Kuwait’s capital markets: introduction of CMA important for Kuwait

Faisal M. Sarkhou, CEO of KAMCO talks about the effects of the introduction of CMA in 2011 in Kuwait’s capital market.

He says, “I think the introduction of the Kuwaiti CMA was a very important factor in the drive for Kuwait to become a strong regional financial centre. Kuwait has a deep and wealthy track record. A bit more than 30% of the listed entities in the Gulf are from Kuwait.

If you look at the market cap of those entities they constitute around 10%.

The liquidity of the market is around 3%. That reflects the challenges of the market. The challenges are the result of the significant growth of companies that have IPOed in the market. With limited regulations we had a number of issues with some of these companies and with instruments that were in the market. The CMA has started to implement a significant role in a number of areas.

If you look at their policies since introduction, increasing corporate governance was key, as well as introducing significant measures for anti-money laundering, regulating securities, and developing tools for introducing more sophistication in the market. We still have a simple market that needs more sophistication. I would say that the significant initiatives that the CMA has undertaken are in making this market closer to changing from a frontier market to an emerging market.”