The Kuwait Stock Exchange yesterday halted trading in 36 companies because they failed to report last year's financial results on time. Among the companies affected are some of the nation's largest investment firms, including Investment Dar, Global Investment House, Noor Financial and Al Mal Investment. Most Kuwaiti companies have submitted last year's results for approval to the central bank, which was expected to review them ahead of their release. Analysts said the central bank might be at least partly responsible for the results being late. "Most companies have sent results to the central bank, and the hold-up is there because they are not approving the auditing or having other problems getting approval there," said Layla al Ammar, an analyst at the investment firm Markaz in Kuwait. The stall in reporting appears to stem partly from Kuwait's investment companies, which make up a major portion of its publicly traded firms, sustaining large profit falls last year in the global financial crisis. On Tuesday, Kipco Asset Management reported 2008 net profits of 1.1 million dinars (Dh13.8m) for last year, down 97 per cent from the year before. Kuwait and Middle East Financial Investment reported a 71 per cent dip in profits, to 3.9m dinars, and Gulf Investment House recorded 1.8m dinars in profits, down 88 per cent. Kuwait has been one of the hardest-hit Gulf countries during the crisis. The country's main stock index has declined by 56 per cent since last summer, and shares were suspended for more than a week last October after protests by traders. Gulf Bank, the country's second-largest bank by assets, also took an unexpected US$1.4 billion (Dh5.14bn) loss on soured derivatives contracts last October, leading the government to guarantee all bank deposits. Meanwhile, Global Investment House has gone into default on a reported $2.8bn of loans in December. Kuwait has yet to introduce an economic stimulus package, unlike other countries in the Gulf. While a $5.2bn package was proposed last year, it was held up for months by conflict in the country's parliament, which was dissolved two weeks ago. Its powers were passed to the Kuwaiti emir and his cabinet before elections are held. The package was approved by the cabinet on March 26 but awaits the emir's final approval. The package also must be be given the approval of the new parliament, once it is elected. Analysts said there was no clarity on when shares in the companies suspended yesterday would resume trading. They said the delay probably was caused by the central bank paying stricter attention to accounting and auditing this year, because of the large potential losses some firms face. Trading is expected to resume once those problems have been worked out. As has been the case for firms across the globe, many Kuwaiti investment companies hold assets that are difficult to value because there is no active market for them. Without an accurate way of pricing these assets, deciding how much of their values companies must write down can be tricky. "They may have issues with the financials, and they are going back and forth between the companies and the auditors to find out what the real values of these things are," Ms al Ammar said. * with Reuters firstname.lastname@example.org
Kuwait bourse halts trade in 36 firms
Companies that failed to report last year's financial results on time have had trading in their shares suspened.
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