Kuwait Working To Improve Stock Exchange Conditions

Kuwaiti authorities are working to improve conditions in the stock market, Finance Minister Anas al-Saleh said on Sunday as the market’s main index fell steeply, bringing its year-to-date losses to 17 per cent.

There is “unprecedented coordination” among authorities to find “comprehensive solutions to conditions of the Kuwait Stock Exchange”, Saleh was quoted as saying by state news agency KUNA in a television interview.

Saleh said amendements to the law covering the Capital Markets Authority, the market regulator, would be submitted to parliament in January. These changes would cover market mechanisms and the operations of market makers.

The CMA is also working to add new investment tools and revise some steps that it took in the past, Saleh said without elaborating. Some investors have criticised the CMA for what they consider excessively harsh efforts to impose tighter corporate governance rules and stamp out improper trading.

Saleh also said a state fund designed to support the market was “currently intensifying its action in the bourse according to its objectives”, adding that it had been investing in 40 stocks.

Preliminary Ministry of Finance estimates obtained by Reuters on Sunday suggested the government could post a budget deficit of KD2.8 billion ($9.6 billion) next fiscal year in the wake of this year’s plunge of oil prices.

The estimates assumed an average oil price of $60 per barrel and slightly lower Kuwaiti oil production of 2.7 million barrels per day.

Saleh said government policy would focus on “slashing current expenditure and lifting capital spending”, while major economic development projects would not be cut back.

Budget deficits will be covered by borrowing from the state general reserves or through commercial loans, he said.