Mubasher: Boursa Kuwait closed Wednesday’s on a steep decline for all indices, after rising for four consecutive sessions.
This comes as the Kuwaiti Banking Association (BKA) declared earlier today that there would be no distribution of cash dividends to banks’ shareholders this year.
The Premier market index dropped by 1.75%, while the main market and BK 50 indices fell by 0.86% and 1.29%. Meanwhile, the all-share index fell by 1.51%.
Traded values surged to its highest level since 19 March, increasing by 45.8% to 72.22 million, while traded volumes grew by 31.2% to 317.75 million shares.
Eight market sectors declined on Wednesday, as the banks' sector closed down by 2.43%, while the telecom and industry increased by 0.23% and 1.03%, respectively.
Al Massaleh led the declining stocks as it dropped by 17.37%, while Fujairah Cement was the top gainer and added 9.09%.
Kuwait Finance House logged the highest traded value with KWD 16.44 million, and closed down by 2.25%, while AUB was the most actively traded stock with 32.91 million shares and tumbled by 1.09%.
Capital market analyst, Nawaf Al Oun, described today’s decision by BKA as hasty and irrational, especially since Kuwaiti banks enjoy good financial solvency with limited effects from the coronavirus disease (COVID-19) pandemic.
Kuwaiti banks recently offered to provide the government with loans of up to KWD 20 billion, which makes the decision not to distribute dividends of negative impacts on the banking sector, the analyst noted, adding that government support for small and medium-sized enterprises (SMEs) is set to benefit the banking sector.
However, Al Oun believes there would be no harm in dividends being limited to bonus share distributions, particularly a many Kuwaiti banks recently increased their capital, which makes them in a better position despite the COVID-19 crisis.