Kuwaiti equities to be in main MSCI emerging markets index

The main hall at the Kuwait Stock Exchange in Kuwait City. (AFP)
Updated 26 June 2019

Kuwaiti equities to be in main MSCI emerging markets index

  • The index compiler will include the MSCI Kuwait index in the emerging market index in the May 2020 semi-annual index review
  • The Kuwaiti market has outperformed markets in the Middle East this year in anticipation of the MSCI move

DUBAI: MSCI plans to upgrade Kuwaiti equities to its main emerging markets index in 2020, a move that could trigger billions of dollars of inflows from passive funds.
The index compiler will include the MSCI Kuwait index in the emerging market index in the May 2020 semi-annual index review.
MSCI, the world’s largest index provider, whose emerging-market group of indexes has about $1.8 trillion of assets tied to it, also said it would start a consultation on reclassifying the MSCI Iceland Index to Frontier Markets status. It said it would announce the results of this by Nov. 29.
Kuwait’s Market Development Project was implementing several regulatory and operational enhancements in the Kuwaiti equity market, said Sebastien Lieblich, global head of equity solutions and chairman of the MSCI Equity Index Committee.

 

MSCI expects Kuwait to introduce more reforms before the end of 2019, such as introducing omnibus accounts that would allow foreign investors to trade while remaining anonymous, offering the same privileges that local investors now have.
The Kuwaiti capital market regulator has announced plans for such facilities to be available to the wider market by November, Arqaam Capital said. “These enhancements have significantly increased the accessibility level of the Kuwaiti equity market for international institutional investors,” Lieblich said.
The Kuwaiti market has outperformed markets in the Middle East this year in anticipation of the MSCI move.
The benchmark premier index is up about 20 percent so far this year. It was down 0.5% in early trade on Wednesday.
“MSCI EM inclusion could represent the biggest ever liquidity event for Kuwait’s stock market,” said Salah Shamma, head of investment MENA at Franklin Templeton Emerging Markets Equity, adding that a 0.5 percent representation in the MSCI EM index could attract investor flows of about $10 billion.

FASTFACTS

MSCI is the world’s largest index provider, whose emerging-market group of indexes has about $1.8 trillion of assets tied to it.


Oil recoups losses as OPEC, US Fed see robust economy

Updated 14 November 2019

Oil recoups losses as OPEC, US Fed see robust economy

  • US-China trade deal will help remove ‘dark cloud’ over oil, says Barkindo

LONDON: Oil prices reversed early losses on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) said it saw no signs of global recession and rival US shale oil production could grow by much less than expected in 2020.

Also supporting prices were comments by US Federal Reserve Chair Jerome Powell, who said the US economy would see a “sustained expansion” with the full impact of recent interest rate cuts still to be felt.

Brent crude futures stood roughly flat at around $62 per barrel by 1450 GMT, having fallen by over 1 percent earlier in the day. US West Texas Intermediate crude was at $56 per barrel, up 20 cents or 0.4 percent.

“The baseline outlook remains favorable,” Powell said.

OPEC Secretary-General Mohammad Barkindo said global economic fundamentals remained strong and that he was still confident that the US and China would reach a trade deal.

“It will almost remove that dark cloud that had engulfed the global economy,” Barkindo said, adding it was too early to discuss the output policy of OPEC’s December meeting.

HIGHLIGHT

  • US oil production likely to grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations.
  • The prospects for ‘US crude exports had turned bleak after shipping rates jumped last month.’

He also said some US companies were now saying US oil production would grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations — reducing the risk of an oil glut next year.

US President Donald Trump said on Tuesday Washington and Beijing were close to finalizing a trade deal, but he fell short of providing a date or venue for the signing ceremony.

“The expectations of an inventory build in the US and uncertainty over the OPEC+ strategy on output cuts and US/China trade deal are weighing on oil prices,” said analysts at ING, including the head of commodity strategy Warren Patterson.

In the US, crude oil inventories were forecast to have risen for a third straight week last week, while refined products inventories likely declined, a preliminary Reuters poll showed on Tuesday.

ANZ analysts said the prospects for US crude exports had turned bleak after shipping rates jumped last month.