Kuwait Stock Exchange Surges: More companies qualify for Premier Market

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It seems that the current scene of Kuwait Stock Exchange trading activity will cause an increase in the number of companies prepared to upgrade from the Main Market to the Premier Market after the required rates and technical requirements have been achieved more than a month before the annual closings, especially with regard to meeting the market value of the total securities issued by the entity, which is set at one million dinars as a minimum, reports Al-Rai daily.

Based on the numbers, trading rates, and volumes of daily liquidity traded in stocks, this leads to increased speculation about the possibility of several companies being promoted to the premier market, during the upcoming annual review of the stock exchange, while the opportunity is still available for more companies that can meet the requirements for the transition, including the ratios, determined liquidity, for each of the two ending years preceding the time of the annual review.

The Stock Exchange sets watch lists for companies listed on the markets, from which a list is allocated to eligible companies that lack one of the requirements necessary to qualify for the premier market.

In the same context, the sources reported that there are companies that will be moved from the main index to the “Main 50” within the upcoming review, benefiting from the recent momentum that had repercussions on a group of companies that could benefit from this for qualification.

Although investment funds and major stock market traders maintained their strategic positions in the leading stocks of banks and major service, real estate, and financial companies, the current of activity led by some medium- and small-cap stocks during the last period took with it some of the liquidity of that category.

The jumps witnessed by shares listed on the stock exchange, achieving market gains ranging between 50 and 250 percent since the beginning of the year (there is an exception that achieved hundreds of times the market price), most of which were achieved since the beginning of the third quarter, had the greatest impact in changing dealers’ attitudes.

These shares did not belong to a specific group, but were distributed among more than one group, including companies owned by hundreds and perhaps thousands of shareholders, as the pace of trading in them restored the spirit of activity to the premier and main markets.

In fact, the momentum witnessed by the pace of trading imposed on certain groups a state of optimism regarding the pace of trading, with indicators rebounding and attracting the largest share of the funds in circulation, while some foreign institutions participated in the pace of activity by strengthening their positions and acquiring quantities of stocks that are currently leading the activity.

The daily trading pace remains subject to correction and profit-taking from time to time after every jump or rise, which shows that the rise will not be endless and vice versa, as inflation readings and fair valuations impose their condition on the market.

Investment sources told Al-Rai: “The portfolios, funds, and asset management sectors of specialized companies preferred not to stand idly by or just defend their strategic positions, as they participated in seizing some of the opportunities offered by daily trading.” The sources added that many medium- and small-cap stocks entered new price ranges, which gave their owners the opportunity to re-price and evaluate their assets to serve their investment orientations, pointing out that some stocks exceeded the fair valuation amid bets on the expansions and investments that the managements of those companies are preparing for, which may generate guaranteed returns.