Inactive foreign institutions that track the three emerging market indices (MSCI, FTSE, and Standard & Poor’s) have closed their accounts regarding their investment positions on the Kuwait Stock Exchange for this year, after completing their periodic and annual reviews, while the stock exchange will return to its trading next Wednesday after the end of the mourning period following the death of His Highness the Amir Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah.
The recent reviews of inactive foreign institutions that track global indices varied between reducing the weights and a limited increase in their positions in some major local companies, while the impact of the last review conducted by FTSE was slight, as the total funds flowing into and leaving the stock exchange amounted to about 22 million dollars, reports Al-Rai daily.
On the other hand, active international institutions were the most present, as they were not restricted to specific weights or number of companies, amid expectations that these positions would be increased and strengthened through selective purchasing during daily trading on the stock exchange.
Investment sources said that local stocks listed on emerging market indices are subject to constant monitoring by global entities, funds, and investment portfolios that track those indices, noting that active institutions have the most influence on the pace of trading, given that their operations form part of daily trading, which has resulted in an increase.
According to last week’s closings, 10 leading entities listed on the stock exchange acquired 27.75 billion dinars, which constituted about 69 percent of the total market value of companies distributed over 13 sectors, amounting to 40.24 billion dinars. According to size, they are: “KFH,” “NBK,” Boubyan Bank, and “KFH.” Zain, Agility, Al-Mabanee, Al-Khaleej, Al-Tijari, Burgan, and Ooredoo.
The rest of the value is distributed among the other companies registered in the primary and main markets, while it was observed that only 4 sectors closed at an increase according to their performance since the beginning of the year, which are consumer goods, health care, consumer services, in addition to insurance, while the other sectors are still led by banks, industry, financial services, and others losing according to its performance since the beginning of the year.
It appears from the reality of purchases and the intensity of the movements of financial portfolios and investment funds that there is great interest on the part of their managers to reduce losses and achieve balanced closings by the end of this month, in terms of annual closings, at a time when some of them are expected to fully compensate for their losses.
According to developments, some investment portfolios are expected to change their plans and outlook towards annual closings, which are now only 8 trading sessions away from the market.
At the level of major investment institutions, they have paid attention to achieving a balance in their components to benefit from the price booms recorded by medium- and large-cap stocks, while continuing to focus on companies that provide returns to their shareholders.
Shares of banks and service companies have been at the forefront of the goals that portfolios and funds have been moving towards for some time, as it is customary to intensify their acquisition in order to benefit from the cash distributions and free grants that they provide to their shareholders annually in accordance with the applicable entitlements controls.
It is worth noting that the stocks listed on the global emerging markets indices have the most liquidity in circulation, while the stocks of some medium and large groups stand out among the targets of individuals and local medium and small portfolios, which has increased the intensity of their transactions over the past period.