Kuwait's investors demand more depth
While Dubai quickly captures the attention of most investors looking at the Middle East region, other financial centres are moving to build sustainable market frameworks that will support further investment activity. Caroline Allen talks to Kuwait's Coast Investment Company.
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All markets in the Gulf Co-operation Council (GCC) region experienced a volatile start to 2008, although less than most other emerging markets. But the recent gainer has been Kuwait, which was the only one in the GCC to post a positive return over the first quarter of the year, of 13.8%.
Established investment firms in the country – there are now some 25 listed and non-listed entities -- are calling for the financial authorities to bring the market up to international standards to give investors confidence to engage further. Sulaiman T Al-Abduljader, vice president of the corporate finance and investment services group at Coast Investment and Development Company, Kuwait, says the market is maturing. Local investors want to broaden their horizons, while foreign investors are keen to increase exposure to local markets.
Kuwait's macro economic backdrop has been improving due to the surge in oil revenues, but also to the government's long term strategic plan of diversification away from energy revenues. This had its historical roots back in 1952, with the setting up of the first shareholding company, National Bank of Kuwait. In 1982, the Kuwait Investment Authority (KIA) took over the management of the country's assets from the Ministry of Finance.