Kuwait to make changes in bid for emerging-market tag

Kuwait is seeking to follow its Gulf neighbours in its bid to gain emerging-market status.

The nation’s Capital Markets Authority plans to extend its settlement cycle for stock trades by the end of April to three days from two for foreigners and zero for local traders, Vice-Chairman Mishaal Al-Usaimi said at a conference in Kuwait City.

The regulators are also planning to introduce short-selling and derivative products as they seek to attract foreign cash.

“We talked about developing a model in which settlement would be convenient to local and foreign investors,” Al-Usaimi said. “We are working to transform Kuwait to the most sophisticated market in the region.”

T+3 settlement is part of a “post-trade model” to be implemented in two phases, Al-Usaimi said. Other measures of Phase I include introduction of lending and borrowing of shares for market makers and certain companies.

Kuwait’s stock exchange, known as Boursa Kuwait, is studying several measures to address lack of liquidity in local market, CEO Khaled Al Khaled said at same event.