The Lyxor ETF Kuwait (FTSE Coast Kuwait 40) offers the ability to access the Kuwait market through one single share traded on the London Stock Exchange with an annual total expense ratio of just 0.65%. Kuwait is ranked the world's sixth richest country with a GDP per capita of $65,000. It has the fifth largest oil reserves in the world and is undertaking a $200 billion infrastructure programme to support growth and diversification of the economy.
Sulaiman Al-Abduljader, vice president, corporate finance and investment services group, Coast Investment & Development Company said: "For the first time, UK and global institutional investors will have direct access to the Kuwait stock market. While performance has been strong (up 600% since 2000), the fundamental and economic indicators reveal strong potential for growth in the near and medium time horizons for investors. With the ETF, investors are assured independence, transparency and an internationally recognised product with direct exposure to the growing region."
The new ETF will be linked to the FTSE Coast Kuwait 40 Index. The Index, established in February 2007 and representative of the Kuwaiti market, is calculated by FTSE on behalf of Coast Investment and Development Company. Its constituents are chosen based on free-float market capitalisation and liquidity. As of end-June 2008 its year-to-date performance was positive (+3.43%) when the FTSE100 was down by 12%. Since its creation the index has returned 30.71%. The three main sector constituents of the Index are banking (32%), IT and telecoms (22%) and investments (17%).
Daniel Draper, global head of Lyxor ETF noted: "We are seeing a growing interest from our clients for investment opportunities in the Gulf region. Working with Coast and FTSE, we have focused on our core strengths of being able to offer low total expense ratios (TERs), liquidity and some of the lowest tracking errors in the marketplace to develop the world's first ETF from the Gulf region."
A new survey amongst institutional investors from Lyxor reveals optimism is rife for the long-term economic future of the Gulf region, with Kuwait and Dubai in particular. The figures speak for themselves.
Institutional investor findings:
* 45% of institutional investors interviewed believe that over the next five years, stock market returns in the Gulf region will be good or excellent. Only 4% expect them to be poor.
* 30% expect the long term returns for the Kuwait stock market to be good or excellent. Only 5% expect them to be poor.
* 70% said the most attractive prospect of investing in Kuwait and the Gulf region in general is the potential for strong future growth there.
* Over the next three years, 50% expect to increase their exposure to the region.
