Kuwait benchmark index advanced for a second day as Credit Suisse Group AG raised the country’s shares and Al-Rai reported Zain may sign a letter of intent for the sale of most of its African assets by the end of this week.

Zain, the country’s biggest phone company, rose to the highest since October. Al-Rai didn’t say where it got the information. Kuwait Cement Co., the nation’s largest cement maker, climbed 4.2 percent. The Kuwait Stock Exchange Index increased 0.3 percent to 7,418.9, bringing the gain for the month to 5.6 percent.
Credit Suisse on Feb. 19 lifted Kuwait’s stocks to “neutral” from “underweight,” citing the government’s spending plan for economic development, and “undemanding” valuations and lower borrowing costs. The country plans to increase spending by about 34 percent in the fiscal year starting April 1, according to a copy of the draft budget sent to parliament earlier this month.
The “increase in government spending was taken extremely positively,” said Paul Cooper, managing director of Sarasin- Alpen & Partners Ltd. The market has also benefited from Bharti Airtel Ltd’s bid for Zain’s African assets, which was “substantially higher than the market expected.”
The 218 companies in Kuwaiti’s benchmark index trade at an average estimated earnings of 9.4 times, according to data compiled by Bloomberg. That compares with 12.3 for the shares in the Bloomberg GCC 200 Index. Kuwait’s central bank on Feb. 8 cut its one-week and one-month repurchase rates by a quarter percentage point, a day after reducing its benchmark interest rate to boost economic growth.
Zain advanced 1.6 percent to 1,300 fils, the highest close since Oct. 25. The company and Bharti said Feb. 15 they entered into exclusive talks under which the Indian company would buy the African assets for $10.7 billion.
Sunil Mittal, the billionaire chairman of Bharti, said last week the price India’s largest mobile-phone company is offering is “not over the top.” Kuwait Cement closed at 740 fils.
Saudi’s Tadawul All Share Index added 0.1 percent at 1:59 p.m. in Riyadh. Qatar and Bahrain’s measures advanced 0.5 percent each and Oman’s MSM30 Index rose less than 0.1 percent. In the United Arab Emirates, the ADX General Index fell 0.4 percent and Dubai’s gauge declined 0.1 percent.
(Source: Bloomberg)