Industry Updates

MSCI to upgrade Kuwait to emerging market status in 2020

Tom Eckett

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The world’s largest index provider MSCI is set to include Kuwait equities in its emerging markets benchmarks in May 2020 after the country met all the necessary requirements.

Following the announcement in June this year, Kuwait was required to make a number of amendments to its regulations in order to be upgraded.

This includes changes to some provisions of the executive bylaws related to the implementation of omnibus accounts and same National Investor Number (NIN) cross trades which the Kuwait Capital Market Authority (CMA) announced it had completed in October.

It is estimated Kuwait equities will make up 0.69% of the index provider’s flagship MSCI Emerging Markets index.

Sebastien Lieblich, global head of index solutions and chairman of the MSCI equity index committee, commented: “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.”

The upgrade could drive as much as $2.8bn passive flows into Kuwait equities, according to Abdullah Albusairi, director for advisory and product development at the Kuwait & Middle East Financial Investment Company which launched the KMEFIC FTSE Kuwait Equity UCITS ETF via white label provider HANetf in April.

Invesco is the other issuer to offer a Kuwait ETF in Europe to investors following the launch of the Invesco MSCI Kuwait UCITS ETF (MKUW) in October, ETF Stream revealed.

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