Kuwait bourse halts trading in 26 firms (Re-post from chartsandnumbers.com)

The Kuwait Stock Exchange (KSE) has halted trading in 26 companies for failing to publish their 2009 first quarter earnings on time. An announcement on the KSE website claims that the 26 firms include Investment Dar , Aayan Leasing & Investment Co , and Gulf Investment House. Trading usually resumes minutes after posting the financial results on the bourse website.

A major problem Kuwait is facing is transparency in regulations. Analysts have long demanded better regulation and clarity on stock market rules. The implications of halting trading has been beneficial to companies that wish to avoid further decline in their stocks. Without an imposed penalty, company’s will hold on to their results and delay announcing results, further skewing comparisons between companies in the local exchange. Investors have been fairly passive in their investments while there is no mention of when the company’s will announce earnings.

The Investment Dar (alDar) had been halted from trading since April 1 following an order to halt company’s which had not announced 2008 annual earnings results. Last week, alDar defaulted on a $100 million Islamic debt issue, the first such default for a major, public, Islamic instrument in the region. The actions of alDar have caused many foriegn investors to avoid investments in Kuwait due to its disregard to investors, and lack of enforcement by authorities.