Kuwait stocks end year as the GCC favourite

Kuwait stocks beat peers in the Gulf this year as investors bet that MSCI Inc. will promote the country into its main index tracking stocks in emerging markets in 2020.

The Boursa Kuwait Premier Market Index, which includes the biggest and most liquid stocks in the country, rose 0.5 per cent on Wednesday, extending its advance to about 30 per cent this year. MSCI Inc. will add the country to its main emerging-market stock index in the first half of 2020.

The stock exchange has made all the necessary changes to guarantee the lift, CEO Mohammad Al Osaimi told Bloomberg Television last month. The index performance this year suggests that investors are also confident. Mohamad Al Hajj, an equities strategist at EFG-Hermes Holding in Dubai, expects the country to become 0.8 per cent of the MSCI Emerging Markets Index, leading to inflows by passive investors of about $3.8bn.

As investors prepare for the upgrade, exchange-traded funds have become a way for foreigners to place bets. BlackRock Inc. filed this month for the registration of what would be the first Kuwait-focused ETF to trade in New York. In Europe, the HANetf KMEFIC FTSE Kuwait Equity UCITS ETF and the Invesco MSCI Kuwait UCITS ETF both launched this year, and have total assets of $43m and $53m, respectively.

The stocks expected to receive the biggest flows, according to EFG-Hermes:

National Bank of Kuwait: $1.7bn

Kuwait Finance House: $794m

Ahli United Bank: $381m

Mobile Telecommunications – Zain: $330m

Agility Public Warehousing: $187m