For Kuwaiti capital markets to develop and compete effectively and meet the needs of investors, investment companies should be allowed to provide all goods and services available in other competitive financial centers with minimal bureaucracy.  What is your assessment of the Kuwaiti capital market? Would you like to see more liberalization or regulation?

We actually need more liberalization of the regulations.  A law just passed to allow an authority over the stock market to regulation and oversee the market.  The current regulations, however, are very primitive and don’t cater to new services and products.  The stock market as it is today has some holes that need to be filled concerning insider trading and brokerage operations.  Brokers in Kuwait are just the executors of orders and they do not make the market.  There is a lot that needs to be done to improve transparency within companies and more importantly we need to change our mind sets regarding the job of regulation in the area.  A partnership is needed to take this vital and important sector of the economy forward and provide guidance.

What additional services and products should be developed in order to address this issue?

Short selling and going long (although restricted) are important.  Hedge instruments are important to use and people should add these to their portfolios.  However, there needs to be education on this for professionals to teach them how to utilize these tools.

How do you see the future of Islamic finance and is there significant potential for growth?

Kuwait is a leader in Islamic finance.  We have the largest number of institutions following Islamic financing methods and it is somewhat of a homegrown industry.   I think there is still a lot of room for growth.  Islamic finance should not be looked at as a competitor for traditional finance but rather a complimentary service.  At the end of the day it is all finance even though maybe the documentation is different.  In Islamic countries people are more comfortable with Islamic banking. If you mimic traditionally financing but do it Islamically I see a lot of products coming into the market and the potential for growth.

I believe 2010 will be a tough year globally and we will feel the pain from 2009.  Kuwait and the Gulf economies are based on oil and if oil prices stay where they are (around $80 dollars per barrel) we will be in good shape.  The next question is what will the government do with this money?  We recently witnessed our economy shrink and 2010 is up to the moves made by the government and how they spend their money.  If they circulate the money effectively we can expect some nice growth.  In Kuwait the major development plan passed by parliament in February is another factor to consider and it is great news.  The market has not reacted positively to this, however, because it is only words on paper for now. The first project produced by this plan will be a major test and it could produce major activity in Kuwait if people believe in the plan.

What is the simple problem of Kuwait?

Management.  But I think that is our major problem as well as there being no shared vision.

You offer a range of services and mergers and acquisitions.  How do you forecast this activity in the region?
We have no seen mergers and acquisitions heat up in the past because there is no culture for it here.  I was lucky to be involved a couple but I think they have been the only couple ever in Kuwait and what’s more is that they were forced by the shareholders- no one else agreed with the mergers.  I don’t foresee any activity in mergers and acquisitions but perhaps we may see some that are forced as a result of the crisis and the need for these companies to survive.

What needs to be done to promote international companies to engage in acquisitions in the region?

First of all, they have to believe in the region and this can be done by meeting the clients, visiting the area, and being briefed in the business.  As the economy and population grows and trusts start to make sense for foreign parties I think we will see more people come into Kuwait just as some international banks have started to come into Saudi Arabia.  We have been talking about being a financial hub since the 1970s and we agree that Kuwait should be a financial hub, however, where we disagree is how it is going to be done.  This is a result of the mindset in Kuwait and this should change. We need to eschew bonds and stock and encourage investments and our institutions to back up these investments.  Once you do this and have easy access to money people will come to you.  If you don’t have access to funding why should anybody come to you? 

You recently announced two real estate projects in Saudi Arabic, among others.  How would you characterize your investment strategy, how different are you, and how do you forecast your performance and growth?

When we set up in 2006 the markets were booming.  2007 was a great year and at that time when we sat and talked we thought the market was overheating and we should revert back to the fundamentals.  Thus, we looked to find where the genuine demand was and it was in the mid-size housing market in Saudi Arabia.  We invested most of our capital in setting up an investment company in Saudi Arabia and this went operational in 2009.  We are not specialized in Saudi real estate, we just look for the right companies to do investments with.  We concentrated on private equity and started investing after the crisis.  We are doing well compared to others and our portfolio only consists of one stock.  In 2010 I think we will be looking into doing more asset management in the stock market. 

Many investment companies are looking to invest in the markets in Europe, the UK, the US through buying assets, buying real estate- is this a part of your strategy?

Not at this time.  We will concentrate first on the GCC and if we can expand we will expand in the MENA region.  After that we will move to Europe and the US but first we need to cover all of the GCC and we have a long way to go.  We see most of our opportunities today in the GCC due to ample cash and opportunity.  Unless we are comfortable and know the market very well it is risky for us. 

What is your message to international investors? What should a smart investor do?

Today one of the safest investments is in the GCC.  I think Saudi Arabia is the best place to put money today in the market because it is growing and there is a lot of opportunity as well as a government who is keen on success.  We have the money, opportunity, and the resources and these elements are very important and can provide a good base for success.  I think the GCC region will always be stable.  Also with the price of oil the economies will expand and the people will benefit.

What are you major challenges?

Trust and confidence pose a major challenge.  After the crisis many entities are clashing and it makes for a tough environment.  In April/June we will likely expand our spending due to new projects coming in and even though finding money will be difficult it can still be done and it is plausible.

What kind of services are you launching in April/June?

We are looking at sectors other than real estate.  When we work we want to work with A-Teams, not just any team and good management is essential for success.  Once we have established these teams we start to work in these sectors and we have begun to do this for telecom.  If this succeeds that is what we plan to offer in April/June.

How do you obtain funding?