Is Kuwaiti Market Over Reacting to Recent Events?

The fall of KSE Price Index on 20th Feb has given birth to opportunities to grab quality companies at descent prices. The current correction (of more than 2.5%) is the first major fall occurring in year 2011 and  first in over 8 month. Adding further stats, this is 27th time since Jan 2005 that the market has corrected so drastically - over 2.5%. 

The regional turmoil ranging from Tunisia, Egypt and more recently Bahrain has created an unstable environment making investors to pull-off cash from equities. Most of the regional markets are down, including Kuwait. The Kuwaiti Index is in a free fall mode and has been  falling non-stop for last few days. 

Value and patient investors should and are generally on lookout for such opportunities to buy things at a discount, hence one should revisit his thesis, if any and can buy quality companies now. Technically, the index is looking oversold. Fundamentally there is not much alteration due to unstable neighbors. Once can buy Blue Chip stocks which are down by more than 7% to 10%. but be careful to analyze companies.  

Happy Investing !!!

Data: Bloomberg; Wealthy Opinions