Panicked investors force Kuwaiti Stock market to close-Sellers-No buyers

Trading on Kuwait’s stock exchange was halted yesterday by court order in a measure meant to stop a months-long slide while authorities try to find ways to reinvigorate the market.

The halt to trading is the first to be announced in the Gulf even though stock markets across the region have fallen steeply.

Angry traders have been demanding a stop to trading for several weeks, protesting outside the exchange and at Kuwait’s parliament. They have even taken their grievances to the Emir’s palace. The closure of the market appears to be an accession to their demands.

The main problem in Kuwait appears to be illiquidity. Essentially, too many investors want to sell shares, but cannot find anyone who wants to buy them.

Dubai: Two Kuwaiti ministers, several MPs and eminent economists all had one thing in common.

They were all united in flaying the first court ruling of its kind in the country that suspended trading on the stock market yesterday as "wrong and dangerous". The spark being the downslide in the bourse and huge losses due to fallout from the international financial crisis.

The judiciary has no right to deprive people from buying at a low price because X or Y sold at a low price," Al Saddoun, who heads Al Shal Centre for Economic Research and Consultancy, said.

"There are people who want to sell even at a low price because they need the cash.... to stop them from exercising their rights is a grave mistake."

Since June 24, Kuwaiti stock market hit an all-time peak of 15,654, and then lost more than 43 per cent.

Kuwait’s market declines are not much worse than they have been across the region. Stock values in Dubai have fallen 56 per cent in the past three months. The Abu Dhabi Securities Exchange index is down 45 per cent since June. Saudi Arabia’s Tadawul market index is down 44 per cent since June, and markets in Qatar and Oman have taken a similar beating.