KUWAIT FINANCIAL SECTOR Banking, Finance and Stock Exchange
Submitted to
Mr. Sheikh Usman Submitted by
Mohammed Amin Shahid Mehmood Khuram Hayat Nosherwan Ali Masood Alam
MI08MBA02 MI08MBA46 MI08MBA54 MI07MBA68 MI07MBA54
Hailey College of Banking and Finance University of the Punjab, Lahore
We dedicate this effort to our parents and respected teachers, especially to Mr. Usman Sheikh, who gave us an opportunity to explore understand.
Preface The report seeks to develop a better understanding of the potential for Banking, finance and Stock Exchange of Kuwait and Economy structure of the State. The study uses a analysis based approach to examine rules, regulation and current situation of the financial sector. The analysis structure was provided by Mr. Usman Sheikh, This procedure ranges within Banking and ForEx sector and a little within industrial. Rather, the purpose of the study is to better understand the systematic approach of the State for the improvements of Financial and Economic position. The contributions to this report by different sources other than the group fellows are pleased, especially from the teachers and the seniors. Mohammed Amin
Shahid Mehmood Khuram Hayat Nosherwan Ali Masood Alam
Contents KUWAIT ............................................................................................................................................................ 1 INTRODUCTION .......................................................................................................................................................... 1 ECONOMY OF KUWAIT ................................................................................................................................................. 1 FOREIGN RELATIONS OF KUWAIT .................................................................................................................................... 3 International disputes ...................................................................................................................................... 4 Middle East ....................................................................................................................................................... 4 Europe .............................................................................................................................................................. 6 Holy See ............................................................................................................................................................ 6 Rest of world .................................................................................................................................................... 6 BANKING AND FINANCE .................................................................................................................................... 9 CENTRAL BANK OF KUWAIT ......................................................................................................................................... 10 Establishment of the Central Bank ................................................................................................................. 10 Objectives of the Central Bank ....................................................................................................................... 10 Operations of the Central Bank ...................................................................................................................... 10 Relations with the Government .................................................................................................................................... 10 Relations with Local Banks ............................................................................................................................................ 11 Gold and Foreign Exchange Operations Inside and Outside the Country ...................................................................... 11 Accounts and Statements .............................................................................................................................................. 12 General Provisions ......................................................................................................................................................... 12
Organization of Banking Business .................................................................................................................. 13 Establishment of Banks ................................................................................................................................................. 13 Registration of Banks ..................................................................................................................................................... 14 Deletion from Register and Liquidation of Banks .......................................................................................................... 15 Activities Not to be Undertaken by Banks ..................................................................................................................... 16 Provisions Relating to Supervision ................................................................................................................................. 17 Specialized Banks........................................................................................................................................................... 19 Inspection of Banks and Institutions Subject to Supervision by the Central Bank ......................................................... 19 Accounts and Statements .............................................................................................................................................. 20 Administrative Penalties ................................................................................................................................................ 21 Islamic Banks ................................................................................................................................................................. 23
BANKING SECTOR IN KUWAIT ........................................................................................................................... 28 LOCAL BANKS .......................................................................................................................................................... 28 Commercial banks .......................................................................................................................................... 28 Specialized banks ............................................................................................................................................ 28 Islamic Banks .................................................................................................................................................. 28 LIABILITY MIX OF BANKS ............................................................................................................................................ 29 ASSET COMPOSITION OF BANKS ................................................................................................................................... 30 KUWAIT BANKING SECTOR RISKS MANAGEMENT ............................................................................................................. 31 KUWAIT STOCK EXCHANGE .............................................................................................................................. 32 LISTED COMPANIES AT KSE ......................................................................................................................................... 32 BROKERAGE FIRMS.................................................................................................................................................... 38 TRADING CYCLE IN KUWAIT STOCK EXCHANGE ................................................................................................................ 38 THE RULES AND CONDITIONS ...................................................................................................................................... 39 Listing Shareholding Companies in the Official Market .................................................................................. 39 Participation of Non‐Kuwaitis in Kuwaiti Shareholding Companies ............................................................... 42 KUWAIT STOCK EXCHANGE ANALYSIS ............................................................................................................................ 45 Opening and Closing Stock ............................................................................................................................. 45 Highest and Lowest Stock ............................................................................................................................... 46 Volume and Value Analysis ............................................................................................................................ 46
Kuwait Financial Sector
Kuwait Introduction The State of Kuwait is a sovereign Arab emirate situated in the northeast of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south and Iraq to the north and lies on the northwestern shore of the Persian Gulf. The name Kuwait is derived from the Arabic "akwat", the plural of "kout", meaning fortress built near water. The emirate covers an area of 20,000 square kilometres (6,880 sq mi) and has a population of about 2.9 million. Historically, the region was the site of Characene, a major Parthian port for trade between India and Mesopotamia. The Bani Utbah tribes were the first permanent Arab settlers in the region and laid the foundation of the modern emirate. By 19th century, Kuwait came under the influence of the Ottoman Empire and after the World War I, it emerged as an independent sheikhdom under the protection of the British Empire. Kuwait's large oil fields were discovered in the late 1930s. After it gained independence from the United Kingdom in 1961, the nation's oil industry saw unprecedented growth. In 1990, Kuwait was invaded and annexed by neighboring Iraq. The seven month‐long Iraqi occupations came to an end after a direct military intervention by United States‐led forces. Nearly 750 Kuwaiti oil wells were set ablaze by the retreating Iraqi army resulting in a major environmental and economic catastrophe. Kuwait's infrastructure was badly damaged during the war and had to be rebuilt. Kuwait is a constitutional monarchy with a parliamentary system of government, with Kuwait City serving as the country's political and economic capital. The country has the world's fifth largest oil reserves and is the eleventh richest country in the world per capita. Petroleum and petroleum products now account for nearly 95% of export revenues, and 80% of government income. Kuwait is regarded as one of the most economically developed countries in the Arab League and is designated as a major non‐NATO ally of the United States.
Economy of Kuwait Kuwait is a small, relatively open economy with proven crude oil reserves of about 96 billion barrels (15 km³), i.e. about 10% of world reserves. Petroleum accounts for nearly half of GDP, 90% of export revenues, and 95% of government income. Kuwait lacks water and has practically no arable land, thus preventing development of agriculture. About 75% of potable water must be distilled or imported. Higher oil prices reduced the budget deficit from $5.5 billion to $3 billion in 1999, and prices are expected to remain relatively strong throughout 2000. The government is proceeding slowly with reforms. It inaugurated Kuwait's first free‐ trade zone in 1999 and will continue discussions with foreign oil companies to develop fields in the northern part of the country.
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Kuwait Financial Sector Economy of Kuwait Currency Fiscal year Trade organisations
Kuwaiti dinar (KD) 1 April–31 March WTO and OPEC
Statistics GDP ranking GDP GDP growth GDP per capita GDP by sector Inflation Labour force Unemployment Main industries
76th (2004) $157.9 billion (2008 est.) 8.1% (2008 est.) $60,800 (2008 est.) agriculture (0.3%), industry (52.2%), services (47.5%) (2007 est.) 11.7% (2008 est.) 2.225 million; note: non‐Kuwaitis represent about 80% of the labor force (2008 est.) 2.2% (2004 est.) petroleum, petrochemicals, cement, shipbuilding and repair, desalination, food processing, construction materials
Trading Partners Exports Main partners Imports Main Partners
Public finances Public debt External debt Revenues Expenses Economic aid
$95.46 billion f.o.b. (2008 est.) Japan 19.9%, South Korea 17%, Taiwan 11.2%, Singapore 9.9%, United States 8.4%, Netherlands 4.8%, China 4.4% (2007) $26.54 billion f.o.b. (2008 est.) United States 12.7%, Japan 8.5%, Germany 7.3%, China 6.8%, South Korea 6.6%, Saudi Arabia 6.2%, Italy 5.8%, United Kingdom 4.6% (2007) $14.21 billion (29.6% of GDP) (2004 est.) $38.82 billion (31 December 2008 est.) $113.3 billion (2008 est.) $63.55 billion (2008 est.) NA
For purchasing power parity comparisons, the US Dollar is exchanged at 0.48 Kuwaiti Dinars only. Average wages in 2007 hover around $4,250 per month for Kuwaitis. As for skilled and experienced non‐Kuwaiti (Engineers, Doctors, and Managers), the average monthly salary is hiked up tremendously, to an average of $10,000+ a month excluding living and other benefits. Please, also keep in mind that Kuwait is a tax free country, so all the above figures reflect actual take home numbers.
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Kuwait Financial Sector Kuwait is a small country with massive oil reserves, whose economy has been traditionally dominated by the state and its oil industry. During the 1970s, Kuwait benefited from the dramatic rise in oil prices, which Kuwait actively promoted through its membership in the Organization of Petroleum Exporting Countries (OPEC). The economy suffered from the triple shock of a 1982 securities market crash, the mid‐1980s drop in oil prices, and the 1990 Iraqi invasion and occupation. The Kuwaiti Government‐in‐exile depended upon its $100 billion in overseas investments during the Iraqi occupation in order to help pay for the reconstruction. Thus, by 1993, this balance was cut to less than half of its pre‐invasion level. The wealth of Kuwait is based primarily on oil and capital reserves, and the Iraqi occupation severely damaged both. In the closing hours of the Persian Gulf War in February 1991, the Iraqi occupation forces set ablaze or damaged 749 of Kuwait's oil wells. All of these fires were extinguished within a year. Production has been restored, and refineries and facilities have been modernized. Oil exports surpassed their pre‐invasion levels in 1993 with production levels only constrained by OPEC quotas.
Foreign Relations of Kuwait Since its independence in 1961, Kuwait maintained strong international relations with most countries, especially nations within the Arab world. Its vast oil reserves give it a prominent voice in global economic forums and organizations like the OPEC. Kuwait's troubled relationship with neighboring Iraq formed the core of its foreign policy from late 1980s onwards. Its first major foreign policy problem arose when Iraq claimed Kuwaiti territory. Iraq threatened invasion, but was dissuaded by the United Kingdom's ready response to the Amir's request for assistance. Kuwait presented its case before the United Nations and successfully preserved its sovereignty. UK forces were later withdrawn and replaced by troops from Arab League nations, which were withdrawn in 1963 at Kuwait's request. On August 2, 1990, Iraq invaded and occupied Kuwait. Largely through the efforts of King Fahd bin Abdul Aziz of Saudi Arabia who was instrumental in obtaining the help of the U.S., a multinational coalition was assembled, and, under UN auspices, initiated military action against Iraq to liberate Kuwait. Arab states, especially the other five members of the Gulf Cooperation Council (Saudi Arabia, Bahrain, Qatar, Oman, and the United Arab Emirates), Egypt, and Syria, supported Kuwait by sending troops to fight with the coalition. Many European and East Asian states sent troops, equipment, and/or financial support. After its liberation, Kuwait largely directed its diplomatic and cooperative efforts toward states that had participated in the multinational coalition. Notably, many of these states were given key roles in the reconstruction of Kuwait. Conversely, Kuwait's relations with nations that had supported Iraq, among them Jordan, Sudan, Yemen, and Cuba, have proved to be either strained or nonexistent.
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Kuwait Financial Sector Since the conclusion of the Gulf War, Kuwait has made efforts to secure allies throughout the world, particularly United Nations Security Council members. In addition to the United States, defense arrangements have been concluded with the United Kingdom, Russia, and France. Close ties to other key Arab members of the Gulf War coalition — Egypt and Syria — also have been sustained. Kuwait's foreign policy has been dominated for some time by its economic dependence on oil and natural gas. As a developing nation, its various economies are insufficient to independently support it. As a result, Kuwait has directed considerable attention toward oil or natural gas related issues. With the outbreak of the War on Iraq, Kuwait has taken a strongly pro‐U.S. stance, having been the nation from which the war was actually launched. It supported the Coalition Provisional Authority, with particular stress upon strict border controls and adequate U.S. troop presence. Kuwait is a member of the UN and some of its specialized and related agencies, including the World Bank (IBRD), International Monetary Fund (IMF), World Trade Organization (WTO), General Agreement on Tariffs and Trade (GATT); African Development Bank (AFDB), Arab Fund for Economic and Social Development (AFESD), Arab League, Arab Monetary Fund (AMF), Council of Arab Economic Unity (CAEU), Economic and Social Commission for Western Asia (ESCWA), Group of 77 (G‐77), Gulf Cooperation Council (GCC), INMARSAT, International Development Association (IDA), International Finance Corporation, International Fund for Agricultural Development, International Labour Organization (ILO), International Marine Organization, Interpol, IOC, Islamic Development Bank (IDB), League of Red Cross and Red Crescent Societies (LORCS), Non‐Aligned Movement, Organization of Arab Petroleum Exporting Countries (OAPEC), Organization of the Islamic Conference (OIC), Organization of Petroleum Exporting Countries (OPEC), and the International Atomic Energy Agency (IAEA).
International disputes In November 1994, Iraq formally accepted the UN‐demarcated border with Kuwait which had been spelled out in Security Council Resolutions 687 (1991), 773 (1993), and 883 (1993); this formally ends earlier claims to Kuwait and to Bubiyan and Warbah islands; ownership of Qaruh and Umm al Maradim islands disputed by Saudi Arabia. Kuwait and Saudi Arabia continue negotiating a joint maritime boundary with Iran; no maritime boundary exists with Iraq in the Persian Gulf.
Middle East Iran: On July 13, 2008, Kuwaiti lawmaker Jassem Al‐Kharafi publicly accused the West of "provoking" Iran on the nuclear issue. In his interview with state‐owned Kuwait TV, Al‐ Kharafi said, "What is happening is that there are provocative Western statements, and Iran
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Kuwait Financial Sector responds in the same way... I believe that a matter this sensitive needs dialogue not escalation, and it shouldn't be dealt with as if Iran were one of America's states." Iraq: Kuwaiti lawmaker Al‐Ameeri opposes forgiving Iraq's debt. The debt, estimated at $16 billion, represents loans Kuwait made to Baghdad in the Saddam Hussein era, mostly during the 1980‐1988 Iraq‐Iran war. Al‐Ameeri argues that, "The debt owed by Iraq to Kuwait is the right of the Kuwaiti people and no one has the right to negotiate over them." Al‐Ameeri believes that the Kuwaiti voices calling to forgive the debt and compensation "should not be heeded and they do not represent the Kuwaiti people." He further opposes the debt forgiveness because Iraq has considerable oil wealth and because the, "Kuwaiti people shed their blood" during the 1990 Iraqi invasion of Kuwait. "The issue is a red line for Kuwait and no Kuwaiti will ever concede these loans," Al‐Ameeri has been quoted as saying. On November 8, 2008, Kuwaiti lawmaker Al‐Mulla proposed that Kuwait allow Iraq to back pay its debt to Kuwait in natural gas. The Arab Times quoted Al‐ Mulla as saying, "In this manner, Kuwait can take the loans back from Iraq and put an end to the shortage of fuel in its power stations." On April 25, 2007, Kuwaiti lawmaker Saleh Ashour called in a statement for reopening Kuwait's embassy in Baghdad and for strongly supporting the government in Baghdad. But Al‐Ghanim said he believes that it was too early to reopen the Kuwaiti embassy in Baghdad and that this issue should wait until security situations improve. Israel: On December 28, 2008, Kuwaiti lawmakers Mikhled Al‐Azmi, Musallam Al‐Barrak, Marzouq Al‐Ghanim, Jaaman Al‐Harbash, Ahmad Al‐Mulaifi, Mohammad Hayef Al‐Mutairi, Ahmad Al‐Saadoun, Nasser Al‐Sane, and Waleed Al‐Tabtabaie protested in front of the National Assembly building against the attacks by Israel on Gaza. Protesters burned Israeli flags, waved banners reading, "No to hunger, no to submission" and chanted "Allahu Akbar." Israel launched air strikes against Hamas in the Gaza Strip on December 26 after Hamas launched rockets into the Israeli town of Sderot following the expiration of a six‐month ceasefire on December 18. On January 3, 2009, Nasser Al‐Sane, Waleed Al‐Tabtabaie, Adnan Abdulsamad, and other MPs protested in front of the National Assembly against the Israeli attacks on Gaza. After Friday prayers on January 8, 2009, Jamaan Al‐Harbash and several other MPs again protested in front of the National Assembly urging Arab leaders to take a stronger stand against the Israeli attacks and open Rafah Crossing to end an embargo imposed by Israel on the residents of Gaza. Saudi Arabia: Although Kuwait and Saudi Arabia are strong allies and cooperate within OPEC and the GCC, Riyadh disputes Kuwait's ownership of the Qaruh and Umm al Maradim islands. Yemen: As a member of the UN Security Council in 1990 and 1991, Yemen abstained on a number of resolutions concerning the Iraqi invasion of Kuwait and voted against the "use of 5 | P a g e
Kuwait Financial Sector force resolution." Kuwait responded by canceling aid programs, cutting diplomatic contact, and expelling thousands of Yemeni workers.
Europe Denmark: On November 6, 2006, the Kuwaiti parliament voted 22‐15 to approve severing diplomatic ties with Denmark over the Jyllands‐Posten Muhammad cartoons controversy and spending about US$50 (€39.20) million to defend the prophet's image in the West. Both votes were nonbinding, meaning the Cabinet does not have to abide by them. Kuwaiti lawmaker Abdulsamad voted in favor of cutting diplomatic ties, saying, ""We have to cut diplomatic and commercial ties with Denmark...We don't have to eat Danish cheese." Al‐ Rashid voted against cutting diplomatic ties, arguing that Muslims have to be positive and remember that it were some individuals, not governments, who insulted the Prophet Muhammad. Al‐Rashid was quoted as saying, "We here in Kuwait curse Christians in many of our mosques, should those (Christian) countries boycott Kuwait?" In February 2008, MP Abdullah Al‐Roumi called for an end to Kuwait's Demark boycott and was quoted as saying, "No Muslim can accept this insult against the Prophet... It is a form of terrorism." Greece: Greece was one of the 34 member countries in the coalition which assisted in the liberation of Kuwait from Iraq in 1991 during the Gulf War. Greece also participated in the UNICOM mission to patrol the demilitarized zone along the Kuwait‐Iraq border.
Holy See Russia:: On 28 December 1991, Kuwait recognised the Russian Federation as the successor state to the Soviet Union. Russia has an embassy in Kuwait City, and Kuwait has an embassy in Moscow. The current Ambassador of Russia to Kuwait is Alexander Kinshchak, who was appointed by Russian President Vladimir Putin on 28 January 2008, and who presented his credentials to Emir Sabah Al‐Ahmad Al‐Jaber Al‐Sabah on 28 April 2008. The current Ambassador of Kuwait to Russia is Nasser Haji Al‐Muzayen, who presented his credentials to Vladimir Putin on 11 December 2007. Turkey: The Ministry of Foreign Affairs in Turkey describes the current relations at "outstanding levels". Bilateral trade between the two countries is around 275 Million dollars. The two countries have recently signed fifteen agreements for cooperation in tourism, health, environment, economy, commercial exchange and oil.
Rest of world India: Kuwait is India's second largest supplier of crude oil and non‐oil bilateral trade was over one billion US dollars in 2008. In light of these close trade relations, the two countries have bound themselves to both a Mutual Promotion and Reciprocal Protection of Investments (BIPA) agreement and a Double Taxation Avoidance Agreement (DTAA). In June 2006, Emir Al‐Sabah visited India, and in April 2007 the two countries inked a Memorandum of Understanding (MoU) on Labor, Employment and Manpower Development. 6 | P a g e
Kuwait Financial Sector Pakistan: After the end of the first Gulf War in 1991 Pakistani army engineers were involved in a programme of mine clearance in the country. Kuwait was also the first country to send aid to isolated mountain villages in Kashmir after the quake of 2005, also offering the largest amount of aid in the aftermath of the quake ($100m). People's Republic of China: China and Kuwait initiated diplomatic relations in 1971. In 2007, Kuwait exported $2.3 billion worth of goods to China ($2.1 billion of which was oil) and Kuwait imported $1.3 billion of goods from China. In 2007, Kuwait supplied China with 95,000 barrels of oil per day, accounting for 2.6% of China's total crude oil imports. Saudi Arabia was China's top supplier with its shipments jumping 69.8 percent to 3.84 million tons (939,000 bpd), followed by Angola with 2.06 million tons (503,000 bpd), down 27.1 percent. Iran became third, with imports from the country shrinking 35.3 percent to 1.18 million tons (289,000 bpd). China is the world's second‐biggest oil consumer after the US. Abdullatif Al‐Houti, Managing Director of International Marketing at state‐run Kuwait Petroleum Corporation (KPC), told KUNA in October that Kuwait is on course for its China‐bound crude oil export target of 500,000 bpd by 2015, but success will heavily depend on the Sino‐Kuwaiti refinery project. The two countries have been in talks for the planned 300,000 bpd refinery in China's southern Guangdong Province. The complex is expected to be on‐stream by 2012, but the joint venture still awaits approval from the National Development and Reform Commission, China's top economic planning agency. United States: The United States opened a consulate in Kuwait in October 1951, which was elevated to embassy status at the time of Kuwait's independence 10 years later. The United States supports Kuwait's sovereignty, security, and independence, as well as its multilateral diplomatic efforts to build greater cooperation among the GCC countries. Strategic cooperation between the United States and Kuwait increased in 1987 with the implementation of a maritime protection regime that ensured the freedom of navigation through the Persian Gulf for 11 Kuwaiti tankers that were reflagged with U.S. markings. The U.S.‐Kuwaiti strategic partnership intensified dramatically again after Iraq's invasion of Kuwait. The United States spearheaded UN Security Council demands that Iraq withdraw from Kuwait and its authorization of the use of force, if necessary, to remove Iraqi forces from the occupied country. The United States also played a dominant role in the development of the multinational military operations Desert Shield and Desert Storm that liberated Kuwait. The U.S.‐Kuwaiti relationship has remained strong in the post‐Gulf War period. Kuwait and the United States worked on a daily basis to monitor and to enforce Iraq's compliance with UN Security Council resolutions, and Kuwait has also provided the main platform for Operation Iraqi Freedom since 2003. Since Kuwait's liberation, the United States has provided military and defense technical assistance to Kuwait from both foreign military sales (FMS) and commercial sources. The U.S. Office of Military Cooperation in Kuwait is attached to the American embassy and 7 | P a g e
Kuwait Financial Sector manages the FMS program. There are currently over 100 open FMS contracts between the U.S. military and the Kuwait Ministry of Defense totaling $8.1 billion. Principal U.S. military systems currently purchased by the Kuwait Defense Forces are Patriot Missile systems, F‐18 Hornet fighters, the M1A2 main battle tank, AH‐64D Apache helicopter, and a major recapitalization of Kuwait's Navy with U.S. boats. Kuwaiti attitudes toward American products have been favorable since the Gulf War. In 1993, Kuwait publicly announced abandonment of the secondary and tertiary aspects of the Arab boycott of Israel (those aspects affecting U.S. firms). The United States is currently Kuwait's largest supplier of goods and services, and Kuwait is the fifth‐largest market in the Middle East. U.S. exports to Kuwait totaled $2.14 billion in 2006. Provided their prices are reasonable, U.S. firms have a competitive advantage in many areas requiring advanced technology, such as oil field equipment and services, electric power generation and distribution equipment, telecommunications gear, consumer goods, and military equipment. Kuwait also is an important partner in the ongoing U.S.‐led campaign against international terrorism, providing assistance in the military, diplomatic, and intelligence arenas and also supporting efforts to block financing of terrorist groups. In January 2005, Kuwait Security Services forces engaged in gun battles with local extremists, resulting in fatalities on both sides in the first such incident in Kuwait's history. 8 | P a g e
Kuwait Financial Sector
Banking and Finance Before independence in 1961, foreign monies, largely the Indian rupee in the period between 1930 and 1960, circulated in Kuwait. At independence the Kuwaiti dinar was introduced, and a currency board was established to issue dinar notes and to maintain reserves. In 1959 the Central Bank of Kuwait was created and took over the functions of the currency board and the regulation of the banking system. The first bank in Kuwait was established in 1941 by British investors. Subsequent laws prohibited foreign banks from conducting business in the country. When the British bank's concession ended in 1971, the government bought 51 percent ownership. In 1952 another bank, the National Bank of Kuwait, the largest commercial bank, was founded. The establishment of several other banks, all under Kuwaiti ownership, followed. Some specialized financial institutions also emerged: the Credit and Savings Bank, established in 1965 by the government to channel funds into domestic projects in industry, agriculture, and housing; the Industrial Bank of Kuwait, established in 1974 to fill the gap in medium‐ and long‐term industrial financing; and the private Real Estate Bank of Kuwait. By the 1980s, Kuwait's banks were among the region's largest and most active financial institutions. Then came the Suq al Manakh stock market crash in 1982. The large revenues of the 1970s left many private individuals with substantial funds at their disposal. These funds prompted a speculation boom in the official stock market in the mid‐ 1970s that culminated in a small crash in 1977. The government's response to this crash was to bail out the affected investors and to introduce stricter regulations. This response unintentionally contributed to the far larger stock market crash of the 1980s by driving the least risk‐averse speculators into the technically illegal alternate market, the Suq al Manakh. The Suq al Manakh had emerged next to the official stock market, which was dominated by several older wealthy families who traded, largely among themselves, in very large blocks of stock. The Suq al Manakh soon became the market for the new investor and, in the end, for many old investors as well. Share dealings using postdated checks created a huge unregulated expansion of credit. The crash of the unofficial stock market finally came in 1982, when a dealer presented a postdated check for payment and it bounced. A house of cards collapsed. Official investigation revealed that total outstanding checks amounted to the equivalent of US$94 billion from about 6,000 investors. Kuwait's financial sector was badly shaken by the crash, as was the entire economy. The crash prompted a recession that rippled through society as individual families were disrupted by the investment risks of particular members made on family credit. The debts from the crash left all but one bank in Kuwait technically insolvent held up only by support from the Central Bank. Only the National Bank of Kuwait, the largest commercial bank, survived the crisis intact. In the end, the government stepped in, devising a complicated set of policies, embodied in the Difficult Credit Facilities Resettlement Program. The implementation of the program was still incomplete in 1990 when the Iraqi invasion changed the entire financial picture. 9 | P a g e
Kuwait Financial Sector
Central Bank of Kuwait Establishment of the Central Bank The Central Bank of Kuwait began operating in April 1969 in accordance with Law No. 32 of 1968 concerning Currency, the Central Bank of Kuwait and the Organisation of Banking Business. Bank supervision: The Central Bank of Kuwait supervises the banking sector in the country.
Objectives of the Central Bank The objectives of the Central Bank shall be: To exercise the privilege of the issue of currency on behalf of the State; 1. To endeavor to secure the stability of the Kuwaiti currency and its free convertibility into foreign currencies; 2. To endeavor to direct credit policy in such a manner as to assist the social and economic progress and the growth of national income; 3. To control the banking system in the State of Kuwait; 4. To serve as Banker to the Government; 5. To render financial advice to the Government
Operations of the Central Bank Relations with the Government The Central Bank will offer advice to the Government in order to facilitate the realization of its objectives and functions, and the Government will consult the Bank in matters relating to monetary and credit policy. The Central Bank shall act as banker and fiscal agent for the Government. On this basis: a. Government funds in Kuwaiti Dinars on current accounts shall be held solely with the Bank. No interest shall be paid by the Bank on such deposits. b. The Bank shall in general carry out, free of charge, banking transactions and services relating to the Government inside and outside the country. c. The Government may place funds in Kuwaiti Dinars with local banks, after seeking the opinion of the Central Bank and in a manner not conflicting with the monetary policy in force. d. The Minister of Finance may entrust the Central Bank with the administration of any other Government funds in accordance with the conditions agreed upon at the time.
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Kuwait Financial Sector e. The Ministry of Finance shall transfer to the Central Bank such amounts as may be necessary for the implementation of any particular monetary policy, after the Minister of Finance has approved such policy. Relations with Local Banks The Central Bank may: a. Open deposit accounts for banks and financial institutions operating in the State of Kuwait, and for public credit institutions. b. Open deposit accounts for other institutions, upon approval of the Minister of Finance. No interest shall be paid on the accounts referred to in the preceding two paragraphs except in such special cases as may be decided by the Board of Directors of the Central Bank and approved by the Minister of Finance. c. Open accounts in Kuwaiti Dinars with banks. d. Participate with banks in any scheme relating to the insurance of deposits. The Central Bank may carry out the following operations with banks only, and not otherwise: a. Sell, purchase, discount or rediscount commercial papers, provided that these shall mature within one year from the date of acquisition, discount or rediscount by the Bank. b. Give loans or advances, in emergency cases, through current account for a period not exceeding six months against such collateral as the Bank may consider adequate. Gold and Foreign Exchange Operations Inside and Outside the Country The Central Bank may: a. Purchase, sell, import and export gold and silver coins and bullion; b. Carry out foreign exchange operations and transfers of all kinds; c. Open accounts with foreign central banks or other banks and with international financial or monetary institutions; d. Open accounts for central banks, or other foreign banks and for international financial or monetary institutions, and act as correspondent for such banks and institutions; e. Grant advances or credits to central banks, other foreign banks or international financial or monetary institutions, and obtain credits, advances or loans from them, provided that such operations are within the scope of its functions as central bank; f. Purchase, sell, discount or rediscount bills or securities or certificates issued or guaranteed by foreign governments or international financial or monetary institutions, provided that they are expressed in freely convertible currencies and are easily negotiable in financial markets; g. Purchase and sell foreign bonds or bills other than those issued or guaranteed by foreign governments or international financial or monetary institutions, provided
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Kuwait Financial Sector that they are expressed in convertible foreign currencies and are easily negotiable in financial markets; h. Purchase and sell commercial papers acceptable to foreign banks. The Central Bank may: a. Invest the Pension Fund set up for the benefit of the officials and employees of the Bank, and grant loans to such officials and employees in accordance with the regulations decided by the Board of Directors; b. Own only such immovable property as assigned for running the business of the Bank; c. In general, carry out all operations customarily carried out by central banks and not inconsistent with the exercise of its powers or the discharge of its duties under this Law, and undertake such duties as may be assigned to it under any other law. Accounts and Statements The financial year of the Central Bank shall be the same as the financial year ofthe State. The bases for evaluation of the assets of the Central Bank shall be specified by decree. Credit balances on this account shall not be entered in the Profit and Loss Account of the Bank. Debit balances shall be met by the Government unless the Board of Directors decides otherwise. The accounts of the Central Bank shall be audited by one auditor or more. The Council of Ministers shall, on the proposal of the Minister of Finance, select the auditor or auditors and fix their fees. The Governor of the Central Bank shall submit to the Minister of Finance: a. A monthly statement showing the assets and liabilities of the Bank. Such statement shall be published in the Official Gazette. b. An annual report on the Bank's operations, including the Balance Sheet and the Profit and Loss Account for the ending financial year, and a general review of the monetary, banking, financial and economic affairs. This report shall be submitted not later than four months after the end of the financial year. c. A report on the events affecting the monetary or financial position, including the causes and outcome of such events and recommendations for handling them. General Provisions The Central Bank shall be exempt from all taxes, duties and financial dues whatsoever, whether they be for the treasury, municipalities or any other public institution or body.
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Kuwait Financial Sector The Bank shall also be exempt from the advance payment of judicial fees, deposits and guarantees, and settlement thereof shall be deferred until the case under litigation has been decided. Debts due to the Central Bank shall be treated in the same way as debts due to the Government, and shall take priority over debts due to other creditors. Such debts shall be collected by the same procedures provided for the collection of debts due to the State. The Central Bank may only be liquidated by a law specifying the liquidation procedures and their dates.
Organization of Banking Business Establishment of Banks Banks are those institutions whose basic and usual functions involve the receipt of deposits for use in banking operations, such as: the discount, purchase and sale of commercial papers, granting of loans and advances, issuing and collecting cheques, placing of public and private loans, dealing in foreign exchange and precious metals, and any other credit operations or operations considered by the Law of Commerce or by custom as banking operations. For the purposes of implementation of the provisions of this Law, and unless otherwise provided, the branches of any bank operating in the State of Kuwait shall be considered as one bank. The provisions of this Chapter shall not apply to: a. Public credit institutions set up by law. b. Financial and investment institutions and companies even if they are permitted by their articles of association to receive deposits and execute investment operations and some banking operations. c. Real estate companies which undertake the partition of land or the construction of buildings and the sale thereof on credit. The Board of Directors of the Central Bank may ‐ upon approval of the Minister of Finance ‐ subject all or some of the institutions and companies referred to, or today rules which the Board of Directors may draw up for purposes of supervision and which are in harmony with the nature of the activities of such institutions and companies. The opinion of the Central Bank shall be sought in respect of the Articles of Association and Memorandums of Agreement relating to financial and investment companies, or amendments thereto, in order to ascertain the economic viability of such companies. Without prejudice to the provisions of the Law of Commerce, wherever they are not in conflict with the provisions of this Law, banking business may only be practiced by institutions set up in the form of joint‐stock companies, the shares of which are placed for public subscription.
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Kuwait Financial Sector Banks founded or co‐founded by the Government, and branches of foreign banks licensed to operate in the State of Kuwait, may be exempted from the provisions of the preceding Paragraph by a decision of the Council of Ministers. Funds allocated for opening a foreign bank’s branch in the State of Kuwait, shall not be less than fifteen million Dinars. This amount may be increased by decision of the Board of Directors of the Central Bank. The Board of Directors of the Central Bank lays down the bases, rules and regulations to be complied with in regard to the operation of branches of foreign banks in the State of Kuwait. A foreign bank’s branch shall be deemed as one bank in the application of the provisions of this Law. Before the formalities of incorporation are processed, the applications to establish banks should be presented to the Board of Directors of the Central Bank to issue the recommendations necessary. Registration of Banks Without prejudice to the provisions of the Law of Commerce and the Law of Commercial Companies, wherever they are not in conflict with the provisions of this Law, no banking institution is allowed to start operation until it has been registered in the Register of Banks at the Central Bank. No institutions other than those registered in the Register of Banks are allowed to practice banking business or use in their business addresses, publications or advertisements the terms: "bank, banker, bank owner" or any other wording the usage of which may mislead the public as to the nature of the institution. No institutions other than those registered in the Central Bank Register of Banks or Register of Investment Companies are allowed to receive money for investment from third parties. The Central Bank may ‐ where necessary ‐ ascertain by any means it deems fit that no particular company or individual firm violates the provisions of the preceding two paragraphs. Without prejudice to any severer penalty under any other law, anyone who violates the provisions of the first, second and third paragraphs of this Article shall be liable to imprisonment for a term not exceeding two years and the payment of a fine not exceeding a hundred thousand Dinars, or to either of these penalties. The licensing body shall, at the Central Bank request, revoke the operating license of the business which exercised the contravening activity, and undertake all necessary arrangements to prevent its repeated exercise of such activity. Registration or refusal of registration of banks shall be affected by a decision of the Minister of Finance on the recommendation of the Board of Directors of the Central Bank. The Minister of Finance shall, on the recommendation of the Board of Directors of the Central Bank, issue regulations for the registration of banks, including the rules, procedures and dates for registration, amendments and publication of registration. 14 | P a g e
Kuwait Financial Sector a. Registered banks shall notify the Central Bank of any amendments they intend to make to their Memorandums of Agreement or Articles of Association. If such amendments are approved in principle by the Central Bank, the formalities necessary for processing them may then be accomplished in accordance with the provisions of the Law of Commercial Companies. Such amendments shall not be effective until they have been entered in the Register of Banks. b. Amendment of entries related to other data which are subject to registration in the Register but not involving amendment of the Articles of Association or Memorandums of Agreement may be effected upon approval thereof by the Governor of the Central Bank. Deletion from Register and Liquidation of Banks Without prejudice to the provisions of the Law of Commercial Companies, no bank may cease is operations or merge with any other bank unless it is given advance permission by the Minister of Finance on the recommendation of the Board of Directors of the Central Bank. The Board of Directors of the Central Bank shall, in such a case, ascertain that the bank has discharged all its obligations towards its customers and creditors in accordance with the general provisions laid down in this respect. A bank may be deleted from the Register of Banks a. At its own request; b. If it does not start business within one year from the date it is notified of the decision regarding its registration in the Register of Banks; c. If it is declared bankrupt; d. If it merges with another bank; e. If it ceases its operations or if its liquidity or solvency are endangered; f. If it commits any act in violation of the provisions of this Law. The deletion of any bank under (e) and (f) above shall not be proposed until the bank concerned has been notified of the proposal and given an opportunity to express its views. The Minister of Finance shall, on the proposal of the Board of Directors of the Central Bank, issue a decision regarding the deletion. The decision shall be effective from the date of its publication in the Official Gazette. Before proposing the deletion from the register of any bank the liquidity or solvency of which is endangered, the Board of Directors of the Central Bank may take any or all of the following measures: a. Forbid the bank from undertaking certain operations, or set limits on the business of the bank; b. Appoint a temporary controller to supervise the progress of the bank's business; c. Assign the Central Bank to manage the bank for a certain period of time, and thereafter decide whether the bank can carry on by itself or should be deleted from the Register and liquidated. Expenses incurred for management purposes shall be borne by the bank involved. 15 | P a g e
Kuwait Financial Sector In all cases, the Central Bank may ‐ if it deems it in the interest of depositors ‐ ask the appropriate court to issue a decision prohibiting measures against the bank involved and staying all lawsuits filed against. Such a decision shall be valid for one year. Every bank which it has been decided to delete from the Register of Banks shall be liquidated. The Board of Directors of the Central Bank shall specify the rules for liquidating the transactions outstanding at the time the decision is issued. Activities Not to be Undertaken by Banks Banks must not: a. Engage in trade or industry, or own any goods unless such goods have been acquired in settlement of debts due to them. Such goods shall be sold by the bank within one year from the date of acquisition; b. Purchase any real estate other than the required for conducting their business or accommodating their staff, unless such property has been acquired in settlement of debts. In the latter case, the bank shall sell the real estate within a period not exceeding three years. The said period, however, may be extended by a decision of the Board of Directors of the Central Bank; c. Own or deal in their own shares unless such shares have been acquired in settlement of debts due to them, and provided that they sell them within two years from the date of acquisition. Banks may: a. Purchase, for their own account, shares of other commercial companies within a limit of 50% of the bank's own funds. This limit may not be exceeded without prior approval by the Central Bank. b. Own shares or other assets held with them in settlement of debts due to them. In such cases, the bank shall dispose of these assets within two years from the date of acquisition. To be a member of a Bank's Board of Directors, or in charge of the Executive Staff of a bank, or Deputy or Assistant thereof, or to continue occupying any of these posts, requires the fulfillment of the following conditions: a. Not to have been adjudged guilty in an offense involving dishonesty, or breach of trust; b. Not to have been declared bankrupt; c. Not to have abstained from payment, even once; d. To be of good reputation; e. To have adequate experience in banking, financial or economic affairs in f. Compliance with the Rules and Regulations laid down under a resolution of the Board of Directors of the Central Bank of Kuwait; g. Not to be a member of a Board of Directors or staff in any of the other banks operating in the State of Kuwait. 16 | P a g e
Kuwait Financial Sector Chairmen of banks' Boards of Directors shall notify the Central Bank of Kuwait of nominees to the membership of that Board, thirty days prior to the date fixed for the meeting of the General Assembly expected to be held to elect the members of the Board of Directors. Moreover, the Central Bank of Kuwait shall be notified of the names of the candidates standing for holding the positions referred to in the preceding paragraph. The Board of Directors of the Central Bank of Kuwait shall have the right within twenty‐one days from the date of its notification to object to the appointment of any such nominees under a resolution showing the relevant reason, for failure to fulfill the required conditions. Such objection shall result in the exclusion of the nominee in question from candidacy for the Board of Directors or from occupying any such positions, as the case may be. Nominees not notified to the Central Bank or candidates objected to by the Central Bank of Kuwait according to the provisions of this The Board of Directors of the Central Bank may request from the Board of Directors of the concerned bank the removal of any of those mentioned in the first paragraph, if those occupying these posts lose –during the time of their service ‐ any of the conditions mentioned in this article, or if the Board of Directors of the Central Bank sees in that measure the safeguard of the depositors funds or shareholders interests or the bank’s general interest. If the removal does not take place, the Board of Directors of the Central Bank shall have the right to issue a resolution showing the relevant reason for the removal of any of the above mentioned from their posts, and make a relevant entry in the Register of Banks. Banks must not, in any form, give loans or overdrafts through current account or issue guarantees in favor of the members of their Boards of Directors without prior permission from the General Assembly. Such loans, advances and guarantees shall be subject to the rules applied by the bank to other customers. This prohibition shall not include the opening of documentary credits. No bank may issue "Travelers' Cheques" without prior permission from the Central Bank. Provisions Relating to Supervision The Central Bank may issue to the banks such instructions as it deems necessary to realize its credit or monetary policy or to ensure the sound progress of banking business. This provision applies to units subject to the supervision of the Central Bank of Kuwait. Branches of foreign banks are bound to comply with that ratio within three years from the date of their licensing to operate in the State of Kuwait. The Kuwaiti banks, branches of foreign banks, and units mentioned in the first paragraph, operating at the time of application of this law shall carry out the necessary adjustments in 17 | P a g e
Kuwait Financial Sector compliance with the provisions of this Article within three years from the date of its application. The Board of Directors of the Central Bank may ‐ whenever necessary – draw up rules and regulations to which all banks shall adhere in order to ensure their liquidity and solvency, particularly with regard to the ratios which must be maintained between the following items: • • •
The bank's own funds on the one hand and the amount of its liabilities on the other; The bank's liquid funds on the one hand and the aggregate of its term and demand liabilities on the other; The amount of the banks own funds on the one hand and the amount of its liabilities in the form of acceptances and guarantees on the other.
In the instructions issued and notified by the Central Bank to the banks, the Central Bank shall define the meaning of the terms: "bank's own funds", "liquid funds", "liabilities" and such other items. The Board of Directors of the Central Bank may, upon approval of the Minister of Finance: 1. Fix for banks the maximum amount for discount or loan operations, or for other banking operations which they may carry out with effect from a certain date. 2. Fix for banks: a. The minimum amount which customers must pay in cash to cover the opening of documentary credits; b. The maximum amount which may be lent to any single person – whether natural or juristic ‐ in proportion to the bank's own funds; c. The proportion of the bank's funds which must be deposited in cash with the Central Bank; d. The proportion of the bank's funds which must be invested in the local market; e. The rate of interest which the banks shall pay on deposits, and the maximum rates of interest and commission which they may charge their customers. Decisions issued by the Central Bank in application of the provisions of the preceding two Articles shall have no retroactive effect and shall not hinder the execution of agreements concluded between banks and their customers prior to the issue of such decisions. In the event exceptional circumstances arise and threaten the regularity of banking business, the Governor of the Central Bank may ‐ upon approval of the Minister of Finance ‐ order the banks to close temporarily and to stop all their operations. The banks shall, then, resume their operations by a decision to be issued by the Governor of the Central Bank and approved by the Minister of Finance.
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Kuwait Financial Sector Specialized Banks Specialized banks are meant to be those banks the main function of which is to finance certain economic sectors, such as the real estate, industrial or agricultural sectors, and which do not basically receive demand deposits. Specialized banks shall be subject to the provisions relating to the organization of banking business, wherever such provisions are not in conflict with the nature of the activities of these banks. The Board of Directors of the Central Bank may lay down special rules for the supervision of each type of the specialized banks. Such rules shall, in particular, cover the following: a. Terms for receipt of deposits. b. The maximum limit for the value of bonds specialized banks may issue, as well as the terms for such issue. c. The terms relating to loans and other credit facilities given by specialized banks. d. The rules relating to participation in establishing other companies, or the purchase of their shares. Inspection of Banks and Institutions Subject to Supervision by the Central Bank a. The Central Bank may, at any time, inspect banks and financial companies and institutions subject to the Central Bank supervision under the provisions of this Law, in addition to branches, companies and banks that operate abroad and are subsidiaries of Kuwaiti banks. Co‐ordination shall be carried out in this regard with the central banks or banking supervision authorities in the concerned countries. The banking supervision authorities in the other countries shall carry out the inspection of branches of their banks operating in the State of Kuwait. In this regard, co‐ ordination with the Central Bank of Kuwait shall precede inspection. b. Central Bank staff authorized to conduct inspection shall have the right to see the accounts, books, records, instruments and all documents they deem necessary for inspection. They may ask any member of the board of directors, or any official of the bank or institution to submit and give such data and information they deem necessary for the purposes of inspection. Review of books, records and instruments shall be carried out within the premises of the bank or institution inspected. c. The Central Bank shall make a comprehensive report on the findings of inspection made in any bank or institution. The report shall incorporate recommendations on the measures the Central Bank deems useful for rectifying any unsound position discovered through inspection. The Governor of the Central Bank shall send a copy of the report to the Chairman of the Board of Directors or to the Manager of the bank or institution inspected. The Governor of the Central Bank may fix a period of grace for the bank or institution to eliminate violations or correct unsound positions discovered through inspection. Periodic dates and rules relating to inspection shall be set by the Board of Directors of the Central Bank. 19 | P a g e
Kuwait Financial Sector Without prejudice to any severer penalty under any other law, every member of the board of directors, manager, or official of the bank or institution inspected who refuses to submit information and data or to present books, records, and instruments required by the inspector for inspection purposes, or who gives information or data while knowing that it is untrue, shall be liable to imprisonment for a term not exceeding three months and to the payment of a fine not less than one hundred but not exceeding two hundred twenty‐five Dinars, or to either of these two punishments. Central Bank officials authorized to conduct inspection shall ‐ during the term of their service and after quitting their jobs ‐ maintain the secrecy of accounts, books and instruments they review by virtue of their duty. They shall not disclose any information relating to the affairs of banks or institutions inspected, or to the affairs of their customers, except in such cases where it is permissible to do so by law. Without prejudice to any severer punishment under any other law, every person who violates the prohibition provided for in the preceding paragraph shall be liable to imprisonment for a period not exceeding three months and to the payment of a fine not exceeding two hundred twenty‐five Dinars, or to either of these two punishments, plus discharge from service. Accounts and Statements Banks shall do the following: a. End their financial year on the thirty‐first of December every year; b. Submit to the Central Bank, within three months from the end of their financial year, their Balance Sheet and Profit and loss Account. Foreign bank branches permitted to be opened under the provisions of this Law shall maintain independent accounts for all their operations in Kuwait, including balance‐sheets and profit and loss accounts. The Central Bank may ask the banks to submit such statements, information and statistical data as the Bank considers necessary to carry out its functions. The Central Bank may also establish a system for the collection of statistics on banking credit on periodical basis. The nature of such statements, information and statistical data, as well as their forms and the periods during which they should be submitted, shall be specified by the Board of Directors of the Central Bank. Banks must submit to the Central Bank all data, information and statistics it requests, in accordance with the system the Central Bank lays down for this purpose. All these information shall remain confidential, except for statistical data in an aggregate form, data and information exchanged between the Central Bank of Kuwait and other central banks and banking supervision authorities, in fulfillment of the objectives of aggregate supervision on banks, branches and companies that are subsidiaries of these banks. Exchange of these data
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Kuwait Financial Sector and information shall be in accordance with the arrangements agreed on between the Central Bank of Kuwait and the concerned central banks or banking supervision authorities. The Central Bank may establish a System of Risks for the purpose of assisting banks to evaluate the financial positions of persons applying to them for credit, and to enable the Central Bank to be constantly aware of the trends of banking credit and to assist in the application of the system of discount and rediscount at the Central Bank. The Board of Directors of the Central Bank shall lay down the rules and procedures for the System, and shall fix the data and returns relating to its enforcement. Data and information acquired through the System of Risks shall only be disclosed to persons who should be advised thereof under the rules laid down for the implementation of the System. Without prejudice to any severer punishment under any other law, anyone who violates this prohibition shall be liable to imprisonment for a term not exceeding three months and to the payment of a fine not exceeding two hundred twenty‐five Dinars, or to either one of these two punishments, plus discharge from service in all cases. The auditor shall indicate in his annual report the rules and means relied upon in verifying the existence of assets, the methods applied in their evaluation thereof, and the process of assessing outstanding liabilities. The auditor’s annual report shall include the auditor’s opinion on the adequacy of internal control systems applied in the bank, and the sufficiency of provisions against any decline in assets value and against the bank liabilities, along with determining the shortage in these provisions if applicable. The auditor shall clarify in his report whether the operations audited were contrary to any rules or provisions of the Law concerning the Central Bank and the Organization of Banking Business, or to the regulations and decisions issued in pursuance of the said Law. A copy of the report shall be forwarded to the Governor of the Central Bank. The auditor shall ‐on request of the Central Bank– check and audit any transactions carried out by the bank whose accounts are audited by him and present a report accordingly to the Central Bank. Furthermore, the auditor shall sign any statements or accounting data forwarded by the bank to the Central Bank. Such signature shall testify to the correctness of theses statements and data. The auditor may not receive any loans ‐ whether with or without collateral ‐ or guarantees from the bank the accounts of which he audits. Administrative Penalties 1. If a bank violates the provisions of this Law or the decisions and instructions issued in pursuance thereof, or the provisions of its Articles of Association, or fails to submit the documents, statements or information which it is required to submit to the Central Bank, or submits statements discrepant with facts, the following penalties may be imposed: 21 | P a g e
Kuwait Financial Sector a. Warning. b. Impose financial penalties that are commensurate with the graveness of the violation, and do not exceed fifty thousand Dinars. c. Temporarily suspend some or all operations usually carried out by the Central Bank with banks. d. Prohibit the bank from carrying out certain operations, or imposing any other limitations on its business. e. Request the removal or replacement of the employee responsible for the violation, if that employee is among those in charge of the main sectors of the bank’s activity. f. Consider the member of the bank’s Board of Directors, which is responsible for the violation, unfit for the Board membership. g. Appoint a temporary controller to supervise the progress of work at the bank. The powers and competences of that controller shall be determined by the Board of Directors of the Central Bank. h. Dissolve the bank’s Board of Directors and appoint a commissioner to manage the bank until the election of a new Board. i. Deleting from the Register of Banks. 2. The penalties provided for in paragraphs (a) and (c) shall be imposed by a decision of the Governor. The penalties provided for in paragraphs (b), (d), (e), (f), (g) and (h) shall be imposed by a decision of the Board of Directors of the Central Bank. The penalty provided for in paragraph (i) shall be imposed by a decision of the Minister of Finance, after the approval of the Board of Directors of the Central Bank, and after perusal of the concerned bank’s explanation in this regard. Unless involving a third party’s rights, any money achieved by the violating bank as a result of the committed violations, shall become the property of the Public Treasury. Furthermore, all financial gains achieved by a member of the bank’s Board of Directors, or the bank’s employee, as a result of committed violations shall become the property of the Public Treasury. The Board of Directors of the Central Bank of Kuwait lays down the rules and principles to be applied in determining the amounts that shall become the property of Public Treasury. 3. Members of Board of Directors, the officer in charge of the Executive Staff, General Managers, Deputies or Assistants thereof, Sector Managers, and Branch Managers of the violating bank shall –all within their respective competences‐ be responsible for deliberately committing any act that resulted in the bank’s violation of this Law and the decisions and instructions issued in pursuance thereof or the provisions of the bank’s Articles of Association, or for failing to submit the documents, statements or information which it is required to submit to the Central Bank, or for submitting statements discrepant with facts. The person responsible for the violation shall bear all ensuing damages to the bank, its shareholders or third parties, as a result of the violation. Except for cases allowed by the law, any member of the bank’s Board of Directors, or bank manager or employee or worker, shall not disclose any information –during the period of his employment or after leaving work at the bank‐ regarding the affairs of the bank or its 22 | P a g e
Kuwait Financial Sector customers, or other banks’ affairs, which he may have become aware of due to the activities inherent in his position. Without prejudice to any severer punishment under any other law, anyone who violates the prohibition mentioned in the previous paragraph shall be liable to imprisonment for a term not exceeding three months and the payment of a fine not exceeding two hundred and twenty five Dinars, or to either of these punishments, plus dismissal from the service. Islamic Banks Islamic Banks exercise the activities pertaining to banking business, and any activities considered by the Law of Commerce or by customary practice as banking activities, in compliance with the Islamic Shari'ah principles. Islamic banks ordinarily accept all types of deposits, in the form of current, savings, or investment accounts, whether for fixed terms and purposes or otherwise. These banks carry out financing operations for all terms, using Shari'ah Contracts, such as: Murabaha, Musharakah and Mudarabah. Furthermore, these banks provide various types of banking and financial services to their customers and to the public. They conduct financial and direct investment operations whether on their own account or on the account of other parties or in partnership with others, including establishment of companies or holding equity participations in existing companies or companies under establishment, which undertake various economic activities, in accordance with both Islamic Shari'ah principles and controls laid down by the Board of Directors of the Central Bank, and all that in compliance with the provisions of this Law. The Central Bank shall lay down the rules and controls that regulate the activities of branches of foreign Islamic banks authorized to operate in the State of Kuwait. Insofar as the provisions of this Law are concerned, the branches of any foreign Islamic bank operating in the State of Kuwait shall be considered as one bank. As an exception of the provisions of the Commercial Companies Law pertaining to the establishment of companies, and of the provisions of this Law (on Islamic banks) pertaining to capital and share percentages of founders' subscription, Kuwaiti banks – with the approval of the Central Bank – may establish subsidiary companies to conduct activities of Islamic Banks in accordance with Shari'ah principles and the provisions of this Law. Each Kuwaiti bank may not establish more than one company with only one premises, and the capital of the company shall not be less than fifteen million Kuwaiti Dinars. The founder bank shall subscribe for a share of not less than 51% in the capital of the company, and shall maintain that percentage at all times after the establishment. The remaining shares shall be placed for public subscription. If placement is not entirely covered by public subscription, the remaining shares shall be covered by the founder bank itself. Apart from the exception stipulated in the preceding paragraph, the subsidiary company mentioned in that paragraph, which conducts its activity in accordance with the Shari'ah principles, shall be considered an independent Islamic bank in the application of the provisions of this Law. The bank shall not sell or transfer the property of its subsidiary 23 | P a g e
Kuwait Financial Sector company or any part thereof to any other party. Before starting the formalities of incorporation, applications for establishing Islamic banks shall be presented to the Central Bank, together with the following documents: a. A statement citing the founders' names, nationalities, addresses, and shares in the bank's capital; b. A draft of the Memorandum of Agreement and Articles of Association; c. The feasibility study for establishing the bank; and d. Any other documents that the Central Bank may require. Application forms for establishing branches of foreign Islamic banks shall be presented to the Central Bank, together with the following documents: a. A copy of the Memorandum of Agreement and Articles of Association of the applicant bank; b. The feasibility study for establishing the branch; c. Evidence that the Headquarters of the foreign Islamic bank is subject to the parent country supervisory authority, together with the relevant approval thereof to establish the branch applied for, and d. Any other documents that the Central Bank may require. Applications to establish Islamic banks or a branch of foreign Islamic bank shall be submitted to the Board of Directors of the Central Bank for its approval in principle or refusal thereof. The license given to establish a branch of a foreign Islamic bank shall not be transferable to any other party. Islamic banks shall be registered in a special register for Islamic Banks at the Central Bank, pursuant to applications presented to the Central Bank on relevant forms. Registration therein shall be affected by a decision of the Minister of Finance on recommendation of the Board of Directors of the Central Bank. Islamic Banks shall not start operation until they have been registered in that Register. Islamic banks shall not establish branches inside or outside Kuwait without prior permission from the Central Bank, and before having these branches registered in the Islamic Bank Register. The Minister of Finance shall, on the recommendation of the Board of Directors of the Central Bank, issue an Islamic Bank Register Bylaw that shall include rules, procedures and timings of effecting, amending and declaring Register entries. In keeping with the provisions of the Law of Commercial Companies, and without prejudice to the provisions of this Law, registration of Islamic banks in the Register shall require the following: a. The bank takes the form of a joint‐stock company that places its shares for public subscription. Branches of foreign Islamic banks, once permitted in the State of Kuwait, may be excluded from this provision by a decision of the Council of Ministers, upon the proposal of the Board of Directors of the Central Bank and the approval of the Minister of Finance. b. The Central Bank approves the bank's Memorandum of Agreement and Articles of Association. 24 | P a g e
Kuwait Financial Sector Registration of branches of foreign Islamic banks in the Register, shall require provision of the following documents to the Central Bank: a. An affidavit by the Headquarters of the foreign bank declaring its commitment to any rights of depositors and creditors as well as all liabilities that may accrue on the branch; b. Evidence of the transfer of the minimum amount of funds allocated for the branch operations in the State of Kuwait, as stipulated in this Law; c. Any other commitment, document or instrument that the Central Bank may require. Without prejudice to the provisions and the provisions of enforced laws, the paid‐up capital of any Islamic bank shall not be less than seventy‐five million Kuwaiti Dinars. The founders' share in the bank capital shall not recede below 10% nor exceed 20% . With regard to the branches of foreign Islamic banks the amount of funds allocated for a branch in the State of Kuwait shall not be less than fifteen million Kuwaiti Dinars. The founders' share in the amount of funds allocated for a branch in Kuwait may be amended and so the amount of funds allocated for the branch increased by a decision of the Board of Directors of the Central Bank, when necessary. If the capital of a bank or the amount of funds allocated for a branch of foreign Islamic bank fall below the required minimum limit as a result of operational losses or other reasons, the bank shall cover the difference within such a period as may be specified by the Central Bank. Each Islamic bank shall have an independent Shari'ah Supervisory Board, comprised of not less than three members appointed by the bank's General Assembly. The Memorandum of Agreement and Articles of Association of the bank shall specify the establishment of the Board as well as its formulation, powers, and workings. In case of a conflict of opinions among members of the Shari'ah Supervisory Board concerning a Shari'ah rule, the board of directors of the designated bank may transfer the matter to the Fatwa Board in the Ministry of Awqaf and Islamic Affairs that shall be the final authority on the matter. The Shari'ah Supervisory Board shall annually submit to the bank's General Assembly a report comprising its opinion on the bank's operations in terms of their compliance with the Islamic Shari'ah principles and any comments it may have in this respect. This report shall be included in the bank's Annual Report. The Central Bank may: a. Open accounts denominated in Kuwaiti Dinar or foreign currencies with Islamic banks; b. Open accounts denominated in Kuwaiti Dinar or foreign currency for Islamic banks; c. Authorize Islamic banks to participate in the Clearing Chamber. Such actions shall be performed in accordance with the terms and conditions that are not in contradiction with the Islamic Shari'ah principles and are as decided by the Central Bank.
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Kuwait Financial Sector The Central Bank may carry out the following operations: a. Provide emergency finance to Islamic banks for a period not exceeding six months using instruments and methods that conform with the Islamic Shari'ah principles, and in accordance with the terms and conditions set by the Board of Directors of the Central Bank. The term of such finance may be extended for a period not exceeding further six months. b. Sell to and purchase from Islamic banks securities and other instruments that comply with the Islamic Shari'ah principles. c. Issue instruments that comply with the Islamic Shari'ah principles, in accordance with the limits and conditions set by the Board of Directors of the Central Bank. Dealing in these instruments, by sale and purchase, may be carried out with both Islamic banks and other institutions subject to the supervision of the Central Bank. Islamic banks shall be under the obligation to fully repay sight deposits to their depositors upon request, while such deposits shall not incur any losses. Owners of investment deposits shall participate in the profits and losses from the bank's business in proportion to the amounts of their participation in the investment, pursuant to the contracts concluded with them in this regard, and in accordance with the provisions of this Law. The Board of Directors of the Central Bank shall set the rules and regulations for the supervision of Islamic banks with respect to liquidity, solvency, and business organization, including in particular: a. A system for liquidity and elements thereof; b. Capital adequacy standards through specifying the ratio of capital to asset elements; c. Rules for calculation of the required provisions for asset risks. The Board of Directors of the Central Bank may specify for Islamic Banks all or some of the following: a. The maximum value of operations pertaining to a specific activity; b. The maximum limit of a bank's equity holdings in companies that it incorporates, participates in establishment, or owns shares therein; and the rules and regulations thereof, in addition to the maximum limit of a bank's participation in any single project; c. The maximum limit of a single customer's liability to the bank while granting a relative advantage to subsidiaries of the bank according to the conditions laid down by the Central Bank; d. The amount of funds that must be invested in the local market; e. The portion of deposits with the bank that must be deposited in cash with the Central Bank; f. The rules and regulations that must be observed in a bank's relationship with its customers, and between its customers and shareholders.
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Kuwait Financial Sector Without prejudice to the provisions of this Law, Islamic banks shall not own or deal in private residential buildings and plots in the State of Kuwait with the exception of those: a. Acquired or dealt in for the purposes of executing finance operations that have been agreed to or are being concluded with customers in accordance with the methods and forms of funding that are in compliance with the Islamic Shari'ah principles; b. Required for the conduct of their business or for the accommodation or recreation of their staff; c. Acquired by reversion of title in settlement of others' unfulfilled obligations towards them, provided that these are sold off within a period not exceeding three years from the date of reversion. The said period, however, may be extended by a decision of the Board of Directors of the Central Bank, when necessary. Unless otherwise stipulated in this section, Islamic banks shall be subject to the provisions of this Law without prejudice to the Islamic Shari'ah principles.
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Kuwait Financial Sector
Banking Sector in Kuwait Regulatory steps to enhance and diversify the economic activity are likely to provide a solid base for sustained economic growth. The conducive macroeconomic environment and increased government and private sector spending is likely to give a further fillip to bolster economic growth. The biggest beneficiary from the strong economic growth is the financial and banking sector. Significant mega projects in the oil and gas sector underpinned the strong growth in the banking sector. The increasing demand for and supply of raw materials, consumables and other consumer items resulted in trading sector too registering strong growth. Real estate sector continues to expand as more real estate development projects are already under implementation or are in the pipeline. Consolidated assets of local banks grew by 24.9% y‐o‐ y to reach KD27.0bn at the end of 2006, thanks to the credit facilities to residents growing by 26.3% to KD14.9bn. During the period 2003‐06, the consolidated assets of local banks grew at a CAGR of 12.8% from KD18.8bn in 2003 to KD27.0bn in 2006
Local Banks Commercial banks • • • • • • • • • • •
National Bank of Kuwait (NBK) Commercial Bank of Kuwait (CBoK) Gulf Bank (GB) Al‐Ahli Bank of Kuwait (ABK) The Bank of Kuwait & the Middle East (BKME) Burgan Bank (BB) The Branch of the Bank of Bahrain & Kuwait The Branch of the BNP Paribas Bank The Branch of HSBC Middle East Bank The Branch of the National Bank of Abu Dhabi The Branch of Citibank of New York
Specialized banks • •
Kuwait Real Estate Bank (KREB) Industrial Bank of Kuwait
Islamic Banks • •
Kuwait Finance House (KFH) Boubyan Bank (Boubyan)
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Kuwait Financial Sector
Liability Mix of Banks Private sector deposits (both sight deposits in KD and quasi‐money) continued to register strong growth during the last three years. Private sector deposits increased from KD9.9bn in 2003 to KD15.3bn in 2006, recording CAGR of 15.5% as compared to the overall liabilities of local banks’ growth of 12.8% during the same period. The contribution of private sector deposits to total liabilities increased from 52.7% in 2003 to 56.6% in 2006. Sight deposits increased from KD2.1bn in 2003 to KD2.9bn in 2006, registering CAGR of 11.0% for the period under review. Proportion of sight deposits to total liabilities declined marginally from 11.3% in 2003 to 10.7% in 2006. Quasi‐money deposits increased from KD7.8bn in 2003 to KD12.4bn in 2006, CAGR of 16.7% for the period 2003‐06. Share of quasi‐money deposits to total liabilities increased from 41.4% in 2003 to 45.8% in 2006. Own funds increased from KD2.0bn in 2003 to KD3.1bn in 2006, registering a CAGR of 15.9% for the period under consideration. Contribution of own funds to overall balance sheet size of local banks increased from 10.7% in 2003 to 11.6% in 2006. The local inter‐bank deposits to consolidated balance sheet of local banks declined from 13.6% in 2003 to 4.8% in 2006. Amount in KD mn Assets Cash Sight Deposits with CBK Time Deposits with CBK CBK Bonds Claims on Government Public Debt Instruments Debt Purchase Bonds Claims on Private Sector Other Local investments Credits Facilities to Residents Foreign Assets Local Interbank Deposits Other Assets Total Assets Liabilities Private Sector Deposits Sight Deposits in KD Quasi ‐ Money Government Deposits Foreign Liabilities Own Funds Local Interbank Deposits Other Liabilities Total Liabilities
2003 91 108 348 ‐ 2,232 818 959 8,419 2,425 2,914 498 18,814
2004 75 175 126 ‐ 2,146 604 1,019 9,867 3,192 1,405 535 19,144
2005 106 112 440 124 2,085 378 1,109 11,827 3,794 1,014 622 21,612
2006 149 50 926 356 1,989 176 1,215 14,934 5,246 1,291 659 26,989
2,117 7,790 634 1,925 2,009 2,561 1,778 18,814
2,643 8,481 842 1,822 2,311 1,369 1,676 19,144
3,149 9,359 996 2,260 2,800 853 2,195 21,612
2,894 12,370 1,434 3,117 3,130 1,302 2,742 26,989
Consolidated Balance Sheet of Local Banks in Kuwait The overall deposits, which includes both private sector as well as Government deposits increased from KD10.5bn in 2003 to reach KD16.7bn in 2006, recording CAGR of 16.6% for 29 | P a g e
Kuwait Financial Sector the period under review. For the year ended 2006, these deposits increased from KD13.5bn in 2005 to KD16.7bn in 2006, a y‐o‐y growth of 23.7%. Private sector deposits increased from KD9.9bn in 2003 to KD15.3bn in 2006, registering CAGR of 15.5% for the period 2003‐06. The share of private sector deposits to total deposits declined from 94.0% in 2003 to 91.4% in 2006. On the other hand, Government deposits registered a CAGR of 31.3% from KD634mn in 2003 to KD1,434mn in 2006. Contribution of Government deposits to total deposits increased from 6.0% in 2003 to 8.6% in 2006.
Asset Composition of Banks Credit facilities to residents during the period under review grew at a CAGR of 21.0% from KD8.4bn in 2003 to reach KD14.9bn in 2006. The deployment by way of credit facilities to residents increased during this period resulting in its contribution to consolidated assets of local banks increase from 44.8% in 2003 to 55.3% in 2006. Foreign assets too witnessed strong growth during the period 2003‐06, as it registered a CAGR of 29.3% as it grew from KD2.4bn in 2003 to reach KD5.2bn in 2006 resulting in higher contribution towards overall consolidated assets of local banks. Share of foreign assets to consolidated assets of local banks increased from 12.9% in 2003 to 19.4% in 2006. Credit facilities to residents increased by 26.3% y‐o‐y in 2006 as compared to the previous year. Deployment towards this segment increased from KD8.4bn in 2003 to reach KD14.9bn in 2006, recording CAGR of 21.0%. Within this segment, credit for personal facilities and real estate contributed 62.8% of the total credit facilities to residents in 2006. The contribution of these two segments was at 57.9% in 2003. Amount in KD mn
2003
2004
2005
2006
Trade Industry Construction Agriculture and Fishing Non-bank Financial Institutions Personal Facilities Consumer loans Installment Loans Purchase of Securities Other Loans Real Estate Crude Oil and Gas Public Services Other Total
1,072 442 633 49 650
1,276 447 592 23 781
1,371 468 770 19 933
1,702 606 1,070 36 1,427
749 1,558 755 380 1,434 73 1 623 8,419
736 2,075 908 451 2,030 55 0 495 9,867
789 2,448 1,248 653 2,539 52 5 534 11,827
756 3,167 1,637 527 3,288 51 5 662 14,934
Sectoral Distribution of Balances of Utilized Cash Credit Facilities to Residents Credit to personal facilities grew at a CAGR of 20.9% from KD3.4bn in 2003 to reach KD6.1bn in 2006, resulting in share to total credit facilities at 40.8% in 2006. Deployment towards real estate sector grew at a CAGR of 31.9% from KD1.4bn in 2003 to reach KD3.3bn in 2006. The 30 | P a g e
Kuwait Financial Sector proportion of real estate to total credit facilities to residents increased from 17.0% in 2003 to 22.0% in 2006. Within personal facilities, deployment towards installment loans and loans for purchase of securities contributed 78.9% of the disbursement by way of personal facilities. Installment loans and loans for purchase of securities contributed 67.2% of the total personal facilities in 2003. Installment loans as percentage of the total credit facilities to residents were 18.5% in 2003, which increased to 21.2% in 2006. Similarly, loans for purchase of securities as percentage of total credit facilities to residents increased from 9.0% in 2003 to 11.0% in 2006.
Kuwait Banking Sector Risks Management Banks in Kuwait benefited from strong economic growth during the last three years on the back of high oil prices and production. The strength of domestic demand continues to fuel momentum in non‐oil activities. Growth of the private sector is on the back of increased investment in infrastructure and expansion projects. Government’s efforts to diversify the economy and improve the investment climate through regulatory and structural measures in various sectors augur well for the banking sector. Buoyancy in the capital market activity helped banks register strong profitability by way of enhanced fee income and gains on their investment portfolio. Despite the correction in regional markets in 2006, banks continued to register earnings growth on the back of strong core banking business. On the funding side, banks are increasing their branch network in order to enhance its deposit base. We believe the growth in time deposits is likely to remain strong over the next two years as banks structure innovative products coupled with higher rates offered. In order to support loan growth, banks will require increasing their deposit franchise. Most banks witnessed a surge in their cost of funds in 2006, as banks were offering higher rates on term deposits to attract depositors. As a consequence, their cost of funding has increased. With the demand for funds being strong due to strong economic growth and massive infrastructure projects in different sectors, we expect banking sector’s growth to remain strong. The near‐term view for the Kuwaiti banks is likely to be influenced by developments in the domestic economy, fluctuations in the oil price and the level of public spending. High oil prices are resulting in high liquidity in the banking system and increased government spending. Going forward, buoyant operating environment, increased government spending and positive business and consumer sentiment are likely to be the key drivers for the banking sector. In a nutshell, core underlying banking income is likely to remain strong. Government thrust towards providing further impetus to economic growth is likely to benefit the banking sector. In our opinion, the long‐term outlook for the banking sector is positive on the back of buoyant core banking activities
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Kuwa ait Financia al Sector
Kuw wait Sttock Exch hange e The Kuwait Stock Exchaange (KSE) is the national stock market m of The State of Kuwait. mpanies (such h as NBK in 1952) existeed in Kuwaitt prior to Although seeveral share holding com the creation n of the KSE, it was not u until Octoberr 1962 that aa law was paassed to orgaanize the country's sto ock market. The Kuwait SStock Exchan nge is also am mong the firrst and largesst stock exch hanges in the e Persian Gulf region, and is now gaining prom minence as o one of the m most potentially important in the world. •
•
•
•
•
•
dent judicial personality with the The Kuwait Stocck Exchange shall enjoy an independ on in a mod de facilitating the performance of iits functionss for the right of litigatio pose of realising the objectives of itss organizatio on in the besst manner w within the purp scop pe of regulattions and law ws governingg the Stock Exxchange opeerations. The Stock Exchaange shall within w its acttivity act to direct and rrationalize dealing in n the scope o of its powers in order to d develop and stabilize stoccks and securrities, within dealing in securities in a maanner securin ng safe, easyy and accurate transactio ons so as to avoid any con nfusion in deealings. The Stock Exchaange, in pursuance of th he research and the studies conclud ded by it and its follow up p of the secu urity dealing process shaall render appropriate ad dvice and opin nion to the competent c g government authorities regarding th he financial status of the Stock Exchange member companiess and means of promotin ng their efficiency for realization of their relevant objectives. p with w the com mpetent autthorities in order to The Stock Exchange shall participate realize coordination and inteegration among the financial and thee economic activities movement so as to assist in achieving the economic and the financial and the capital m nd stability of the state. deveelopment an The Stock Exchaange staff shall continue to develop the systems and the me ethods of ng modern teechniques su uch as those e applied dealing in securrities, besidees introducin dvanced stocck markets for the purpo ose of achievving a sound financial possition for in ad the Kuwait Stockk Exchange o on both, regiional and international leevels. The Stock Exchaange shall acct to encourrage saving, promote invvestment aw wareness ong citizens, protect depositors and d create meeans for investment of funds in amo secu urities, in a m manner beneeficial to the economy
Listed Co ompanies at KSE BA ANKS 10 01 10 02 10 03 10 04
NBK GBK CBK ABK
Nattional Bank o of Kuwait Gulf Bank of Ku uwait Com mmercial Bank of Kuwaitt Al‐A Ahli Bank of Kuwait 32 | P a g e
Kuwa ait Financia al Sector 10 05 10 06 10 07 10 08 10 09
BKME KIB BURG KFIN BOUBYA AN
Ban nk of Kuwait and the Mid ddle East Kuw wait Internattional Bank Burrgan Bank Kuw wait Finance e House Bou ubyan Bank K.S.C.
KINV FACIL IFA NINV KPROJ AINV COAST TII SECH IIC SGC IFC MARKAZZ KMEFIC IIG AIG TID ALAMAN N ALOLA ALMAL GIH AAYAN BAYANIN NV GLOBALL OSOUL GULFINV VEST KFIC KAMCO ILIC KTINVESST NIH ISKAN MADAR ALDEERA A ALSAFATT BURGAN NGRP EKTTITA AB
Kuw wait Investm ment Compan ny Com mmercial Facilities Comp pany Inteernational Fiinancial Adviisors Nattional Investtments Comp pany Kuw wait Investm ment Projectss Company Al‐A Ahleia Holding Companyy Coaast Investme ent and Deveelopment Company Thee Internation nal Investor ((KSCC) Seccurities Housse K.S.C.C Ind dustrial Invesstments Com mpany (KSCC)) Seccurities Grou up Company (KSCC) Inteernational Fiinance Comp pany (K.S.C.C C) Kuw wait Financiaal Centre S.A A.K.C Kuw wait and Mid ddle East FIN N. INV. CO. KSSCC Inteernational In nvestment Group K.S.C.C C Areef Investmen nt Group (KSC CC) Thee Investmentt Dar Co. (KSSCC) Al‐A Aman Investtment CO. K.S.C.C Firsst Investmen nt Company ((K.S.C.C.) Al‐Mal Investm ment Compan ny (K.S.C.C.) Gulf Investmen nt House (K.SS.C.C.) Aayyan Leasing aand Investment CO. (K.S.C.C) Bayyan Investme ent CO. K.S.C C.C. Glo obal Investment House K K.S.C.C Oso oul Investme ent CO. K.S.C C.C Gulfinvest Interrnational K.SS.C.C. Kuw wait Finance e and Investm ment CO. KSC C KIP PCO Asset Maanagement C Company KSC ‐ KAMCO Inteernational Le easing and In nvestment C CO. Kuw wait Invest C CO. (HOLDING G) K.S.C.C Nattional Intern national CO. ((HOLDING) Housing Financce CO. S.A.K.C C Al‐Madar Finan nce and Invesstment CO. Al‐Deera Holdin ng CO. K.S.C..C Al‐SSafat Investm ment CO. K.SS.C.C Burrgan Group H Holding CO. K.S.C.C Ektttitab Holding CO. K.S.C.C C
IN NVESTMENTT 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 10 21 11 21 12 21 13 21 14 21 15 21 16 21 17 21 18 21 19 22 20 22 21 22 22 22 23 22 24 22 25 22 26 22 27 22 28 22 29 23 30 23 31 23 32 23 33 23 34 23 35 23 36 23 37
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Kuwait Financial Sector 238 239 240 241 242 243 244 245 246
QURAINHLD SOKOUK ALMADINA NOOR TAMINV EXCH DAMACKWT KSHC STRATEGIA
Al Qurain Holding CO. Sohouk Holding CO. S.A.K.C Al‐Madina for Finance and Investment CO. Noor Financial Investment K.S.C.C Al‐Tamdeen Investment CO. K.S.C.C Kuwait Bahrain International Exchange CO Damac Kuwaiti Holding CO. K.S.C.C. Kuwait Syrian Holding CO K S C HOLDING Strategia Investment CO. (K.S.C.C.)
INSURANCE 301 302 303 304 305 306 307
KINS GINS AINS WINS KUWAITRE FTI WETHAQ
Kuwait Insurance Company Gulf Insurance Company Al‐Ahleia Insurance Company Warba Insurance COMPANY Kuwait Reinsurance COMPANY K.S.C.C. First Takaful Insurance COMPANY K.C.S.C Wethaq Takaful Insurance COMPANY K.C.S.C.
REAL ESTATE 401 402 403 404 405 406 407 408 409 410 411 412 413 414 415 416 417 418 419 420 421 422
KRE URC NRE SRE PEARL TAM IIPC AREEC MREC ARABREC UREC ERESCO MABANEE INJAZZAT JEEZAN INVESTORS IRC ALTIJARIA SANAM AAYANRE AQAR ALAQARIA
Kuwait Real Estate COMPANY United Real Estate COMPANY National Real Estate COMPANY Salhiah Real Estate COMPANY Pearl of Kuwait Real Estate COMPANY Tamdeen Real Estate COMPANY International Investment Projects CO KSC Ajial Real Estate Entertainment CO. KSCC Al‐Massaleh Real Estate CO. [K.S.C.C] Arab Real Estate CO. (K.S.C.CLOSED) Union Real Estate CO. (KSCC) Al‐Enma'a Real Estate CO. (K.S.C.CLOSED) Mabanee Company ( S.A.K.C ) Injazzat Real Estate Development CO (K.S.C.C.) Jeezan Holding CO. K.S.C.C Investors Holding Group CO.KSCC International Resorts CO. K.S.C.C The Commercial Real Estate CO. K.S.C.C Sanam Real Estate CO. K.S.C.C A'ayan Real Estate CO. S.A.K.C Aqar Real Estate Investments CO. S.A.K.C Kuwait Real Estate Holding CO. K.S.H.C 34 | P a g e
Kuwait Financial Sector 423 424 425 426 427 428 429 430 431 432 433 434 435
MAZAYA ADNC THEMAR GRAND TIJARA TAMEERK ARKAN SAFATGLB ARGAN ABYAAR MUNSHAAT FIRSTDUBAI KBT
Al‐Mazaya Holding CO. S.A.K.C Al‐Dar National Real Estate CO. K.S.C.C Al‐Themar International Holding CO. Grand Real Estate Projects (K.S.C.C) Tijara and Real Estate Investment CO. KSCC Tameer Real Estate Investment CO. K.S.C.C Arkan Al‐Kuwait Real Estate CO. K.S.C.C Safat Global Holdings K.S.C Alargan International Real Estate CO. Abyaar Real Estate Development CO. KSCC Munshaat Real Estate Projects CO K.S.C.C First Dubai for Real Estate Development Kuwait Business Town Real Estate CO.
NIND PIPE KCEM REFRI CABLE SHIP MARIN PCEM PAPER MRC KFOUC ACICO UIC BPCC GGMC HCC ALKOUT KPAK KBMMC NICBM ROCKS EQUIPMENT MENAHOLD NCCI GYPSUM ALQURAIN SALBOOKH IKARUS
National Industries Group (HOLDING) Kuwait Pipes Industries and Oil Services Kuwait Cement Company Refrigeration Industries COMPANY Gulf Cable and Electrical Industries COM Heavy Engineering and Ship Building CO. Contracting and Marine Services COMPANY Portland Cement Company Shuaiba Industrial CO. (K.S.C.C) Metal and Recycling CO. Kuwait Foundry CO. (S.A.K.C) ACICO Industries CO.[K.S.C.C] United Industries CO. (K.S.C.CLOSED) Boubyan Petrochemicals CO. (K.S.C) Gulf Glass Manufacturing CO. K.S.C.C Hilal Cement CO. (KSCC) Alkout Industrial Projects CO. (K.S.C.C) Kuwait Packing Materials MANUFACTURING Kuwait Building Materials MANUFACTURING National Industries COMPANY Gulf Rocks COMPANY S.A.K.C. Equipment Holding Company K.S.C.C. Mena Holding CO. K.S.C National Company for Consumer Industries Kuwait Gypsum MANUFACTURING & TRADING CO Qurain Petrochemical INDUSTRIES CO.K.S.C Salbookh Trading CO. K.S.C.C. Ikarus Petroleum INDUSTRIES CO. K.S.C.C.
INDUSTRIAL 501 502 503 504 505 506 507 508 509 510 511 512 513 514 515 516 517 518 519 520 521 522 523 524 525 526 527 528
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Kuwait Financial Sector SERVICES 601 602 603 604 605 606 607 608 609 610 611 612 613 614 615 616 617 618 619 620 621 622 623 624 625 626 627 628 629 630 631 632 633 634 635 636 637 638 639 640 641 642 643
KCIN KHOT AGLTY SHOP ZAIN SENERGY EDU IPG CLEANING SULTAN AGHC TRANSPORT NMTC KGL CABLETV ASC NAPESCO KCPC KSH EYAS HITSTELEC ALSAFWA HUMANSOFT KPPC NAFAIS NSH AREFENRGY SAFWAN GPI GFC TAHSSILAT MAYADEEN ABAR IFAHR CGC JEERANH PAPCO SAFTEC MTCC UPAC ABRAJ ALAFCO MHC
Kuwait National Cinema Kuwait Hotels COMPANY The Public Warehousing Company Kuwait Commercial Complex COMPANY Mobile Telecommunications COMPANY K.S.C Al Safat Energy HOLDING COMPANY K.S.C.C Kuwait Educational Services COMPANY Independent Petroleum Group National Cleaning CO. (S.A.K.C) Sultan Center Food CO. (KSCC) Al‐Arabi Group HOLDING CO. (K.S.C) The Transport and Warehousing Group CO. (K. S. C.) National Mobile Telecommunications KSC Kuwait and Gulf Link Transport CO. (KSCC) Kuwait Cable Vision (S.A.K.) Automated Systems Company (K.S.C.C) National Petroleum Services CO. K.S.C.C. Kuwait Company for Process Plant CONS.&CONT Kuwait Slaughter House CO. K.S.C.C Eyas For Higher and Technical Education Hits Telecom Holding CO. K.S.C Al‐Safwa Group CO. K.S.C.C HOLDING Human Soft HOLDING CO. K.S.C.C Privatization Holding Company Nafais Holding Company K.S.C CLOSED National Slaughter House CO. K.S.C.C Aref Energy HOLDING CO. K.S.C.C. Safwan Trading and Contracting CO. K.S.C.C Gulf Petroleum Investment (S.A.K.C) Gulf Franchising HOLDING CO. K.S.C.C. Credit Rating and Collection K.S.C.C. National Ranges COMPANY K.S.C.C. Burgan Well Drilling (K.S.C.C.) IFA Hotels and Resorts CO. K.S.C.C Combined Group Contracting CO (S.A.K.C) Jeeran Holding CO. S.A.K.C Palms Agro Production CO. K.S.C.C. Al‐Safat TEC HOLDING COMPANY K.S.C.C Mushrif Trading and Contracting CO. United Projects Group K.S.C.C Al‐Abraj Holding CO. S.A.K.C Aviation Lease and Finance CO. K.S.C.C Al‐Mowasat Holding CO. S.A.K.C 36 | P a g e
Kuwait Financial Sector 644 645 646 647 648 649 650 651 652 653 654 655 656 657
MASHAER OULAFUEL VILLAMODA FUTURE NETWORK HAYATCOMM MUBARRAD MUNTAZAHAT ATC YIACO JAZEERA SOOR KNA FUTUREKID
Haj and Umrah Services Consortium CO KSCC Oula Fuel Marketing COMPANY K.S.C Villa Moda Life Style K.S.C.C Future Communications CO. GLOBAL K.S.C.C Network Holding CO. K.S.C.C Hayat Communications CO. K.S.C.C Mubarrad Transport CO. K.S.C.C. Kuwait Resorts COMPANY K.S.C.C. Advanced Technology COMPANY K.S.C.C Yiaco Medical CO. K.S.C.C Jazeera Airways CO. K.S.C. Soor Fuel Marketing CO. K.S.C Kuwait National Airways CO. K.S.C. Future Kid Entertainment and Real Estate
CATTL DANAH POULT FOOD UFIG KOUTFOOD
Livestock Transport and Trading COMPANY Danah Alsafat Foodstuff COMPANY Kuwait United Poultry COMPANY Kuwait Food Company (AMERICANA) United Foodstuff Industries Group CO. Kout Food Group K.S.C.C.
SCEM GCEM QCEM FCEM RKWC ARIG UGB EKHOLDING BKIKWT GFH CIB INOVEST AUB BBK ITHMR
Sharjah Cement and Industrial Development Gulf Cement COMPANY Umm Al‐Qaiwain Cement INDUSTRIES COMPANY Fujairah Cement INDUSTRIES COMPANY Ras Al Khaimah CO. FOR WHITE CEMENT(PSC) Arab Insurance Group B.S.C. United Gulf Bank (B.S.C) E.C Egypt Kuwait Holding CO. (S.A.E) Bahrain Kuwait Insurance CO. BSC Gulf Finance House E.C. Commercial International Bank (EGYPT) Inovest (B.S.C) Ahli United Bank B.U.C Bank of Bahrain and Kuwait B.S.C Ithmaar Bank B.S.C
FOOD 701 702 703 704 705 706 NON‐KUWAITI 804 805 806 807 808 809 810 811 812 813 814 817 818 819 820
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Kuwait Financial Sector PARALLEL MARKET 2003 BAREEQ 2004 REAM 2005 AFAQ 2006 ALSHAMEL 2007 SAFRE 2008 AJWAN 2009 MENA 2010 SPEC 2011 MASAKEN 2012 DALQAN 2013 ALEID 2014 MIDAN 2015 FLEX 2016 ALMUDON
Al‐Bareeq Holding CO. K.S.C.C. Real Estate Asset Management CO. (REAM) Afaq Educational Services CO. K.S.C.C. Al‐Shamel International HOLDING CO. KSCC Al Safat Real Estate CO. K.S.C.C Ajwan Gulf Real Estate CO.(K.S.C.C) Mena Real Estate COMPANY (K.S.C.C) Specialized Group HOLDING CO. (K.S.C.C) Al Masaken International Real Estate REAL ESTATE DEV. CO. Dulaqan Real Estate CO. K.S.C.C. Al Eid Food CO. (K.S.C.C) Al‐Maidan Dental Clinic CO. (K.S.C.C) Flex Resorts and Real Estate CO. (K.S.C.C) Al Mudon International Real Estate CO (K.S.C.C)
Brokerage Firms • • • • • • • • • • • • • •
Al‐Etehad Union Securities Brokerage Co EFG‐Hermes IFA Brokerage Al‐Muthana Financial Brokerage Co Al‐Robaeya Brokerage Al‐Seef Brokerage Co Al‐Sharq Financial Brokerage Co Al‐Arabi Brokerage Co K.I.C Financial Brokerage Co Watani Financial Brokerage Co KFIC Financial Brokerage Co Al‐Waseet Financial Business Co Al‐Wataniya National Finance Brokerage Co. First Securities Brokerage Co Al‐Awsat Middle East Financial Brokerage Firm Co
Trading Cycle in Kuwait Stock Exchange 1. Open an account at the Kuwait Clearing Company (KCC). 2. A Copy of the civil identification, the name of the bank the client deals with (3 K.D for individuals, 5 K.D for corporate). 3. Choose one of the registered Brokerage Firms in KSE. 4. When issuing a selling order, share certificates should be presented the following day after the transaction. 5. When issuing a buying order, payment should be submitted to the broker the following day before 11:00 am if the client’s balance with KCC is insufficient.
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Kuwait Financial Sector 6. Commission is calculated 1.250 K.D for each one Thousand K.D, commission is calculated 1 K.D for each one Thousand K.D for transaction of Fifty Thousand K.D and above. 7. A cheque will be issued by KCC in favor of the client every Sunday and Wednesday. 8. KSE account is accredited 500 fils for each executed transaction. 9. Share prices can fluctuate 5 pricing units daily according to its category. Note: The One Kuwaiti Dinar is equivalent to 1,000 fils. The price& share are not permitted to increase or to decrease more than 5 units per day. Example: A share with a value of 300 fils cannot increase more than 325 fils or decrease less than 275 fils daily during its daily trading.
The Rules and Conditions Listing Shareholding Companies in the Official Market After the perusal of the Amiri Decree issued on 14/08/1983 organizing the Kuwait Stock Exchange. And the Decision no (35) of the Minister of Commerce and Industry for the year 1983 issuing the by laws of KSE. And the KSE Committee Decision no (3) for the year 2004 concerning the rules of listing companies in the Official Market and the Parallel Market. And the KSE Committee Decision no. (7) for the year 2005 to add two conditions to the listing conditions. And the market committee’s decision no (1) for the year 2007 concerning the rules and conditions for listing shareholding companies in the official market. And the approval of the market committee in its meeting no (9) dated 2/11/2008. The following has been decided: Article 1: The rules and procedures annexed with this resolution shall be enforceable regarding the application form for listing shareholding companies in the market as well as its revision and its determination. Article 2: This law shall be enforceable from the date of its issuance. It shall be published in the official gazette and shall cancel all resolutions that collide with it. The market director must implement it.
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Kuwait Financial Sector Article (1) The shareholding companies requesting listing of their shares in the Official Market shall satisfy the following conditions. Article (2) The company’s issued capital should be fully paid and should not be less than (10) million Kuwaiti Dinars or any equivalent amount in foreign currency, and the shareholders’ equity rights shall not be less than 115% of the weighted average of the paid‐up capital in each of the last two fiscal years, according to the annual audited financial reports prior to the listing request from the financial auditor and approved by the company’s general assembly. Article (3) The company’s shares shall be tradable according to the law under which they were established taking into account that the period required to trade shareholders’ or founder's shares is not less than that required in the Kuwaiti commercial companies law for trading the shares of shareholders and founder's in Kuwaiti shareholding companies. Article (4) The company shall have achieved net profit in the last two fiscal years, and the yearly net profit shall not be less than 7.5% of the weighted average of the paid‐up capital at the end of each fiscal year. Article (5) If the listing request is from a closed company which had increased its capital more than 50% during a single fiscal year, a period of one year should have passed from the last date of the capital increase’s notice. Article (6) If the listing request is from a closed company which had changed its legal structure from a limited liability company to a closed shareholding company, a period of three years should have passed from the date of notice in the commercial registry of the change of structure. Article (7) 30% of the company’s capital should be distributed to a number of shareholders according to the schedule guide authorized by market committee where the ownership of each one isn’t below two trading units according to the book value of the latest fiscal year. In case the company can’t provide this percentage, 30% the company’s capital shall be offered for private placement by a specialized company independent from the company that requested listing. 40 | P a g e
Kuwait Financial Sector Article (8) The company should attain the approval of its general assembly to list its shares in Kuwait Stock Exchange. Article (9) The company’s board members shall pledge to adhere with all the rules and regulations set by Kuwait Stock Exchange, and to provide KSE management with all the required data and information provided that this information is correct and reliable. Article (10) The company shall provide its shareholders’ registry to the clearing company and adhere with all the instructions issued by KSE in this regard. Article (11) A non‐Kuwaiti company should be listed in its country of origin stock market. Article (12) Any company wishing to enlist will be subjected to a reserve of 25% of its paid‐up capital at the clearing chamber for a period of 2 years from the enlisting date. The names of shareholders owning this percent will be specified with the knowledge of the company’s board of directors. Article (13) The company shall pay a registration fee of 10,000 Kuwaiti Dinars and an annual subscription fee of (0.05%) of the company’s paid‐up capital but not exceeding 50,000 Kuwaiti Dinars. Article (14) The company shall fulfill KSE listing procedures during four months from the date of notification of Market approval which shall be considered void in case of incompliance with this period. Article (15) In addition to the fulfillment of all the listing rules in the articles above, the market committee has the right to authorize or reject listing of a company in light of the company’s profits, financial status, its importance to the national economy and the success in achieving its objectives; for that sake it is permitted to request from the proposed company any reports or extra information including turning to any specialized party to study these reports
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Kuwait Financial Sector and information, in case the committee decides to reject the listing request it must enclose a reason.
Participation of NonKuwaitis in Kuwaiti Shareholding Companies Referring to the commercial companies law issued in the law no. 15 for year 1960 and all amended laws thereto; And persual to the law no. 32 for year 1968 concerning the monetary and the Central Bank and the monetary profession and all amended laws thereto; And persual to the Amiree Decree no. 31 for year 1990 with regards to regulating the trading in securities and the establishment of mutual funds; And following the law no 2 for year 1999 concerning the promulgation of interests in securities in the shareholding companies. And following the law no 20 for year 2000 relevant to the approval for non‐Kuwaitis to own securities in Kuwaiti shareholding companies. And perusal to the Decree issued in August 14 1983 concerning organizing Kuwait Stock Exchange. And following the Decree issued on August 8, 1984 governing registration of brokers and their assistants in Kuwait Stock Exchange. And relating to the Decree issued on December 27 1986 with regards to organizing the settlement of the trading activity and the Clearing Company in the Kuwait Stock Exchange. And following the internal bylaws of Kuwait Stock Exchange issued by the ministerial resolution no. 25 for year 1983. And after the ratification of the Council of Ministers. It has been decided upon the following: Article (1) In implementing the jurisdiction of this resolution, the following terms and expressions indicated will have the confronting meaning: • •
•
Non‐Kuwaitis: Any individual person or company (entity) not carrying the Kuwaiti nationality and is investing his capital in Kuwait shareholding companies. Shareholding Companies: Kuwaiti Shareholding Companies enlisted in Kuwait Stock Exchange and which non‐Kuwaitis own shares in or may attain approval to participate in its establishment. Trading: Buying and selling shares of shareholding companies enlisted in Kuwait Stock Exchange according to the provisions dealt with in the Exchange. 42 | P a g e
Kuwait Financial Sector • •
•
•
Establishment: The right to establish shareholding companies through participating in its establishment where subscription in its capital is considered as establishment. Clearing and Settlement: Settling liabilities accrued on all procedures undertaken in Kuwait Stock Exchange and specifying the position of parties through the Clearing Chamber. Ownership and Consolidated Management: Any economic or juristic affiance through ownership or management, and is considered as a kind of consolidated ownership and management: o Anything owned from shares in the shareholding companies by the investor personally or being a guardian for his minors. o Anything acquired by the individual establishment owned by the investor and the companies that are affiliated partners in. o Financial companies owned by the investor exceeding 50% percent of it’s capital or those that are under his domination and that is according to what is specified by the IAS. o Any economic or juristic relation associated to the investor granting him the right to dominate over and that is according to what is specified by the IAS. Overlaping interests: Any interest that may permit one party to dominate over or to excersice impressive influence over another party in the event of taking financial and operative decisions. This will be according to the following: o The relation‐ship between the investing company’s Board of Directors and the principal shareholders and owners, i.e., anyone that possess 5% or more of the capital. o Distinctive management parties in the investing company (manager of the executive team and the deputy executive manager, his assistants and the executive managers and all managers with corresponding degree). o Subsidiary companies which the investor owns more than 50% of it’s capital or dominates over. o Associated companies which mean companies that the investor owns 20% of its capital and has impressive influence (effect) over.
Article (2) With consideration of the jurisdiction of article no. 3 of this resolution it is permitted for non‐Kuwaitis to own and trade shares of shareholding companies listed in Kuwait Stock Exchange according to the regulation indicated in this resolution. They will also be granted the permission to join in establishing public shareholding companies according to the determined procedures in this regards applied to Kuwaitis in this regards. Article (3) The non‐Kuwaiti investor shall be permitted to own and to trade in bank share. He will be conditioned to attain the approval of the Central Bank of Kuwait if this investor wishes to own more than 5% of the capital of any bank. This applies to any individual or group of investors connected by juristic or economic means either by mutual ownership or by 43 | P a g e
Kuwait Financial Sector consolidated management or by joint interest will be considered as a single investor entity. It is prohibited for non‐Kuwaiti investors to exceed the ownership of 49% in the capital of any individual bank, except after attaining a preceding approval from the Council of Ministers, and after consulting of the Central Bank of Kuwait. Article (4) Trading in shares which are allowed for non‐Kuwaitis to own, will be through the brokers registered at the Kuwait Stock Exchange according to the provisions governed at the Exchange. Article (5) It is prohibited for non‐Kuwaitis to buy or sell shares which are permitted for them to own outside the premises of Kuwait Stock Exchange. It is also prohibited for companies whose shares are sold and bought to register any trading action outside the Exchange to registering transaction in its records, accordingly. Article (6) Companies which acts as portfolio managers will be required to provide the Kuwait Stock Exchange with a monthly report comprising the selling and buying activity it had undergone through for each non‐Kuwaiti client. The Exchange Administration will have the authority to investigate over the authenticity of those reports if it sees necessary. Article (7) Non‐Kuwaitis will have the privilege of voting and nominating rights in the shares they own in the Kuwait shareholding companies in addition to the rights guaranteed by law for shareholders in those companies. Article (8) Aside from what has been mentioned above all laws, Decrees, bylaws, resolutions, regulations and provisions carried out at the Kuwait Stock Exchange with relation to trading in securities, settling liabilities, transfer of ownership and announcements of interest in shareholding Companies will be applied to non‐Kuwaiti investors. Article (9) Kuwait Stock Exchange will handle within specialized area all operations conducted for the account of non‐Kuwaitis on shares listed in the Exchange as well as analyzing and studying the effect of these operations on the performance of the market.
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Kuwait Financial Sector
Kuwait Stock Exchange Analysis Opening and Closing Stock Open High Value Wt. Index
6991.111111 7008.711111 55267375.56 384.0544444
Close Low Deal
6995.7 6950.177778 6182
An analysis of Kuwait Stock Exhange for the period of january 1, 2010 to January 13, 2010 carried out during the prepartion of this report. Sector wise average opening and closing stock is shown below; Banking Investment Insurance Real Eatate Industrial Services Foods Non‐Kuwaities Mutual Finds Parallel Markets
Open 8359.2 5536.125 712.7875 2788.6625 5408.8375 14751.4875 4221.525 7273 0 1080.3875
Close 8357.1375 5528.375 2886.35 2792.1 5419.35 14790.325 4247.4375 7270.9625 2764.1 1234.3
The analysis shows that the higest stock in the market is Services, Banking and Non‐ Kuwaities sector respectively. Mutual Funds sector beared a zero opening stock during the analysis period. 16000 14000 12000 10000 8000 6000
Open
4000
Close
2000 0
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Kuwait Financial Sector
Highest and Lowest Stock Banking Investment Insurance Real Eatate Industrial Services Foods Non‐Kuwaities Mutual Finds Parallel Markets
High 8385.6125 5564.3875 1065.7125 2800.125 5420.925 14819.475 4258.175 7286.775 0 925.8375
Low 8275.45 5481.7875 700.4 2771.475 5365.6125 14668.85 4198.4875 7222.7 0 924.3625
16000 14000 12000 10000 8000 6000
High
4000
Low
2000 0
Volume and Value Analysis Banking Investment Insurance Real Eatate Industrial Services Foods Non‐Kuwaities Mutual Finds Parallel Markets
Vol 6734375 167563750 191875 139266875 12224687.5 117889375 8310625 34033125 0 100000
Value 4637756.25 16375510 79943.75 10167056.25 3715345 17800291.25 1513802.5 3117221.25 0 11595
Deal 259.625 1905.125 8.5 1143.25 478.5 1990.625 188.5 393.75 0 3 46 | P a g e
Kuwait Financial Sector
Value 20000000 18000000 16000000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0
Value
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