Kuwait's stock exchange is going public.
The Kuwait Capital Markets Authority (CMA), regulator for the securities industry, will sell its 50% stake in Boursa Kuwait Securities, the country’s only stock exchange operator, through an initial public offering of its shares to Kuwaiti citizens in the fourth quarter of 2019.
The IPO is the final stage of the bourse’s privatization process, which began in February with the sale of a 44% stake in the exchange to a consortium led by Kuwait’s National Investments Company (NIC) and including the Athens bourse, which will provide technical infrastructure and install its trading system.
Following the IPO, 50% of Boursa Kuwait’s shares will be held by Kuwaiti citizens, 44% by strategic investors, and 6% by the Kuwait government through the Public Institution for Social Security.
The subscription period for citizens will be open from October 1 through December 1, 2019. The offer price is 100 Kuwait fils ($0.33) per share, and more than 100 million shares will be offered. The proceeds of the offering will be used to upgrade the bourse’s systems and eventually to launch derivatives and other new products.
The reclassification of Kuwait as an emerging market by MSCI, expected next June, could attract an estimated additional $2.8 billion of passive investment flows.
Formerly the Kuwait Stock Exchange, Boursa Kuwait was admitted to the World Federation of Exchanges in October 2018. One of the oldest exchanges in the Gulf, Boursa Kuwait has been the best-performing exchange in the region this year, in part because of the anticipated MSCI upgrade.
The CMA described the IPO as an important step toward achieving national development objectives, “which will enhance Kuwait’s status as a regional financial center, and will grant the private sector a stronger role and a greater opportunity to develop the national economy.”