The Month That Was - Kuwait Price Index up by 19% in Jan 2017

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The Kuwaiti stock market is the best performer globally in Jan'17, as positive investor sentiment drove up volume and liquidity to record highs.....

Summary

  • The Kuwaiti stock market is the best performer globally in Jan'17, as positive investor sentiment drove up volume and liquidity to record highs. Kuwait Price and Weighted indices climbed 18.9% and 12.4%, respectively. It is still not clear what is driving this euphoria given the fact that valuations are not that cheap.
  • The Kuwait euphoria failed to translate into wider GCC markets as S&P GCC closed January, 1.6% higher than the previous month.
  • The Frontier Market index of MSCI was up 7.1% thanks to Kuwait, which enjoys a weight of 18%.
  • Corporate earnings news were mixed in the GCC, but rise in oil prices are leading to a resurgence in petrochemicals sector. Kuwaiti blue chips were the best performers, due to rise in volume of transactions. 
  • Oil price fell 2% to USD 56 per barrel, despite OPEC and non-OPEC members committing to production cuts to stabilize the oil markets. The deal to cut production will lead to oil producers shedding atleast 1.8mn barrels per day for the next six months, although speculation remains regarding the extent of the cuts   
  • S&P 500 notched up another positive month, closing 1.8% higher at 2,279 points. Trump rally continued, despite rising political and economic uncertainties, as the President unleased a string of orders protecting local businesses and employees.
  • In order to diversify government revenues in a low oil price environment, the Saudi cabinet, in line with the IMF recommendation for Gulf States, has approved a 5% value-added tax (VAT).
  • Government of Oman plans to bridge its projected USD 7.8bn deficit for 2017, using a combination of international and domestic bond issuance, and a drawdown on reserves.

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The Month That Was - Kuwait Price Index up by 19% in Jan 2017

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