12. The Bloomberg GCC 200 Index was down less than one percent.
Investors held back during Islam’s holy month of Ramadan and “now feel more comfortable buying shares that would benefit if a rebound happens,” Carlos Ribeiro, Gulf Bank KSC (GBK)’s chief financial officer said by telephone. Investors are picking “particular companies in very particular industries” that will be part of a rally after the dip in the index, he said.
Repeated cabinet resignations and political disputes have slowed Kuwait’s development plans. Prime Minister Sheikh Jaber al-Mubarak Al-Sabah formed a cabinet on July 19, its 10th since February 2006. Parliament failed to convene July 31 as most lawmakers boycotted the session.
Agility rose 2.4 percent to 420 fils. The company said yesterday it won a 27-month contract from the U.K. Ministry of Defence that will yield revenue of $15 million.
Boubyan Bank gained 1.7 percent to 610 fils, while Wataniya Telecom rose 0.8 percent to 2,560 fils.
Qatar Telecom, majority owned by the gas-rich country’s government, on Aug. 16 offered to buy all of Wataniya shares that it doesn’t already own at 2,600 fils each.
Kuwait’s stocks were hurt in August by the political turmoil and on fears some companies will be suspended from trading after failing to meet an Aug. 16 deadline to disclose quarterly results, according to Fouad Darwish, head of brokerage at Kuwait-based Global Investment House KSCC.
“People were scared and hesitant to put new money into the market but 81 companies disclosed results” in the last week and only one company was suspended, Darwish said. “Ever since that deadline, we’ve been having upwards closing, and the last seven sessions the index has been regaining,” he said.
Asian stocks fell today, with the regional benchmark index heading for a three-week low, after Japan downgraded its assessment of the world’s third-biggest economy and as investors await policy direction from the Federal Reserve. European stocks also declined and U.S. index futures were little changed.
Elsewhere in the Gulf region, Dubai’s DFM General Index fell 0.9 percent and Abu Dhabi’s ADX General Index dropped 0.6 percent. Oman’s MSM30 Index dropped 0.5 percent while Bahrain’s measure rose 0.1 percent. Qatar’s QE Index lost 0.2 percent and Saudi Arabia’s Tadawul All Share Index was little changed.
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