Kuwait Shares Gain to Highest Since 2011 Amid Economy Optimism

Kuwaiti shares gained, sending the benchmark index to the highest level since January 2011 amid optimism the government will revive a $110 billion investment plan to boost economic growth in the OPEC member.

The Kuwait SE Price Index rose for a sixth day, climbing 0.5 percent to 6,851.17 at the close. Kuwait Real Estate Co. (KRE) climbed to the highest level in a month. Agility (AGLTY) advanced 1.7 percent after winning a $190 million UN contract in Sudan's Darfur region. The Bloomberg GCC 200 Index, which tracks the biggest 200 companies in the Gulf Cooperation Council, fell 0.1 percent.

About 673 million shares were traded in Kuwait, compared with a 12-month daily average of about 608 million shares, according to data compiled by Bloomberg. Kuwait's government and parliament this year pledged to fast-track the development plan first approved in February 2010.

"People are optimistic and believe the government will do something with the development plan," Fouad Darwish, head of brokerage at Kuwait-based Global Investment House KSCC (GLOBAL), said by phone. "The optimism is so strong that people even ignored the fact that many companies didn't announce their results on time, which usually led to selling off."

'Trickle Down'

Kuwait's parliament passed a law requiring the government to pay 744 million dinars ($2.6 billion) to purchase citizens' loans taken before March 30, 2008 and write off all interest before rescheduling payments. The law also requires banks to repay borrowers who were charged more than 4 percentage points above the base rate on their loans.

The law may have also helped spur gains in the stock market, according to Julian Bruce, head of institutional trading at EFG-Hermes Holding SAE in Dubai. "It's positive for banks non-performing loans and also means some trickle down of additional cash being recycled into the market."

The index has gained 15 percent this year. Agility rose to 610 fils while Kuwait Real Estate surged 3.3 percent to 62 fils, the highest since March 6.

Elsewhere in the GCC, Dubai's DFM General Index (DFMGI) fell 0.3 percent, Abu Dhabi's measure declined 0.1 percent and Qatar's gauge lost 0.5 percent. Oman's MSM30 Index advanced 0.4 percent, Bahrain's measure rose 0.2 percent and Saudi Arabia's Tadawul All Share Index fell less than 0.1 percent.

Egypt's EGX 30 Index rose 1 percent. EFG-Hermes Holding SAE jumped 3.3 percent to 9.71 Egyptian pounds. The country's biggest investment bank said its joint-venture with Qatar's QInvest LLC may be at risk if it doesn't receive Egyptian regulatory approval in the coming days.

Israel's TA-25 index declined 0.3 percent. The yield on the 4.25 percent notes due March 2023 fell five basis points, or 0.05 percentage point, to 3.81 percent, the lowest since the notes started trading in August, at the close in Tel Aviv.