MSCI to reclassify Kuwait indexes to emerging markets status

A Kuwaiti trader follows the stock market at the Kuwait Stock Exchange. (File photo: AFP)

Global index compiler MSCI Inc. said late on Wednesday that it will boost the MSCI Kuwait Indexes to Emerging Markets status as the country’s equity market had met all necessary requirements.

“We welcome the latest market accessibility enhancements introduced by the Kuwaiti authorities that now allow international institutional investors to benefit from omnibus account structures and same NIN cross trade capabilities,” said Sebastien Lieblich, Global Head of Index Solutions and Chairman of the MSCI Equity Index Committee.

“Kuwait’s addition adds further diversification to the MSCI Emerging Markets Index with an estimated weight of 0.69 percent,” said Lieblich.

MSCI will include Kuwait in the Emerging Market Index as part of its semi-annual index review in May 2020.

NBK Capital had previously estimated Kuwait’s weight in the MSCI EM Index to be around 0.6 percent, and said the move would result in passive inflows of $3 billion, according to the Kuwait News Agency.

The country's Trade and Industry Minister Khaled Al-Roudhan said Kuwait's inclusion into the index could generate inflows of 1 billion Kuwaiti dinars ($3.30 billion), Reuters reported.

In October, the Kuwait Capital Market Authority (CMA) had issued resolutions to amend some provisions in its executive bylaws and regulations related to the implementation of omnibus accounts and same National Investor Number (NIN) cross trades.

MSCI noted that international investors confirmed afterwards that these new market improvements were indeed applied.

According to Nasdaq.com, an omnibus account is carried by one futures commission trader with another futures commission trader, in which the trades of two or more individuals are combined and carried in the name of the originating broker – rather than being carried separately.

On June 25, MSCI announced that it would reclassify the MSCI Kuwait Index to Emerging Markets status, subject to the two aforementioned regulation enhancements being accessible to international institutional investors by November-end.

MSCI is the world’s largest index provider and is followed by global funds that manage trillions of dollars in assets.

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Last Update: 06:53 KSA 09:53 - GMT 06:53
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