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Mon 12 Nov 2012 10:59 AM

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Kuwait seen steady; US fiscal woes weigh globally

Kuwait's market is expected to see limited impact from Sunday's demonstrations

Kuwait seen steady; US fiscal woes weigh globally
(Image for illustrative purposes).

Kuwait's market is expected to see limited impact from Sunday's demonstrations, which were carried out under tight security, but weakness in global markets is likely to weigh on Gulf sentiment.

Tens of thousands of Kuwaitis packed into a square opposite parliament on Sunday in a peaceful opposition-led rally against new voting rules.

Recent demonstrations against the electoral changes, ordered by Kuwait's ruler last month ahead of a poll on December 1, have led to clashes between protesters and police as marches spread out of the areas usually designated for rallies.

Hundreds of Kuwaiti men wearing white traditional robes streamed into the square where opposition leaders gave speeches from a stage to protesters, many sitting on carpets drinking tea as others sang Kuwaiti songs.

"I don't believe we will have the repercussions [from the protest] as previous ones," says Fouad Darwish, head of brokerage at Global Investment House. But he added that some fundamental concerns remain, associated with the fact that more than 120 companies have not yet announced earnings and the November 15 deadline is fast approaching.

Kuwait's index on Sunday closed at a fresh three-week high on hopes of economic and political improvement, after comments from the emir were taken positively.

In Saudi Arabia, the Capital Market Authority is allowing subscription rights for share offers to be listed and traded on the Saudi stock market, in a bid to modernise the exchange in preparation to permit the entry of foreign investors.

Investors in Saudi Arabia will be looking for developments on King Abdullah's health, who will undergo a back operation next week, the Royal Court said in a statement.

Investor reaction may be mixed on petrochemical stocks which react to demand, and prices, for petrochemical products.

On Sunday, Saudi Oil Minister Ali al-Naimi said the global oil market is in a good shape and the kingdom is happy with the current oil price. But he added that other non-conventional fuel options, such as shale oil, may put pressure on demand for fossil fuels next year.

Brent oil slipped below US$109 a barrel on Monday.

In Asia, shares were capped on Monday as concerns over US fiscal woes as well as Greece's bailout weighed on investor sentiment, despite improving economic data from the world's two largest economies, the United States and China.