The Kuwait Stock Exchange has halted trading in the shares of 50 companies after they failed to report third-quarter results on time.
Kuwait suspends yet more late-filing firms
The Kuwait Stock Exchange has halted trading in the shares of 50 companies, about a quarter of those listed on the bourse, after they failed to report third-quarter results on time.
The companies did not announce financial results for the July to September period within the stipulated 45 days, the bourse said on its website yesterday.
Twenty-two of the listed companies had already been suspended for not declaring earnings results for previous quarters.
Most of those suspended are investment firms that have so far failed to recover from global financial crisis in 2008.
Among the first suspended was the troubled Investment Dar, which owns half of the car maker Aston Martin. Other prominent companies include Kuwait National Airlines. The holding company owns Wataniya Airlines, which in March ceased all operations because of financial difficulties, and began discussions with its shareholders to determine the future of the carrier. Kuwait's benchmark is down 15.5 per cent to 6,955.5 since January.
The problems in Kuwait run much deeper than failing to report on time. There is a general malaise among traders and investors, who see the market as an unhealthy. Many complain that the market, which has no independent regulator, is rife with insider trading, plagued with dubious schemes to entice unwitting investors and driven by rumours that often make it into local newspapers.
"Kuwait's market is driven by speculations on company announcements, mergers and acquisitions, especially on small-cap stocks," said Marwan Shurrab, the chief trader at Gulfmena Investments in Dubai. "More than often, the movement on the stock happens before the actual announcement."
One possible illustration of the effect of such laxity is the case of Hazem Al Braikan, a Kuwaiti businessman who died last year in an apparent suicide after the US Securities and Exchange Commission sued him over false stories he was said to have planted in local newspapers about bids for US companies.
While activities such as that can go unnoticed in Kuwait, playing the stock-manipulation game in well-regulated foreign markets is much more difficult and often harshly punished.