AlJoman: Cross Holdings on KSE Equal KD3 Billion or 9.4% of Market Value

AlJoman issued another interesting analytic piece.  This one on cross holdings on the KSE.

A bit of initial tafsir:

1. It's based on information from the KSE on shareholders of listed companies.  
2. As per KSE rules, shareholdings 5% or more are to be reported. 
3. Data is as of 5 August 2010.

Here's a quick summary.

1. 84 listed companies have cross shareholdings spread across 132 companies.
2. The amount is KD3.035 billion which represents 9.4% of the total market capital of KSE listed companies (KD32.4 billion).
3. It also is 21% of the disclosed investments by KSE listed firms (KD14.7 billion).  
4. Al Joman estimates that aggregate cross holdings (including those below the 5% threshold) equal 20% of the market capital of KSE listed firms.  It doesn't detail its rationale.
5. It ascribes this motive for this cross holding essentially as market manipulation.  Companies cross hold, inflate demand (sometime fictitious) for their partners' shares, and thus create bubbles.  When the downturn came, this mechanism which had been so powerful in creating the updraft was powerless to stop the downdraft.  Not the manipulators, nor the market makers, nor even the Government with its National Portfolio.   Al Joman refers to it as like a snowball rolling downhill, getting bigger as it goes and crushing all in its path.
6. As it has done before it faults the regulator and the weakness of the existing system, noting that many companies violated their corporate charters by investing in economic activities outside of the one listed in their Articles.   There's a biting comment about some real estate companies that own no real estate - not even a single apartment or shop.
7. In closing it notes that some out there may say that Al Joman is "beating a dead horse" on this topic.  But that it's intent is to remind the Kuwait CMA of the necessity of ending such "deviant" practices.

Here's an abbreviated version of the chart in the report.

Sector	# w Cross Hold	KD Millions	% Total
Banking	6	836	27.5%
Investment	31	1,237	40.8%
Insurance	4	44	1.4%
Real Estate	17	286	9.4%
Industry	9	371	12.2%
Services	11	108	3.6%
Food	2	4	0.1%
Non Kuwaiti	3	148	4.9%
Parallel Market	1	2	0.1%
TOTAL	84	3,035	100.0%

One final note, an appeal actually for some linguistic help.  There are two expressions that Al Joman uses in the report, the precise translation of which elude me.  Appreciate it if someone will post to give me not only a translation but a  ذوق of the expression.

1. الضحك على الذقون       
2. طاح الفاس بالراس