Peninsula - 14/5/2006

Kuwaiti stocks fell yesterday despite a region-wide rally as investors sold shares to cash in on the listing of Islamic Boubyan Bank this week, analysts said.

The main index fell 0.74 per cent to 9,587.40 points, with analysts saying weak first quarter earnings reports also weighed on investor sentiment.

Decliners outnumbered gainers 61 to 26 on turnover of 33.7m dinars ($116.7m), down from 39.9m dinars last Wednesday.

Listed companies have until May 15 to report their results or they will face suspension of trading.

"Most traders are liquidating to speculate on Boubyan Bank," says Naser Nafisi of Al Joman Centre for Economic Consultancy.

Kuwait's government owns a majority stake in Islamic-shariah compliant bank, whose shares are expected to debut May 15.

"This is the second Islamic bank in Kuwait and if it is managed properly they would make good profit. That is why speculators are very interested in the bank," he said.

Analysts said Kuwait's market will continue to face pressure, with the National Bank of Kuwait saying in a recent report that investors will withdraw money from the market to invest in real estate or hold in bank accounts.

Bayan Investment Co said in a market report that the lack of proper regulatory supervision over big funds and portfolios has led to "small investors selling their shares haphazardly," contributing to a fall in the index.

A recent report from Al Shall Economic Consultants, which sampled eighty two listed companies on the Kuwait bourse, said operating profits have been strong for many companies even as net earnings have been hit by the stock market downturn.