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Kuwait sinks to 8-yr low on political upheaval; most Gulf mkts up - ASHARQ AL-AWSAT English Archive
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DUBAI, (Reuters) – Intensifying political turmoil in Kuwait, where police used teargas to disperse protesters a day earlier, triggered another sell-off on the country’s main index on Thursday, dragging it down to its lowest level since August 2004.

Most other Gulf bourses ended higher ahead of the weekend.

Kuwait’s benchmark fell 1.9 percent to 5,658 points, falling below the previous eight-year low hit in August this year.

“The political instability is directly impacting the short-term and long-term outlook for Kuwait,” said Fouad Darwish, head of brokerage services at Global Investment House.

“In the past, we had day traders who were willing to gamble on a quick resolution of the political scene. But unfortunately, the problem is becoming fiercer and the opposition is becoming more vocal.”

Kuwaiti police used teargas and smoke bombs on Wednesday night to disperse thousands of protesters marching on a prison where an opposition leader is being held on charges of insulting the emir, witnesses said.

The Ministry of Interior, in a statement on state news agency KUNA, said security services must intervene to disperse violent protests and arrest rioters.

Retail investor-dominated small-caps were hardest hit. Of the three most traded stocks, Gulf Investment House dropped 4.1 percent, Abyaar Real Estate fell 5.0 percent and Ithmaar Bank shed 5.0 percent.

In the UAE, Dana Gas shares gained 2.4 percent, rising from Wednesday’s six-week low as bargain hunters returned. The stock accounted for more than half of shares changing hands on the Abu Dhabi bourse. After markets closed, the bourse said it would suspend Dana shares pending clarification on its Islamic bond.

Dana said on Thursday it failed to pay the outstanding $920 million on an Islamic bond that matured on Wednesday, as well as a $18.75 million accrued profit payment due on Oct 30, adding it is in ongoing discussions with sukuk holders to amend and extend the terms.

“For some people this would represent distress buying if all bad news is priced in, but if you’re looking for something safe, this isn’t it,” said Amer Khan, fund manager at Shuaa Asset Management. “There could be further bad news and the risk-to-reward ratio right now is a bit muddled.”

Abu Dhabi’s index ticked up 0.04 percent to close at a fresh 15-month high.

Dubai’s heavyweights helped lift the benchmark, by 0.2 percent to 1,623 points, up for a second session in the last six.

Emaar Properties gained 1.4 percent and Emirates NBD climbed 0.7 percent. Dubai Financial Market , the Gulf’s only listed bourse, advanced 2 percent.

“A short-term correction already looks to have started in the Dubai market,” said Bruce Powers, head of research and analysis at Trust Securities.

“The next area of support is around 1,596.50, followed by the more important 1,580.25 support area. A period of profit taking or relatively sideways consolidation in the near-term would be healthy for the longer-term trend.”

Elsewhere, Industries Qatar (IQ) rallied to a four-year high as foreign investors continued buying in the bluechip, helping lift the main benchmark to a six-week high.

Shares in IQ rose 1.7 percent to their highest close since September 2008.

The petrochemicals and metals company posted a 23.7-percent jump in third-quarter net profit last month, beating average analysts’ forecasts.

“IQ was being picked up in advance of the Q3 and they will continue posting strong earnings on volume expansion,” said Shuaa’s Khan.

The index gained 0.7 percent to its highest close since Sept. 19.

Investors are expected to begin the year-end dividend payout play in coming weeks, which should help buoy Doha’s market, Khan added. “There should be chunky dividends, especially from banks. Expect to see additional buying.”

Gainers outnumbered losers 13 to five. Qatar Electricity and water added 0.9 percent and Qatar Navigation (Milaha) climbed 3.1 percent.

In Oman, the market rose to a two-week high, up 0.5 percent to close at 5,689 points, as it resumed trade after a long Eid al Adha holiday.

Omantel gained 0.6 percent, Bank Muscat climbed 1.1 percent and National Bank of Oman advanced 1.5 percent.

“The market is seeing more funds, from foreign investors and regional institutions,” said Kanaga Sundar, Gulf Baader Capital Markets’ head of research.

“People are looking at valuations, growth and yield to capture the medium-term perspective. Infrastructure spending should drive growth in industrial stocks.”

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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