A Simple Illustrative Guide to buying Shares on the Kuwait Stock Exchange

A very simple guide to making money in the Kuwait Stock Market.

Never keep all your eggs in one basket“, the age old adage by which all investors attempt to lead their portfolio filled lives. Diversification is the key, and in this quick guide, I will attempt to break the market down into its simplest elements.

Selecting stock is not as difficult as a lot of people make it out to be; all you need is good internet research skills, a working knowledge of Excel and you are good to go!

This post assumes that you have already registered with the Kuwait Stock Exchange Authority (the how to was highlighted in previous posts here and here and here) and are ready to have at it with the purchasing.

My broker of choice is Union Securities Brokerage Co. (USBC) the illustrations will be through their website:

Step 1: Log in to your USBC account

Investing in the Kuwait Stock Market

Step 2: point your cursor over to trade and select odd lot placement

guide to making money on the Kuwait Stock Exchange, KSE

 

Step 3: Click on Add to find the following screen

guide to making money on the Kuwait Stock Exchange, KSE

 

Step 4: copy the table and paste it into an Excel Sheet

Investing in the Kuwait Stock Market

Step 5: insert the following formula into the column next to Ask

guide to making money on the Kuwait Stock Exchange, KSE

Drag this formula down the entire column (for those who are Excel Savvy, go one cell to the left into ask column, hold down Ctrl, click the down arrow, go to the right into the empty cell, hold down Ctrl+Shift and click the Up arrow, once the column is highlighted click Ctrl+D)

guide to making money on the Kuwait Stock Exchange, KSE

Now you have the total price in KD of all the stocks on sale at this point in time in the Odd Lot Market. You can arrange them by order of Price (highest to lowest) or Quantity offered (highest to lowest), or combine the two and set them in order of Price first then quantity to get the highest amount of stock for the lowest amount of KD. As you can see the Odd Lot market caters to all tastes, from stocks worth a few hundred KD to those in the high thousands depending on your pocket size.

The next step is very basic and it depends on past performance dictating future results, which is not always the case but as a first step, it is ok.

Step 6: Go to the Kuwait Stock Exchange website; on the left hand side click on Distributions (right above the blinking RSS button) and download the Distribution of dividends for 2010 report (the previous financial year; remember financials are prepared for the previous year at the beginning of the current year).

guide to making money on the Kuwait Stock Exchange, KSE

The report will look something like this:

guide to making money on the Kuwait Stock Exchange, KSE

Now you have the dividend distributions during the previous year; it is a risky albeit logical assumption that companies that gave distributions last year will do so again this year.

Step 7: Return to the Excel sheet, my analysis did the following – I sorted price to be less than 300KD thereby viewing all shares that are 300KD or less in total. Then I arranged them in order of number of shares on sale (the more shares sold, the higher the dividend distribution).

Something like this:

guide to making money on the Kuwait Stock Exchange, KSE

Step 8: Now it is merely a matter of taking the ID Number (aka Ticker Number) of the stock and viewing its results from the previous year in the PDF file downloaded from the KuwaitSE website.

Here is one I did before to highlight the investments I found interesting:

guide to making money on the Kuwait Stock Exchange, KSE

Step 9: the last columns are strictly theoretical and illustrate that if you had had these shares last year, this would be the amount of return you received in stocks or cash. What people fail to realise is that returns are measured on the number of shares not their value; 20% cash dividend means you receive 20fils per share you own.

guide to making money on the Kuwait Stock Exchange, KSE

And that dear friends is how to buy stocks on the Odd Lot Market in Kuwait! If further clarification is needed, please do not hesitate to ask, I am no investment Guru, I just know a few things that the average non-financial background person would not.

Before deciding to buy the stock, it is a good idea to read up on the company, usually through www.zawya.com or www.gulfbase.com.

Also, please note that I am not advertising for USBC, the only relationship between us is that they represent me on KSE, they did not ask me to write this, I wrote it of my own accord.

Now go out there and build your nest eggs!

 

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