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Kuwait Stocks End Year as Gulf Darling Ahead of MSCI Ruling

(Bloomberg) –Kuwait stocks beat peers in the Gulf this year as investors bet that MSCI Inc. will promote the country into its main index tracking stocks in emerging markets in June 2020.

The Boursa Kuwait Premier Market Index, which includes the biggest and most liquid stocks in the country, rose 0.5% on Wednesday, extending its advance to about 30% this year. MSCI has said that Kuwait’s change from its current “frontier” status would happen after certain trading mechanisms were improved. The compiler will give a final decision on Wednesday after 11 p.m. Central European Time.

The stock exchange has made all the necessary changes to guarantee the lift, Chief Executive Officer Mohammad Al Osaimi told Bloomberg Television last month. The index performance this year suggests that investors are also confident. Mohamad Al Hajj, an equities strategist at EFG-Hermes Holding in Dubai, expects the country to become 0.8% of the MSCI Emerging Markets Index, leading to inflows by passive investors of about $3.8 billion.

As investors prepare for the upgrade, exchange-traded funds have become a way for foreigners to place bets. BlackRock Inc. filed this month for the registration of what would be the first Kuwait-focused ETF to trade in New York. In Europe, the HANetf KMEFIC FTSE Kuwait Equity UCITS ETF and the Invesco MSCI Kuwait UCITS ETF both launched this year, and have total assets of $43 million and $53 million, respectively.

Check the stocks expected to receive the biggest flows, according to EFG-Hermes:

  • National Bank of Kuwait: $1.7 billion
  • Kuwait Finance House: $794 million
  • Ahli United Bank: $381 million
  • Mobile Telecommunications – Zain: $330 million
  • Agility Public Warehousing: $187 million

–With assistance from Rachel Evans.

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