KUWAITI financial markets were steady yesterday after the Islamist-led opposition won control of parliament in an election, a victory which could worsen political tensions but conceivably also lead to fresh government spending measures.
The main stock market index, which has been edging up from multi-year lows over the past three weeks, was up 0.03 per cent during the early afternoon in fairly active turnover. Trade in the Kuwaiti dinar, which is pegged to a dollar-dominated currency basket, was quiet.
Candidates from the loose, Islamist-led opposition bloc took about two-thirds of the assembly’s 50 seats in Thursday’s election, eroding the position of Shi’ite parliamentarians who generally sided with the cabinet. The opposition bloc, which had just over 20 seats before the vote, will lead the state’s fourth parliament in six years.
Analysts said the election results might deepen political tensions in the country if they emboldened the opposition to push for constitutional changes and challenge the cabinet, which is appointed by a prime minister hand-picked by the ruling family. These tensions led in November to the storming of parliament by opposition lawmakers and protesters, though protests have generally been peaceful.
“The opposition will now feel it has a democratic and moral mandate to push further against the government and what they see as official corruption,” said Farouk Soussa, Middle East chief economist at Citi.
