(MENAFN - Arab Times) Kuwait's main index closed up 2.7 percent Wednesday following the country's move to overhaul monetary policy tools to boost liquidity after last week's government launch of a bailout fund for investment firms.
With surging investor confidence, the benchmark added 228.4 points to close 8,811.7 points. Kuwaiti shares, down more than 30 percent this year, have revived after a spate of declines when investors took the central bank's move of asking sovereign wealth of funds to invest in stocks as a cue the state would keep taking an active role at stabilizing the market.
Banking stocks paced the climb with Commercial Bank of Kuwait up 6.67 percent and United Gulf Bank gaining 4.76 percent. Most blue chips gained. National Bank of Kuwait and Kuwait Finance House hit the day's circuit breaker of 100 fils each. NBK was up 8.7 percent, while KFH was up 7.3 percent. KIPCO Asset Management Company (KAMCO) was down 20 fils, 3.6 percent, while Global Investment Hose was up 3.5 percent. Noor Financial Investment Company climbed 0.8 percent. National Real Estate Company gained 4.5 percent.
Logistics provider, Public Warehousing Company (Agility) went up 9.2 percent. Mobile Telecommunications Company (Zain) was up 8.1 percent, while competitor Wataniya ended trading hitting the day's ceiling of 100 fils, gaining 6.8 percent. Jazeera Airways was up 4.8 percent.
Kuwait Food Company (Americana) reached the upper limit of 100 fils, gaining 6.6 percent.
During early trading the rise in stock index was paced by Kuwait Finance House and National Bank of Kuwait. Talking about the government launched monetary tools, head of research at Global Investment House Faisal Hassan said, "The monetary tools that will help in boosting liquidity in the system and news of the Cabinet's approval of a fund to invest in the stock market is improving investor sentiments.
"In the last few days, the market was down a lot, so institutional investors are now looking for good bargain hunting stocks, which are propping up the market." The benchmark has lost 44.4 percent since hitting an all-time high of 15,667 points in June. Last week, investors, upset over losses, won a court order forcing the closure of the stock market for a little over one session. In a statement issued by Arunesh Madan, Vice-President of Treasury at Global Investment House, said, "the fear of liquidity is no longer there in the market. This means the central bank will provide enough liquidity to banks, so the business of lending which banks usually do on a day-to-day basis will continue."
While, across the Gulf, policymakers are struggling to shore up confidence as investors fear economies in the world's top oil-exporting region will suffer after oil prices tumbled by more than half in four months, in Kuwait analysts said the central bank deliberately set the new rates well below levels on the interbank market to help channel funds into the market, driving down rates.
The central bank set the overnight repo rate at 1 percent, the one-week rate at 2 percent and a one-month rate at 3 percent. The one-month Kuwait interbank offered rate was 3.1 percent on Wednesday.
A total of 464.5 million shares were traded for KD 89.6 million. The increase in total volume was 18.8 percent compared to Tuesday, while value was down 16.1 percent. The investment sector sold the most number of shares pushing 214.9 million, which accounted for 41.4 percent of the total market volume. The sector earned KD 30.7 million from the transaction. Ayan Leasing and Investment Company gained 10 fils to close 186 fils, while Global Investment House took in 15 fils to end 440 fils.
KAMCO lost 20 fils to close 530 fils. Al Safat Investment Company added 10 fils, taking its closing value to 154 fils. Global Investment House said it still considers buying stake in the UAE Umm Al Quwain Bank. In another development, Global won an Islamic finance license in Malaysia. In a study conducted by the company, it found that the profitability of the cement industry in the Gulf region has decreased by 15 percent.
The realtors were the day's second best gainers behind the banking sector recording a sectoral rise of 3.4 percent. The sector sold 88.11 million shares for KD 12.8 million. The increase in volume was 27.7 percent, while the increase in value was 6.1 percent. National Real Estate Company took in 10 fils to close 232 fils.
Tamdeen Real Estate Company was up 15 fils after closing at 236 fils Tuesday. Mabanee Company gained 50 fils, 8.4 percent up, to close 640 fils, while Injazzat Real Estate Company climbed 9.6 percent to end 285 fils. The banking sector was up 5.8 percent. The services sector was up 1.6 percent, while the investment sector climbed 2.8 percent. The insurance sector recorded an increase of 1.4 percent. The services sector saw a hike of 1.6 percent, while food sector closed 3.7 percent up and non-Kuwaitis closed 2.4 percent up.
Mazaya Holding Company took in 20 fils to close 400 fils. In the industrial sector Gulf Cables and Electrical Industries Company closed gaining 100 fils at KD 1.300. Kuwait Cement Company took in 50 fils to close 650 fils.
Among individual stocks, Aayan Real Estate Company gained the most of 10 percent, followed by Kuwait Syrian Holding Company at 9.62 percent, leveled by Injazzat Real Estate Company. Mubarrad Transport Company gained 9.4 percent, while Public Warehousing Company climbed 9.2 percent. Among the heavy losers, International Leasing and Investment Company slipped 8 percent, while National Petroleum Services Company fell 7.1 percent. Al Madina for Finance and Investment Company fell 6.5 percent.
Al Abraj Holding Company fell 5.7 percent and Ekktitab Holding Company was down 5.5 percent. The best seller of the day was Al Safwa Group Company. It sold 47.5 million shares. International Leasing and Investment Company sold 42.3 million shares, while Ekttitab Holding Company sold 41.8 million. International Investment Group sold 24.5 million, followed by Al Madina for Finance and Investment Group that sold 23.9 million shares.
Four scrips touched the highest permitted limit of 100 fils on Wednesday. They were National Bank of Kuwait, Kuwait Finance House, Gulf Cables and Electrical Industries Company, Wataniya Telecom Company and Kuwait Food Company.