Of the 227 listed companies in the Kuwait Stock Exchange, 94 are currently trading at/below their 100 fils PAR value! This translates into a whopping 40% of all companies. Something is deemed to be done. I believe the Central Bank of Kuwait should run stress-tests on all companies. Depending on the results, companies should either recapitalize or get “the boot.”
In addition to all this “fungus” (Al-Qabas articulately uses this term!) created by the ailing companies, we have not much to offer. The banks have no projects to finance and no real worthy private sector to extend credit to. Their exposure to prone-to-fail companies and a real-estate bubble are alarming. As far as operational companies, the ”beautiful world” of Zain was sold and so was the company’s future expansion. Doesn’t that remind you of another company? Does Wataniya Telecom ring a bell? Many investors were hoping Agility would be the light at the end of the tunnel, but the US government’s contract dispute crippled the company. What’s left? Nothing much. A bunch of derivative plays on the Kuwait Stock Exchange heavyweight companies. What happens to derivative plays when the underlying collapses? They explode.
Nevertheless, there is still hope that we, the next generation, will force change.
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Loading ...Tags: Agility, KFH, Kuwait, Kuwait SE, Kuwait Stock Exchange, nbk, Wataniya Telecom, Zain
The sad thing is a lot of these companies have book values of over 100 fils per share..
Are they just undervalued or is there truly a fundamental problem in reporting where the true value is correctly represented in the price on the KSE
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Book value is a number at a point in time. It can be extremely misleading if companies don’t adjust their books downward. Beware.
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the word used in the alqabas article was عفن and i believe that translates more accurately into ‘rot’ and not ‘fungus’.
alqabas should also look at the rot in its editorial standards over the last few years since we’re on the subject. they tend to recycle and regurgitate unsubstantiated information with the rest coming from foreign-language sources that are, many times, translated verbatim with no attribution.
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As for the short-ended small investors lost in a “loose” market regulations (insider trading..etc), they are rotting in their loses !
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What market? what management? what a mess of a country. if ppl in Kuwait doesn’t wake up, history will show yet another place of resource boom and bust and in the middle of it, few crooks made (stole) lots of money!!
“Future Generation”……..that was a good one
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Apart from the 94, I would hazard a guess that there are possibly a few more that should also be trading below par – its just that either their auditors have been weak or that the shares trade in such small volumes that the promoters can “support” the price. Unless and until the KSE clans up (and out) such zombie companies, the market will go nowhere.
If that is too (politically) difficult, they should divide the board into a first section and a second section, putting the zombies in the latter. While they would remain “quoted” (even if hardly traded), everyone would understand what being Second Section really meant.
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“Same circus, Different clowns”
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I drop a comment when I appreciate a post on a website or I have something to valuable to contribute to the conversation. Usually it’s a result of the passion communicated in the article I read. And after this post WHAT Kuwaiti Stock Exchange? Alpha Dinar- talking Gulf finance. I was excited enough to post a commenta response
I actually do have some questions for you if you usually do not mind. Is it only me or do a few of the comments appear like they are written by brain dead people? 
And, if you are posting at other online sites, I’d like to follow everything fresh you have to post. Could you list every one of your public sites like your linkedin profile, Facebook page or twitter feed?
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