Kuwaiti companies will enter the popular emerging-market stocks benchmark compiled by MSCI Inc. this month. But you would barely know it looking at the main local equities index, which has failed to stage the customary rally before such an elevation in status.
MSCI is due to unveil its semi-annual index review on Tuesday, disclosing Kuwaiti shares to be added to the MSCI Emerging Markets Index that is widely followed by fund managers. The Gulf state’s inclusion, initially expected in May, was postponed due to operational difficulties associated with the coronavirus outbreak.
Typically, investors rush to buy shares in soon-to-be upgraded markets the moment their pending promotion is announced, for a head start on the flood of money from passive funds -- a window that usually lasts about a year. That’s been the case in other countries in the region, such as the United Arab Emirates, Qatar and Saudi Arabia.
But coronavirus restrictions, the slump in oil prices as global demand plunged and the blow this dealt to Kuwait’s economy sent a chill through the stock market. The Premier Market index, down 12% for the year, is trading below the level seen before MSCI first announced its intentions to raise the country from its frontier markets group. The gauge climbed 0.5% on Monday, versus a 1.2% advance for MSCI Emerging Markets.
No comments:
Post a Comment