Kuwait Stock Exchange (KSE) has chosen Nasdaq OMX Group Inc to develop its trading system, a senior bourse official said on Monday, as part of a plan to introduce greater transparency.

"The bourse committee chose Nasdaq OMX not only for a trading system," said Wafa al-Rasheed, director of the technical bureau department at the KSE.

"It will be a full partnership,” he added.

The new system will be implemented within 13 months, allow electronic surveillance of the market and establish a platform for derivatives trading, she added.

The minister of trade and industry Ahmad al-Haroun earlier on Monday said the KSE will prepare a contract with Nasdaq OMX within two months.

The KSE had rejected an offer made by Germany's Deutsche Borse in favour of Nasdaq OMX's, said Haroun, who also heads Kuwait's bourse committee. He didn't say how much the deal for a trading system would be worth.

Kuwait, the world's fourth-largest oil exporter, wants to emulate the success of Gulf Arab neighbours such as Dubai which have managed to diversify their economies away from oil and attract investors and financial institutions.

The bourse has been hit by a string of irregularities and Kuwait is the only Gulf Arab state not to have an financial industry  regulator to supervise the stock market as plans to establish one have been stalled by tensions between parliament and the government.

Other Gulf financial markets have attracted foreign partners. On Friday, NYSE Euronext, owner of the New York Stock Exchange, said it would take a 20 per cent stake in the newly created Qatar Exchange for $200 million, while Qatar will own the rest. – Reuters