Abu Dhabi, UAEMonday 23 September 2019

Kuwait's Capital Markets Authority to sell 50% share in the bourse to citizens

The IPO marks the second and final stage of the privatisation process for Boursa Kuwait Securities Company

The Boursa Kuwait plans an IPO on October 1, 2019. Reuters
The Boursa Kuwait plans an IPO on October 1, 2019. Reuters

Boursa Kuwait will proceed with plans for an initial public offering on October 1 when the country's stock market regulator Capital Markets Authority sells its 50 per cent share in the bourse to Kuwaiti citizens.

The offer price for the sale is 100 fils (Dh1.20) per share and the subscription period is open for three months until December 1, the CMA and Boursa Kuwait said in a joint statement on Sunday. The IPO marks the second and final stage of the privatisation process for Boursa Kuwait Securities Company.

"The privatisation of Kuwait’s stock exchange is an important step towards achieving the ambitious national development goals set out in Kuwait Vision 2035 with an aim to strengthen the country’s position as a regional financial centre and give the private sector a stronger role and a greater opportunity to develop the national economy," they said.

After listing, 50 per cent of Boursa Kuwait's shares will be owned by citizens and 44 per cent will be owned by strategic investors, while the remaining 6 per cent will be owned by the Kuwaiti government, through the Public Institution for Social Security.

Kuwait's $98 billion (Dh360bn) stock market, which is similar in size to markets in New Zealand and Ireland, is currently the largest member of the MSCI’s main frontier gauge, but it is set to be upgraded to emerging market status in June next year. The upgrade has seen active managers buying Kuwaiti stocks ahead of anticipated passive inflows.

The exchange was included in the FTSE Russell Emerging Markets Index (FTSE) in September 2017 and S&P Dow Jones Global Benchmark Indices with an emerging market classification in December 2018.

Boursa Kuwait, one of the oldest and largest stock exchanges in the Arab world, expects as many as two initial public offerings from the services and finance sectors and two real estate investment trusts within the next 12 months, its acting chief executive Mohamed Al Osaimi, told The National in June.

The exchange seeks to attract more companies from the petrochemicals sector, he said at the time.

MSCI, the world's largest index compiler, will upgrade Kuwait to its main emerging markets index by 2020, a reclassification that could attract $2.8bn of inflows from passive funds to its equities market. Kuwait will be the fourth country from the region after the UAE, Qatar and Saudi Arabia to be reclassified as an emerging market.

Updated: September 8, 2019 12:35 PM

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