Kuwait firms condemn new stock exchange rules
Kuwait City, October 3, 2007
Publicly traded Kuwaiti companies including Investment Dar said on Wednesday new stock exchange rules might hinder the development of firms and encourage them to list on foreign bourses.
Almost a quarter of companies listed on the second-largest Arab exchange condemned the bourse's announcement on Monday that it would halt trading in shares of companies that buy into or sell out to firms the bourse has previously turned down for listing.
"This will restrict the activity of listed firms, prevent their development and force Kuwaiti companies to look for other markets to list their shares," 43 companies, including Kuwait Projects Co, said in full page advertisements in local newspapers.
The decision, together with others taken by the bourse, discouraged "trust in one of the country's most important economic institutions," the companies said.
The bourse rules is the latest in a series of changes aimed at improving transparency and shareholder rights on the Gulf's best performing stock market this year.
The exchange sparked criticism when it said it would halt for a year trading in companies that more than quadrupled their share capital.
The bourse lists 190 companies and one investment fund, according to Reuters data.
"Revolution against the bourse," a front page headline in Kuwait's al-Watan newspaper read.
"The rules are not very clear and are also not good for the economy," said Mustafa Behbehani, director at Kuwait Gulf Consulting Co.
The regulations will only create extra bureaucracy rather than enhance shareholder rights, analysts including Kuwait University's Amani Bouresli said. "I don't think this rule is feasible," said Bouresli, a finance professor. "It will affect all companies ... this should be decided on a case-to-case basis." - Reuters