Tight Kuwait bourse rules causes less delisted companies

KUWAIT: A number of Kuwaiti economists have concurred that stricter rules over primary and secondary listings on Kuwait’s stock exchange has caused less withdrawals on the part of companies, with only three pullouts this year. “The new measures require all listed companies to provide their financial statements no more than 90 days before the end of the fiscal year,” the economists told KUNA in separate interviews yesterday.

They revealed that the number of companies to have withdrawn from the national stock exchange, known as Boursa Kuwait, “skyrocketed” in 2017, with 20 pullouts occurring that year. The Chairman of Kuwait Industries Company Holding Mohammad Al-Naqi attributed the withdrawals to the companies’ “failure to meet stock exchange listing requirements,” in addition to diminished profits and a poor solvency ratio. Salah Al-Sultan, an advisor at Arzaq Capital Holding, cited certain provisos levied by Kuwait’s Capital Market Authority (CMA) as among the “chief reasons” for the company pullouts, besides geopolitical tension that has affected the stock market.

According to statistics posted on Kuwait stock exchange’s official website, some 40 listed companies, running the gamut from real estate to oil, pulled out during the period between 2012 to 2018. The new conditions set forth by CMA stipulate that the fair value of a Kuwait Bourse listed company’s share has to be a minimum of KD 45 million (USD 148.5 million).
Other terms require companies to have no less than 450 stockholders, provided that each of them owns shares of no less than KD 10,000 (USD 33,000). Kuwait has taken measures in recent years to privatize its stock exchange, which was officially established in 1983 and is one of the oldest markets in the Middle East. As per a law passed in 2010, the CMA is supposed to offer 50 percent of the shares to Kuwaiti citizens and 50 percent to ten companies already listed on the stock exchange. – KUNA


This article was published on 10/10/2018