MSCI is set to upgrade Kuwait to emerging markets status at the end of the year pending market infrastructure improvements for international institutional investors, which are expected before the end of November.
Following Kuwait regulator Capital Market Authority's announcement June 12 that omnibus structures, as well as national investor numbers, to open such accounts with brokers, will be made available to international institutional investors no later than November this year, MSCI said in a news release that it plans to include the MSCI Kuwait index in its MSCI Emerging Markets index.
MSCI will decide by Dec. 31 whether nine Kuwaiti stocks will be included in the emerging markets index, putting the country's weight at around 0.5% of the index.
Since 2017, Kuwait removed foreign ownership restrictions on listed banks and simplified requirements for investor registration, introducing a T+3 settlement cycle for both local and foreign investors.
"Kuwait's Market Development Project has set the path for the seamless implementation of numerous regulatory and operational enhancements in the Kuwaiti equity market," said Sebastien Lieblich, managing director, global head of equity solutions and chairman of the MSCI equity index committee, in a news release. "These enhancements have significantly increased the accessibility level of the Kuwaiti equity market for international institutional investors and resulted in broad positive feedback from these investors on our reclassification proposal."
Kuwait also is still expected to launch central counterparty clearing, equity swaps, stock lending and short-selling facilities under the market development program.
An MSCI spokesman could not be immediately reached.