Share prices in Kuwait jumped in very heavy trade on Sunday, the top performing market in a strong Gulf region, while tax fears continued to weigh on prices in Egypt. The Kuwaiti market index surged 3.2 percent, its biggest rise in more than two years, to a 23-month high, while trading volume was the biggest since mid-2013. The index is up 15.6 percent so far this year, far outperforming other Gulf bourses. The narrower Kuwait 15 index of blue chips is up 9.6 percent.
The market attracts little non-Arab foreign investment and with a trailing price/earnings ratio near 15 times, it is not cheap compared with its neighbours or emerging markets in general.
Nevertheless, fund managers said some regional funds as well as local retail investors were piling into the market to profit from its momentum. Because of its huge oil reserves and small population, Kuwait has been hit less hard than most countries in the region by low oil prices.
"Kuwait remains the most resilient country to lower oil prices in the Gulf Co-operation Council," Arqaam Capital said in a report.
The appointment of a new chairman of the Kuwait Stock Exchange on January 7 has raised hopes for stronger efforts to eventually upgrade Kuwait from frontier market to emerging market status. Pakistan will move to MSCI's emerging market index in May, and some frontier funds withdrawing from Pakistan as a result are expected to go to Kuwait.
Also, investors who accept an offer to buy out minority shareholders in Kuwait Food Co (Americana) this month may put the proceeds into other Kuwaiti stocks; about $1 billion could be involved.
Much of the bull run is focusing on financial stocks; Burgan Bank climbed 6.3 percent and Kuwait Finance House added 5.2 percent on Sunday.
But nine of the day's 10 most heavily traded stocks rose sharply, suggesting investors were pouring money into most shares that moved significantly.
Saudi Arabia's index fell in early trade after poor fourth-quarter earnings from some major companies, but it closed 0.3 percent higher as builder Khodari jumped 9.1 percent.
The stock has been buoyed since November by signs of improving conditions for the construction sector as the government makes delayed payments on its debts to companies in the industry.
Real estate developer Dar Al Arkan, which could benefit from the government's plans to stimulate the housing sector this year, climbed 7.0 percent.
Saudi Basic Industries rose 0.5 percent after agreeing to acquire the 50 percent it does not already own in its petrochemical venture with Shell Arabia, a unit of Royal Dutch Shell, for $820 million.
Those three stocks helped to offset weakness in banks, which were hit by higher than expected fourth-quarter provisions against bad debts at several lenders.
Alawwal Bank fell 3.4 percent after swinging to a net loss of 249.3 million riyals; Alistithmar Capital and EFG Hermes had forecast profit of 330.5 million and 438 million.
Saudi British Bank dropped 1.6 percent after posting a 35 percent fall in fourth-quarter net profit, while Samba Financial Group sank 3.7 percent after reporting a 12 percent drop in profit.
Savola plunged as much as 9.5 percent during the day, but closed only 2 percent lower, after reporting a net loss of 964.3 million riyals; analysts had predicted a profit.
Dubai's index gained 0.7 percent as the most heavily traded stock, builder Drake & Scull, which has exposure to Saudi Arabia, climbed 4.8 percent.
Property developer Deyaar rose 2 percent after state news agency WAM reported it had signed a memorandum of understanding with Dubai South, the master developer of the area around Dubai's Al Maktoum International Airport, for a multi-purpose development.
Strong banking shares pushed Qatar's index up 0.2 percent, with Qatar National Bank gaining 2.4 percent.
Abu Dhabi's index slipped 0.1 percent but Waha Capital's share price soared to hit its 15 percent daily limit in the heaviest trading volume since late 2014.
Egypt's share market index dropped a further 0.7 percent after tumbling 3.7 percent on Thursday, when Reuters reported that the authorities were considering temporarily reintroducing a stamp duty charge on stock market transactions. Alexandria Mineral Oils surged 7 percent, however, after saying first-half net profit rose to 545.8 million Egyptian pounds ($29.3 million), up from 157 million pounds in the same period a year ago.
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