Boursa Kuwait's initial public offering is progressing "very well" and the 50 per cent stake sale to Kuwaiti citizens is expected to conclude on December 1, the Kuwaiti stock exchange chief said.
The sale, which began on October 1, is likely to be oversubscribed, Mohammad Al-Osaimi said in an interview with Bloomberg TV on Thursday.
"We see the IPO going very well," Mr Al-Osaimi said in an interview in Dubai. "I'm 100 per cent sure it will be covered many times."
Kuwait’s market regulator, the Capital Markets Authority, put up its 50 per cent stake in Boursa Kuwait for sale on October 1 when it opened subscription to Kuwaiti nationals, setting the offer price at 100 fils (Dh1.20) per share.
The IPO will make the bourse only the second listed exchange in the region after the Dubai Financial Market. It will be 50 per cent owned by citizens, 44 per cent by strategic investors, while the remaining 6 per cent will be controlled by the Kuwaiti government through the Public Institution for Social Security.
After the listing of the bourse in June, regional and international investors can buy shares in Boursa Kuwait, Mr Al-Osaimi said.
In October, Kuwait's highest religious authority objected to the IPO, saying it violated Islamic law’s prohibition on interest. Mr Al-Osaimi said local legislation does not require the bourse to be Shariah-compliant.
The executive also said the bourse has completed the work required for an upgrade to emerging market status on the MSCI, the world's largest index compiler, in June before the set deadline.
The upgrade is expected to lead to $2.7 billion to $3 billion in passive inflows with additional inflows expected from active managers, he said. Estimates for inflows from active managers will depend on the MSCI inclusion, valuation, geopolitics and other factors.
Boursa Kuwait is expecting two or three IPOs in the pipeline, Mr Al-Osaimi said.
The exchange chief noted that the recently announced IPO of Saudi Arabia's oil giant Aramco in Riyadh is a positive development for regional markets.
"The global trade war is a big risk for all markets, especially emerging markets, but I'm really glad that Saudi decided to do the Aramco IPO ... it will give more attention to the region--attention that's much needed," he said. "Governments have to help fiscal policy by adding privatisation but it needs a rigorous time to plan these IPOs to be successful."
Updated: November 7, 2019 12:18 PM