Kuwait Stock Exchange is preparing for its initial public offering in the first quarter of 2019 amid a pick up in equity capital market deals and efforts of the regional government to privatise some state-controlled assets.
"We’re getting ready for an IPO, hopefully by the first quarter of next year,” Boursa Kuwait chief executive Khaled AbdulRazzaq AlKhaled said at a conference in Dubai on Monday. “The reason of that is to reconfigure and restructure the Kuwait stock exchange and we went through a rigorous infrastructure upgrade and we are in the process of implementing it."
The GCC governments are looking to part-privatise some state-owned companies to raise capital to offset the impact of lower oil revenues. Stock exchanges are among the assets lined up for public floats. The Kuwait bourse privatisation move follows Saudi Arabia’s plans to IPO its stock exchange. Riyadh is vying to make Tadawul, the region’s biggest bourse by market capitalisation, only the second publicly-traded regional equities platform after the Dubai Financial Market.
Kuwait’s market regulator, the Capital Markets Authority (CMA), in mid-February appointed a consortium of advisers to help it to sell a stake in the state’s stock exchange, joining a growing list of Arabian Gulf countries looking to privatise their equity markets.
The CMA picked up Tri International Consulting Group to advise on selling a minimum of 26 per cent and a maximum of 44 per cent of Boursa Kuwait to an international exchange operator. Another option may see the sale of a stake to a joint venture between Kuwait-listed companies and a foreign bourse operator.
Kuwait’s investment company Kamco and consultancy Oliver Wyman are also working on the privatisation deal, which will see not less than 6 per cent and not more than 24 per cent of the shareholding allocated to public entities, while 3.5 per cent of the shares offered to Kuwaiti citizens, the CMA said last month.
Boursa Kuwait, which is among the region’s oldest equity markets, expects IPO activity to pick up pace in the $90 billion market in the next few quarters.
“We are anticipating two or three major IPOs this year and the beginning of next year,” Mr AlKhaled said.