KUWAIT STOCK EXCHANGE BOUNCES BACK ON SUCCESSION

UNCLAS KUWAIT 000226 SIPDIS SENSITIVE SIPDIS DEPARTMENT NEA/ARPI, LONDON FOR LTSOU E.O. 12958: N/A TAGS: EFIN PGOV KU SUBJECT: KUWAIT STOCK EXCHANGE BOUNCES BACK ON SUCCESSION RESOLUTION REF: A. KUWAIT 200 ¶B. KUWAIT 184 ¶C. KUWAIT 097 ¶1. (SBU) Reacting to the resolution of the succession issue in favor of Prime Minister and next Amir Shaykh Sabah Al-Ahmed Al-Sabah, traders on the morning of January 24 pushed the Kuwait Stock Exchange (KSE) back up to 11,782 by the closing bell at 12:30, making up for all of the losses of the past week. All sectors performed well, with the investment, services and real estate sectors leading the way. The month of January saw the KSE start at 11,445 and was up to 11,688 on January 15, the day that previous Amir Shaykh Jaber Al-Ahmed Al-Jaber Al-Sabah died. The market reopened on January 21 to a two percent decline (225 point drop),but rose almost 300 points on January 24. ¶2. (SBU) KSE Technical Director (and former Public Relations head) Ms. Wafa Alrasheed, informed Econoff on January 23 that the January 21 decline was expected given the impact of the Amir's death on Kuwaiti society. Alrasheed expressed continued optimism in the market's resilience, despite confusion resulting from the ongoing succession struggle attracting the nation's attention. Comment -------------- ¶3. (SBU) While most Kuwaitis expressed confidence in the political process of the past week, it is no surprise that the succession debates and their end result this morning have had an impact on the market. The expected appointment of Prime Minister Shaykh Sabah Al-Ahmad Al-Jaber Al-Sabah as Amir, a relatively healthy and pro-business minded reformer, likely will continue to bolster investor confidence and result in a short-term rally. -------------- Visit Kuwait's Classified Website: http://www.state.sgov.gov/p/nea/kuwait -------------- LeBaron