Regulatory body for KSE vital: Al-Hajri, Forum discusses ‘Future of Kuwait’s Financial Markets’
By Rania El Gamal, Kuwait Times

KUWAIT: Passing of the legislation to establish a regulatory authority for Kuwait Stock Exchange (KSE) is essential for capital market reform, stressed Falah Fahad Al-Hajri, Minister of Commerce and Industry yesterday, addressing the forum on “Future of Kuwait’s Financial Markets.” “There are several laws that can contribute to the economic reform, but passing the KSE Authority Law is the most important among them,” said Al-Hajri.

The minister said, “The draft law has been presented to the Ministerial Council.” “I expect that next month the law will be presented before the National Assembly, “he added.

The forum was organised by Bloomberg and the Kuwait Foreign Investment Bureau. It took place at Kuwait Chamber of Commerce and Industry.

Addressing the forum, Al-Hajri stated that transparency in the financial market and the passage of Foreign Direct Investment (FDI) law enabled the country to attract more foreign investments.

“The law offers potential investors tax exemption for a period of 10 years,” he explained. “Kuwait is also studying another draft tax law that offers a lot of benefits to foreign investors,” he added.

According to Al-Hajri, statistics show that there is currently about 250 billion pounds in the region being dealt with in Islamic finance, and that is expected to increase by 15 per cent per annum. Talking about the challenges that face the country, Al-Hajri said: “money-laundering, terrorism and corruption are huge challenges.” As for future plans, the minister announced that Kuwait is also “working to establish a parallel market to complement the KSE and offer protection to the investors.”
Competition with Asia and other emerging markets was another point stressed by Andrew Bainbridge, COO & Commercial Banking Director, Global Retail & Commercial Banking, Barclays. “Much of the news tends to be focused on Asia, particularly China, which has received the lion’s share of the limelight over the last three years for its economic boom… with per capita GDP growth ranging between 10 -20 per cent per annum,” said Bainbridge. “However, the fastest growing per capita GDP in the world last year was here in the Middle East, in Dubai. We should also note the fact that with real GDP growth of around 8 per cent in recent years, the emerging track record of Kuwait compares with the growth rates of any of the Asian Tigers,” he added.
Bainbridge cited certain key drivers for growth in the Middle East such as its unique location as a distribution hub, privatisation of state-owned enterprises and the development of small to medium enterprises (SMEs). Pointing out the advantages of investing in the Kuwait Stock Exchange, Mohammad Al-Qahtany, CEO, Al-Aman Investment Company said that the number of companies listed on the KSE is more than other countries in the Gulf. “KSE has 181 listed companies, while Saudi has 87 and Dubai has 25,” he said. However, he added that regulations are still needed for the healthy growth of the financial market in the country.

Total transparency tied to hike in foreign investments

Kuwait hosts financial markets’ forum
By Dahlia Kholaif

Arab Times Staff

KUWAIT CITY, March 6: Total transparency in Kuwait’s financial markets along with the amendments recently executed via the law for Monitoring Direct Foreign Investments are the main reasons for a growing flux of foreign direct investments in Kuwait, said Minister of Commerce and Industry Engineer Falah Al-Hajeri in the first Bloomberg Forum to be held in the region.

Speaking to the attendees of the “Future of Kuwait Financial Markets” Forum that was held in Kuwait’s Chamber for Commerce and Industry (KCCI) on Tuesday, Al-Hajeri affirmed that “this forum is a great opportunity to represent Kuwait as an important global and regional financial centre.

“A financial reformation in Kuwait is underway, the initial manifestations of which were the passing of the Commercial Law, the establishment of a more stable stock exchange market, the creation of an atmosphere that attracts foreign investors, launching a tax system that has proven apt for the private sector, as well as diversifying its financial incomes and monitoring its oil returns,” said Al-Hajeri.

Referring to Kuwait permitting foreign investors to contribute in sectors including infrastructure, Al-Hajeri affirmed that a draft bill giving numerous tax privileges to foreign investors is currently being considered. “We are expecting a blatant boost in the market and investments in Kuwait, especially with the prevalence of Islamic Sharia-complaint funding. Statistics indicate that 250 million pounds is invested by the Sharia-compliant system in the region, and is expected to witness an annual increase of 15 percent,” Al-Hajeri added.

Al-Hajeri asserted Kuwait’s eagerness to eradicate financial crimes such as corruption, money laundering and terrorism and its willingness to cooperate with the Commission of Financial Work to put an end to such crimes.

On his behalf, COO and Commercial Banking Director of Barclays Andrew Bainbridge stressed the great opportunities provided for investors in the Kuwaiti financial market. “Kuwait has a growing infrastructure, relative calm, and huge potential. There is a pool of talent in the Kuwaiti community, as well as a strategic location between the East and West, making it a logical location to be a centre for investments covering Europe, Africa and Asia,” said Bainbridge.

Commending Kuwait’s attempts to reduce its reliance on oil revenues by finding other sources of income, Bainbridge said “our status in the region is strong, and we have great hopes for us in Kuwait and the whole region”.

Meanwhile, Chief Executive Officer of Al-Aman Investment Company Mohamed Mohareb Al-Qahtani affirmed that Kuwait has managed to establish a less volatile financial market compared to other GCC states. “Kuwait has about 180 companies enlisted in its stock exchange market, with only 87 companies in Saudi Arabia, 64 in Abu Dhabi, 25 in Dubai, 140 in Oman and 25 in Bahrain.

“Furthermore, Kuwait has opened the gates of its markets for foreign investors unlike other GCC states that still ban foreign contributions in their markets, especially in the telecommunications zone,” said Al-Qahtani. He added that Kuwait’s market has proven to be much stronger compared to GCC states’ markets, saying “the fluctuations witnessed in Kuwait’s market during 2006, despite the various obstacles, were much less than other countries of GCC”.

Citing achievements such as the growth of originally Kuwaiti companies such as NBK and MTC, Al-Qahtani said “numerous Kuwaiti companies have grown to gain regional and international importance. Kuwait Financial House has also gained a pioneer in Al-Sukook market in the region”.

However, Al-Qahtani stated that GCC states have managed to outrun Kuwait in several arenas despite Kuwait being the pioneer. “The BOT system first adopted in Kuwait, has now suffered a setback while prevailing in other neighboring countries,” he said.