KUWAIT CITY, Dec 17: The Capitals Market Authority (CMA) Sunday, December 17 floated a tender in demand for consultative services to help it sell a stake in the Boursa Kuwait. According to a report published in The National, the deadline for financial consultative firms to present their bids is Jan 7, as per the official announcement made by CMA, which did not specify how much of the share capital of Boursa Kuwait could come up for sale or when the transaction is expected to take place.
The State of Kuwait, through this move, will be joining an increasing number of Arabian Gulf countries that are seeking the privatization of their equity markets. Governments in the Arabian Gulf region are looking to partially privatize state-owned assets including stock exchanges in order to raise capital due to the lower oil revenues.
Earlier, Saudi Arabia declared its plan to sell a stake in Tadawul – the biggest bourse in the GCC based on market capitalization — to become the region’s second publicly-traded equities platform after Dubai Financial Market. According to Director General of Oman’s Bourse Ahmed Saleh Al-Marhoon, Oman’s market regulator also plans to privatize the country’s Muscat Securities Market (MSM) via a share sale.
He explained that Oman will create a holding company under the State General Reserve Fund (SGRF) that will assume ownership of the bourse. SGRF will be the owner of MSM. When the market’s trading volume improves and the climate is encouraging, the company shares will be listed”.
Al-Marhoon did not specify a timeline or how much of a stake will be sold. Boursa Kuwait, one of the region’s oldest stock exchange, is the top performer among the GCC stock markets this year, rising 12 percent since the beginning of this year. Index provider FTSE Russell included Kuwait in its emerging market index in September, a move that is expected to bring $822 million of inflows to the bourse. FTSE picked Kuwait ahead of Saudi Arabia, which is also vying for an upgrade to emerging market status from both FTSE and fellow index provider MSCI.
Success would result in billions of dollars of passive inflows into Saudi equities. Saudi Aramco, the world’s biggest oil exporter, is on track for a 2018 share sale, possibly the biggest ever globally. Emirates Global Aluminum in the UAE is also lined up for an IPO during the coming year. Emaar Development, a unit of Emaar Properties, and Adnoc Distribution, retail and distribution arm of the Abu Dhabi National Oil Company (Adnoc), have already floated shares this year on Dubai and Abu Dhabi stock markets respectively. Initial public offerings across the region have picked up pace after a lull of three years due to the fall in the crude prices which dented investor sentiment. (Source — The National)