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Kuwait bourse sale oversubscribed – Privatisation complete

KUWAIT CITY, Dec 2, (Agencies): The Kuwait Capital Market Authority (CMA) said on Monday the sale of its stake in the local bourse to Kuwaiti citizens was more than 8.5 times oversubscribed, in the last stage of the company’s privatisation process.

“The CMA has now completed the privatisation of Boursa Kuwait,” it said. “The 50 percent public offering was preceded by the successful sale of 44 percent of the company to strategic investors in February 2019.” The remaining 6 percent is owned by Kuwait’s Public Institution for Social Security, it said. Kuwait wants to strengthen its position as a regional financial centre and give the private sector a stronger role in the economy. The stake sale comes ahead of the potential inclusion in 2020 of Kuwaiti equities into the MSCI main emerging markets index, a move that could trigger billions of dollars of inflows from passive funds.

CMA’s Chairman of the Board of Commissioners and Managing Director Dr Ahmad A. Al-Melhem said, “As of 1:00 pm yesterday, 94 percent of Boursa Kuwait Securities Company (BKSC) is owned by private investors, while the remaining 6 percent is owned by the Staterun pension fund, the Public Institute for Social Security. As a result of the successful closure of the offering, Boursa Kuwait has become the only stock exchange operator in the Middle East that is not owned by the State.

This marks as a landmark transaction in the history of Kuwait’s capital markets, and an important step towards achieving the ambitious national development goals set out in Kuwait’s Vision 2035 with an aim to strengthen the country’s position as a regional financial center,and give the private sector a stronger role and a greater opportunity to develop the national economy”.

The public offering of 50 percent of BKSC, led and managed by KAMCO Investment Company, is the second and final phase of the privatization process of Boursa Kuwait which followed the sale of 44 percent of the company to strategic investors in February 2019.

The BKSC privatization program was mandated by Article 33 of Law No. 7 of 2010 regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and its Amendments and was rolled out in two phases. The first phase took place in February 2019 through an open and transparent bidding process, a strategic consortium consisting of local investors and an international Securities Exchange operator acquired a 44 percent stake in the company.

The consortium comprised of Hellenic Exchanges-Athens Stock Exchange SA Holding, National Investments Company, First Investment Company, and Arzan Financial Group. The second phase, the nation-wide IPO, was implemented in the last quarter of 2019 with the distribution of the CMA’s 50 percent stake in the company to Kuwaiti citizens. Upon the allocation of the remaining 50 percent of Boursa Kuwait’s shares, Boursa Kuwait will be 94 percent owned by citizens and the private sector, while the Kuwaiti government, through the Public Institution for Social Security, owns the remaining 6 percent.

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