By: Mohamed Farouk
Mubasher: Boursa Kuwait indices closed in the red zone on Tuesday, recording their biggest drop since the start of 2017 amid growing fears and political tensions in the region.
The price index retreated 2.79% or 176 points to close the mid-week session at 6,143.01 points, its lowest level since mid-January.
The weighted index dropped 3.8% to 387 points, its lowest level since 8 January, while the Kuwait 15 index slid 4.7% to 875.6 points, its lowest level this year.
Commenting on Boursa Kuwait’s performance on Tuesday, head of investment research at KAMCO said that the Kuwaiti market was heavily impacted by the geopolitical tensions in the region, particularly the wave of arrests carried out by the Saudi government, which resulted in random selling and profit-taking on blue chips.
Despite companies’ positive third quarter financial results, the trading scene appears ‘fragile’, according to Raed Diab, who added that the bourse was likely to see further declines as investors maintain their distance from risk at the moment and hold on to their money until new positive catalysts emerge and the geopolitical situation calms.
From a technical perspective, Diab told Mubasher that the sharp drop has pushed Boursa Kuwait’s benchmark index below the 6,535 level, while major psychological support will be seen at 6,000 points.
On Tuesday, the benchmark index fell to 6,027 points, but was able to erase some of its losses and close at 6,143.01 points.
It is unlikely that Boursa Kuwait will see selective buying on the short-term or a strong rebound, the analyst added.
On Tuesday, 10 sectors ended in the red, led by insurance with 4.6%, followed by financial services with 4.4% after its stock Kuwait Syrian Holding plummeted 17.9%.
The banking sector fell 4% after 10 of its stocks closed down, led by Kuwait International Bank (KIB), Kuwait Finance House (KFH), and Burgan Bank, which retreated 7.41%, 6.75%, and 5.5%, respectively.
Gulf Insurance’s stock led Boursa Kuwait’s fallers on Tuesday, nose-diving by 20%, whereas Tahssilat’s stock led gainers, surging 19%.
Turnover grew 35.4% to KWD 38.51 million on Tuesday from KWD 28.44 million on Monday, while traded volume increased 31.2% to 175.31 million shares versus 133.63 million in the previous session.
KFH was the value leader on Boursa Kuwait with KEF 7.77 million, while Alimtiaz’s stock, up 0.65%, recorded the highest traded volume of 23.09 million shares.
Translated by: Nada Adel Sobhi
