Banks up ahead of Zain deal, Kuwait rises

Banks and Zain advance as investors bet the latter's $9bn asset sale will go through, lifting Kuwait's index. Zain climbs 1.6 per cent. It is up 20 per cent since saying it was in exclusive talks to sell some of its African assets to India's Bharti Telecom. As Kuwait's largest listed company, many investors used Zain shares as collateral with banks to borrow funds to reinvest in the market, the analyst says. Much of the borrowing was done around when Zain's shares peaked at 1.6 dinars in September in the wake of major shareholder, Kharafi group saying it had agreed to sell a 46 per cent stake in the telecoms operator. As this deal foundered, Zain's shares slumped, losing almost half their value and leaving lenders' reeling, but with the market now convinced Zain's $9bn asset sale will go through and the stock back to up to 1.3 dinars, banks' balance sheets are looking more favourable. Kuwait Finance House climbs 3.3 per cent and Burgan Bank adds 5.4 per cent. The index climbs 0.2 per cent to 7,416 points.