The Two Trades That Put Kuwait Stocks Back on Top of the World

  • Price index rose to the highest level since November 2014
  • Weighted stock gauge still showed a decline in the day

It was a bleak day for emerging-market equities around the world on Wednesday, including Kuwait’s, until two trades in one tiny stock helped jolt the country’s main index into a rally to tie with Kazakhstan’s KASE as the top performers globally this year.

With a market capitalization of 50.3 million Kuwaiti dinars ($165 million), Eyas for Higher & Technical Education accounts for just one percent of Kuwait Stock Exchange Index’s price weightings, but a 24 percent surge in the stock price was enough to knock the benchmark out of its decline. Eyas invests in tertiary education and training services, according to the website of its parent company, Educational Holding Group.

“It is a stock that is not liquid, but still, it moved the market a lot,” said Samar Santini, who manages the equities institutional trading desk at Global Investment House in Kuwait City. Only two trades in Eyas shares occurred, according to data compiled by Bloomberg.

While the education sector is currently the most attractive industry for equity investors in Kuwait, the move itself didn’t appear to have a catalyst, Santini said. Educational Holding’s marketing and public relations department didn’t reply to an e-mail and phone call seeking comment.

Liquidity in stock trading in the oil-rich country surged earlier this year amid expectations of inflows spurred by its inclusion in MSCI’s emerging market index and implementation of reforms to boost trading in the equities market. Using the index that considers market capitalization in its calculation, Kuwait tracked most other global benchmarks on Wednesday, falling 0.6 percent.

Some other milestones in Wednesday’s index gain: 

  • Kuwait’s SE price index finished at the highest level since November 2014
  • Shares of National Consumer Holding Co. climbed 70 percent to 0.085 dinars, only the third time they registered trades this year
  • Eyas’s shares only registered trades in three previous sessions this year. They slid 7 percent in two days earlier in March after its parent group said one major stakeholder was selling 32.8 percent of the company
  • Trading volume in Eyas has surged this year alongside gains by another education company, Human Soft Holding Company, whose shares are up 15 percent since December, as its second-biggest shareholder indicated a willingness to sell a 20 percent stake
  • Shares of National Bank of Kuwait, the country’s biggest lender, declined 4 percent, exerting the biggest pressure on the weighted index. The stock is still up 12 percent this year

— With assistance by Dana El Baltaji, and Stefania Bianchi

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