Kuwait stock market regulator suspends 31 companies

02 April 2012

Suspended firms failed to submit year-end financial results

Kuwait’s Capital Markets Authority (CMA) has suspended 31 companies from the Kuwait Stock Exchange (KSE) for failing to submit year-end financial results for 2011.

The majority of the firms on the list are from the investment sector and include International Financial Advisers (IFA), Kuwait and Middle East Financial Investments Company (KMEFIC), Global Investment House and Amwal International Investment Company. The real estate sector is also represented with Grand Real Estate Projects and Kuwait Business Town Real Estate Company.

“The number is big, but most of the companies were not trading, so it will not affect the market much, we are used to this,” says Majdi Gharzeddeene, senior vice-president and head of research at Kipco Asset Management (Kamco).

It did, however, affect sentiment slightly on the first day of the suspension on 1 April. The KSE main index ended flat at 6,164.10 points before gaining 0.40 per cent the following day to close at 6,189 points.

The suspension is a bold step from the CMA and the move is seen as an attempt to establish itself as a tough regulator.

The KSE is expected to finalise its privatisation plans at some point this year, although no deadline has been set. It has KD200m ($719m) in deposits, which will be transferred to the CMA and an advisory board is currently undertaking a feasibility report for the initial public offering (IPO), according to Gharzeddeene.

If the KSE manages to go public before the Palestine Exchange (PEX), it will become the second listed bourse in the region after the Dubai Financial Market (DFM).

The KSE is the region’s second largest stock exchange with a market capitalisation of more than $107bn. It gained 3.6 per cent in the first quarter of this year and liquidity was up at $8.73bn.

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