Kuwait’s stock exchange IPO will be oversubscribed, says CEO

The Kuwait stock exchange’s initial public offering is progressing well and will close next month oversubscribed, the bourse’s chief executive officer said.
“I’m 100 per cent sure it will be covered many times,” Mohammad Al Osaimi, the CEO of Boursa Kuwait, said in an interview with Bloomberg Television in Dubai.

The sale of half the exchange to local citizens began last month and will end on December 1, with the offering price set at 100 fils per share, or one-tenth of a dinar. The IPO follows a 44 per cent sale earlier this year to a consortium of domestic and international investors.

Last month, Kuwait’s highest religious authority said the offering breached Islamic law’s prohibition on interest and branded it “haram,” or forbidden. According to the authority, that’s because Boursa Kuwait facilitates trades in some companies that don’t comply with Islamic principals.

Al Osaimi said local legislation doesn’t state the bourse must be Shariah-compliant, and that the exchange operates with normal practices seen in other markets. He expects the stock to start trading “around June.”

The exchange has made all the changes necessary for index compiler MSCI Inc. to upgrade it to emerging-market status in June, as required by the New York-based company earlier this year, he said. That should lead to as much as $3bn in passive inflows to the country, he estimated.

The main equities index in Kuwait rose 0.1 per cent as of 9.32am. local time, extending its increase this year to 17 per cent, the most among major gauges in the Middle East, North Africa. That’s also more than benchmarks tracking frontier and emerging markets.