Kuwait's bourse tumbled to a two-week low on Monday as investors sold shares in small-cap companies ahead of a deadline to report corporate earnings, while other regional markets were mixed in thin trade as investors await first-quarter earnings.
Kuwait firms must publish fourth-quarter results by March 31 and many have yet to do so. Failure to meet this deadline could lead to their shares being suspended, sparking Monday's sell-off. More than 50 companies face this possible sanction, according to Fouad Darwish, head of brokerage at Global Investment House.
"These stocks have been creating volumes and number of transactions - it's a good time to book profits" he said, adding that the sell-off is a trend in Kuwait as some companies usually wait till the last day to report earnings. Gulf Investment House and Abyaar Real Estate dropped 7 and 2.9 percent respectively. The main index lost 2.1 percent, its biggest daily drop in five months and lowest close since March 11. The market is still up 12.7 percent year-to-date.
In the United Arab Emirates, Dubai's bourse climbed 0.2 percent in muted trade. Many investors are wary of increasing their exposure due to fears a sharp correction may be imminent following an early-year surge. The index has been trapped in a 100-point range since hitting a 39-month peak in late February, raising worries of a sharp sell-off. "Looking at the flows, we have seen foreign investors turn quiet lately," said Adel Merheb, managing partner at investment advisory Tradeyourmarket.com.
Abu Dhabi's benchmark advanced 0.2 percent, extending 2013 gains to 14 percent. In Saudi Arabia, real estate stocks extended gains on bets the sector will benefit from a new mortgage law being introduced. The sector's index rose 1.5 percent to a fresh 10-month high.
Banking and petrochemical stocks also supported the main index, which climbed 0.4 percent to its highest since January 12. Al Rajhi Bank and Yanbu National Petrochemical Co added 0.8 and 1.9 percent respectively. Elsewhere, Egypt's main benchmark slipped 0.5 percent in thin trading as investors hesitate to increase exposure as a weak political and economic backdrop weighs on sentiment. National Societe Generale Bank jumped 10 percent with 16,591 shares bring trades, which analysts say may be an error trade.
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