MSCI reclassifies MSCI Kuwait indexes to emerging markets

KUWAIT, Morgan Stanley Capital International (MSCI), the world’s top equity indexing provider, announced Wednesday that it will reclassify the MSCI Kuwait Indexes to Emerging Markets status.

In a press statement, the MSCI said the move comes as a part of the May 2020 Semi-Annual Index Review.

It also noted that the Kuwaiti equity market now meets all the necessary requirements.

“Kuwait’s addition adds further diversification to the MSCI Emerging Markets Index with an estimated weight of 0.69 percent,” Sebastien Lieblich, Global Head of Index Solutions and Chairman of the MSCI Equity Index Committee.

He also welcomed the latest market accessibility enhancements introduced by the Kuwaiti authorities that now allow international institutional investor to benefit from omnibus account structures and same National Investor Number (NIN) cross trade capabilities.

On June 12, 2019, CMA publicly announced that omnibus structures, as well as same NIN cross trading would be made available to international institutional investors no later than November 2019.

The upgrade is intertwined with the ability to attract foreign capital, leading to further liquidity, increasing transparency and better corporate governance.

A report by NBK Capital predicted that in case of a positive announcement from MSCI in December, Kuwait’s weight in the MSCI EM index is likely to be around 0.60 percent, and is expected to result in passive inflows of around USD three billion.

This will be significantly higher than the USD one billion or so of passive inflows from the FTSE EM upgrade event.

The report also estimated the potential upgrade would result in additional active flows in addition to the passive flows.

The updated provisional list for MSCI standard index comprises of seven constituents.

Source: Kuwait News Agency