Kuwaiti cabinet approves by-laws for foreigners to own stocks
The Kuwaiti cabinet on Sunday approved regulations necessary to implement a bill allowing foreigners to own stocks and trade on the emirate's bourse, the state minister for cabinet affairs said. "The cabinet approved the regulations and ordered concerned authorities to start implementing them," Mohammad Deifallah Sharar told AFP.
The legislation, dubbed the indirect foreign investment law, was passed by the emirate's parliament in May.
It allows foreign investors and expatriates living in Kuwait to own up to 100 percent of the stock of Kuwaiti companies listed on the Kuwait Stock Exchange (KSE), except in banks where the ownership will be limited to 49 percent, Sharar said.
Under existing laws, foreigners can own up to 40 percent of Kuwaiti banks, which the emirate considers a strategic sector that needs government protection. Ownership of Kuwaiti shares is currently limited to citizens and other Gulf Arab nationals, but foreigners can take part through mutual funds.
The announcement came after the close of trading on the KSE, which has been facing difficult times in recent weeks as the index dropped to levels not seen in five years. "The new regulations provide complete freedom for foreigners to buy, sell and own stocks exactly like Kuwaitis, with the exception of banks," Sharar said.
"The implementation of the law is aimed at encouraging foreign investments and boosting the local economy," the minister added.
Sharar said the KSE would soon introduce trading through the Internet to enable foreign investors easy access to Kuwaiti stocks. Some MPs objected to the law, warning it would allow foreigners to control sensitive companies in Kuwait and could have a devastating impact on the local economy. The parliament still has a long list of economic bills to pass, notably direct foreign investment and privatization bills.
Some 87 companies with market capitalization of about 20 billion dollars are listed on the KSE, the second largest bourse in the Arab world after the NCFEI in Saudi Arabia. – (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)