Foreign investors will now be allowed to own and trade in Kuwaiti banks’ shares, according to a new decision issued by the Kuwaiti Ministry of Commerce and Industry.
However, the decision states that the ownership of a foreign investor shall not exceed 5 per cent in any Kuwaiti bank, directly or indirectly, the official Kuwait News Agency (KUNA) reported.
The approval of the Central Bank of Kuwait should be obtained if ownership exceeds 5 per cent of the bank’s capital, the ministry said.
The latest move comes in accordance with Decree 694, which notes that non-Kuwaiti investors shall be allowed to own and trade in Kuwaiti banks’ shares, KUNA reported.
The ministry said that the Capital Markets Authority received several enquiries from many international investors regarding the ease of investing in the Kuwaiti market.
The investors spoke about the “existence of obstacles or restrictions” imposed on them, possibly referring to the maximum percentage of non-Kuwaiti investors’ ownership in a single bank, which is supposed to not exceed 49 per cent of the bank’s total capital, the report added.
Kuwaiti banks have performed extremely well this year, and are also expected to post strong earnings in 2019 driven increased lending, according to a report by investment bank EFG-Hermes.
The latest decision also comes ahead of the index-compiler MSCI’s anticipated move to upgrade Kuwait to emerging-market status next year.