Kuwaiti equities will upgrade to emerging market status by the end of 2019, the New York-based index compiler MSCI has announced.
Currently, the MSCI Kuwait Index has frontier status but on 25 June the MSCI said in a statement that various processes are scheduled to come together with a final communication from the index committee by 31 December.
Sebastien Lieblich, global head of equity solutions and chairman of the MSCI Equity Index Committee, said: “Kuwait’s Market Development Project has set the path for the seamless implementation of numerous regulatory and operational enhancements in the Kuwaiti equity market.
“These enhancements have significantly increased the accessibility level of the Kuwaiti equity market for international institutional investors and resulted in broad positive feedback from these investors on our reclassification proposal.”
He added, “During the consultation, international institutional investors highlighted the criticality of omnibus account structures and same NIN cross trade capabilities to avoid frictions in their investment process. We welcome the Capital Market Authority’s public commitment to deliver these market features by November 2019. We will closely monitor their implementation before making the final decision.”
High inflows from passive funds predicted
The move could trigger $2.8bn of inflows from passive funds, according to Mohammad Al Osaimi, the acting chief executive officer of Boursa Kuwait.
“We have ticked all the boxes that are required by MSCI,” he said in an interview on 23 June. “We have also offered international investors additional services and products they were looking for and some changes in bylaws they requested”, he said.
