Mohamed Al Osaimi, Acting CEO, Boursa Kuwait: Interview

Interview: Mohamed Al Osaimi

What gains are to be expected from the privatisation of Boursa Kuwait and Kuwait’s upgrade to emerging market status by several indices?

MOHAMED AL OSAIMI: Boursa Kuwait’s privatisation and ongoing progressive market reforms have paved the way for the implementation of numerous regulatory and operational enhancements in the Kuwaiti equity market. These reforms established an exchange capable of supporting the strength, depth and long-term growth of the Kuwaiti private sector. The upgrade of Kuwait to emerging market status is instrumental in attracting foreign investment from large institutions, reinforcing investors’ confidence in the market’s stability, all the while substantially boosting the market’s liquidity. We received an upgrade from FTSE Russell in 2017 and S&P Dow Jones in 2018, and we are working with the Capital Markets Authority to get the final decision of reclassification to emerging market status from MSCI. This upgrade, if affirmed by end-2019, is expected to lead to inflows ranging from $1.8bn to $2.8bn of passive funds, in addition to lateral growth in local trading.

Which measures are currently being taken to boost the attractiveness of Boursa Kuwait?

AL OSAIMI: We have been working with partners from across the investment community, locally and abroad, to introduce new products and services, and to encourage government entities and family businesses to list on the exchange. We are engaging in a strategy that incentivises foreign companies to list and invest in the market.

We have also established a long-term partnership with Refinitiv, a global provider of financial markets data, to supply investors with real-time analysis on financial statements and ratios, charting and comparability capabilities and daily updates on a number of ratios according to closing prices. Additionally, Boursa Kuwait’s continuous pursuit of international recognition, accreditation and upgrades from international credit ratings agencies and indices providers, such as MSCI or FTSE Russell and S&P Dow Jones, entails compliance with global transparency standards.

In what ways can Boursa Kuwait encourage further diversification of issuers and local investors?

AL OSAIMI: Boursa Kuwait is keen to diversify and develop its product portfolio in line with international standards, taking solid steps towards continuously introducing new products and services that address market and investor needs. Product launches such as an over-the-counter platform, short selling, a trade-at-last session, stock-swap transactions and real estate investment trusts reflect the pace at which Boursa Kuwait is operating and rolling out its market developments, and elevating market offerings.

Driven by its market development strategy, the stock exchange is focused on infrastructural upgrades, regulatory reforms and the diversification of offerings in a bid to improve the business environment, and expand its issuer and investor bases.

How is Boursa Kuwait encouraging listings, and what role has market segmentation had in this?

AL OSAIMI: At Boursa Kuwait we have a team working with government entities and family businesses to optimise their market readiness. Our internal programme helps firms to adopt international best practices and assists with compliance and financial disclosures. While the segmentation of the market has resulted in a notable leap in enhancing market conditions and catering to firms of different sizes, it is the changes in requirements that has encouraged more listings. The free-float concept is now implemented, which improves the attractiveness of the issuers base for family businesses and government entities, while a rise in the number of total shareholders boosts liquidity. Meanwhile, more flexible international standards for listing have been adopted, providing market participants with the opportunity to invest in newly established companies and start-ups.