MSCI to boost Kuwait equities with 2020 emerging markets upgrade

This post was originally published on this site
https://i-invdn-com.akamaized.net/news/LYNXNPEC0L0PD_M.jpg
© Reuters. MSCI to boost Kuwait equities with 2020 emerging markets upgrade© Reuters. MSCI to boost Kuwait equities with 2020 emerging markets upgrade

DUBAI (Reuters) – MSCI Inc, the world’s largest index provider, said it will reclassify the MSCI Kuwait Indexes from frontier to emerging markets as the Kuwaiti equity market had met all the necessary requirements, a move expected to generate billions of dollars of inflows.

The index compiler will include the MSCI Kuwait index in the Emerging Market Index in one phase during the May 2020 semi-annual index review, it said in a statement late on Wednesday.

Sebastien Lieblich, Global Head of Index Solutions and Chairman of the MSCI equity index committee, said: “Kuwait’s addition adds further diversification to the with an estimated weight of 0.69%.”

The upgrade follows Kuwait’s implementation of regulatory and operational enhancements in the Kuwaiti equity market, such as introducing omnibus accounts that would allow foreign investors to trade while remaining anonymous, offering the same privileges that local investors now have.

Oil-rich Kuwait wants to strengthen its position as a regional financial center and give the private sector a stronger role in the economy.

Inclusion in a benchmark index attracts inflows from “passive investors” who track those indexes. Dubai-based Arqaam Capital said in a note it estimates the inclusion will generate about $2.7 billion in net passive inflows.

Beyond that, the inclusion may also generate up to $7 billion in interest from active investors, according to the Kuwait and Middle East Financial Investment Company (KMEFIC), an asset management firm.

The Saudi stock exchange, the region’s largest market, completed the second and final phase of joining the MSCI Emerging Markets Index earlier this year, garnering inflows worth billions of dollars.

“Using the comparison, Kuwait might experience a large performance boost in the first half of 2020 due to buy side pressure,” said Abdullah Albusairi at KMEFIC.

The Kuwaiti benchmark premier index rose 30% this year, outperforming regional peers in anticipation of the MSCI upgrade. It was up 0.3% in early trade on Thursday.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add Comment