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Thu 1 Nov 2012 10:01 AM

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Kuwait seen lower; Dana Gas under pressure

Kuwait's bourse is likely to witness selling pressure on Thursday after fresh protests

Kuwait seen lower; Dana Gas under pressure
(Image for illustrative purposes)

Kuwait's bourse is likely to witness selling pressure on Thursday after fresh protests, while UAE's Dana Gas said it is in ongoing discussions with creditors after it failed to pay a US$1bn sukuk on maturity.

Kuwaiti police used teargas and smoke bombs on Wednesday to disperse thousands of protesters marching on a prison where an opposition leader is being held on charges of insulting the emir, witnesses said.

"The market will react like it always does to protests - negatively," says a Kuwait-based trader who asked not to be identified. "While we're getting used to political uncertainty, the market is not immune to violent protests and it's weak already."

The index fell to a two-month low last week on protests against changes to the election law, which now allows each voter to choose only one candidate instead of four.

The opposition has condemned the amendment as an attempt to give pro-government candidates an advantage in parliamentary elections on December 1 and said they will boycott the poll.

Shares in heavyweight mobile operator Zain will be in focus after the firm said on Wednesday it aims to list its Iraqi unit by the end of the first quarter next year pending receipt of regulatory approvals.

In the UAE, Dana Gas said it failed to pay the outstanding US$920m on an Islamic bond that matured on Wednesday, as well as a US$18.75m accrued profit payment due on October 30, adding it is in ongoing discussions with sukuk holders to amend and extend the sukuk.

Shares in the energy firm plunged 8.9 percent on Wednesday to their lowest close since September 18 on sukuk repayment concerns. Analysts expect further selling pressure on the stock until a solution is reached.

Also in Abu Dhabi, National Bank of Abu Dhabi said higher interest and fee income would help it offset lower loan growth this year, keeping its top-line profit forecast on track.

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