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Kuwait shares fall on global rating cut; UAE indexes decline
Kuwait shares dropped as the credit downgrade of Global Investment House KSCC, the country’s biggest investment bank, raised concern that other companies might be affected too. Measures in the United Arab Emirates also retreated.
- Bloomberg
- Published: 15:53 December 18, 2008
Dubai: Kuwait shares dropped as the credit downgrade of Global Investment House KSCC, the country's biggest investment bank, raised concern that other companies might be affected too. Measures in the United Arab Emirates also retreated.
Global tumbled to the lowest since December 2004 after Standard & Poor's cut its credit rating to “selective default.'' Kuwait Finance House KSC, the country's biggest Islamic bank, fell for a third day.
Emirates Telecommunications Corp., the U.A.E.'s biggest phone company, also declined.
The Kuwait Stock Exchange Index dropped 2.1 per cent to 8,623.6, bringing the slump this year to 31 per cent. The Dubai Financial Market General Index declined 1 per cent, while Abu Dhabi's gauge fell 1.3 per cent.
"Kuwait's market is dominated by investment companies and the news on Global's downgrade because of difficulties in refinancing debt indicates this problem could affect a wide range of companies," said Fadi Al Said, head of equities at ING Investment Management (Dubai) Ltd. "A bigger concern is the impact this would have on the banks, who may be forced to refinance this debt."
Global's downgrade by S&P followed the Kuwaiti company's non-payment of a $200 million syndicated loan due December 15, on which it sought a one-week extension, the rating company said in a statement on Thursday. Fitch on December 15 downgraded Global's long- term issuer default rating to "C" from "BBB" and also reduced its short-term and individual ratings.
Global fell 7.6 per cent to 305 fils, while Kuwait Finance House dropped 4.6 per cent to 1,680 fils. Emirates Telecom, or Etisalat, retreated 1.2 per cent to 12.15 riyals.
Bahrain's market dropped 0.9 per cent and Oman's Muscat Securities Market 30 Index added 1 per cent. Qatar's bourse is shut today for a national holiday, while Saudi Arabia's bourse is closed for the weekend.
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