Kuwait Shares Rise to Three-Year High as Citizens Loans Canceled
Kuwait’s benchmark index climbed on Wednesday to a three-year high on bets investors will boost stock purchases after their retail loans are canceled.
Kuwait Food, the company known as Americana, advanced to the highest since 2008 and Combined Group Contracting Co., a construction company, increased the most since March 14. The Kuwait Stock Exchange Index (KWSEIDX) rose for a ninth day, gaining 1.8 percent to 7,562.83, the highest since April 2010, at the close in Kuwait City. The measure surged 11 percent last month, the sixth-best performer among 94 indexes tracked by Bloomberg.
The Arab Gulf country’s parliament last month passed a law requiring the government to pay 744 million dinars ($2.6 billion) to purchase citizens’ loans taken before March 30, 2008 and write off all interest before rescheduling payments. The law also requires banks to repay borrowers who were charged more than 4 percentage points above the base rate. Some 47,444 Kuwaitis who borrowed from conventional banks are eligible to benefit from the law, according to estimates by lawmakers.
“Expectation that the cancellation of retail loans will bring more inflows to the market has allowed the Kuwait Stock Exchange to maintain its momentum for the past two weeks,” Julian Bruce, head of institutional trading at investment bank EFG-Hermes Holding SAE in Dubai, said in an e-mail.
The value of shares traded in Kuwait climbed to 94.7 million dinars today compared with a three-month daily average of 54.7 million dinars, according to data compiled by Bloomberg.
Kuwait Food rose 3.1 percent to 1,980 fils, the highest since October 2008. Combined Group Contracting gained 2.9 percent to 1,400 fils. United Projects Group KSCC, a provider of air and catering services, jumped 5.3 percent to 800 fils, the highest level in more than two weeks.
Elsewhere in the region, Saudi Arabia’s Tadawul All Share Index fell less than 0.1 percent at 1:31 p.m. in Riyadh. Dubai’s DFM General Index (DFMGI) and Abu Dhabi’s measure were little changed, while Qatar’s gauge lost 0.1 percent. Oman’s MSM30 Index advanced 0.3 percent. Markets in Egypt and Bahrain were closed on Wednesday for a holiday.
Bloomberg
