The benchmark index of Kuwait has reached the highest level in more than 2 years as investors believe that the Government is all set to revive a $110 billion investment plan for boosting the economic growth in the OPEC member. The Kuwait SE Price Index has increased for the 6th straight day now and on today; it experienced an increase of 0.5%. The gauge is now at 6851.17. The BGCC 200 Index, which measures the biggest 200 companies in the entire Gulf Cooperation Council, experienced a decline of 0.1%.
On today, around 673 million shares were traded in Kuwait. Incidentally, the 12-month daily average of share trading is around 608 million shares for this Asian country. The Government of Kuwait and Parliament have already pledged to fast track the development plan which was approved for the first time in February, 2010.
According to the head of brokerage at the Global Investment House KSCC, Fouad Darwish, people are currently optimistic and they feel that the Government is all set to do certain things with the country’s development plan. The optimism is pretty strong at this point of time and many have ignored this fact that most of the Kuwait companies have not announced any sort of results till this date. Such things, in general, lead investors to sell off.
Incidentally, the Parliament of Kuwait passed a law which stated that the Government will need to pay 744 million dinars for purchasing the citizens’ loans taken before 30th March, 2008. They will also need to write off all the interest before making any kind of rescheduling of the payments. As part of the law, banks will also need to repay the borrowers who were charged more than 4 percentage points on top of the base rate on their loans.
The head of institutional trading at the EFG Hermes Holding SAE, Julian Bruce, stated that this new law may have played a big part in spurring the stock market gains. Julian added that the law is positive for banks’ non-performing loans and it means some trickle down of additional cash being recycled into the market as well.
Kuwait’s benchmark gauge has experience an increase of 15% in 2013. Agility has also increased to 610 Fils, while the Kuwait Real Estate increased by 3.3% to 62 Fils, marking its best figure since 6th March.