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Kuwait sinks 3.1 pct before protest; Gulf mostly down - ASHARQ AL-AWSAT English Archive
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DUBAI, (Reuters) – Kuwait’s bourse tumbled 3.1 percent on Sunday, its biggest daily drop since July 2009, ahead of a demonstration called by opposition leaders to protest against planned changes to the electoral law.

Market participants said they believed state-linked funds were buying blue chips in an effort to support the market, as they have done during some periods of weakness in the past.

But selling pressure was very heavy in small-capital stocks favoured by retail traders, who cut their exposure because they feared a confrontation between police and protesters on Sunday evening.

“The government was trying to stabilise the market today through the National Portfolio Fund, but the sell-flow was heavy,” said a Kuwait-based trader who asked not to be identified. “There’s only so much selling they can absorb.”

Kuwaiti opposition groups accuse the government of mounting a “a coup against the constitution”. Sunday’s protest was to start from a number of locations in Kuwait City after Muslim evening prayers and gather outside government offices.

State news agency KUNA reported Interior Minister Sheikh Ahmad al-Hamoud al-Sabah had instructed security forces to “decisively confront” any attempt to hold protests outside designated areas. The ministry also said special forces were on alert to deal with any unrest.

Kuwait has avoided the uprisings that have forced four Arab heads of state out of office since last year, thanks partly to its generous welfare system, but the protests may indicate parliamentary elections scheduled for Dec. 1 will not end a political deadlock between the cabinet and parliament that is blocking economic policy-making and development.

The benchmark stock index slumped to 5,729 points, near an eight-year low of 5,661 points hit in August. Its last daily fall of this magnitude occurred when the global financial crisis was affecting the market.

Blue chips recovered in late trade with the three largest stocks, National Bank of Kuwait, Zain and Kuwait Finance House, ending flat.

But among smaller caps, Gulf Finance House and National Ranges dropped 6.9 and 11.4 percent respectively, while Abyaar Real Estate lost 5.8 percent. Trading in these three stocks accounted for more than a third of overall volume on the bourse.

“Kuwait’s index is approaching the strong support zone of 5,660,” said Mohabeldeen Agena, head of technical analysis at Cairo’s Beltone Financial.

“We are expecting the index to move flat between 5,650 and 5,800 before rising again. Any dip below 5,600 means that we are going to see lower lows.”


In Saudi Arabia, the bourse declined for a second session, down 0.4 percent from last Wednesday’s 10-day high as investors cut risk with the approach of a long holiday.

Banks were lower with the sector’s index down 0.4 percent. Heavyweight Al Rajhi Bank shed 0.4 percent, Arab National Bank fell 1.2 percent and Bank Albilad lost 1.8 percent.

Saudi Telecom Co (STC) weighed on the market with a 3.5 percent drop after missing third-quarter profit estimates.

“We believe higher operating expenses, particularly outside of Saudi, and a poor performance on the non-operating line led to the net income miss,” NBC Capital said in a note.

Bucking the trend, Refining & Petrochemical Co (PetroRabigh) soars its daily 10 percent limit after announcing it has swung to a quarterly profit. Shares close at their highest since Sept. 19.

The firm made a net profit of 409.3 million riyals ($109 million) in the third quarter compared to a 280 million riyal loss in the year-ago period, because of improved gross margins on refined products and higher sales, PetroRabigh said.

Saudi Arabia’s market will close on Oct. 25 for Eid al Adha holidays and resume trade on Nov. 3.

In the UAE, Dubai’s benchmark eased away from Thursday’s 25-week closing high, ending 0.3 percent lower.

Investors booked recent gains in Emaar Properties, which slipped 0.8 percent. Emirates NBD shed 0.7 percent and Dubai Islamic Bank declined 1.0 percent.

Elsewhere, Abu Dhabi and Qatar’s measures ended essentially flat, while Oman’s market eased 0.1 percent.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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