Kuwait Financial Centre “Markaz” participated in the ‘Kuwait Investment Outreach’ webinar, themed ‘Investing in Kuwait – Capitalizing on Transformation’, as a Supporting Partner. The webinar, which was held on 9 December, was organized by the Kuwait Direct Investment Promotion Authority (KDIPA), in collaboration with The Financial Times and FDI Magazine, and is the third in a series of digital dialogues held in London and Silicon Valley. Markaz’s support for this webinar is in line with its Corporate Social Responsibility (CSR) strategy, and its strong belief in the importance of the role played by the private and public sectors in developing an attractive investment environment that will elevate the performance of the private sector specifically, and the nation’s economy as a whole.
Mr. M. R. Raghu, Executive Vice President of Published Research at Markaz, took part in a dynamic panel discussion titled ‘Kuwait’s Capital Markets and Economic Development’ that addressed the effect of the pandemic on the Kuwait capital markets, and how the recent developments have impacted investor perception. It also shed light on the sectors that provide the greatest opportunities for investors and possibilities to capitalize on the opportunities of a Kuwait investment.
Kuwaiti Capital Markets Growth
From a fund manager perspective, Mr. Raghu highlighted the resilience of Kuwait capital markets, as a result of the series of reforms seen over the past few years and the importance of the recent MSCI inclusion, on the back of which great foreign investor interest is seen. Mr. Raghu expressed his hopes in seeing more active inflows, which will in turn further elevate the performance of Kuwait capital market, creating a positive impact on all market participants. From international fund manager perspective, he pointed out that few markets present bargain hunting, and Kuwait is certainly one of them, as it is yet to participate in the global equity rally.
Kuwait Economy Outlook, COVID19 Impact and Vaccine
Despite the challenges seen throughout 2020 as a result of the pandemic, and the decline in GDP, Mr. Raghu stated that Kuwait is surely in a safe position, and strongly believes that it will be able to maintain its strong credit rating. When looking at the size of Kuwait’s sovereign funds, oil revenues and even in light of the current deficit, it will surely survive the downfalls seen in 2020. Mr. Ragu also expressed his positive views for the coming year, in light of the potential vaccine and on the back of a resilient 2020.
Sustainability and ESG Factors
On the topic of Sustainability and ESG, Mr. Raghu highlighted that the development of these factors from a global sense has been phenomenal and is confident that they will gain more traction in the near future in Kuwait. Looking at sustainability as a concept, Mr. Raghu clarified that Markaz has integrated it within its due diligence process, when researching a company and assessing how sustainable its business model is over the span of three to five years. From an ESG perspective, and especially from an environment, social and governance view, Mr. Raghu believes it is beginning to take shape however; he emphasized that in order to see a drastic change in the uprise of these factors, there must be a shift in dominance of the investment scene from retail to institutional investors.
Talent and Human Capital
From a talent and human capital perspective, and the importance of attracting local and foreign talent to the private sector, Mr. Raghu voiced that it is a key aspect that requires critical human capacity training in order to achieve the transition aspired, when shifting from an oil economy to a non-oil economy. He added that the results aspired will surely be evident on the long term.