Kuwait market hit by liquidity crunch

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KUWAIT CITY, Aug 18, (KUNA): This week’s sessions at Kuwait Stock Exchange (KSE) were distinguished with liquidity shortage, absence of market makers and intense speculations thus impacting negatively on the key indices, according to analysts. The market witnessed greater focus on high-capital stocks, amid investors’ jitters as to trading on speculative chips, currently dominant in the sessions, as compared to the others.

This stagnant situation is likely to proceed in the coming week, due to the summer holiday and forecast onset of Eid Al-Adha, which falls on September 10th. Maitham Al-Shakhs, Director General of Al-Arabi Financial Brokerage Co., told Kuwait News Agency (KUNA) that the daily trading averaged KD 7.2 million, the same rate of the past month.

Moreover, most investors of certain funds and portfolios abstained from trading, thus weakening the market. Furthermore, up to 24 companies that had failed to disclose bi-annual financial statements were suspended. Meanwhile, the traders continued following up on major incentives; namely the Americana deal and the decision to suspend trades in derivatives, said Al- Shakhs. He added that the experts prepared for operating a new trade system, involving the brokerage companies, Kuwait Clearance Company and Kuwait Bourse Co., under sponsorship of the Capital Market Authority (CMA).

Hamad Al-Hajri, a financial analyst, said nature of the trades has not changed much since nearly two months ago, where major groups have abstained from trades, leaving the arena for the speculators who have taken advantage of bearish stocks of some companies to reap some earnings. Most of the week’s trades involved half of the listed companies; an irregular situation for the regional second largest stock market, Al-Hajri said. As to today’s session, it was characterized with noticeable sell-offs, thus affecting pace of the operations until the session closing bell tolled

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