«You need to accelerate the launch of new investment instruments to boost liquidity and attract investors»
The Bayan report said that the country's public investment environment needs urgent economic reforms that contribute to restoring confidence levels to a high level, especially with regard to economic reforms and the government's ability to implement its measures.
The Kuwait Stock Exchange (KSE) continued its negative performance and the three indices continued to decline and, for the second week in a row, closed the red zone, amid rising sales pressure, persistent lows, lack of purchasing power and profit-taking. Focused on the leading stocks and heavy, especially the shares of the first market, which has seen good increases lately.
The weakness and weakness of purchases that characterized the stock market last week clearly led to a drop in liquidity levels in some of the daily sessions of the week, especially the session last Wednesday, which reached liquidity to just 8.9 million dinars , the lowest level in four months approx.
The index closed the week with a decrease of 1.09 percent and closed at 5257.16 points.The index of the main market recorded a weekly loss of 0.49 percent and closed at the end of the week at 4718.42 points , while the general index closed at 5,065.81 A point lower than 0.89 percent.
The continued losses of the stock exchange and the continued weakness of cash flows and lowering to a low level surprised many traders and led the investment community and the economy to wonder why the stock market did not benefit from the promotion to emerging markets and late last month was included in the FTSE Russell, (The first, most important and general) since the promotion until the end of last week, with 0.60 percent, 0.42 percent and 0.54 percent respectively.
It is noteworthy that in previous reports we mentioned that the equity market upgrade to emerging markets can not only support the market, and advised us not only to rely on the promotion of poor liquidity, especially if we know that the liquidity that could potentially go to the stock market as a result of the promotion focuses on Very limited number of shares without others, so the role of promotion in reducing the market to return to its prestigious position will be very limited.
On the one hand, the exchange should accelerate the launch of new investment instruments that stimulate liquidity and contribute to increasing the investor base. In addition to starting practicing the market makers system and encouraging more companies to list their shares in the market.
On the other hand, the country's public investment environment also needs urgent economic reforms that contribute to the return of confidence levels to high levels, in particular on the issue of economic reform and the ability of the government to implement the reform measures, such as by the Oxford Business Group in Emphasize the urgent need for business in Kuwait to rely not only on infrastructure, but also on regulatory frameworks that often need to be reformed.
Therefore, after the Kuwait Stock Exchange was upgraded to emerging markets, it was hoped that the economic environment in which the stock exchange operates would be suitable for investments in general and would help to support private companies and enable them to return to the economic activity. Investors' confidence in the future to build a strong, competitive and highly transparent economy, enabling the stock market to attract more investments and increase cash flow.
Returning to the performance of the stock market last week, the market suffered a loss of approximately 255 million dinars, as the capitalization of the total listed shares at the end of the week increased to around 28.35 billion dinar compared to 28.60 billion in the previous week, a loss of 0.89 percent. Thus, the profit of the stock market since the introduction of the system of dividing the new market to reduce to about 490.50 million dinars by 1.76 percent. (Note: the capitalization of listed companies is calculated on the basis of the weighted average number of outstanding shares according to the latest available financial statements).
The weak performance of the market during the last week is due to the reluctance of some investors to act, especially in anticipation of the results of listed companies for the third quarter of this year, in addition to the activity of the pace of profit taking on the stock market two weeks ago. This coincided with the fall in trade indicators. The total number of shares traded decreased during the week by 11.98% to 333.67 million shares. The total value of the trade decreased by 5.66% to 59.99 million dinars.
The stock market pressures were concentrated on many of the listed equities, led by the leading equities listed on the first market, reflecting the first market index, which was the biggest drop among the three market indices, with a loss of 1.09% the end of the week The past.
On the other hand, during the week, the market was trading for the last time around 147 of the 175 listed shares, while the prices increased 43 shares compared to the decrease of 88 shares, while 44 shares remained unchanged.
The index closed the market at 5.257.16 points at the end of the week, a decrease of 1.09 percent compared to the closing level of the previous week, and the main market index fell by 0.49 percent, after a closing on the level of 4,718.42 points, while the index marketed up to 5,065.81 points, down 0.89 percent.
In terms of trading indicators during the week, the average number of shares traded was 66.73 million shares, 11.98 percent less than the average of 75.81 million shares of the previous week. The average trade value fell by 5.66 percent to nearly 11.10 million dinars to reach 12.72 million dinars in the week before the previous one.
Eight sectors of the Kuwait Stock Exchange recorded a decrease in their indices, while the index of two sectors only increased, while the healthcare and technology sectors remained unchanged. In the area of decliners, the Consumer Goods sector closed at 815.54 points and recorded a loss of 2.10 percent. Followed by the industrial sector in second place with a decrease of 1.59 percent after closing at 967.69 points. While the real estate sector came in third after a weekly drop of 1.49 percent, the week ended at 871.47 points. The worst performing sectors were Consumer Service that closed at 986.97 points, a drop of 0.43 percent.
On the other hand, the Basic Materials sector ended this week with a growth of 4.21% to 1,225.83 points. The insurance sector was the second highest after the index closed at 962.42 points with a growth of 0.08%.
The Financial Services sector led the trading volume with 101.43 million shares, accounting for 30.40 percent of total market revenue, while the banking sector came in second place with 93.92 million shares that changed hands. 28.15 percent of the total market trade. Third place was in the real estate sector, where the volume of trading volume to the market amounted to 20.67 per cent, after reaching 68.95 million shares.
On the other hand, the banking sector was in first place with 51.97% of the total traded value with a market capitalization of 31.18 million KD. The industrial sector came in second place with 12.04% and 7.22%, while third place was taken by the financial sector, the value of the traded shares was approximately JD 6.23 million, accounting for 10.38% of the total market turnover.