Boursa Kuwait Obtains CMA Approval To Restructure Promotion Requirements for Its “Premier Market

Press release
Published December 27th, 2020 - 10:43 GMT
Boursa Kuwait Obtains CMA Approval To Restructure Promotion Requirements for Its “Premier Market
New Initiative Will Help Increase Listed Companies on Premier Market
Highlights
Boursa Kuwait has received approval from the Capital Markets Authority to restructure its promotion requirements for its “Premier Market”.

 

After the success of the “Premier Market”, which is considered the ideal destination for investors for what it offers in terms of transparency and liquidity, Boursa Kuwait has received approval from the Capital Markets Authority to restructure its promotion requirements for its “Premier Market”. The new parameters are expected to raise transparency and increase the issuer base in the “Premier Market” by potentially increasing the number of mid to large sized companies in it, all of which will reflect positively on the development of the Kuwaiti capital market and benefit its investors. 

Companies listed in the “Premier Market” are required to maintain an average market capitalization greater than or equal to 78 million Kuwaiti dinars as a minimum, which is the median market capitalization of all companies listed on the exchange. This filter was developed by Boursa Kuwait, with the cooperation of the Capital Markets Authority, and will be updated whenever listed companies’ market caps undergo considerable changes. 

Additionally, the requirement of a price to par ratio will be waived as per the new filters. Furthermore, a condition that the company has not faced any disciplinary sanctions, which could be related to the suspension of trading of its securities, the suspension or revocation of its license, or the dismissal of all or some of the members of the board of directors or the CEO, during the two years prior to the annual review was added. 

The new filters will be implemented starting from the annual review set to take place in January of next year, with the results announced on the second Sunday of January and taking effect on the second Sunday of February. The Capital Markets Authority Commissioners’ Council also approved a Boursa Kuwait initiative to suspend reclassification of listed companies from the “Premier Market” to the “Main Market” due to not meeting liquidity criteria for this year only. 

The Capital Markets Authority has supported the restructuring of promotion requirements because it aims to develop the Kuwaiti capital market overall by raising transparency levels and allowing more companies to be promoted into Boursa Kuwait’s flagship market, raising the market’s ability to attract local and foreign investors. 

The “Premier Market’s” requirements and obligations, which include bilingual (Arabic and English) disclosures, the establishment of an investor relations department as well as quarterly analyst conferences, have made it the premier investment destination for investors from all classes since the market was segmented around two years ago. With that in mind, Boursa Kuwait wants to increase the issuer base of that market and entice companies from the “Main Market”, who fit the new criteria and want to attract the local and international investment community, to be promoted to the “Premier Market”.  It should be emphasized that a listed company eligible for promotion to the “Premier Market” must officially accept its promotion to the “Premier Market”. Otherwise, it can opt to stay in the “Main Market”.

It is worth noting that most investment products are more effective when there is more trading and liquidity on a particular stock and that most mid to large companies that enjoy high liquidity levels and continuous communication with their investors usually attract local and international institutional investors on a bigger scale. 

Boursa Kuwait aims to entice more investors to the Kuwaiti capital market through its series of Corporate Days, showcasing some of its standout listed companies and the investment opportunities that reside in the Kuwaiti capital market. Putting these companies in touch with some of the world’s leading investment firms and financial institutions, the events aim to highlight these companies’ financial health and business strategies and outlooks helping investors gain an in-depth understanding of the benefits and opportunities of investing in Kuwaiti companies.

Boursa Kuwait is working to develop a strong and efficient financial market with liquidity and transparency, that can effectively put issuers and investors in touch with one other for investment opportunities and high returns on investment to create a developed capital market that is a pioneer in the region.

Background Information

Boursa Kuwait

Boursa Kuwait was founded on April 21st, 2014 by the Capital Markets Authority Commissioners’ Council Resolution No. 37/2013 dated 20th November, 2013 and the Capital Markets Authority Law No. 7/2010. In addition to being primarily responsible for regulating all aspects of the Kuwaiti capital market, the Capital Markets Authority also has full ownership of Boursa Kuwait, which manages the exchange operations. Boursa Kuwait is responsible for introducing new trading rules, risk management practices, price discovery mechanisms and new technology to ensure that Boursa Kuwait is as robust and secure as possible. The establishment of Boursa Kuwait marked the first step in privatizing the Kuwaiti Stock Exchange, which was founded in 1983. 

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