EMEA INTERVIEW
plans and a number of regulatory changes during the year keeping the momentum and the index performance on track. Further efforts were made by regulatory bodies with many reforms on capital market to qualify for the emerging market status especially in Kuwait and Saudi Arabia. Positive sentiments of upgrading of Kuwait and Saudi Arabia to global indices like FTSE and MSCI have given a boost to local markets and attracted foreign interest in the region subsequently increasing the trading activity and particularly in Kuwait which witnessed a doubling of trading value. Furthermore, many policy changes also paved way to a positive economic outlook boosting investment activity which provided support to economic and market growth. NIC believes this trend will continue in 2018 and thereafter, but in a moderate form due to the geopolitical tensions in the region and concerns on effective implementation and execution of planned development plans and reforms. Where do you see the potential for further development of the investment sector in? Boursa Kuwait has massive potential for growth and development. Just recently, Boursa Kuwait became part of the FTSE Worldwide Index and labeled it as a Frontier Developing Market. There still remain integral actions needed for the market to become fully developed. Nevertheless, significant steps have been taken to enhance the market such as the introduction of the Capital Markets Authority to act as regulator for listed Companies in Kuwait. The introduction of derivatives and alternative investments will upgrade the market significantly. Implementing derivatives will enhance liquidity levels massively in the market due to instruments such futures and options where investors can hedge their investments and balance price movements of stocks. Furthermore, the introduction of instruments such as ETFs and REITS will allow useful alternatives for passive investors willing to take long-term positions. A key objective at NIC is to support the economic growth in Kuwait. What opportunities do you see for Foreign Direct Investment into the Kuwait market? The upside potential for foreign investors in Kuwait is potentially very rewarding. Kuwait has one of the most adequately capitalised Banking sectors in the region, with high levels of liquidity and successful investments in both Islamic and conventional segments. E-commerce and Technology are yet untapped markets. Technological advances from Developed Markets can be introduced in the Country, benefiting the foreign investor and the local consumer. Infrastructure development is also
a significant market to enter into currently due to government plans to build major economic cities around the country such as Silk City. The government has been focusing on regulation and reduction of corruption lately to entice foreign investors. There have been steps taken to enhance Kuwait equity market. Boursa Kuwait has been segmented into three categories recently to remedy certain inherent problems. The categories are the Premier, Main, and Auction markets. Companies are segmented based on liquidity, market capitalization, price to par ratio, years of operation, and compliance with terms and conditions of listing. The Premier market includes the best companies that fall under these categories and the Auction market represents the less attractive companies. The Premier market is subject to increased scrutiny and annual reviews to prove its worthiness in this segment. The segmentations are changeable and can be delisted in one category to be listed in another. In effect, this will organise the sectors and develop the markets efficiently. Foreign investors now face less uncertainty when entering the Kuwaiti market due to further regulation and increased transparency. What are some of the ways you help clients achieve their investment goals and enhance shareholder value? We maintain a continuous dialogue with our clients to discern their objectives and deploy our firm’s resources effectively in their best interests. This is achieved by thinking outside the box to find the optimal financial solutions for them. Our proven track record and long-term client relationships underscore our ability to do so. Our research team provides valuable guidance on investment outlook, current market obstacles and attractive riskadjusted opportunities. Research has always been an essential component of your asset and investment activities. What advantage does this provide your managers with? The Research and Studies Department at NIC directly plays an integral role in the asset and investment activities’ decision-making process by offering research services, hence indirectly contributing to the success of the Company. It is designated to service the asset managers with extensive research analysis and valuation services. Such input ranges from macroeconomic analysis to specific equity analysis. This allows the Department to achieve autonomy, credibility, and accountability. NIC believes the Department should have full autonomy when servicing the asset management departments, in order to enhance and innovate research methods.
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