Recently, I have seen a company in the Kuwait Stock Exchange that has been among the best performers for days. Then after a week or so of stellar performance, the stock’s momentum reversed and it become one of the worst performing stocks in the KSE. The company I’m talking about is called Nafais Holding which is listed in the Services industry. I was baffled by what had happened and tried to research the company. I couldn’t find anything useful, their website is useless, and since I don’t cover Kuwait and the Gulf at work, I left it at there.

Today, Al-Qabas newspaper had an article about some kind of insider trading, and how a person told his “Diwaniya” friends to buy the stock. Driven by buy-orders from two “Diwaniya” portfolio managers, the stock surged. Then, all of a sudden, new investors started to see their capital decline as the stock price plummeted and their “friend” had no explanation.

My question is where are the authorities? Why don’t they launch an investigation on what happened? Nafais is a company that is barely traded on regular days (volume is usually in the area of KD 10,000 per week). Out of no where, the volume shoots up to more than KD 3.5 million in one day! This type of activity should raise red flags. I guess these types of deals laminate our desparate need in Kuwait for a Capital Markets Authority. Until then, beware of getting caught in a “Diwaniya” insider-scheme!

Tags: Capital Markets Authority, Insider Trading, KSE, Kuwait, Kuwait Stock Exchange, Nafais

This entry was posted on Wednesday, January 20th, 2010 at 11:11 am and is filed under Kuwait. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.