20000221

Kuwait stocks slip further to new low

KUWAIT: Kuwait stocks closed down on Sunday, sinking to a new record low for the year following official statements that the government has no plans to interfere in the market to "artificially" boost it through the injection of state funds.

The Kuwait Stock Exchange (KSE) index ended the second day of the trading week down 4 points at 1,381.7, its lowest level in some 4-1/2 years.

It slipped almost half a percentage point during the session to 1,379.8 points before recovering slightly. The index of what was once one of the main and livliest Arab markets ended Saturday at 1,385.7 points.

The index, which hit a year low of 1,382.6 on February 7, is currently 4.2 percent down from the start of the year and 51.3 percent below an all-time high recorded in November 1997, despite official assurances of steps to reform the bourse and boost liquidity..

Two floors above the KSE trading floor, officials from the Kuwait, Qatar, Bahrain, Oman, Lebanon and Egypt bourses inspected a new proposed system for on-line trading for Gulf Arab bourses which would eventually include other Arab markets.

Officials said the system would start operating before the end of the year as a vehicle for disclosure of information to be followed by actual on-line trading which is aimed at boosting liquidity and attracting new global investors to regional markets.

"The Internet is sucking liquidity out of our markets," said a senior Gulf Arab official. "Our local investors now watch financial television stations closely and have their computers ready next to them to trade mainly on American markets."

Trading on Sunday on the KSE fell to 3.43 million dinars ($11 million) from 4.13 million on Saturday, compared with last week's daily average of 4.8 million dinars and 1.94 million dinars the previous week.

Liquidity soared last week on news of imminent economic and other reforms, but slow movement on the pledges and a major clash between an elected parliament and the government quickly evaported an earlier jump in the KSE index to 1,417 points.

Decliners on Sunday included The Internation Investor which shed 15 fils to close at its 1999 low of 250 fils, compared with a high last year of 430 fils.

There are 1,000 fils to the dinar.

Blue chip National Bank of Kuwait (NBK), the country's largest commercial bank, lost 50 fils to close at 550 fils compared with a high of 630 fils in December. The stock has been trading at its high level for weeks.

NBK on Saturday evening announced a dividend of 63 fils a share for 1999, compared with 53 fils the previous year. The bank had earlier announced a record net profit of 93.28 million dinars last year, compared with 78.67 million dinar in 1998.-Reuters