JEDDAH, 2 April 2006 — The selling spree in the Kuwaiti market continued during the month of March. Even the excellent 2005 corporate earnings numbers and the prevailing high oil prices could not save the market tumbling for the second consecutive month as investors engaged in heavy profit-taking, according to a report by the Kuwait-based Global Investment House (Global). The benchmark "Global" General Index was down by 11.73 percent to end the month at 283.02 points, the biggest loss witnessed in the last 15 months. All the "Global" sector indices were in the negative territory at the end of the month. Overall, the index reported YTD loss of 11.62 percent at the end of March-2006. The market capitalization of the stock exchange reached KD37.68 billion, down 10.86 percent compared to the previous month. Kuwait Stock Exchange price index dropped below the psychological 10,000-point mark for the first time in last six months and ended at 9,896.70 points in March, down 14.26 percent.
The volume and value of shares traded on the KSE were higher than the previous months as the market witnessed huge selling pressures. The volume of shares traded increased by 10.84 percent as compared to the previous month, aggregating to 3.18 billion shares traded on the bourse. The value of shares traded also witnessed an increase of 6.11 percent over the previous month amounting to KD1.66 billion in March.
The market breadth was clearly in favor of decliners, with 126 decliners and 19 stocks reporting a monthly increase, while 16 stocks remained unchanged. However, despite the weakness in the market, 5 stocks managed to register more than 10 percent monthly gains. The biggest gainer during the month was Al-Madar Finance and Investment Company (31.3 percent), followed by Transport and Warehousing Group (21.0 percent), Injazzat Real Estate Development (11.5 percent) and Credit rating and collection company (10.5 percent). The biggest losers during the month were International Investment Group (-49 percent), followed by Grand Real Estate Co. (-46.2 percent) and International Investments Projects Co. (-42.7 percent).
Stocks in the investment sector also took a cue from the market as 36 stocks reported monthly decline out of the 39 listed companies. The Investment Dar (TID) hogged the limelight in March. The company announced its intention to establish a new Islamic investment company in Saudi Arabia with a capital of SR600 million (160 million). TID will also establish Syria's first Islamic bank in cooperation with Kuwaiti, Saudi and Syrian investors during the year 2006. TID's earnings improved by 198.69 percent to KD80.49 million in 2005 as compared to KD26.95 million reported in 2004.
The banking sector declined by 3.01 percent in March. Although the banks have reported healthy annual earnings growth, stock prices of five out of the eight listed banks declined in March. Kuwait Finance House (-20.8 percent) was the biggest loser during the month, followed by Burgan Bank (-14.5 percent) and Gulf Bank (-13.7 percent).
The market added one new company in March, further improving its depth. Jeeran Holding Company was listed under the service sector, which increased the total number of listed companies to 161. So far, 3 new companies have been added to the market in 2006.