By: Mohamed Farouk
Mubasher: Liquidity commenced 2017 at high levels, starting in the Saudi Stock Exchange (Tadawul), then Boursa Kuwait, analyst Ibrahim Al Filkawy commented, noting that the high turnover was seen in the Qatari and Omani bourses in February, but dropped suddenly by the end of the first quarter of 2017.
Moreover, the Gulf dispute, which took place sometime in Q2-17 significantly reduced liquidity in Gulf bourses, including Kuwait, as investors feared the uncertainty surrounding the rift and its prospective impact.
In June 2017, a political dispute emerged between Qatar and several Arab and Gulf states led by Saudi Arabia, Egypt, Bahrain, and the UAE. These countries cut diplomatic and transport ties with Qatar.
The analyst forecast that market turnover would rise in 2018, albeit slightly as investors remain wary of the local and regional political events, especially after the most recent summit in Kuwait did not result in any major updates in terms of the rift.
A reconciliation between Gulf member states would definitely improve performance across various bourses, Al Filkawy highlighted.
One of the things Boursa Kuwait needs in 2018 is better supervision from regulatory bodies, Al Filkawy told Mubasher, indicating that regulators do not control what happens to the indices, where there is significant speculation and stock manipulation.
Technical view
From a technical perspective, Al Filkawy forecast that Boursa Kuwait’s benchmark price index will move between support at 6,000 and resistance at 6,700 points in Q1-18.
Should the price index succeed in surpassing resistance at 6,700, it will gain momentum and rise towards 7,400 points, the analyst told Mubasher. However, a drop below 6,000 points would push the index lower by 500 points to 5,500 and 5,250.
FTSE effects
Meanwhile, Raed Diab, head of investment research at KAMCO, forecast that companies’ financial results will give a major boost to the Kuwaiti market, added to the upcoming bourse division, which will give a better reading of the stocks and will stop manipulation.
Boursa Kuwait will also see some cash inflows towards September, ahead of its listing on the FTSE Emerging Markets Index, Diab told Mubasher, adding that a stability in oil prices will positively impact the Kuwaiti market.
Also in the first quarter, the Kuwaiti bourse will see its first listing of the year with Shamal Azzour Al-Oula, which will likely attract investors, the analyst noted.
2018 leap
Boursa Kuwait’s benchmark index succeeded in achieving a leap at the start of 2017, but later shed its gains on the back of the political rift despite the strong profits achieved by many Kuwait-listed companies, commented market analyst Mohamed Al Anzi.
Other factors such as the increase in oil prices have not helped the Kuwaiti bourse’s performance towards the end of 2017, the analyst told Mubasher.
He forecast that Boursa Kuwait will see a similar leap in January 2018 and pass previous peaks on the back of companies’ annual results, which he expects will be positive.
Translated by: Nada Adel Sobhi
