Kuwait scraps Agility Sunday trading
Kuwait, May 18, 2008
The Kuwait Stock Exchange said it would cancel all trades made on Sunday in shares of Agility, the Gulf's biggest logistics firm by market value, after the stock rose nearly 5 per cent on a calculation error.
Trading in Agility will resume on Monday after the bourse adjusts the stock price to factor for a 2007 cash dividend and
bonus share dividends, the exchange said on its website.
It had earlier halted the stock, which had jumped 4.71 per cent, despite Agility having earlier reported a 10-per cent decline in first quarter net profit.
A source familiar with the situation said the bourse had calculated the stock price incorrectly on Sunday by deducting a dividend as well as a 25-per cent capital increase not yet approved.
In a statement before markets opened, the exchange had said that Agility's stock would start trading ex-dividend and factor in a capital hike following its annual shareholder meeting last Tuesday, the last trading day before Kuwait announced three days mourning due to the death of an ex-ruler.
It changed that stance later on Sunday and said it would no longer include the capital hike in the price calculation since Agility's shareholders had decided that only existing investors - who already owned stock the day before subscription starts - would be able to participate.
A source familiar with the situation said the capital increase still needed approval by the government and an extraordinary shareholder meeting.
"The stock was supposed to be trading at 950 fils, but the
bourse deducted both the dividends and capital increase starting
at 850 fils," said the source.
"People were buying in the stock at 850 fils, knowing the real price was 950 fils. They were looking for arbitrage gains."
Last month, Agility said it planned to increase its share capital by 25 per cent, selling shares for 450 fils each to
existing investors in a deal worth KD120 million.
It paid a cash dividend of 80 fils each and a 10 percent bonus share issue for 2007. Separately, Agility said operating profit rose by 1 per cent in the first quarter to KD38.7 million.
Net revenues rose 13.5 percent to KD153.6 million in the first three months, the company said. Agility also said first-quarter net profit fell 10 per cent to KD37.5 million, confirming what a company official had told Reuters on Saturday.-Reuters