How has Boursa Kuwait adapted to global financial changes in the past year, and what stands out as a major achievement during this transformative period?
In the past year, Boursa Kuwait has navigated the challenges of the global financial landscape, adapting to the turbulent capital market environment thanks to the company’s forward-thinking strategy and dedication of its employees.
Throughout 2023, a key focus for Boursa Kuwait was the enhancement of investor access to the Kuwaiti capital market. Collaborating closely with our sister company, the Kuwait Clearing Company (KCC), we prioritised the development and testing of the Central Clearing Counterparty (CCP). Rigorous stress tests were conducted to ensure the preparedness of financial brokerage firms to meet settlement requirements with the Central Bank of Kuwait and local banks. The planned launch of the CCP in the first half of 2024 is a significant milestone in our commitment to strengthening the efficiency of our financial ecosystem.
Additionally, to ease international investor access to the market, our sister company, KCC, introduced features like same-day NIN account opening for foreign clients, an updated design for custodian migration and movement, and a partial rejection facility to give investors more control over their obligations. They have also launched an updated eAGM system, which provides international access and have submitted a Securities Lending and Borrowing (SLB) study to the Capital Markets Authority (CMA) that took into account what foreign institutional investors require from our capital market. Previously, we have introduced features like late, late confirmations for international investors, omnibus accounts and foreign investor Know Your Customer (KYC) through a global custodian. These features are unique to us in the region and have helped us increase the efficiency and transparency of the Kuwaiti capital market.
Boursa Kuwait also continued its efforts to promote the Kuwaiti capital market and its listed companies. Our series of roadshows and corporate days provided listed companies with a platform to engage with major global asset management firms and investment companies. The corporate days organised by Boursa Kuwait facilitated over 200 meetings between listed companies and more than 80 representatives from prominent financial institutions. Boursa Kuwait also organised an initiative for licensed Kuwaiti investment companies, bringing together representatives from eight licensed Kuwaiti investment companies and a globally recognised financial institution to foster collaboration and a knowledge exchange in our first “Financial Asset Managers’ Day”. These initiatives not only showcased the financial health and business outlook of Kuwaiti companies, but also encouraged valuable connections between institutional investors and local entities.
The accomplishments of Boursa Kuwait in the past year highlight our dedication to collaborations that enhance the Kuwaiti capital market and support all involved stakeholders through a variety of strategic initiatives. These achievements attest that Boursa Kuwait is a leading force in driving the development and enhancement of the market.
Sustainability and ESG continue to play a big role in capital markets. How has Boursa Kuwait responded to the growing importance of those two fields?
Boursa Kuwait stands at the forefront of integrating sustainability and environmental, social, and governance (ESG) principles into the core of the Kuwaiti capital market. Our commitment goes beyond mere compliance, emphasising the alignment of our business practices with global standards and metrics as well as setting a benchmark for other market participants.
We actively participate in ESG initiatives, collaborating with local and international organisations to drive positive impacts on our community and the environment under our Corporate Sustainability strategy. These efforts are aligned with the United Nations’ Sustainable Development Goals (SDGs) and the State of Kuwait’s National Development Plan.
To encourage ESG awareness, we empower our listed companies through knowledge-sharing sessions, organising seminars and workshops to enlighten them on the nuances of ESG reporting and its significance in the contemporary landscape.
Boursa Kuwait's dedication to sustainability has earned regional recognition, particularly from Global Finance magazine. We have been honoured with awards such as the "Outstanding Financial Leadership in Sustaining Communities Award" and "Outstanding Leadership in Sustainability Transparency" by the publication - accolades that underscore our unwavering commitment to promoting sustainability and nurturing climate change awareness within our community.
It's worth noting that our iconic headquarters, which has housed the exchange since the mid-1980s, has achieved Gold certification from the Green Building Council and its Leadership in Energy and Environmental Design (LEED) program — a globally recognised green building rating system, making Boursa Kuwait one of the first entities in Kuwait to obtain such recognition. We leverage LEED systems to achieve sustainability and establish environmentally friendly buildings, contributing to creating green cities and energy conservation in Kuwaiti society.
What are you most excited about in 2024? What are your biggest opportunities?
The forthcoming year presents significant opportunities for Boursa Kuwait. We anticipate listings in 2024. Over the past few years, we have conducted visits to potential listings, an outreach program that encompasses government entities, family owned businesses, and small and medium businesses looking to grow. These are companies that add to the overall quality of the Kuwaiti capital market’s participants.
We are also looking forward to the introduction of corporate fixed-income and exchange-traded funds (ETFs) as well as a market for bonds and sukuk, which will come after the launch of the CCP system. These products will not only diversify and expand on our existing products, but will undoubtedly create a more comprehensive financial ecosystem and may attract a different investor base, providing opportunities for both buyers and sellers and contributing to the development of a more robust capital market.
We also expect to see increased competition between brokerage firms in terms of services offered to the consumer, which will result in a more dynamic market environment. This can be advantageous for consumers as firms strive to differentiate themselves by offering improved services. Consumers can expect a broader range of services, potentially leading to more competitive pricing, enhanced customer service, and innovative solutions.
We also anticipate the market will begin to correct itself in 2024, ushering in stability and helping us rebound from the market volatility that started at the end of the first quarter of 2022. That period of uncertainty has underscored the importance of adaptability and resilience in navigating the evolving financial landscape.
We are also focused on enhancing our market's infrastructure. This involves the further digitisation of the exchange and incorporating technologies, streamlining processes, and reinforcing the foundation that sustains our financial ecosystem. Boursa Kuwait is committed to continuing its ongoing efforts to secure reclassification for Kuwait and position itself as a pioneer in the Middle East and North Africa region. Additionally, we remain dedicated to exemplifying best-in-class standards and practices, solidifying our reputation as a model issuer in Kuwait's capital market.
The views, thoughts and opinions contained in this Focus article belong solely to the author and do not necessarily reflect the WFE’s policy position on the issue, or the WFE’s views or opinions.