KUWAIT: Financial quarters are anticipating with interest promotion of Boursa Kuwait on Morgan Stanely index for emerging markets, amid predictions $2.8 billion might be lured into the national market. This is the third upgrade of the Kuwaiti bourse after a similar move had been taken by FTSE Russel and Standard and Poor’s Dow Jones for international indices.
The forthcoming promotion is forecast to lure inflow of idle funds estimated at $2.8 billion. The process of elevating the national stock market kicked off in 2017, when FTSE Russel enlisted Boursa Kuwait as an emerging market. The promotion that was executed in two phases, in 2019, had drawn $950 million of inactive liquidity. Simultaneously, Standard and Poor’s declared, in December, uplifting the bourse as an emerging market, effective in September.
The Kuwaiti stock exchange had met all terms to qualify for the promotion; enacting regulations and marketing new tools desired by local and foreign investors, as part of a strategy to create the proper environment for attracting liquidity. The scenario according to Watani Investment Company is as following: If the promotion does not materialize in 2019, there will be very high chances that it will happen in June 2020. And, if the positive announcement is made later today, the execution will begin in May 2020.
However, it remains unknown whether the process will be carried out in two stages. Liquidity is forecast to start flowing into the local market, simultaneously with the announcement, however active investors are believed to have been ready in advance. The SMCI index is forecast to be used by active funds and portfolios, involving $1.5 trillion, in addition to $500 billion of stagnant assets. There are other factors that need to be taken into consideration in the upcoming process, namely profits’ growths, transparency and corporate governing. – KUNA