Kuwait to Boost Bourse's Allure Amid Bid for Emerging-Market Tag

  • T+3 settlement cycle to be fully implemented by end of April
  • Nation plans to introduce products to help boost liquidity

Kuwait is seeking to follow its Gulf neighbors in its bid to gain emerging-market status.

The nation’s Capital Markets Authority plans to extend its settlement cycle for stock trades by the end of April to three days from two for foreigners and zero for local traders, Vice-Chairman Mishaal Al-Usaimi said at a conference in Kuwait City. The regulators are also planning to introduce short-selling and derivative products as they seek to attract foreign cash.

"We talked about developing a model in which settlement would be convenient to local and foreign investors," Al-Usaimi said. "We are working to transform Kuwait to the most sophisticated market in the region."

Read more about changes in Kuwait’s market:

  • T+3 settlement is part of a “post-trade model” to be implemented in two phases, Al-Usaimi said.
    • Other measures of Phase I include introduction of lending and borrowing of shares for market makers and certain companies.
  • Kuwait’s stock exchange, known as Boursa Kuwait, is studying several measures to address lack of liquidity in local market, Chief Executive Officer Khaled Al Khaled said at same event.
    • Boursa to allow tradable rights issues and exchange traded funds next year as part of second phase of post-trade model
    • Stock exchange to separate companies already listed in segregated markets, respecting different criteria including market capitalization and daily trading volume.
    • Changes will ensure more transparency to trading, said Mohammad Al-Osaimi, executive director of the market section at Boursa Kuwait
      • “We need to make available instruments that are available for every type of market.”
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