2/22/2018 7:52:49 PM Market is CLOSED     عربي


1. What is the status of Boursa Kuwait now?
Boursa Kuwait was granted the official license after successfully concluding the transition phase, which was commenced on 25 April 2016, and meeting a set of licensing requirements in accordance with the CMA law no.7 for year 2010. The company’s ability to fulfil these requirements is an indication of its successful planning and execution approach, which has translated into a series of achievements delivered throughout the transition phase.
As of 5 October 2016, Boursa Kuwait is considered as the official owner of the stock market of Kuwait.

2. What is Boursa Kuwait’s Vision and Mission?
Our vision is to develop a liquid, reliable and sound capital market providing issuers with efficient access to capital, and investors with diverse return opportunities, evolving into a leading regional exchange.

Our mission is to operate an efficient, fair and transparent capital market platform that services all relevant asset classes, whilst focusing on clients’ interest through excellence in everything we do.

3. What are Boursa Kuwait’s Core Values?
The Core Corporate Values of Boursa Kuwait are:
1. PROFESSIONALISM: We adhere to widely accepted, proven international standards in our work. We deal with our clients and all stakeholders in utmost professional manner.
2. ACCOUNTABILITY: We take responsibility for our performance in the eyes of all. We are ready to being held to account for our individual actions and to receiving commensurate rewards for our hard work and achievements. A key attribute for transforming the current culture to a private sector mentality.
3. CLIENT IMPACT: We are results-oriented and strive to make a difference. We create a sustainable impact with our work in our industry and communities, while delivering on our social responsibility commitments. A key attribute needed to transform the bureaucratic present culture to a one that is result driven.
4. PRUDENCE: We take prudent actions. We understand the risks that our firm and clients face; and we proactively manage and mitigate them. Boursa Kuwait will be operating in a risky business. Instilling a prudent culture that will sustain long-term profits and returns for all.

4. What are Boursa Kuwait’s strategic objectives?
Boursa Kuwait’s key strategic objective is to effectively manage and create an attractive issuer base, broaden the investor base, increase depth and breadth of products and upgrade the stock exchange infrastructure and business environment to international standards. Boursa Kuwait aims with this strategy to enhance the current level of performance, achieve emerging markets status, enable the market to compete with regional peers and build a market reflecting the strength, depth and flexibility of the Kuwaiti private sector.

5. Will this transformation bring new products?
Yes, there will be new products and we will share information on these when CMA approval is given. Our objective is to develop products that will allow Kuwaiti investors to trade in leading regional and international equities in an easy and efficient manner.

6. What is the current status of KSE?
As of 5 October 2016, Boursa Kuwait is the owner of the stock market. KSE has transferred its responsibilities to Boursa Kuwait, hence they already cease to exist as a legal entity.

7. How did the transition work?
The transition entailed an upgrade in KSE’s infrastructure and business environment to international standards, creating a robust, transparent and fair capital market platform that services all relevant asset classes, whilst focusing on clients’ interest. All stock exchange activities is now under the ownership of Boursa Kuwait.

8. Can you share the road map with us?
Boursa Kuwait had put in place a clear strategy and plan to ensure a smooth transition process. With the new systems and processes in place, Boursa Kuwait aims to create a robust and regionally competitive exchange operating to world class standards and will address areas of concern by adopting a new and progressive approach, with focus on day to day operations and the introduction of new products and tools. On the long term from 2017 onwards, our objective is to develop a competitive leading regional stock exchange for the State of Kuwait, one which provides issuers with efficient access to capital and investors with diverse return opportunities.

9. How can I get further information?
We will ensure that there are regular updates on progress over the course of this year via email and through face to face briefings at both departmental and company levels. If you have any concerns, you can always email info@boursakuwait.com.kw, and we will respond as soon as we can.

10. What is the role of CMA in the running of the stock exchange?
The CMA granted Boursa Kuwait full authorization to own and manage the stock exchange. The CMA’s role is to supervise the work of Boursa Kuwait and regulate the stock market of Kuwait.

11. How is Boursa Kuwait preparing and safeguarding the stability of the local exchange against these disruptive global trends?
Boursa Kuwait is very aware that many of the disruptive effects of the global market, since, in common with other markets, it was adversely affected by the impact of the 2007/2008 global downturn. Valuations and trading activity both dropped off, but investment companies, some of which had borrowed heavily to buy into real estate and equities were particularly hard hit. The Kuwait government and the CBK took measures to stabilise the situation but the lesson has been learned.

New regulatory measures have been introduced to ensure proper oversight and bring market operations in line with international best practice. The government established the Capital Markets Authority (CMA), formally dividing the regulatory and operational aspects of the KSE for the first time. Boursa Kuwait was created by the CMA to manage the exchange to international standards and best practice, introducing new trading rules, risk management practices, price discovery mechanisms and new technology to ensure that Boursa Kuwait is as robust and secure as possible. The aim of this is to attract new investors into the Kuwaiti market, particularly foreign institutional investors who left the market following the turmoil of 2008/2009. Kuwait has a history as an important regional trading hub and we see Boursa Kuwait as being central to the country consolidating this position in the future.

12. What is an effective capital raising framework for SMEs? Do smaller companies need specific regulation with regard to using capital markets to manage their business development?
Stock markets can be an effective way of raising capital to enable SMEs to expand but there are many unique issues which need individual consideration. For an SME to list, it requires understanding and most of all trust that listing is the right thing to do. Many SMEs are self- owned and its sometimes very difficult for individual owners to ’let go’ or lose control of part of what they see as their creation. And yet, often this is what is required if the company is going to attract enough investment to allow it to reach its potential. Another point is that SME’s are not set up, or have the resources, to address the full regulatory requirement of listed companies. A third point is understanding; companies need to be fully clear on what they will get from a stock exchange listing, so we think there is some sense in treating SMEs and their specific needs differently in terms of listing and specifically regulating for their needs. At Boursa Kuwait we have prioritized SMEs as we see them as part of the successful future of Kuwait’s economy. We are the only stock exchange in the market, so it’s not simply waiting for companies to make a decision on their own, we have to take the lead. We have to convince companies that IPOs are in their interests and give them confidence that the stock exchange is one of the best ways of raising capital. To do this we need to showcase the benefits of listing and that the process is only positive. It makes sense to me to ensure that Boursa Kuwait is set up to accommodate the needs of its customers and of its potential customers. On this basis SME’s do need to be treated as a special case. We want to appeal to both international and new customers. The vision for Kuwait is to develop as a regional trading hub, and it is impossible for us to achieve this without taking into account smaller developing companies. Kuwait is a very entrepreneurial country and has many SMEs which in time we hope will grow into large companies with both domestic and international markets.

13. Regulation is the most important factor shaping banks and the financial markets today. Could the regulatory burden become so great that it is no longer possible for the financial system to function efficiently and effectively?
In the wake of the global economic crisis of 2007/8 the government set up the CMA as a modern independent regulator, whose role is to organize the market and facilitate its operation; its role is to benefit the market and not harm it. We can see that sometimes the regulations processes could slow the pace of rolling our plans out, but we don’t believe it will affect it negatively, provided they are considered and are communicated effectively. The CMA and Boursa Kuwait work very closely to ensure that rules and operations of the market reflect international best practice, as well as the needs of its current and potential customers, and that these are made as transparent as possible. As part of this, Boursa Kuwait has been working towards producing a best-in-class Rulebook which will be the first ever produced in Kuwait.

14. The Fourth Industrial Revolution (FIR) is expanding at exponential pace and is bringing technology at the centre of everything, how are the stock exchanges revising their business models under the FIR? What do you foresee as the greatest opportunities FIR will bring to capital markets and yield hunters?
As we mentioned before, we are investing in technology and are aware of its vitality. We are a newly privatized company which allows us to look at everything afresh. This, we believe is a crucial advantage, especially when we plan on implementing innovative solutions to our operations, services and products. The opportunity here relies in getting new investors such as SMEs to take part and invest in Kuwait stock market and we have to make it as convenient and as straightforward as possible for them. Investing in technology helps us to do this. By targeting SMEs, we intend to bringing new investors on board and widen the scope of Kuwait’s market.

15. Is Boursa Kuwait, an investment magnet and contributor to the national economy?
Since its establishment in 2014 by the Capital Markets Authority, Boursa Kuwait has been undertaking a crucial journey to transform itself into a private entity to take over the management of the Kuwait stock market. The in-depth transition aims to develop the capital market into a world-class investment platform focusing on transparency, efficiency and accessibility. Besides attracting investments, the new entity will play a crucial role in the diversification strategy of the country.
• Vision and course of actions undertaken to transform the stock market into a world-class investment platform
• Infrastructures and services for investors
• Importance to provide foreign and domestic investors with sound, transparent and efficient access to information and capital
• Contribution to the national economy, alternative financing – Facilitating innovation and access to finance for small to medium-sized enterprises

We believe that 2017 will be a watershed year. We are going to focus on SMEs (small and medium sized enterprises), which are a key part of the economy, especially in relation to diversification. Kuwait is the most innovative country in the region. While other countries are focusing on conglomerates and big businesses, in Kuwait we concentrate far more on entrepreneurship and encouraging business growth. There are conglomerates here, but much of their success is based on collaboration with small businesses.

Kuwait is very entrepreneurial and has many SME’s which in time we hope will grow, some into large companies with both domestic and international interests who will want to seek an IPO.

16. What is the Regional competition and reputation of Kuwait’s capital market?
Kuwait’s stock exchange is one of the region’s oldest stock exchanges, with a strong trading reputation that roots back to the 1960s. However, since the early eighties, the exchange lacked the adequate regulations and investments to allow it to compete effectively with newer markets emerging in the region.
• How to regain the reputation at a regional and international level
• Kuwait’s image as reasoned and entrusted investment destination
• Going international to grow – Key targeted markets and attractiveness of Boursa Kuwait

Kuwait used to boast not only one of the Arab world’s oldest, but one of the world’s largest stock markets. For some time, however, the stock market in Kuwait had been losing some of its lustre, especially after the global economic collapse of 2007/8. The privatization of Kuwait’s stock exchange was initiated as part of the reforms to galvanize Kuwaiti economy. Boursa Kuwait plans to address the reputation of the stock market in Kuwait by overhauling the existing trading infrastructure including international standards and best practice trading rules and price discovery mechanisms. It also plans to introduce new products such as ETFs, sukuks, and exchange-traded bonds to allow for a wider range of trading activity and pursue emerging market status.

Boursa Kuwait’s objective is to improve the trading environment by creating a more efficient marketplace for private investors and publicly - listed companies to transact.