Kuwait steals the limelight

The Kuwait Stock Exchange index gained 78.8 points last week to close at 2,091.4 points, up four per cent in the week, a level not seen in four years.

Shrugging off fears about a looming internal political crisis, a fresh injection of liquidity took the market to new heights. On Wednesday total liquidity headed north from a daily average of 23m dinars the previous week to 55.84m dinars.

With this sort of cash flowing into the market, local brokers are confident that the KSE's bull-run can be maintained across the 2,100 barrier. However, there have been some signs of selling to accumulate cash for the upcoming bank privatization issue, though in equal measure this event is promoting public interest in the bourse.

Last week the government started a month-long subscription period to sell-off most of its stake in the Bank of Kuwait and the Middle East.

But it was a good week all around with several stocks hitting a new high for the year. Kuwait Finance House, the Islamic bank, closed at 990 fils, up 12.5 per cent on the year. And National Mobile Telecommunications closed at 1.16 dinars, up 78.5 per cent in 2002.

Can the market keep up this momentum? Many observers think it will, but the KSE has been notoriously volatile in the past, and along with most emerging markets investors need to remember the old adage that 'what goes up, must come down'. But it is probably not too late to jump in yet.