The Kuwait Stock Exchange index rose 2 percent to a new record high on Sunday as the Arab world's second largest bourse continues a winning streak that has lifted the market more than 650 points in seven sessions. The index of nearly 130 mostly Kuwaiti companies closed 146.70 points higher, or 2.01 percent, at 7,446.30. It broke the 7,400-point psychological barrier for the first time ever and overtook a previous high of 7,299.60 set Saturday.
Analysts attribute the recent rally to a renewed surge in oil prices, strong 2004 corporate profits or dividends, investor bets on strong first quarter profits and speculation a local blue chip firm will secure more mega Iraq-related supply deals.
Indeed, the advance comes amid a bullish economic backdrop as Kuwait, which has 10 percent of world oil reserves, eyes a record $9-billion budget surplus for the fiscal year ending this month, according to a leading local bank. But the recent parabolic ascent also raises fears of a possible looming correction as some investors may opt to book profits, some traders warn.
"Oil prices are high and there's very high liquidity coming into the market, local or from the Gulf, the US or Europe," Waleed al-Houty of Securities House said, noting many factors are supportive but the market needs to pause for breath.
Some 51 stocks gained while 36 lost. But volume continued to decline from a peak of 368 million shares traded on March 8, falling to 264.8 million shares from 314.7 million Saturday.
Sunday's big winners included al-Ahli Bank, up 25 fils, or 6.25 percent, at 425 fils. Chairman Ahmed Behbehani told an assembly meeting 2005 profits will top expectations after it logged a 24 percent rise in 2004 net to 27.2 million dinars. The bank also distributed 20 fils per share dividend.
Public Warehousing Co (PWC) and affiliates - a key force behind the rally - continued to sizzle. Shares in the supply and logistics firm rose 2.1 percent to 4.860 dinars, up 43 percent since February 16 when news broke it secured a $3.27 billion Pentagon supply deal.
The gains follow press speculation PWC is in talks with for another deal that may reach $8 billion. Among affiliates, Sultan Centre Food added 4.4 percent to 2.360 dinars and National Real Estate 6.1 percent to 1.740 dinars.
The index is up 16 percent year-to-date, having surged 101 percent and 34 percent in 2003 and 2004, respectively. Bourse capitalisation currently stands at 25 billion dinars ($85.5 billion).
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