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Abu Dhabi, UAESunday 16 December 2018

Kuwait to be added to S&P DJI Global Benchmark Indices with emerging market status

Move effective before the market opens on September 23, 2019

Kuwait will be added to S&P Dow Jones Indices’ Global Benchmark Indices with an emerging market classification Stephanie McGehee / Reuters
Kuwait will be added to S&P Dow Jones Indices’ Global Benchmark Indices with an emerging market classification Stephanie McGehee / Reuters

Kuwait will be added to the S&P Dow Jones Indices' Global Benchmark Indices with an emerging market classification by next year.

The move will be effective before the market open on September 23, 2019, S&P said in a statement on its website.

"S&P DJI recognizes the progress Kuwait has made with regards to trade clearing and settlement, including changing to a T+3 settlement cycle and establishing a delivery versus payment (DVP) system," it said, referring to a system whereby trades are settled within three days of execution.

The move is the latest boost to Kuwait, one of the best performers in Gulf markets this year, ahead of US index provider MSCI's decision next year on whether to upgrade its Kuwait index to its widely used emerging-market benchmark. The inclusion would result in another $2 billion (Dh7.3bn) of passive inflows, according to analysts at Arqaam Capital and Franklin Templeton.

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Kuwait’s inclusion in the FTSE Russell Emerging Markets Index in September is expected to attract $1bn of passive inflows to its capital markets, according to Franklin Templeton. Kuwait will have a 0.51 per cent weighting in the index with a total of 12 companies joining the benchmark over two phases in September and December.

Boursa Kuwait, which is preparing for its own initial public offering in the first quarter of next year, introduced several measures to overhaul the capital markets since it took control of the Kuwait Stock Exchange in early 2016. It relaxed listing rules, delisted companies deemed unsuitable for public investment and segmented the market with different disclosure requirements.

Kuwait's economy is forecast to swing to growth of 2.4 per cent this year after contracting 2.5 per cent last year, according to Fitch Solutions' September report.

Kuwait, Opec’s fifth largest oil producer, has the GCC’s oldest stock exchange and sovereign wealth fund.