Kuwait bourse 'float plan flawed'
Kuwait, June 27, 2011
Plans to float the Kuwait Stock Exchange (KSE), the Arab world's second largest bourse, are flawed and will hurt its independence, the exchange's head said on Sunday.
Hamed al-Saif, the director of the Kuwaiti bourse, said the privatization plan for the exchange should not proceed as outlined in Kuwait's new Capital Markets Authority law.
Under the law, 50 per cent of the stock market will be floated in an initial public offering for Kuwaiti citizens. The remaining 50 per cent will be auctioned to listed companies, each of which can only buy a 5 per cent stake in the market.
'This means that only 10 firms will control the stock market and elect its board and I think this conflicts with the independence that the stock market's board should have,' Saif told reporters.
He also said the CMA, which was approved by the Gulf state's parliament last year, needs to have its own budget from the government and not depend on fees to run its business.
'The separation between management and regulation was important, and I think we were the last Arab country to setup a markets regulator ... but I think that the (CMA) law contains some flaws that could affect the market's future,' he said.-Reuters