Boursa Kuwait retreats on bearish sentiment

Boursa Kuwait ended last week in the red zone. The Price Index closed at 7,029.43 points, down by 0.20 percent from the week before closing, the Weighted Index decreased by 2.66 percent after closing at 413.27 points, whereas the KSX-15 Index closed at 933.84 points down by 3.04 percent. Furthermore, the week’s average daily turnover decreased by 16.19 percent, compared to the preceding week, reaching KD 27.16 million, whereas trading volume average was 260.05 million shares, recording a decrease of 31.33 percent.

Boursa Kuwait three indices underperformed last week and none of it was able to record gains by the end of the week, to close in the losses area on the weekly level, as a number of stocks of different sectors were subject to quick sale for profit operations that directly put pressure on the indices and limited its increases, also the market was affected by the random purchasing operations that targeted some cheap stocks of tempting prices, which caused some reaction witnessed by the trading activity during some sessions of the week, however was not enough to pull the indices’ performance to close in higher levels than the previous week.

The market initiated its first session of the week with limited losses to the three indices, affected by the selling pressures and the profit collection operations executed on many leading and small-cap stocks, especially after the increases realized over about 8 sessions, in addition to the random purchasing operations executed on some lowpriced stocks, which caused a fluctuated trading activity, where the value increased by 16 percent and the volume grew by 8.75 percent, however the deals dropped by 2.35 percent. On the second session of the week, the three market indices continued its grouped decline to close in the red zone, affected by the continued strong selling and the speculative operations on a number of listed stocks to build new financial positions, in parallel with a slowed trading activity compared to the previous session.

On the mid-week session, the Boursa indices recorded mixed performance, whereas the Price Index was able to compensate its previous losses, to end the session at 7,051.84 point, its highest level in more than two years, specifically since 18 November 2014 session, supported by the active speculative operations executed on the cheap stocks after it reached tempting purchasing levels, however, the selling pressures and the profit collection operations that the leading stocks were subject to, pushed the Weighted and KSX-15 indices to close in the red zone, and caused the trading activity to fluctuate.

Wednesday’s session witnessed a noticeable drop in the Boursa’s performance, as the Price Index declined steeply by 43.73 point to close at 7,008.11 point level by the end of the session, to lose by this all its gains realized since the beginning of the week, affected by the continued profit collection operations that targeted the small and cheap stocks, while the Weighted and KSX-15 indices decreased for the fourth consecutive session, in light of the selling pressures that the leading and heavy stocks were subject to, especially in the Financial Services and the Banks sectors.

On Thursday’s session, the three market indices were able to redirect its downward performance to close in the green zone, compensating by this some of its losses recorded during the previous week’s sessions, as a result to the random purchasing operations that concentrated on the small-cap stocks, in addition to the speculative selling operations executed on some leading stocks and the stocks that did not disclose its 2016 financial results as at end of Thursday, fearing of banning such stocks from trading, whereas the number of deals executed during the session increased by 24.92 percent.

Moreover, Boursa Kuwait lost around KD 900.77 million of its market cap during the last week, as the total market capitalization for the listed companies in the primary market reached about KD 27.17 billion, down by 3.22 percent of its value at a week earlier, where it reached around KD 28.02 billion. On an annual level, the market cap gains reached 6.73 percent since the beginning of the current year, compared to its level at end of 2016, where it reached then around KD 25.41 billion.

By the end of last week, the number of companies that disclosed its 2016 financial results reached about 152, representing 85.39 percent of the 178 total listed companies in the primary market, with KD 1.66 billion in net profits, up by 3.12 percent of the same companies results for 2015, where it was KD 1.63 billion. Also, the number of companies that recorded growth in its EPS reached 81 company, while 69 company recorded losses in its EPS compared to 2015, and 33 company declared losses for the financial year 2016. For the annual performance, the Price Index ended last week recording 22.29 percent annual gain compared to its closing in 2016, while the Weighted Index increased by 8.73 percent, and the KSX-15 recorded 5.52 percent growth.

Sectors’ Indices

Nine of Boursa Kuwait’s sectors ended last week in the red zone, while the other three recorded increases. The Oil & Gas sector headed the losers list as its index declined by 5.43 percent to end the week’s activity at 943.98 points. The Financial Services sector was second on the losers’ list, which index declined by 3.35 percent, closing at 761.64 points, followed by the Banks sector, as its index closed at 938.28 points at a loss of 3.03 percent. The Consumer Goods sector was the least declining as its index closed at 1,150.92 points with a 0.52 percent decrease.

On the other hand, last week’s highest gainer was the Industrial sector, achieving 6.85 percent growth rate as its index closed at 1,784.17 points. Whereas, in the second place, the Telecommunication sector’s index closed at 668.55 points recording 4.65 percent increase. The Health Care sector came in third as its index achieved 2.70 percent growth, ending the week at 1,521.19 points.

Sectors’ Activity

The Financial Services sector dominated a total trade volume of around 480.31 million shares changing hands during last week, representing 36.94 percent of the total market trading volume. The Real Estate sector was second in terms of trading volume as the sector’s traded shares were 36.79 percent of last week’s total trading volume, with a total of around 478.31 million shares.

On the other hand, the Banks sector’s stocks were the highest traded in terms of value; with a turnover of around KD 46.01 million or 33.87 percent of last week’s total market trading value. The Financial Services sector took the second place as the sector’s last week turnover was approximately KD 31.63 million representing 23.29 percent of the total market trading value. —Prepared by the Studies & Research Department, Bayan Investment Co.