Kuwait Stocks Tumble Most Since 2009 on Politics; Dubai Declines
Kuwaiti stocks fell the most since 2009 after the government amended the electoral system, prompting calls by the opposition for more protests and a boycott of the elections. Dubai’s index declined.
Construction company Combined Group Contracting Co. (CGC) decreased 4.4 percent. National Mobile Telecommunications Co. (NMTC), the company known as Wataniya, fell the most since June. Kuwait’s Stock Exchange Price Index (KWSEIDX) tumbled 3.1 percent, the most since July 2009, to 5,729.38 at the close in Kuwait City. Dubai’s benchmark lost the most in a week.
Kuwait’s cabinet yesterday issued draft decrees setting Dec. 1 as election day and amending the voting system by reducing the number of candidates each voter can elect to one from four. Opposition groups have called for a mass protest tonight against the amendments. The opposition and a number of former lawmakers said they would boycott the parliamentary elections, Kuwait’s second in less than a year.
“In the past two years, the Kuwaiti market has relied mainly on small players, they run away the quickest as soon as there’s some political instability and that’s what happened today,” said Fouad Darwish, head of brokerage at Kuwait-based Global Investment House KSCC by phone. “They won’t take any additional risks.”
Four people have been detained since Oct. 16, when a demonstration by the opposition turned violent and protesters clashed with security forces. Thousands of people had assembled outside parliament in Kuwait City to protest what the opposition said was an attempt by the government to amend the election law to weaken their chances at the polls.
About 843 million shares were traded in Kuwait today, compared with a 12-month daily average of about 523 million. The benchmark’s 14-day relative index slumped from 44 on Oct. 18 to 25 today. A reading below 30 indicates to some investors that a security is poised to gain. Bader Al-Saad, the head of the Kuwait Investment Authority, said in remarks to al-Arabiya that share prices are now at “investment levels.”
Combined Group declined for the first time since Oct. 16 to 1,300 fils. Wataniya dropped 2.5 percent, the most since June 3, to 2,360 fils.
Dubai’s measure lost 0.3 percent to 1,649.69 after oil declined and amid investor concern companies in the emirate may report lower third-quarter results. Builder Arabtec Holding Co. (ARTC), which has the fourth-heaviest weighting on Dubai’s gauge, may post a 58 percent drop in profit for the three months ended Sept. 30, according to the mean estimate of five analysts compiled by Bloomberg. The shares lost 1.2 percent.
“Investors are waiting on more clarity for third-quarter results and 1,650 is a level of strong resistance,” said Nabil Rantisi, managing director of brokerage at Abu Dhabi-based Menacorp. A decline in international markets also pushed stocks lower, he said.
Crude oil for November delivery tumbled 2.2 percent, the most in more than two weeks, to $90.05 a barrel on Oct. 19 in New York, as Microsoft Corp. (MSFT) and General Electric Co. (GE) missed quarterly sales forecasts, raising concern that slowing economic growth will reduce oil demand. Kuwait, Saudi Arabia and four other members in the Gulf Cooperation Council supply about a fifth of the world’s oil. The Standard and Poor’s 500 Index fell 1.7 percent, the most since June, to 1,433.19 at the end of last week.
The Tadawul All Share Index fell 0.4 percent. Oman’s MSM30 Index (MSM30) and Qatar’s QE Index (DSM) slipped less than 0.1 percent, while Abu Dhabi’s ADX General Index (ADSMI) was little changed. Bahrain’s BB All Share Index (BHSEASI) declined 0.4 percent. In North Africa, the EGX 30 Index (EGX30) lost 1.5 percent, the most since Oct. 8.
Israel’s TA-25 Index (TA-25) declined 1.5 percent to 1,199.19, the lowest close since Sept. 27. The yield on the 5.5 percent benchmark Mimshal Shiklit government bonds due January 2022 fell four basis points, or 0.04 percentage point, to 4.07 percent.
To contact the reporter on this story: Zahra Hankir in Dubai at email@example.com
To contact the editor responsible for this story: Claudia Maedler at firstname.lastname@example.org