Kuwait equities represent an opportunity for investors in lead up to MSCI Inclusion in November
The team behind the Kuwait ETF, KMEFIC FTSE Kuwait Equity UCITS ETF (KUW8), says the outlook for Kuwaiti equities is positive, and that the oil price war in Q1 coupled with the impact of Covid-19 has created a potential buying opportunity ahead of the MSCI inclusion in its emerging market category from November.
GCC equity markets delivered their 5th consecutive month of positive results in August, with the Kuwait All Share Index registering a gain of 6.6 per cent.
It says most of the ‘inclusion’ premium has been wiped off the value of Kuwaiti equities, and that the decision by MSCI to delay its upgrade of Kuwaiti equities from frontier to emerging market status has been a blessing in disguise as it has allowed firms time to stabilise prior to the inclusion inflows.
Abdullah Al-Busairi, the Director of KMEFIC FTSE Kuwait ETF, commented: “As well as delivering growth, we have also seen greatly improved liquidity in the Kuwait market, increasing by 45% last month. The Kuwaiti parliament has also adopted a new law which will allow companies to opt for a settlement with creditors or a restructuring plan before they are forced to declare bankruptcy. This is a positive development as it aims to protect ailing companies and attract foreign investors. Overall, market sentiment for Kuwaiti equities is positive.”
The KMEFIC FTSE Kuwait Equity UCITS ETF (KUW8), a UCITS compliant Exchange Traded Fund domiciled in Ireland which tracks the FTSE Kuwait All Cap 15 per cent Capped Index, an index of large, mid and small cap securities trading on the premier or main market of Kuwait Stock Exchange. The KUW8 ETF is up 8.06 per cent in August, -10.52 per cent over the last 12 months. Past performance is no guarantee of future performance.