KUWAIT CITY, June 3: The equation of sale and purchase at the Kuwait Stock Exchange has changed since the beginning of this year.
While purchases were in favor of the foreigners who procured shares from Kuwaitis in the previous yearin light of the continuous rise in stock prices, foreigners reversed their orientation and began selling this year due to the repercussions of the emergent coronavirus and delay in adding the Morgan Stanley Index, which Kuwaitis had exploited and started operating at low cost because of the high prices they sold to foreigners in 2019.
Kuwaitis intensified their purchase of shares in May and exceeded sales by 19.12 million dinars to increase Kuwaiti investments on the stock market since the beginning of the year to 57.17 million dinars, indicating the sum of Kuwaiti investments that entered the stock market in 2020 is equivalent to about 188.6 million dollars.
These purchases coincide with the availability of liquidity among Kuwaiti whose net purchases amounted to 5.9 million dinars in the month of May and approximately 49.4 million dinars since the beginning of the year (equivalent to 163 million dollars), as most of them have stopped paying loan installments for a period of six months starting from April.
Travel and education expenses have also stalled due to the consequences of the corona pandemic. On the other hand, Kuwaiti investment institutions and companies as usual sought to maintain liquidity in crises, which caused their transactions to be achieved in May with a net sale value of 2.9 million dinars through purchases worth 37.9 million dinars offset by sales worth 40.9 million dinars.
The local investment funds in May registered a net purchase of shares at a value of 9.6 million dinars through purchases reaching 22.1 million dinars offset by 12.5 million dinars in sales, while purchases by client portfolios that achieved net purchase from their investments in the stock market in May amounted to 6.5 million dinars after their purchases reached 111.4 million dinars, compared to 104.8 million dinars in sales.
Foreign bleeding continues
The bleeding of foreign investments in the Kuwaiti stock market continued throughout May amid the economic repercussions of the spread of the coronavirus pandemic and fluctuating oil prices such that about 15% of the investments they continued to pump in the previous year emerged after withdrawing 320 million dollars (an equivalence of 98.63 million dinars) of their investments from the Kuwaiti stocks in the first five months of this year; about a third of exits concentrated on trading in which foreign investments made a net sale of 103.8 million dollars (equivalent to 32 million dinars).
Foreign sales in this month were concentrated through institutions and companies that achieved a sale surplus of 29.7 million dinars (equivalent to 96.3 million dollars), and investment funds achieved net sales transactions of 2.6 million dinars (equivalent to 8.44 million dollars), while net retail transactions to purchase with a value of only 320,000 dinars (equivalent to 1.04 million dollars).
Sales of foreigners were concentrated since the beginning of the year through institutions and companies that achieved a sale surplus of 56.4 million dinars (equivalent to 183 million dollars).
The investment funds achieved net sales transactions of 43.9 million dinars (equivalent to 142.4 million dollars), while the net dealings of individuals went to purchase with a value of 1.73 million dinars (the equivalent of 5.6 million dollars)
Reducing property in banks
Foreign exits reflected in the ownership of banks’ shares, as their investments in the Kuwaiti Stock Exchange decreased in the month of May in various proportions, with the exception of the National Bank of Kuwait where its shares obtained a slight increase to reach 6.30% at the end of the month’s transactions.
Also, Kuwait Finance House’ shares reached 7.25% at the end of the month’s transactions. The exit of foreign investments and reduction of foreign ownership in the shares of Kuwaiti banks is in conjunction with the repercussions of the spread of Coronavirus pandemic and consequent delay in the accession of Kuwaiti shares to the Morgan Stanley Emerging Markets Index, which was scheduled to begin last May and has since been postponed to November.
Gulf dealings violated the approach of foreigners this month, as they made purchases last May on the net purchase investment of the Gulf nationals worth 12.9 million dinars (equivalent to 41.8 million dollars), while purchases made by institutions and companies reached around 9.63 million dinars (equivalent to 31.24 million dollars).