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Tue 21 Dec 2010 03:33 PM

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Kuwait bourse mulls over-the-counter market

New index expected to run by end of 2011; new index to include 15 blue-chips

Kuwait bourse mulls over-the-counter market
Kuwaiti businessmen, Kuwaiti investors

Kuwait Stock Exchange, the Arab world's second largest, is mulling launching
an over-the-counter market in 2011 mainly for troubled listed firms, its
director said on Tuesday.

"The management of the bourse will submit this proposal to the bourse
committee in January (2011) ... and God willing it could be set up in
2011," Hamed Al Saif, the director of Kuwait Stock Exchange told Reuters
in an interview.

This market will be set up for companies that trade below 100 fils per share,
Saif said, adding that the bourse will filter the firms based on certain
criteria including their financial results and core business.

There are 1,000 fils to the dinar ($3.54).

"There are some companies that trade below 100 fils, and are affecting the
main index ... we will look into their financials, their core business, their
trading activity and based on that the decision will be taken if they should be
moved to the over-the-counter market," he said. The Gulf Arab state's
stock market has 86 firms which trade below 100 fils per share, out of 212
listed firms, according to Tuesday's close. The bourse currently has two
markets, the main trading market and the parallel market.

"New unlisted firms that want to try trading, before being able to list
on the main market could also apply to list on the over-the-counter one,"
Saif said.

Last year, the stock exchange signed an 18.3 million dinar deal with Nasdaq
OMX Group Inc for a new trading system, which would include a platform for
equities, bonds and derivative trading.

This index which is expected to run by the end of 2011, Saif said, will
include 15 of the blue-chips trading in the bourse.

"The 15 firms in the index will be changed every six months, based on
each firm's capital and financial results," he said.

The new index will make it easier, especially for foreign investors who want
to invest in the best stocks trading in the market, Saif added.

Kuwait's bourse index closed up 0.3 percent on Tuesday.  ($1=KD0.2826)

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