ARAB TIMES, SUNDAY, DECEMBER 27, 2015

29BUSINESS

Kuwait indices end week’s trading mixedKuwait Stock Exchange (KSE)

ended last week with mixed per-formance. The Price Index closed at5,619.98 points, down by 0.07% fromthe week before closing, the WeightedIndex decreased by 0.11% after closingat 380.98 points, whereas the KSX-15Index closed at 902.52 points up by0.04%. Furthermore, last week’s aver-age daily turnover decreased by28.80%, compared to the precedingweek, reaching K.D 8.85 million,whereas trading volume average was86.97 million shares, recording a lossof 8.50 %.

The stock market indicators endedthe last week’s trading with mixedclosings for the three indicators, where-as the Price and Weighted indices con-tinued its decline for the fourth consec-utive week, whilst the KSX-15 indexwas able to realize small gain due to thepurchasing operations that targetedsome heavy stocks. The market overallperformance was negative, despite thefluctuation was witnessed throughoutthe week, which came among a contin-ued presence of the negative factorsand lack of supportive motivators forpurchase, especially in light of the oilprices declines witnessed for a relative-ly long time, which pushed manyinvestors towards selling fearing aggre-gation of the situation.

The market trading activity was lim-ited to four sessions last week, whereasthe first session witnessed a cleardecrease for the three indicators, espe-cially the Price Index which recordedbig losses that pushed it to close at its

lowest level since July 2004, in parallelwith the noticeable slowing down ofthe trading activity during the session,as the volume reached its lowest levelin four years, recording a drop of31.83% compared to the previous ses-sion, whilst the value recorded adecline of 7.70% to reach its lowestlevel since last July.

However on the next session, themarket was able to record various gainsfor the three indices, especially thePrice Index which was able to compen-sate a small portion of the previous ses-sion’s losses, while the Weighted andKSX-15 indices were able to compen-sate all its losses ; and such perform-ance came in light of the purchasingactivities that were strongly presentduring that session, and concentratedon the stocks that declined and itsprices reached low levels in previous

sessions, and became tempting to buy.On Tuesday’s session, the market wit-nessed mixed performance for the clos-ing of its three indicators, whereas thePrice Index continued to increase inlight of the purchasing activity on thesmall-cap stocks which enabled it tocompensate all of its losses made earli-er in the week, while the Weighted andKSX-15 indices dropped as a result tothe profit collection operations thatincluded heavy stocks, to return onceagain to the red zone.

The market continued its mixed per-formance at the end of week session,which witnessed the return of the PriceIndex to drop and the Weighted andKSX-15 indices to increase once again,which came in light of the quick spec-ulation and profit collection operationsexecuted on the small-cap stocks,where the cosmetic purchasing opera-

tions witnessed during the sessionenabled the Weighted and KSX-15indices to record limited gain by theend of the session.

The market capitalization for KSEreached by the end of last week K.D.25.28 billion, declining by 0.51%,compared to its level in a week earlier,which was K.D. 25.40 billion. On anannual level, the market cap for the list-ed companies in KSE declined by9.67% from its value at end of 2004,where it was K.D. 27.98.

As far as KSE annual performance,the Price Index ended last week record-ing 14.01% annual loss compared to itsclosing in 2014, while the WeightedIndex decreased by 13.19%, and theKSX-15 contracted by 14.85%.

Sectors’ IndicesSeven of KSE’s sectors ended last

week in the green zone, while the other

five recorded declines. Last week’shighest gainer was the Consumer Goodssector, achieving 2.49% growth rate asits index closed at 1,078.31 points.Whereas, in the second place, the BasicMaterials sector’s index closed at982.78 points recording 2.38% increase.The Oil & Gas sector came in third as itsindex achieved 2.22% growth, endingthe week at 808.60 points.

On the other hand, the Health Caresector headed the losers list as its indexdeclined by 1.28% to end the week’sactivity at 955.98 points. The Industrialsector was second on the losers’ list,which index declined by 1.15%, clos-ing at 1,048.02 points, followed by theTechnology sector, as its index closedat 851.47 points at a loss of 0.93%.

Sectors’ ActivityThe Financial Services sector domi-

nated a total trade volume of around

160.59 million shares changing handsduring last week, representing 46.16%of the total market trading volume. TheReal Estate sector was second in termsof trading volume as the sector’s tradedshares were 27.65% of last week’s totaltrading volume, with a total of around96.18 million shares.

On the other hand, the Banks sec-tor’s stocks were the highest traded interms of value; with a turnover ofaround K.D 13.24 million or 37.38% oflast week’s total market trading value.The Financial Services sector took thesecond place as the sector’s last weekturnover was approx. K.D 6.01 millionrepresenting 16.96% of the total markettrading value.

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KSE weekly reportBayan Investment Co

Embattled German auto giantVolkswagen is abandoning itsambition to become the world’sbiggest carmaker ahead ofJapanese rival Toyota, its new chiefexecutive said in a magazine inter-view published Monday.

“For me, this obsession with unitsales and the ambition to constant-ly reach new records makes nosense, “ CEO Matthias Mueller toldthe weekly WirtschaftsWoche in an

interview.VW is currently engulfed in a

scandal of global proportions afterit was forced to admit in Septemberthat it installed pollution-cheatingsoftware in 11 million dieselengines worldwide.

Mueller was brought in to resolvethe crisis.

The oft-stated goal of his prede-cessor Martin Winterkorn had beenfor VW to overtake Toyota as the

world’s number one carmaker by2018.

And the German giant — whichowns 12 different brands — hadeven looked set to reach that goalthis year.

But VW sales have been fallingin the wake of the scandal.

While unit sales would remainimportant for the group, “I’m notgoing declare sheer size as an endin itself,” Mueller said. (AFP)

VW drops out of race to become world’s biggest carmaker

Investment firm Greybull Capital hasemerged as a favourite to buy TataSteel’s struggling UK-based unit, ina move that could offer some reliefto Britain’s troubled steel sector.

The country’s largest steelmakerhas been trying to sell its long prod-ucts unit, which makes steel usedin construction, since last year withincreasing urgency as a globalsteel crisis intensified and prices hitdecade lows.

Two industry sources toldReuters that Greybull, which lastyear rescued British holidays andairline company Monarch , isfavourite to buy the unit, and thatTata Steel will make a decision inJanuary at the latest.

The sources said there were twomore parties interested, one ofwhich was private equity firmEndless. Final bids went in aroundtwo weeks ago, one of the people

said, cautioning that no deal wascertain.

Greybull declined to commentand no-one at Endless was imme-diately available.

A Tata Steel spokesman declinedto comment on the sale talks, say-ing only that the company is “stillassessing all strategic options”.

Long products are used in con-struction, railways, shipbuildingand engineering. (RTRS)

Greybull favourite to buy Tata Steel’s UK-based unit

The newly-opened Al Muzaini Exchange Co branch in Shuwaikh at ZeenaComplex.

A photo from the event.

Al Muzaini opens 65th branch in ShuwaikhKuwait’s leaders in money exchangeand remittances for over 70 yearshave opened their newest branch inShuwaikh at the Zeena Complex. Thebranch is open to serve customers allweek from 9:00 am to 9:00 pm fromSaturday to Thursday and 4:00 pm to8:30 pm on Fridays.

With this new opening their branchnetwork races up to 65 the largest inKuwait. Al Muzaini’ s network of

branches span all over Kuwait inmajor commercial/residential areas,Co-ops and Malls like TheAvenues/360/Sheikh Saad Airportand most importantly the 24/7 branchat the Kuwait International Airport.

As a goodwill gestures to its cus-tomer, fees on selected services suchas bank transfers, drafts are waivedoff (conditions apply) till the Jan 13,2016.

Non-oil growthContinued from Page 28

Gulf statesContinued from Page 28

With the Brent oil price likely toremain in the $40-50 range and toimprove only gradually in the comingtwo years, Kuwait is expected to postmoderate sized deficits at least through2017. Substantial fiscal buffers, in theform of a sovereign wealth fund estimat-ed at over 400% of GDP, should helpKuwait pull through relatively easily,without making deep spending cuts.While the government is expected to tapinto its liquid assets to finance part of thedeficit, debt issuance is also expected.

Even with the government already tak-ing some measures to rationalize spend-ing, revenues are expected to fall short tothe tune of 6.2% of GDP in FY15/16. Thiscould narrow to 3.8% of GDP in FY16/17on some improvement in oil prices. InFY17/18, we expect oil prices to recoverfurther towards $60, which should helpnarrow the deficit to around 3.6% of GDP.

The government’s first response tolower oil prices was to rationalize spend-ing. This initiative started late in 2014and was reflected in the FY15/16 budget.The latter sought to reduce governmentexpenditures by 17%. Around half ofthese cuts came from the reduced cost offuel subsidies due to lower oil prices andwere little more than an accountingchange; the rest came from cuts in non-essential spending and reducing ineffi-ciencies and waste. Importantly, there

were no reductions in wages and salariesor in capital expenditures.

In the medium term, the government iskeen on tackling subsidy reform, startingwith fuel subsidies, in an effort to furtherrationalize spending and reduce econom-ic inefficiencies. Subsidies in Kuwaitamount to 9% of GDP according to theIMF. The cabinet is expected to issue apetrol subsidy reform package in thecoming months. This is expected toinclude a phase-out of subsidies on petrolin 2016. It is thought that this will includea cash transfer to low income Kuwaitihouseholds. The cabinet will likely makea similar proposal for electricity andwater subsidies sometime in 2016 but thiswill require legislative changes.

The parliament is also currently delib-erating on an ambitious wage bill reforminitiative, which could result in substan-tial savings for the government on itswage bill. The legislation aims to stan-dardize pay across the public sector andto increase control over the government’swage bill. It will also put limits on wageand salary growth in the public sector bystreamlining the process of salaryincreases.

Beyond efforts to reduce spending, thegovernment is taking some steps toaddress the long term sustainability chal-lenges facing Kuwait by bolsteringnonoil revenues. Steps include efforts tointroduce a comprehensive corporateincome tax at a proposed rate of 10%.This would replace existing taxesimposed on foreign corporates and anumber of smaller levies on domestic

companies. Another measure being pro-posed is a value added tax (VAT), whichis being tackled in a coordinated fashionwith other GCC countries. Neither of thetwo tax initiatives is expected to takeeffect before 2019 at the earliest.

We estimate that the government willrequire around KD 10-15 billion indeficit financing in the coming five years.The government has sufficient liquidfunds to easily finance the deficits in themedium term without resorting to debt,including KD 34 billion in mostly liquidoverseas assets in the General ReserveFund (managed by KIA, the KuwaitInvestment Authority). Nonetheless, theMinistry of Finance has indicated anintention to finance some of this require-ment through bond issuance in an effortto reduce the burden on KIA assets, totake advantage of low interest rates andto deepen domestic capital markets.

With the government running a deficitand the current account seeing its surplusnarrow considerably, there is a concernthat system liquidity could be under pres-sure. Indeed, we have already seen aslowdown in M2 growth, which has fall-en from around 8% in the middle of 2014to 5.3% in September 2015. Still, levelsof liquidity remain relatively healthy.

Major moments in thebusiness world in 2015

Despite turmoil, year appears to be ending on calm note

LONDON, Dec 26, (AP): 2015 ends with theglobal economy at a juncture and markets abit edgy.

The main engines of the global economy are not insync and the markets know it. That’s evident fromthe regular bouts of unease that gripped investors

over the past 12 months.Worries over China’s economic slowdown were more

often than not the cause of those jitters. Although China isstill posting growth that developed economies are unlikelyto ever see again, its policymakers know there are chal-lenges ahead.

Not least is transforming an economy that’s beenreliant on trade with the rest of theworld into one that depends more onspending by its growing middleclass. That challenge sparked deepfears in August, when global stockmarkets suffered some of theirbiggest declines since the bad daysof 2008.

The repercussions of China’sslowdown have been felt far andwide, particularly in the energy andcommodity markets, where priceshave fallen. Commuters around theworld have enjoyed the benefits ofcheaper gas, but central bankers,notably in Europe, are worried thatmay lead to a debilitating period offalling prices that can cause stagna-tion.

Despite the turmoil, 2015 appearsto be ending on a calm note, mainlythanks to the strength of the US econ-omy. It’s so healthy the FederalReserve finally decided — after muchagonizing —to start reversing thesuper-low interest rate policy it put inplace during the global financial cri-sis. On Dec 16, the Fed raised interestrates for the first time since the sum-mer of 2006.

It’s not just the big economies thatcause jitters.

Greece, a country of barely 11million, captured nearly as manyheadlines as China and the US thisyear as the country teetered on thebrink of bankruptcy and an exitfrom the euro, Europe’s single cur-rency.

And speaking of surprises, whowould have thought that Volkswagen,a pillar of German engineering andreliability, would be embroiled in acheating scandal that’s undermined itsvenerable brand?

Lender ranked 2nd locally, 5th regionally

AUB named among 50 most‘secure’ international banksKUWAIT CITY, Dec 26: Ahli UnitedBank has embodied its leading role inthe Islamic banking field both locallyand regionally obtaining the secondposition locally and fifth in the GCCin 2015 on the “Global Finance” list ofthe most secure 50 international banks.

This evaluation is based on thelong-term credit ratings of foreigncurrencies by international ratinginstitutions such as: Fitch, Moody’s,and Standard & Poor’s. This reem-phasizes the Bank’s strength andfinancial solvency as well as the suc-cess of its conservative strategy plusits desire to provide the best bankingservices and solutions that conformto the Islamic Shari’a principles.

On this occasion, Moataz Al-Rafie, the Senior Deputy CEO –Banking Group at Ahli United Bank,clarified: The Bank’s achievement ofthe second position in Kuwait and thefifth position in the GCC proves thegood financial performance of theBank which is very satisfactory andexcellent recognition for our role andas a leading bank in this country.

Al-Rafie added: This evaluationreflects the tangible development ofthe Bank in its various departmentswhich was lately crowned by theInterest-Free Loan campaignlaunched by the Bank to assist itsclients to achieve a better standard ofliving through the largest interest-

free loan obtainable in the local mar-ket. The Bank is also unique in offer-ing the Al-Hassad Islamic SavingProgram which offers prizes with thehighest value that amounts to KD 3.4million per year in addition to 26weekly prizes. It is the only prizeprogram in Kuwait which is compat-ible to Islamic Shari’a.

These successive accomplish-ments of the Bank double the AhliUnited Bank’s commitment to inten-sify efforts to streamline the servicesand banking procedures to its clients,Mr. Al-Rafie asserted. Its servicesand products combine the latestbanking technologies with conformi-ty to Islamic Shari’a principlesthrough its network comprising 37branches built and designed accord-ing to highest standards of technolo-gy and service. 90 ATM machinesthroughout Kuwait also provideuninterrupted service to its clients.

Al-Rafie expressed deep apprecia-tion to the Bank’s clients for theirconfidence and loyalty as well as tothe Bank’s personnel whose dedica-tion represents the backbone of theBank’s distinguished achievementsyear after year.

Global Finance adopts a number ofcriteria in its selection of world banksfrom among 500 banks for this awardincluding: credit rating, assets vol-ume and financial indexes.

For its part, Bahrain has moved to endsubsidies offered for meat. Sill, officialshave to decide on those existing for utili-ties and petroleum products during 2016.

Overcoming joblessness or creating suffi-cient job opportunities is another challengefor some GCC economies. Oman, Bahrainand Saudi Arabia suffer from unemploy-

ment rates of 8.1 per cent, 7.4 per cent and5.6 per cent, respectively. The ‘RethinkingArab Employment’ report, published by theWorld Economic Forum, gives higher fig-ures for joblessness among youths.

Of the three countries, Saudi Arabia hasadopted a controversial measure of ban-ning expatriates from working in morethan 30 job categories. Notwithstandingthe objective of sustaining employmentopportunities for locals, the move is notpopular with private sector investors.

Within the broader pan-GCC, authori-

ties are expected to address the challengeof ensuring implementation of projectsdealing with regional economic integrationschemes. The 36th summit GCC held inRiyadh in December stressed the need forcompleting projects such as the customsunion and Gulf common market (GCM).

The customs union focuses on adopt-ing unified trade rules with non-GCCmembers, while the GCM allows for freemovement of factors of productionamong member-states.