(MENAFN Press) Global Investment House “ Kuwait- The year 2011 was exceptional on all fronts for Kuwait Stock Exchange (KSE) that witnessed a sequence of events. Investors' optimism that 2011 will be a new starting point for the market was swept away as the market succumbed to stronger external factors. The year saw a series of Arab revolutions, known as the Arab Spring, the Greek debt crisis, then the credit downgrade of most Eurozone countries. Events on the local arena were more intense, which led to a significant decline in local market indices. The latest of the local events were the dissolving of the parliament and the calling for early elections on February 02, 2012. As a result, the market weighted Global General Index, ended 2011 down by 19.78 percent as it closed at 179.31 points. In 2011 all the sectoral indices ended the year in red showing the broad “based decline in the market. In terms of 4Q2011 performance, the bearish tone from the previous quarter carried into 4Q2011 sessions but with margin loss.The index declined by 0.62 percent in 4Q2011.
Trading activity in 2011 was much lower compared to a year earlier with investors not showing interest to enter the market. Total 2011 volume shrunk by 48.66 percent compared to 2010, with 38.34bn shares changing hands at a total traded value of KWD6.06bn (USD21.75bn), a 51.62 percent decrease compared to last year.
The investment sector was the most active in terms of volume of shares traded during 2011, with 10.77bn shares changing hands, representing 28.10 percent of the market's total traded volume for 2011. On the other hand, the banking sector was the most active in terms of value of shares traded during 2011, with an aggregate value of KWD2.07bn (USD7.42bn) being traded, representing 34.12 percent of the market's aggregate for 2011.
Company-wise, Abyaar Real Estate Development Company was the most traded stock in the bourse in terms of volume with 2.29bn shares changing hands, accounting for 5.97 percent of the total traded volume in KSE for 2011. However, the stock ended 2011 down by 17.14 percent at KWD0.029. Heavy-weight National Bank of Kuwait (NBK) accounted for 10.11 percent of total value traded on the exchange during 2011 with KWD612.71mn worth of stocks being traded. The scrip recorded 12.50 percent loss in 2011, as it ended at KWD1.120.
All sectoral indices ended the year in the negative territory. Global Investment Index was the biggest loser, shedding 30.39 percent of its value. Housing Finance Company (ISKAN) was the top decliner in the sector, losing 68.42 percent from its share value to close at KWD0.036. Ekttitab Holding Company was another major losers in the sector, shedding 67.23 percent. On December 21, 2011 the AGM & EGM were held and approved the capital reduction from KWD51.70mn to KWD22.86mn.
Kuwait Project Company (Holding) closed down by 22.78 percent during 2011 to close at KWD0.305. lately, the company announced that it has received the Market's Committee approval to issue bonds with a value not exceeding its capital. Al-Imtiaz Investment Company closed down by 37.14 percent during 2011 to close at KWD0.132.
On the positive side, Strategia Investment Company was the prominent gainers in the sector and second biggest gainer in the market as its scrip closed up by 138.60 percent for 2011 to reach KWD0.068. The company swung to a 9M2011 net profit of KWD0.18mn from a net loss of KWD0.28mn a year earlier.
The company announced that it has fully paid its KWD2.5mn loan to a local bank. Furthermore, Strategia Investment Company announced that it has exited part of its investments, realizing a profit of KWD1.08mn to be reflected in the company's financial statements for the fourth quarter ending December 31, 2011.
Global Services Index was down by 29.51 percent for FY2011. Telecom giant, Zain Company shed 31.82 percent of its value and closed at KWD0.900 in 2011. On September 29, 2011 Bahrain Telecommunications Company and Kingdom Holding Company announced that they will not proceed in the acquisition of 25% stake in Mobile Telecommunications Company Saudi Arabia, which follows a period of due diligence and discussions with Zain Group and other stakeholders. Agility witnessed its share value drop by 21.88 percent and closed at KWD0.375. Meanwhile, Kuwait Cable Vision Company was the top loser in sector, shedding 63.83 percent to close the year at KWD0.068.
The banking sector was hit hard with only one bank managing the end the year with gains. Ahli United Bank ended the year adding 29.51 percent to its share price. Global Banking Sector Index lost 11.04 percent in 2011. Kuwait International Bank posted the steepest decline during 2011, shedding 25.0 percent of its value, as it ended 2011 at KWD0.255.
Industrial stocks too were notable losers, as highlighted by a 22.16 percent drop in Global Industrial Index. Kuwait Portland Cement Company was the major loser in this sector, registering a loss of 55.49 percent, followed by Kuwait Metal Pipe Industries & Oil Services Company (-51.85 percent). Only 5 companies registered gains in this sector in 2011. Gulf Glass Manufacturing Company was the biggest gainer in the sector, adding 93.65 percent to close at KWD1.220.
By the end of 2011, market capitalization of Kuwait Stock Exchange (KSE) shrunk by KWD6.9bn (USD 24.8bn) compared to its value by the end of the year 2010. The distribution of market cap amongst the market's eight sectors did not change compared to the end of 2010. Banking sector led in terms of market cap, as it represented 44.24 percent of the total market cap, followed by services sector which accounted for 25.70 percent of the total market cap. As for the biggest 10 large capitalized stocks, 8 companies saw their market cap decline by the end of 2011 compared to their value by the end of the year 2010. While Ahli United Bank and National Mobile Telecommunications Company ended with higher market cap. by increasing 25.7 percent and 2.1 percent respectively.
Meanwhile, Zain's market cap posted the steepest decline amongst the top 10 companies, as its market capitalization retreated by 40.6 percent, followed by Kuwait Finance House (KFH) with a decline of 16.2 percent. Nonetheless, National Bank of Kuwait's market cap was the biggest amongst all KSE listed companies, as it represented 15.12 percent of the aggregate market capitalization of the Kuwaiti bourse.