Kuwait Complete

KUWAIT FINANCIAL SECTOR
Banking, Finance and Stock Exchange

Submitted to

Mr. Sheikh Usman
Submitted by
Mohammed Amin MI08MBA02
Shahid Mehmood MI08MBA46
Khuram Hayat MI08MBA54
Nosherwan Ali MI07MBA68
Masood Alam MI07MBA54

Hailey College of Banking and Finance

University of the Punjab, Lahore

We dedicate this effort to our parents and
respected teachers, especially to Mr. Usman Sheikh,
who gave us an opportunity to explore understand.

Preface

The report seeks to develop a better understanding of the potential for Banking, finance and
Stock Exchange of Kuwait and Economy structure of the State.
The study uses a analysis based approach to examine rules, regulation and current situation
of the financial sector. The analysis structure was provided by Mr. Usman Sheikh, This
procedure ranges within Banking and ForEx sector and a little within industrial.
Rather, the purpose of the study is to better understand the systematic approach of the
State for the improvements of Financial and Economic position.
The contributions to this report by different sources other than the group fellows are
pleased, especially from the teachers and the seniors.
Mohammed Amin
Shahid Mehmood
Khuram Hayat
Nosherwan Ali
Masood Alam

Contents
KUWAIT ............................................................................................................................................................ 1
INTRODUCTION .......................................................................................................................................................... 1
ECONOMY OF KUWAIT ................................................................................................................................................. 1
FOREIGN RELATIONS OF KUWAIT .................................................................................................................................... 3
International disputes ...................................................................................................................................... 4
Middle East ....................................................................................................................................................... 4
Europe .............................................................................................................................................................. 6
Holy See ............................................................................................................................................................ 6
Rest of world .................................................................................................................................................... 6
BANKING AND FINANCE .................................................................................................................................... 9
CENTRAL BANK OF KUWAIT ......................................................................................................................................... 10
Establishment of the Central Bank ................................................................................................................. 10
Objectives of the Central Bank ....................................................................................................................... 10
Operations of the Central Bank ...................................................................................................................... 10
Relations with the Government .................................................................................................................................... 10
Relations with Local Banks ............................................................................................................................................ 11
Gold and Foreign Exchange Operations Inside and Outside the Country ...................................................................... 11
Accounts and Statements .............................................................................................................................................. 12
General Provisions ......................................................................................................................................................... 12
Organization of Banking Business .................................................................................................................. 13
Establishment of Banks ................................................................................................................................................. 13
Registration of Banks ..................................................................................................................................................... 14
Deletion from Register and Liquidation of Banks .......................................................................................................... 15
Activities Not to be Undertaken by Banks ..................................................................................................................... 16
Provisions Relating to Supervision ................................................................................................................................. 17
Specialized Banks........................................................................................................................................................... 19
Inspection of Banks and Institutions Subject to Supervision by the Central Bank ......................................................... 19
Accounts and Statements .............................................................................................................................................. 20
Administrative Penalties ................................................................................................................................................ 21
Islamic Banks ................................................................................................................................................................. 23
BANKING SECTOR IN KUWAIT ........................................................................................................................... 28
LOCAL BANKS .......................................................................................................................................................... 28
Commercial banks .......................................................................................................................................... 28
Specialized banks ............................................................................................................................................ 28
Islamic Banks .................................................................................................................................................. 28
LIABILITY MIX OF BANKS ............................................................................................................................................ 29
ASSET COMPOSITION OF BANKS ................................................................................................................................... 30
KUWAIT BANKING SECTOR RISKS MANAGEMENT ............................................................................................................. 31
KUWAIT STOCK EXCHANGE .............................................................................................................................. 32
LISTED COMPANIES AT KSE ......................................................................................................................................... 32
BROKERAGE FIRMS.................................................................................................................................................... 38
TRADING CYCLE IN KUWAIT STOCK EXCHANGE ................................................................................................................ 38
THE RULES AND CONDITIONS ...................................................................................................................................... 39
Listing Shareholding Companies in the Official Market .................................................................................. 39
Participation of Non‐Kuwaitis in Kuwaiti Shareholding Companies ............................................................... 42
KUWAIT STOCK EXCHANGE ANALYSIS ............................................................................................................................ 45
Opening and Closing Stock ............................................................................................................................. 45
Highest and Lowest Stock ............................................................................................................................... 46
Volume and Value Analysis ............................................................................................................................ 46
Kuwait Financial Sector
Kuwait
Introduction
The State of Kuwait is a sovereign Arab emirate situated in the northeast of the Arabian
Peninsula in Western Asia. It is bordered by Saudi Arabia to the south and Iraq to the north
and lies on the northwestern shore of the Persian Gulf. The name Kuwait is derived from the
Arabic "akwat", the plural of "kout", meaning fortress built near water. The emirate covers
an area of 20,000 square kilometres (6,880 sq mi) and has a population of about 2.9 million.
Historically, the region was the site of Characene, a major Parthian port for trade between
India and Mesopotamia. The Bani Utbah tribes were the first permanent Arab settlers in the
region and laid the foundation of the modern emirate. By 19th century, Kuwait came under
the influence of the Ottoman Empire and after the World War I, it emerged as an
independent sheikhdom under the protection of the British Empire. Kuwait's large oil fields
were discovered in the late 1930s. After it gained independence from the United Kingdom in
1961, the nation's oil industry saw unprecedented growth. In 1990, Kuwait was invaded and
annexed by neighboring Iraq. The seven month‐long Iraqi occupations came to an end after
a direct military intervention by United States‐led forces. Nearly 750 Kuwaiti oil wells were
set ablaze by the retreating Iraqi army resulting in a major environmental and economic
catastrophe. Kuwait's infrastructure was badly damaged during the war and had to be
rebuilt.
Kuwait is a constitutional monarchy with a parliamentary system of government, with
Kuwait City serving as the country's political and economic capital. The country has the
world's fifth largest oil reserves and is the eleventh richest country in the world per capita.
Petroleum and petroleum products now account for nearly 95% of export revenues, and
80% of government income. Kuwait is regarded as one of the most economically developed
countries in the Arab League and is designated as a major non‐NATO ally of the United
States.
Economy of Kuwait
Kuwait is a small, relatively open economy with proven crude oil reserves of about 96 billion
barrels (15 km³), i.e. about 10% of world reserves. Petroleum accounts for nearly half of
GDP, 90% of export revenues, and 95% of government income. Kuwait lacks water and has
practically no arable land, thus preventing development of agriculture. About 75% of potable
water must be distilled or imported. Higher oil prices reduced the budget deficit from $5.5
billion to $3 billion in 1999, and prices are expected to remain relatively strong throughout
2000. The government is proceeding slowly with reforms. It inaugurated Kuwait's first free‐
trade zone in 1999 and will continue discussions with foreign oil companies to develop fields
in the northern part of the country.
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Economy of Kuwait
Currency Kuwaiti dinar (KD)
Fiscal year 1 April–31 March
Trade organisations WTO and OPEC
Statistics
GDP ranking 76th (2004)
GDP $157.9 billion (2008 est.)
GDP growth 8.1% (2008 est.)
GDP per capita $60,800 (2008 est.)
GDP by sector agriculture (0.3%), industry (52.2%), services (47.5%) (2007
est.)
Inflation 11.7% (2008 est.)
Labour force 2.225 million; note: non‐Kuwaitis represent about 80% of the
labor force (2008 est.)
Unemployment 2.2% (2004 est.)
Main industries petroleum, petrochemicals, cement, shipbuilding and repair,
desalination, food processing, construction materials
Trading Partners
Exports $95.46 billion f.o.b. (2008 est.)
Main partners Japan 19.9%, South Korea 17%, Taiwan 11.2%, Singapore 9.9%,
United States 8.4%, Netherlands 4.8%, China 4.4% (2007)
Imports $26.54 billion f.o.b. (2008 est.)
Main Partners United States 12.7%, Japan 8.5%, Germany 7.3%, China 6.8%,
South Korea 6.6%, Saudi Arabia 6.2%, Italy 5.8%, United
Kingdom 4.6% (2007)
Public finances
Public debt $14.21 billion (29.6% of GDP) (2004 est.)
External debt $38.82 billion (31 December 2008 est.)
Revenues $113.3 billion (2008 est.)
Expenses $63.55 billion (2008 est.)
Economic aid NA
For purchasing power parity comparisons, the US Dollar is exchanged at 0.48 Kuwaiti Dinars
only. Average wages in 2007 hover around $4,250 per month for Kuwaitis. As for skilled and
experienced non‐Kuwaiti (Engineers, Doctors, and Managers), the average monthly salary is
hiked up tremendously, to an average of $10,000+ a month excluding living and other
benefits. Please, also keep in mind that Kuwait is a tax free country, so all the above figures
reflect actual take home numbers.
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Kuwait is a small country with massive oil reserves, whose economy has been traditionally
dominated by the state and its oil industry. During the 1970s, Kuwait benefited from the
dramatic rise in oil prices, which Kuwait actively promoted through its membership in the
Organization of Petroleum Exporting Countries (OPEC). The economy suffered from the
triple shock of a 1982 securities market crash, the mid‐1980s drop in oil prices, and the 1990
Iraqi invasion and occupation. The Kuwaiti Government‐in‐exile depended upon its $100
billion in overseas investments during the Iraqi occupation in order to help pay for the
reconstruction. Thus, by 1993, this balance was cut to less than half of its pre‐invasion level.
The wealth of Kuwait is based primarily on oil and capital reserves, and the Iraqi occupation
severely damaged both.
In the closing hours of the Persian Gulf War in February 1991, the Iraqi occupation forces set
ablaze or damaged 749 of Kuwait's oil wells. All of these fires were extinguished within a
year. Production has been restored, and refineries and facilities have been modernized. Oil
exports surpassed their pre‐invasion levels in 1993 with production levels only constrained
by OPEC quotas.
Foreign Relations of Kuwait
Since its independence in 1961, Kuwait maintained strong international relations with most
countries, especially nations within the Arab world. Its vast oil reserves give it a prominent
voice in global economic forums and organizations like the OPEC.
Kuwait's troubled relationship with neighboring Iraq formed the core of its foreign policy
from late 1980s onwards. Its first major foreign policy problem arose when Iraq claimed
Kuwaiti territory. Iraq threatened invasion, but was dissuaded by the United Kingdom's
ready response to the Amir's request for assistance. Kuwait presented its case before the
United Nations and successfully preserved its sovereignty. UK forces were later withdrawn
and replaced by troops from Arab League nations, which were withdrawn in 1963 at
Kuwait's request.
On August 2, 1990, Iraq invaded and occupied Kuwait. Largely through the efforts of King
Fahd bin Abdul Aziz of Saudi Arabia who was instrumental in obtaining the help of the U.S., a
multinational coalition was assembled, and, under UN auspices, initiated military action
against Iraq to liberate Kuwait. Arab states, especially the other five members of the Gulf
Cooperation Council (Saudi Arabia, Bahrain, Qatar, Oman, and the United Arab Emirates),
Egypt, and Syria, supported Kuwait by sending troops to fight with the coalition. Many
European and East Asian states sent troops, equipment, and/or financial support.
After its liberation, Kuwait largely directed its diplomatic and cooperative efforts toward
states that had participated in the multinational coalition. Notably, many of these states
were given key roles in the reconstruction of Kuwait. Conversely, Kuwait's relations with
nations that had supported Iraq, among them Jordan, Sudan, Yemen, and Cuba, have proved
to be either strained or nonexistent.
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Since the conclusion of the Gulf War, Kuwait has made efforts to secure allies throughout
the world, particularly United Nations Security Council members. In addition to the United
States, defense arrangements have been concluded with the United Kingdom, Russia, and
France. Close ties to other key Arab members of the Gulf War coalition — Egypt and Syria —
also have been sustained.
Kuwait's foreign policy has been dominated for some time by its economic dependence on
oil and natural gas. As a developing nation, its various economies are insufficient to
independently support it. As a result, Kuwait has directed considerable attention toward oil
or natural gas related issues.
With the outbreak of the War on Iraq, Kuwait has taken a strongly pro‐U.S. stance, having
been the nation from which the war was actually launched. It supported the Coalition
Provisional Authority, with particular stress upon strict border controls and adequate U.S.
troop presence.
Kuwait is a member of the UN and some of its specialized and related agencies, including the
World Bank (IBRD), International Monetary Fund (IMF), World Trade Organization (WTO),
General Agreement on Tariffs and Trade (GATT); African Development Bank (AFDB), Arab
Fund for Economic and Social Development (AFESD), Arab League, Arab Monetary Fund
(AMF), Council of Arab Economic Unity (CAEU), Economic and Social Commission for
Western Asia (ESCWA), Group of 77 (G‐77), Gulf Cooperation Council (GCC), INMARSAT,
International Development Association (IDA), International Finance Corporation,
International Fund for Agricultural Development, International Labour Organization (ILO),
International Marine Organization, Interpol, IOC, Islamic Development Bank (IDB), League of
Red Cross and Red Crescent Societies (LORCS), Non‐Aligned Movement, Organization of Arab
Petroleum Exporting Countries (OAPEC), Organization of the Islamic Conference (OIC),
Organization of Petroleum Exporting Countries (OPEC), and the International Atomic Energy
Agency (IAEA).
International disputes
In November 1994, Iraq formally accepted the UN‐demarcated border with Kuwait which
had been spelled out in Security Council Resolutions 687 (1991), 773 (1993), and 883 (1993);
this formally ends earlier claims to Kuwait and to Bubiyan and Warbah islands; ownership of
Qaruh and Umm al Maradim islands disputed by Saudi Arabia. Kuwait and Saudi Arabia
continue negotiating a joint maritime boundary with Iran; no maritime boundary exists with
Iraq in the Persian Gulf.
Middle East
Iran: On July 13, 2008, Kuwaiti lawmaker Jassem Al‐Kharafi publicly accused the West of
"provoking" Iran on the nuclear issue. In his interview with state‐owned Kuwait TV, Al‐
Kharafi said, "What is happening is that there are provocative Western statements, and Iran
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responds in the same way... I believe that a matter this sensitive needs dialogue not
escalation, and it shouldn't be dealt with as if Iran were one of America's states."
Iraq: Kuwaiti lawmaker Al‐Ameeri opposes forgiving Iraq's debt. The debt, estimated at $16
billion, represents loans Kuwait made to Baghdad in the Saddam Hussein era, mostly during
the 1980‐1988 Iraq‐Iran war. Al‐Ameeri argues that, "The debt owed by Iraq to Kuwait is the
right of the Kuwaiti people and no one has the right to negotiate over them." Al‐Ameeri
believes that the Kuwaiti voices calling to forgive the debt and compensation "should not be
heeded and they do not represent the Kuwaiti people." He further opposes the debt
forgiveness because Iraq has considerable oil wealth and because the, "Kuwaiti people shed
their blood" during the 1990 Iraqi invasion of Kuwait. "The issue is a red line for Kuwait and
no Kuwaiti will ever concede these loans," Al‐Ameeri has been quoted as saying.
On November 8, 2008, Kuwaiti lawmaker Al‐Mulla proposed that Kuwait allow Iraq to back
pay its debt to Kuwait in natural gas. The Arab Times quoted Al‐ Mulla as saying, "In this
manner, Kuwait can take the loans back from Iraq and put an end to the shortage of fuel in
its power stations."
On April 25, 2007, Kuwaiti lawmaker Saleh Ashour called in a statement for reopening
Kuwait's embassy in Baghdad and for strongly supporting the government in Baghdad. But
Al‐Ghanim said he believes that it was too early to reopen the Kuwaiti embassy in Baghdad
and that this issue should wait until security situations improve.
Israel: On December 28, 2008, Kuwaiti lawmakers Mikhled Al‐Azmi, Musallam Al‐Barrak,
Marzouq Al‐Ghanim, Jaaman Al‐Harbash, Ahmad Al‐Mulaifi, Mohammad Hayef Al‐Mutairi,
Ahmad Al‐Saadoun, Nasser Al‐Sane, and Waleed Al‐Tabtabaie protested in front of the
National Assembly building against the attacks by Israel on Gaza. Protesters burned Israeli
flags, waved banners reading, "No to hunger, no to submission" and chanted "Allahu Akbar."
Israel launched air strikes against Hamas in the Gaza Strip on December 26 after Hamas
launched rockets into the Israeli town of Sderot following the expiration of a six‐month
ceasefire on December 18.
On January 3, 2009, Nasser Al‐Sane, Waleed Al‐Tabtabaie, Adnan Abdulsamad, and other
MPs protested in front of the National Assembly against the Israeli attacks on Gaza.
After Friday prayers on January 8, 2009, Jamaan Al‐Harbash and several other MPs again
protested in front of the National Assembly urging Arab leaders to take a stronger stand
against the Israeli attacks and open Rafah Crossing to end an embargo imposed by Israel on
the residents of Gaza.
Saudi Arabia: Although Kuwait and Saudi Arabia are strong allies and cooperate within OPEC
and the GCC, Riyadh disputes Kuwait's ownership of the Qaruh and Umm al Maradim
islands.
Yemen: As a member of the UN Security Council in 1990 and 1991, Yemen abstained on a
number of resolutions concerning the Iraqi invasion of Kuwait and voted against the "use of
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force resolution." Kuwait responded by canceling aid programs, cutting diplomatic contact,
and expelling thousands of Yemeni workers.
Europe
Denmark: On November 6, 2006, the Kuwaiti parliament voted 22‐15 to approve severing
diplomatic ties with Denmark over the Jyllands‐Posten Muhammad cartoons controversy
and spending about US$50 (€39.20) million to defend the prophet's image in the West. Both
votes were nonbinding, meaning the Cabinet does not have to abide by them. Kuwaiti
lawmaker Abdulsamad voted in favor of cutting diplomatic ties, saying, ""We have to cut
diplomatic and commercial ties with Denmark...We don't have to eat Danish cheese." Al‐
Rashid voted against cutting diplomatic ties, arguing that Muslims have to be positive and
remember that it were some individuals, not governments, who insulted the Prophet
Muhammad. Al‐Rashid was quoted as saying, "We here in Kuwait curse Christians in many of
our mosques, should those (Christian) countries boycott Kuwait?" In February 2008, MP
Abdullah Al‐Roumi called for an end to Kuwait's Demark boycott and was quoted as saying,
"No Muslim can accept this insult against the Prophet... It is a form of terrorism."
Greece: Greece was one of the 34 member countries in the coalition which assisted in the
liberation of Kuwait from Iraq in 1991 during the Gulf War. Greece also participated in the
UNICOM mission to patrol the demilitarized zone along the Kuwait‐Iraq border.
Holy See
Russia:: On 28 December 1991, Kuwait recognised the Russian Federation as the successor
state to the Soviet Union. Russia has an embassy in Kuwait City, and Kuwait has an embassy
in Moscow. The current Ambassador of Russia to Kuwait is Alexander Kinshchak, who was
appointed by Russian President Vladimir Putin on 28 January 2008, and who presented his
credentials to Emir Sabah Al‐Ahmad Al‐Jaber Al‐Sabah on 28 April 2008. The current
Ambassador of Kuwait to Russia is Nasser Haji Al‐Muzayen, who presented his credentials to
Vladimir Putin on 11 December 2007.
Turkey: The Ministry of Foreign Affairs in Turkey describes the current relations at
"outstanding levels". Bilateral trade between the two countries is around 275 Million dollars.
The two countries have recently signed fifteen agreements for cooperation in tourism,
health, environment, economy, commercial exchange and oil.
Rest of world
India: Kuwait is India's second largest supplier of crude oil and non‐oil bilateral trade was
over one billion US dollars in 2008. In light of these close trade relations, the two countries
have bound themselves to both a Mutual Promotion and Reciprocal Protection of
Investments (BIPA) agreement and a Double Taxation Avoidance Agreement (DTAA). In June
2006, Emir Al‐Sabah visited India, and in April 2007 the two countries inked a Memorandum
of Understanding (MoU) on Labor, Employment and Manpower Development.
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Pakistan: After the end of the first Gulf War in 1991 Pakistani army engineers were involved
in a programme of mine clearance in the country. Kuwait was also the first country to send
aid to isolated mountain villages in Kashmir after the quake of 2005, also offering the largest
amount of aid in the aftermath of the quake ($100m).
People's Republic of China: China and Kuwait initiated diplomatic relations in 1971. In 2007,
Kuwait exported $2.3 billion worth of goods to China ($2.1 billion of which was oil) and
Kuwait imported $1.3 billion of goods from China.
In 2007, Kuwait supplied China with 95,000 barrels of oil per day, accounting for 2.6% of
China's total crude oil imports. Saudi Arabia was China's top supplier with its shipments
jumping 69.8 percent to 3.84 million tons (939,000 bpd), followed by Angola with 2.06
million tons (503,000 bpd), down 27.1 percent. Iran became third, with imports from the
country shrinking 35.3 percent to 1.18 million tons (289,000 bpd). China is the world's
second‐biggest oil consumer after the US. Abdullatif Al‐Houti, Managing Director of
International Marketing at state‐run Kuwait Petroleum Corporation (KPC), told KUNA in
October that Kuwait is on course for its China‐bound crude oil export target of 500,000 bpd
by 2015, but success will heavily depend on the Sino‐Kuwaiti refinery project. The two
countries have been in talks for the planned 300,000 bpd refinery in China's southern
Guangdong Province. The complex is expected to be on‐stream by 2012, but the joint
venture still awaits approval from the National Development and Reform Commission,
China's top economic planning agency.
United States: The United States opened a consulate in Kuwait in October 1951, which was
elevated to embassy status at the time of Kuwait's independence 10 years later. The United
States supports Kuwait's sovereignty, security, and independence, as well as its multilateral
diplomatic efforts to build greater cooperation among the GCC countries.
Strategic cooperation between the United States and Kuwait increased in 1987 with the
implementation of a maritime protection regime that ensured the freedom of navigation
through the Persian Gulf for 11 Kuwaiti tankers that were reflagged with U.S. markings.
The U.S.‐Kuwaiti strategic partnership intensified dramatically again after Iraq's invasion of
Kuwait. The United States spearheaded UN Security Council demands that Iraq withdraw
from Kuwait and its authorization of the use of force, if necessary, to remove Iraqi forces
from the occupied country. The United States also played a dominant role in the
development of the multinational military operations Desert Shield and Desert Storm that
liberated Kuwait. The U.S.‐Kuwaiti relationship has remained strong in the post‐Gulf War
period. Kuwait and the United States worked on a daily basis to monitor and to enforce
Iraq's compliance with UN Security Council resolutions, and Kuwait has also provided the
main platform for Operation Iraqi Freedom since 2003.
Since Kuwait's liberation, the United States has provided military and defense technical
assistance to Kuwait from both foreign military sales (FMS) and commercial sources. The
U.S. Office of Military Cooperation in Kuwait is attached to the American embassy and
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manages the FMS program. There are currently over 100 open FMS contracts between the
U.S. military and the Kuwait Ministry of Defense totaling $8.1 billion. Principal U.S. military
systems currently purchased by the Kuwait Defense Forces are Patriot Missile systems, F‐18
Hornet fighters, the M1A2 main battle tank, AH‐64D Apache helicopter, and a major
recapitalization of Kuwait's Navy with U.S. boats.
Kuwaiti attitudes toward American products have been favorable since the Gulf War. In
1993, Kuwait publicly announced abandonment of the secondary and tertiary aspects of the
Arab boycott of Israel (those aspects affecting U.S. firms). The United States is currently
Kuwait's largest supplier of goods and services, and Kuwait is the fifth‐largest market in the
Middle East. U.S. exports to Kuwait totaled $2.14 billion in 2006. Provided their prices are
reasonable, U.S. firms have a competitive advantage in many areas requiring advanced
technology, such as oil field equipment and services, electric power generation and
distribution equipment, telecommunications gear, consumer goods, and military equipment.
Kuwait also is an important partner in the ongoing U.S.‐led campaign against international
terrorism, providing assistance in the military, diplomatic, and intelligence arenas and also
supporting efforts to block financing of terrorist groups. In January 2005, Kuwait Security
Services forces engaged in gun battles with local extremists, resulting in fatalities on both
sides in the first such incident in Kuwait's history.
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Banking and Finance
Before independence in 1961, foreign monies, largely the Indian rupee in the period
between 1930 and 1960, circulated in Kuwait. At independence the Kuwaiti dinar was
introduced, and a currency board was established to issue dinar notes and to maintain
reserves. In 1959 the Central Bank of Kuwait was created and took over the functions of the
currency board and the regulation of the banking system.
The first bank in Kuwait was established in 1941 by British investors. Subsequent laws
prohibited foreign banks from conducting business in the country. When the British bank's
concession ended in 1971, the government bought 51 percent ownership. In 1952 another
bank, the National Bank of Kuwait, the largest commercial bank, was founded. The
establishment of several other banks, all under Kuwaiti ownership, followed. Some
specialized financial institutions also emerged: the Credit and Savings Bank, established in
1965 by the government to channel funds into domestic projects in industry, agriculture,
and housing; the Industrial Bank of Kuwait, established in 1974 to fill the gap in medium‐
and long‐term industrial financing; and the private Real Estate Bank of Kuwait. By the 1980s,
Kuwait's banks were among the region's largest and most active financial institutions. Then
came the Suq al Manakh stock market crash in 1982.
The large revenues of the 1970s left many private individuals with substantial funds at their
disposal. These funds prompted a speculation boom in the official stock market in the mid‐
1970s that culminated in a small crash in 1977. The government's response to this crash was
to bail out the affected investors and to introduce stricter regulations. This response
unintentionally contributed to the far larger stock market crash of the 1980s by driving the
least risk‐averse speculators into the technically illegal alternate market, the Suq al Manakh.
The Suq al Manakh had emerged next to the official stock market, which was dominated by
several older wealthy families who traded, largely among themselves, in very large blocks of
stock. The Suq al Manakh soon became the market for the new investor and, in the end, for
many old investors as well.
Share dealings using postdated checks created a huge unregulated expansion of credit. The
crash of the unofficial stock market finally came in 1982, when a dealer presented a
postdated check for payment and it bounced. A house of cards collapsed. Official
investigation revealed that total outstanding checks amounted to the equivalent of US$94
billion from about 6,000 investors. Kuwait's financial sector was badly shaken by the crash,
as was the entire economy. The crash prompted a recession that rippled through society as
individual families were disrupted by the investment risks of particular members made on
family credit. The debts from the crash left all but one bank in Kuwait technically insolvent
held up only by support from the Central Bank. Only the National Bank of Kuwait, the largest
commercial bank, survived the crisis intact. In the end, the government stepped in, devising
a complicated set of policies, embodied in the Difficult Credit Facilities Resettlement
Program. The implementation of the program was still incomplete in 1990 when the Iraqi
invasion changed the entire financial picture.
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Central Bank of Kuwait
Establishment of the Central Bank
The Central Bank of Kuwait began operating in April 1969 in accordance with Law No. 32 of
1968 concerning Currency, the Central Bank of Kuwait and the Organisation of Banking
Business.
Bank supervision: The Central Bank of Kuwait supervises the banking sector in the country.
Objectives of the Central Bank
The objectives of the Central Bank shall be:
To exercise the privilege of the issue of currency on behalf of the State;
1. To endeavor to secure the stability of the Kuwaiti currency and its free convertibility
into foreign currencies;
2. To endeavor to direct credit policy in such a manner as to assist the social and
economic progress and the growth of national income;
3. To control the banking system in the State of Kuwait;
4. To serve as Banker to the Government;
5. To render financial advice to the Government
Operations of the Central Bank
Relations with the Government
The Central Bank will offer advice to the Government in order to facilitate the realization of
its objectives and functions, and the Government will consult the Bank in matters relating to
monetary and credit policy.
The Central Bank shall act as banker and fiscal agent for the Government. On this basis:
a. Government funds in Kuwaiti Dinars on current accounts shall be held solely with
the Bank. No interest shall be paid by the Bank on such deposits.
b. The Bank shall in general carry out, free of charge, banking transactions and services
relating to the Government inside and outside the country.
c. The Government may place funds in Kuwaiti Dinars with local banks, after seeking
the opinion of the Central Bank and in a manner not conflicting with the monetary
policy in force.
d. The Minister of Finance may entrust the Central Bank with the administration of any
other Government funds in accordance with the conditions agreed upon at the time.
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e. The Ministry of Finance shall transfer to the Central Bank such amounts as may be
necessary for the implementation of any particular monetary policy, after the
Minister of Finance has approved such policy.
Relations with Local Banks
The Central Bank may:
a. Open deposit accounts for banks and financial institutions operating in the State of
Kuwait, and for public credit institutions.
b. Open deposit accounts for other institutions, upon approval of the Minister of
Finance. No interest shall be paid on the accounts referred to in the preceding two
paragraphs except in such special cases as may be decided by the Board of Directors
of the Central Bank and approved by the Minister of Finance.
c. Open accounts in Kuwaiti Dinars with banks.
d. Participate with banks in any scheme relating to the insurance of deposits.
The Central Bank may carry out the following operations with banks only, and not otherwise:
a. Sell, purchase, discount or rediscount commercial papers, provided that these shall
mature within one year from the date of acquisition, discount or rediscount by the
Bank.
b. Give loans or advances, in emergency cases, through current account for a period
not exceeding six months against such collateral as the Bank may consider adequate.
Gold and Foreign Exchange Operations Inside and Outside the Country
a. Purchase, sell, import and export gold and silver coins and bullion;
b. Carry out foreign exchange operations and transfers of all kinds;
c. Open accounts with foreign central banks or other banks and with international
financial or monetary institutions;
d. Open accounts for central banks, or other foreign banks and for international
financial or monetary institutions, and act as correspondent for such banks and
institutions;
e. Grant advances or credits to central banks, other foreign banks or international
financial or monetary institutions, and obtain credits, advances or loans from them,
provided that such operations are within the scope of its functions as central bank;
f. Purchase, sell, discount or rediscount bills or securities or certificates issued or
guaranteed by foreign governments or international financial or monetary
institutions, provided that they are expressed in freely convertible currencies and
are easily negotiable in financial markets;
g. Purchase and sell foreign bonds or bills other than those issued or guaranteed by
foreign governments or international financial or monetary institutions, provided
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that they are expressed in convertible foreign currencies and are easily negotiable in
financial markets;
h. Purchase and sell commercial papers acceptable to foreign banks.
a. Invest the Pension Fund set up for the benefit of the officials and employees of the
Bank, and grant loans to such officials and employees in accordance with the
regulations decided by the Board of Directors;
b. Own only such immovable property as assigned for running the business of the
Bank;
c. In general, carry out all operations customarily carried out by central banks and not
inconsistent with the exercise of its powers or the discharge of its duties under this
Law, and undertake such duties as may be assigned to it under any other law.
Accounts and Statements
The financial year of the Central Bank shall be the same as the financial year ofthe State.
The bases for evaluation of the assets of the Central Bank shall be specified by decree.
Credit balances on this account shall not be entered in the Profit and Loss Account of the
Bank. Debit balances shall be met by the Government unless the Board of Directors decides
otherwise.
The accounts of the Central Bank shall be audited by one auditor or more. The Council of
Ministers shall, on the proposal of the Minister of Finance, select the auditor or auditors and
fix their fees.
The Governor of the Central Bank shall submit to the Minister of Finance:
a. A monthly statement showing the assets and liabilities of the Bank. Such statement
shall be published in the Official Gazette.
b. An annual report on the Bank's operations, including the Balance Sheet and the
Profit and Loss Account for the ending financial year, and a general review of the
monetary, banking, financial and economic affairs. This report shall be submitted
not later than four months after the end of the financial year.
c. A report on the events affecting the monetary or financial position, including the
causes and outcome of such events and recommendations for handling them.
General Provisions
The Central Bank shall be exempt from all taxes, duties and financial dues whatsoever,
whether they be for the treasury, municipalities or any other public institution or body.
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The Bank shall also be exempt from the advance payment of judicial fees, deposits and
guarantees, and settlement thereof shall be deferred until the case under litigation has been
decided.
Debts due to the Central Bank shall be treated in the same way as debts due to the
Government, and shall take priority over debts due to other creditors. Such debts shall be
collected by the same procedures provided for the collection of debts due to the State.
The Central Bank may only be liquidated by a law specifying the liquidation procedures and
their dates.
Organization of Banking Business
Establishment of Banks
Banks are those institutions whose basic and usual functions involve the receipt of deposits
for use in banking operations, such as: the discount, purchase and sale of commercial
papers, granting of loans and advances, issuing and collecting cheques, placing of public and
private loans, dealing in foreign exchange and precious metals, and any other credit
operations or operations considered by the Law of Commerce or by custom as banking
operations. For the purposes of implementation of the provisions of this Law, and unless
otherwise provided, the branches of any bank operating in the State of Kuwait shall be
considered as one bank.
The provisions of this Chapter shall not apply to:
a. Public credit institutions set up by law.
b. Financial and investment institutions and companies even if they are permitted by
their articles of association to receive deposits and execute investment operations
and some banking operations.
c. Real estate companies which undertake the partition of land or the construction of
buildings and the sale thereof on credit.
The Board of Directors of the Central Bank may ‐ upon approval of the Minister of Finance ‐
subject all or some of the institutions and companies referred to, or today rules which the
Board of Directors may draw up for purposes of supervision and which are in harmony with
the nature of the activities of such institutions and companies. The opinion of the Central
Bank shall be sought in respect of the Articles of Association and Memorandums of
Agreement relating to financial and investment companies, or amendments thereto, in
order to ascertain the economic viability of such companies.
Without prejudice to the provisions of the Law of Commerce, wherever they are not in
conflict with the provisions of this Law, banking business may only be practiced by
institutions set up in the form of joint‐stock companies, the shares of which are placed for
public subscription.
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Banks founded or co‐founded by the Government, and branches of foreign banks licensed
to operate in the State of Kuwait, may be exempted from the provisions of the preceding
Paragraph by a decision of the Council of Ministers.
Funds allocated for opening a foreign bank’s branch in the State of Kuwait, shall not be less
than fifteen million Dinars. This amount may be increased by decision of the Board of
Directors of the Central Bank. The Board of Directors of the Central Bank lays down the
bases, rules and regulations to be complied with in regard to the operation of branches of
foreign banks in the State of Kuwait. A foreign bank’s branch shall be deemed as one bank in
the application of the provisions of this Law.
Before the formalities of incorporation are processed, the applications to establish banks
should be presented to the Board of Directors of the Central Bank to issue the
recommendations necessary.
Registration of Banks
Without prejudice to the provisions of the Law of Commerce and the Law of Commercial
Companies, wherever they are not in conflict with the provisions of this Law, no banking
institution is allowed to start operation until it has been registered in the Register of Banks
at the Central Bank.
No institutions other than those registered in the Register of Banks are allowed to practice
banking business or use in their business addresses, publications or advertisements the
terms: "bank, banker, bank owner" or any other wording the usage of which may mislead
the public as to the nature of the institution. No institutions other than those registered in
the Central Bank Register of Banks or Register of Investment Companies are allowed to
receive money for investment from third parties.
The Central Bank may ‐ where necessary ‐ ascertain by any means it deems fit that no
particular company or individual firm violates the provisions of the preceding two
paragraphs. Without prejudice to any severer penalty under any other law, anyone who
violates the provisions of the first, second and third paragraphs of this Article shall be liable
to imprisonment for a term not exceeding two years and the payment of a fine not
exceeding a hundred thousand Dinars, or to either of these penalties.
The licensing body shall, at the Central Bank request, revoke the operating license of the
business which exercised the contravening activity, and undertake all necessary
arrangements to prevent its repeated exercise of such activity.
Registration or refusal of registration of banks shall be affected by a decision of the Minister
of Finance on the recommendation of the Board of Directors of the Central Bank.
The Minister of Finance shall, on the recommendation of the Board of Directors of the
Central Bank, issue regulations for the registration of banks, including the rules, procedures
and dates for registration, amendments and publication of registration.
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a. Registered banks shall notify the Central Bank of any amendments they intend to
make to their Memorandums of Agreement or Articles of Association. If such
amendments are approved in principle by the Central Bank, the formalities
necessary for processing them may then be accomplished in accordance with the
provisions of the Law of Commercial Companies. Such amendments shall not be
effective until they have been entered in the Register of Banks.
b. Amendment of entries related to other data which are subject to registration in the
Register but not involving amendment of the Articles of Association or
Memorandums of Agreement may be effected upon approval thereof by the
Governor of the Central Bank.
Deletion from Register and Liquidation of Banks
Without prejudice to the provisions of the Law of Commercial Companies, no bank may
cease is operations or merge with any other bank unless it is given advance permission by
the Minister of Finance on the recommendation of the Board of Directors of the Central
Bank. The Board of Directors of the Central Bank shall, in such a case, ascertain that the bank
has discharged all its obligations towards its customers and creditors in accordance with the
general provisions laid down in this respect.
A bank may be deleted from the Register of Banks
a. At its own request;
b. If it does not start business within one year from the date it is notified of the
decision regarding its registration in the Register of Banks;
c. If it is declared bankrupt;
d. If it merges with another bank;
e. If it ceases its operations or if its liquidity or solvency are endangered;
f. If it commits any act in violation of the provisions of this Law.
The deletion of any bank under (e) and (f) above shall not be proposed until the bank
concerned has been notified of the proposal and given an opportunity to express its views.
The Minister of Finance shall, on the proposal of the Board of Directors of the Central Bank,
issue a decision regarding the deletion. The decision shall be effective from the date of its
publication in the Official Gazette. Before proposing the deletion from the register of any
bank the liquidity or solvency of which is endangered, the Board of Directors of the Central
Bank may take any or all of the following measures:
a. Forbid the bank from undertaking certain operations, or set limits on the business of
the bank;
b. Appoint a temporary controller to supervise the progress of the bank's business;
c. Assign the Central Bank to manage the bank for a certain period of time, and
thereafter decide whether the bank can carry on by itself or should be deleted from
the Register and liquidated. Expenses incurred for management purposes shall be
borne by the bank involved.
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In all cases, the Central Bank may ‐ if it deems it in the interest of depositors ‐ ask the
appropriate court to issue a decision prohibiting measures against the bank involved and
staying all lawsuits filed against. Such a decision shall be valid for one year. Every bank which
it has been decided to delete from the Register of Banks shall be liquidated. The Board of
Directors of the Central Bank shall specify the rules for liquidating the transactions
outstanding at the time the decision is issued.
Activities Not to be Undertaken by Banks
Banks must not:
a. Engage in trade or industry, or own any goods unless such goods have been acquired
in settlement of debts due to them. Such goods shall be sold by the bank within one
year from the date of acquisition;
b. Purchase any real estate other than the required for conducting their business or
accommodating their staff, unless such property has been acquired in settlement of
debts. In the latter case, the bank shall sell the real estate within a period not
exceeding three years. The said period, however, may be extended by a decision of
the Board of Directors of the Central Bank;
c. Own or deal in their own shares unless such shares have been acquired in
settlement of debts due to them, and provided that they sell them within two years
from the date of acquisition.
Banks may:
a. Purchase, for their own account, shares of other commercial companies within a
limit of 50% of the bank's own funds. This limit may not be exceeded without prior
approval by the Central Bank.
b. Own shares or other assets held with them in settlement of debts due to them. In
such cases, the bank shall dispose of these assets within two years from the date of
acquisition.
To be a member of a Bank's Board of Directors, or in charge of the Executive Staff of a bank,
or Deputy or Assistant thereof, or to continue occupying any of these posts, requires the
fulfillment of the following conditions:
a. Not to have been adjudged guilty in an offense involving dishonesty, or breach of
trust;
b. Not to have been declared bankrupt;
c. Not to have abstained from payment, even once;
d. To be of good reputation;
e. To have adequate experience in banking, financial or economic affairs in
f. Compliance with the Rules and Regulations laid down under a resolution of the
Board of Directors of the Central Bank of Kuwait;
g. Not to be a member of a Board of Directors or staff in any of the other banks
operating in the State of Kuwait.
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Chairmen of banks' Boards of Directors shall notify the Central Bank of Kuwait of nominees
to the membership of that Board, thirty days prior to the date fixed for the meeting of the
General Assembly expected to be held to elect the members of the Board of Directors.
Moreover, the Central Bank of Kuwait shall be notified of the names of the candidates
standing for holding the positions referred to in the preceding paragraph. The Board of
Directors of the
Central Bank of Kuwait shall have the right within twenty‐one days from the date of its
notification to object to the appointment of any such nominees under a resolution showing
the relevant reason, for failure to fulfill the required conditions.
Such objection shall result in the exclusion of the nominee in question from candidacy for
the Board of Directors or from occupying any such positions, as the case may be. Nominees
not notified to the Central Bank or candidates objected to by the Central Bank of Kuwait
according to the provisions of this
The Board of Directors of the Central Bank may request from the Board of Directors of the
concerned bank the removal of any of those mentioned in the first paragraph, if those
occupying these posts lose –during the time of their service ‐ any of the conditions
mentioned in this article, or if the Board of Directors of the Central Bank sees in that
measure the safeguard of the depositors funds or shareholders interests or the bank’s
general interest. If the removal does not take place, the Board of Directors of the Central
Bank shall have the right to issue a resolution showing the relevant reason for the removal
of any of the above mentioned from their posts, and make a relevant entry in the Register of
Banks.
Banks must not, in any form, give loans or overdrafts through current account or issue
guarantees in favor of the members of their Boards of Directors without prior permission
from the General Assembly.
Such loans, advances and guarantees shall be subject to the rules applied by the bank to
other customers. This prohibition shall not include the opening of documentary credits. No
bank may issue "Travelers' Cheques" without prior permission from the Central Bank.
Provisions Relating to Supervision
The Central Bank may issue to the banks such instructions as it deems necessary to realize its
credit or monetary policy or to ensure the sound progress of banking business.
This provision applies to units subject to the supervision of the Central Bank of Kuwait.
Branches of foreign banks are bound to comply with that ratio within three years from the
date of their licensing to operate in the State of Kuwait.
The Kuwaiti banks, branches of foreign banks, and units mentioned in the first paragraph,
operating at the time of application of this law shall carry out the necessary adjustments in
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compliance with the provisions of this Article within three years from the date of its
application.
The Board of Directors of the Central Bank may ‐ whenever necessary – draw up rules and
regulations to which all banks shall adhere in order to ensure their liquidity and solvency,
particularly with regard to the ratios which must be maintained between the following
items:
• The bank's own funds on the one hand and the amount of its liabilities on the other;
• The bank's liquid funds on the one hand and the aggregate of its term and demand
liabilities on the other;
• The amount of the banks own funds on the one hand and the amount of its liabilities
in the form of acceptances and guarantees on the other.
In the instructions issued and notified by the Central Bank to the banks, the Central Bank
shall define the meaning of the terms: "bank's own funds", "liquid funds", "liabilities" and
such other items.
The Board of Directors of the Central Bank may, upon approval of the Minister of Finance:
1. Fix for banks the maximum amount for discount or loan operations, or for other
banking operations which they may carry out with effect from a certain date.
2. Fix for banks:
a. The minimum amount which customers must pay in cash to cover the
opening of documentary credits;
b. The maximum amount which may be lent to any single person – whether
natural or juristic ‐ in proportion to the bank's own funds;
c. The proportion of the bank's funds which must be deposited in cash with the
Central Bank;
d. The proportion of the bank's funds which must be invested in the local
market;
e. The rate of interest which the banks shall pay on deposits, and the
maximum rates of interest and commission which they may charge their
customers.
Decisions issued by the Central Bank in application of the provisions of the preceding two
Articles shall have no retroactive effect and shall not hinder the execution of agreements
concluded between banks and their customers prior to the issue of such decisions.
In the event exceptional circumstances arise and threaten the regularity of banking business,
the Governor of the Central Bank may ‐ upon approval of the Minister of Finance ‐ order the
banks to close temporarily and to stop all their operations. The banks shall, then, resume
their operations by a decision to be issued by the Governor of the Central Bank and
approved by the Minister of Finance.
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Specialized Banks
Specialized banks are meant to be those banks the main function of which is to finance
certain economic sectors, such as the real estate, industrial or agricultural sectors, and which
do not basically receive demand deposits.
Specialized banks shall be subject to the provisions relating to the organization of banking
business, wherever such provisions are not in conflict with the nature of the activities of
these banks.
The Board of Directors of the Central Bank may lay down special rules for the supervision of
each type of the specialized banks. Such rules shall, in particular, cover the following:
a. Terms for receipt of deposits.
b. The maximum limit for the value of bonds specialized banks may issue, as well as the
terms for such issue.
c. The terms relating to loans and other credit facilities given by specialized banks.
d. The rules relating to participation in establishing other companies, or the purchase
of their shares.
Inspection of Banks and Institutions Subject to Supervision by the Central Bank
a. The Central Bank may, at any time, inspect banks and financial companies and
institutions subject to the Central Bank supervision under the provisions of this Law,
in addition to branches, companies and banks that operate abroad and are
subsidiaries of Kuwaiti banks. Co‐ordination shall be carried out in this regard with
the central banks or banking supervision authorities in the concerned countries. The
banking supervision authorities in the other countries shall carry out the inspection
of branches of their banks operating in the State of Kuwait. In this regard, co‐
ordination with the Central Bank of Kuwait shall precede inspection.
b. Central Bank staff authorized to conduct inspection shall have the right to see the
accounts, books, records, instruments and all documents they deem necessary for
inspection. They may ask any member of the board of directors, or any official of the
bank or institution to submit and give such data and information they deem
necessary for the purposes of inspection. Review of books, records and instruments
shall be carried out within the premises of the bank or institution inspected.
c. The Central Bank shall make a comprehensive report on the findings of inspection
made in any bank or institution. The report shall incorporate recommendations on
the measures the Central Bank deems useful for rectifying any unsound position
discovered through inspection. The Governor of the Central Bank shall send a copy
of the report to the Chairman of the Board of Directors or to the Manager of the
bank or institution inspected. The Governor of the Central Bank may fix a period of
grace for the bank or institution to eliminate violations or correct unsound positions
discovered through inspection. Periodic dates and rules relating to inspection shall
be set by the Board of Directors of the Central Bank.
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Without prejudice to any severer penalty under any other law, every member of the board
of directors, manager, or official of the bank or institution inspected who refuses to submit
information and data or to present books, records, and instruments required by the
inspector for inspection purposes, or who gives information or data while knowing that it is
untrue, shall be liable to imprisonment for a term not exceeding three months and to the
payment of a fine not less than one hundred but not exceeding two hundred twenty‐five
Dinars, or to either of these two punishments.
Central Bank officials authorized to conduct inspection shall ‐ during the term of their service
and after quitting their jobs ‐ maintain the secrecy of accounts, books and instruments they
review by virtue of their duty. They shall not disclose any information relating to the affairs
of banks or institutions inspected, or to the affairs of their customers, except in such cases
where it is permissible to do so by law.
Without prejudice to any severer punishment under any other law, every person who
violates the prohibition provided for in the preceding paragraph shall be liable to
imprisonment for a period not exceeding three months and to the payment of a fine not
exceeding two hundred twenty‐five Dinars, or to either of these two punishments, plus
discharge from service.
Accounts and Statements
Banks shall do the following:
a. End their financial year on the thirty‐first of December every year;
b. Submit to the Central Bank, within three months from the end of their financial year,
their Balance Sheet and Profit and loss Account.
Foreign bank branches permitted to be opened under the provisions of this Law shall
maintain independent accounts for all their operations in Kuwait, including balance‐sheets
and profit and loss accounts.
The Central Bank may ask the banks to submit such statements, information and statistical
data as the Bank considers necessary to carry out its functions. The Central Bank may also
establish a system for the collection of statistics on banking credit on periodical basis. The
nature of such statements, information and statistical data, as well as their forms and the
periods during which they should be submitted, shall be specified by the Board of Directors
of the Central Bank.
Banks must submit to the Central Bank all data, information and statistics it requests, in
accordance with the system the Central Bank lays down for this purpose. All these
information shall remain confidential, except for statistical data in an aggregate form, data
and information exchanged between the Central Bank of Kuwait and other central banks and
banking supervision authorities, in fulfillment of the objectives of aggregate supervision on
banks, branches and companies that are subsidiaries of these banks. Exchange of these data
20 | P a g e

and information shall be in accordance with the arrangements agreed on between the
Central Bank of Kuwait and the concerned central banks or banking supervision authorities.
The Central Bank may establish a System of Risks for the purpose of assisting banks to
evaluate the financial positions of persons applying to them for credit, and to enable the
Central Bank to be constantly aware of the trends of banking credit and to assist in the
application of the system of discount and rediscount at the Central Bank.
The Board of Directors of the Central Bank shall lay down the rules and procedures for the
System, and shall fix the data and returns relating to its enforcement. Data and information
acquired through the System of Risks shall only be disclosed to persons who should be
advised thereof under the rules laid down for the implementation of the System.
Without prejudice to any severer punishment under any other law, anyone who violates this
prohibition shall be liable to imprisonment for a term not exceeding three months and to
the payment of a fine not exceeding two hundred twenty‐five Dinars, or to either one of
these two punishments, plus discharge from service in all cases.
The auditor shall indicate in his annual report the rules and means relied upon in verifying
the existence of assets, the methods applied in their evaluation thereof, and the process of
assessing outstanding liabilities. The auditor’s annual report shall include the auditor’s
opinion on the adequacy of internal control systems applied in the bank, and the sufficiency
of provisions against any decline in assets value and against the bank liabilities, along with
determining the shortage in these provisions if applicable.
The auditor shall clarify in his report whether the operations audited were contrary to any
rules or provisions of the Law concerning the Central Bank and the Organization of Banking
Business, or to the regulations and decisions issued in pursuance of the said Law. A copy of
the report shall be forwarded to the Governor of the Central Bank.
The auditor shall ‐on request of the Central Bank– check and audit any transactions carried
out by the bank whose accounts are audited by him and present a report accordingly to the
Central Bank. Furthermore, the auditor shall sign any statements or accounting data
forwarded by the bank to the Central Bank. Such signature shall testify to the correctness of
theses statements and data.
The auditor may not receive any loans ‐ whether with or without collateral ‐ or guarantees
from the bank the accounts of which he audits.
Administrative Penalties
1. If a bank violates the provisions of this Law or the decisions and instructions issued
in pursuance thereof, or the provisions of its Articles of Association, or fails to
submit the documents, statements or information which it is required to submit to
the Central Bank, or submits statements discrepant with facts, the following
penalties may be imposed:
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a. Warning.
b. Impose financial penalties that are commensurate with the graveness of the
violation, and do not exceed fifty thousand Dinars.
c. Temporarily suspend some or all operations usually carried out by the
Central Bank with banks.
d. Prohibit the bank from carrying out certain operations, or imposing any
other limitations on its business.
e. Request the removal or replacement of the employee responsible for the
violation, if that employee is among those in charge of the main sectors of
the bank’s activity.
f. Consider the member of the bank’s Board of Directors, which is responsible
for the violation, unfit for the Board membership.
g. Appoint a temporary controller to supervise the progress of work at the
bank. The powers and competences of that controller shall be determined
by the Board of Directors of the Central Bank.
h. Dissolve the bank’s Board of Directors and appoint a commissioner to
manage the bank until the election of a new Board.
i. Deleting from the Register of Banks.
2. The penalties provided for in paragraphs (a) and (c) shall be imposed by a decision of
the Governor. The penalties provided for in paragraphs (b), (d), (e), (f), (g) and (h)
shall be imposed by a decision of the Board of Directors of the Central Bank. The
penalty provided for in paragraph (i) shall be imposed by a decision of the Minister
of Finance, after the approval of the Board of Directors of the Central Bank, and
after perusal of the concerned bank’s explanation in this regard. Unless involving a
third party’s rights, any money achieved by the violating bank as a result of the
committed violations, shall become the property of the Public Treasury.
Furthermore, all financial gains achieved by a member of the bank’s Board of
Directors, or the bank’s employee, as a result of committed violations shall become
the property of the Public Treasury. The Board of Directors of the Central Bank of
Kuwait lays down the rules and principles to be applied in determining the amounts
that shall become the property of Public Treasury.
3. Members of Board of Directors, the officer in charge of the Executive Staff, General
Managers, Deputies or Assistants thereof, Sector Managers, and Branch Managers
of the violating bank shall –all within their respective competences‐ be responsible
for deliberately committing any act that resulted in the bank’s violation of this Law
and the decisions and instructions issued in pursuance thereof or the provisions of
the bank’s Articles of Association, or for failing to submit the documents, statements
or information which it is required to submit to the Central Bank, or for submitting
statements discrepant with facts. The person responsible for the violation shall bear
all ensuing damages to the bank, its shareholders or third parties, as a result of the
violation.
Except for cases allowed by the law, any member of the bank’s Board of Directors, or bank
manager or employee or worker, shall not disclose any information –during the period of his
employment or after leaving work at the bank‐ regarding the affairs of the bank or its
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customers, or other banks’ affairs, which he may have become aware of due to the activities
inherent in his position.
Without prejudice to any severer punishment under any other law, anyone who violates the
prohibition mentioned in the previous paragraph shall be liable to imprisonment for a term
not exceeding three months and the payment of a fine not exceeding two hundred and
twenty five Dinars, or to either of these punishments, plus dismissal from the service.
Islamic Banks
Islamic Banks exercise the activities pertaining to banking business, and any activities
considered by the Law of Commerce or by customary practice as banking activities, in
compliance with the Islamic Shari'ah principles. Islamic banks ordinarily accept all types of
deposits, in the form of current, savings, or investment accounts, whether for fixed terms
and purposes or otherwise. These banks carry out financing operations for all terms, using
Shari'ah Contracts, such as: Murabaha, Musharakah and Mudarabah. Furthermore, these
banks provide various types of banking and financial services to their customers and to the
public. They conduct financial and direct investment operations whether on their own
account or on the account of other parties or in partnership with others, including
establishment of companies or holding equity participations in existing companies or
companies under establishment, which undertake various economic activities, in accordance
with both Islamic Shari'ah principles and controls laid down by the Board of Directors of the
Central Bank, and all that in compliance with the provisions of this Law.
The Central Bank shall lay down the rules and controls that regulate the activities of
branches of foreign Islamic banks authorized to operate in the State of Kuwait. Insofar as the
provisions of this Law are concerned, the branches of any foreign Islamic bank operating in
the State of Kuwait shall be considered as one bank.
As an exception of the provisions of the Commercial Companies Law pertaining to the
establishment of companies, and of the provisions of this Law (on Islamic banks) pertaining
to capital and share percentages of founders' subscription, Kuwaiti banks – with the
approval of the Central Bank – may establish subsidiary companies to conduct activities of
Islamic Banks in accordance with Shari'ah principles and the provisions of this Law. Each
Kuwaiti bank may not establish more than one company with only one premises, and the
capital of the company shall not be less than fifteen million Kuwaiti Dinars. The founder bank
shall subscribe for a share of not less than 51% in the capital of the company, and shall
maintain that percentage at all times after the establishment. The remaining shares shall be
placed for public subscription. If placement is not entirely covered by public subscription,
the remaining shares shall be covered by the founder bank itself.
Apart from the exception stipulated in the preceding paragraph, the subsidiary company
mentioned in that paragraph, which conducts its activity in accordance with the Shari'ah
principles, shall be considered an independent Islamic bank in the application of the
provisions of this Law. The bank shall not sell or transfer the property of its subsidiary
23 | P a g e

company or any part thereof to any other party. Before starting the formalities of
incorporation, applications for establishing Islamic banks shall be presented to the Central
Bank, together with the following documents:
a. A statement citing the founders' names, nationalities, addresses, and shares in the
bank's capital;
b. A draft of the Memorandum of Agreement and Articles of Association;
c. The feasibility study for establishing the bank; and
d. Any other documents that the Central Bank may require.
Application forms for establishing branches of foreign Islamic banks shall be presented to
the Central Bank, together with the following documents:
a. A copy of the Memorandum of Agreement and Articles of Association of the
applicant bank;
b. The feasibility study for establishing the branch;
c. Evidence that the Headquarters of the foreign Islamic bank is subject to the parent
country supervisory authority, together with the relevant approval thereof to
establish the branch applied for, and
d. Any other documents that the Central Bank may require.
Applications to establish Islamic banks or a branch of foreign Islamic bank shall be submitted
to the Board of Directors of the Central Bank for its approval in principle or refusal thereof.
The license given to establish a branch of a foreign Islamic bank shall not be transferable to
any other party. Islamic banks shall be registered in a special register for Islamic Banks at the
Central Bank, pursuant to applications presented to the Central Bank on relevant forms.
Registration therein shall be affected by a decision of the Minister of Finance on
recommendation of the Board of Directors of the Central Bank. Islamic Banks shall not start
operation until they have been registered in that Register.
Islamic banks shall not establish branches inside or outside Kuwait without prior permission
from the Central Bank, and before having these branches registered in the Islamic Bank
Register. The Minister of Finance shall, on the recommendation of the Board of Directors of
the Central Bank, issue an Islamic Bank Register Bylaw that shall include rules, procedures
and timings of effecting, amending and declaring Register entries. In keeping with the
provisions of the Law of Commercial Companies, and without prejudice to the provisions of
this Law, registration of Islamic banks in the Register shall require the following:
a. The bank takes the form of a joint‐stock company that places its shares for public
subscription. Branches of foreign Islamic banks, once permitted in the State of
Kuwait, may be excluded from this provision by a decision of the Council of
Ministers, upon the proposal of the Board of Directors of the Central Bank and the
approval of the Minister of Finance.
b. The Central Bank approves the bank's Memorandum of Agreement and Articles of
Association.
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Registration of branches of foreign Islamic banks in the Register, shall require provision of
the following documents to the Central Bank:
a. An affidavit by the Headquarters of the foreign bank declaring its commitment to
any rights of depositors and creditors as well as all liabilities that may accrue on the
branch;
b. Evidence of the transfer of the minimum amount of funds allocated for the branch
operations in the State of Kuwait, as stipulated in this Law;
c. Any other commitment, document or instrument that the Central Bank may require.
Without prejudice to the provisions and the provisions of enforced laws, the paid‐up capital
of any Islamic bank shall not be less than seventy‐five million Kuwaiti Dinars. The founders'
share in the bank capital shall not recede below 10% nor exceed 20% .
With regard to the branches of foreign Islamic banks the amount of funds allocated for a
branch in the State of Kuwait shall not be less than fifteen million Kuwaiti Dinars. The
founders' share in the amount of funds allocated for a branch in Kuwait may be amended
and so the amount of funds allocated for the branch increased by a decision of the Board of
Directors of the Central Bank, when necessary.
If the capital of a bank or the amount of funds allocated for a branch of foreign Islamic bank
fall below the required minimum limit as a result of operational losses or other reasons, the
bank shall cover the difference within such a period as may be specified by the Central Bank.
Each Islamic bank shall have an independent Shari'ah Supervisory Board, comprised of not
less than three members appointed by the bank's General Assembly. The Memorandum of
Agreement and Articles of Association of the bank shall specify the establishment of the
Board as well as its formulation, powers, and workings. In case of a conflict of opinions
among members of the Shari'ah Supervisory Board concerning a Shari'ah rule, the board of
directors of the designated bank may transfer the matter to the Fatwa Board in the Ministry
of Awqaf and Islamic Affairs that shall be the final authority on the matter.
The Shari'ah Supervisory Board shall annually submit to the bank's General Assembly a
report comprising its opinion on the bank's operations in terms of their compliance with the
Islamic Shari'ah principles and any comments it may have in this respect. This report shall be
included in the bank's Annual Report.
a. Open accounts denominated in Kuwaiti Dinar or foreign currencies with Islamic
banks;
b. Open accounts denominated in Kuwaiti Dinar or foreign currency for Islamic banks;
c. Authorize Islamic banks to participate in the Clearing Chamber. Such actions shall be
performed in accordance with the terms and conditions that are not in contradiction
with the Islamic Shari'ah principles and are as decided by the Central Bank.
25 | P a g e

The Central Bank may carry out the following operations:
a. Provide emergency finance to Islamic banks for a period not exceeding six months

using instruments and methods that conform with the Islamic Shari'ah principles,
and in accordance with the terms and conditions set by the Board of Directors of the
Central Bank. The term of such finance may be extended for a period not exceeding
further six months.
b. Sell to and purchase from Islamic banks securities and other instruments that
comply with the Islamic Shari'ah principles.
c. Issue instruments that comply with the Islamic Shari'ah principles, in accordance
with the limits and conditions set by the Board of Directors of the Central Bank.
Dealing in these instruments, by sale and purchase, may be carried out with both
Islamic banks and other institutions subject to the supervision of the Central Bank.
Islamic banks shall be under the obligation to fully repay sight deposits to their depositors
upon request, while such deposits shall not incur any losses. Owners of investment deposits
shall participate in the profits and losses from the bank's business in proportion to the
amounts of their participation in the investment, pursuant to the contracts concluded with
them in this regard, and in accordance with the provisions of this Law.
The Board of Directors of the Central Bank shall set the rules and regulations for the
supervision of Islamic banks with respect to liquidity, solvency, and business organization,
including in particular:
a. A system for liquidity and elements thereof;
b. Capital adequacy standards through specifying the ratio of capital to asset elements;
c. Rules for calculation of the required provisions for asset risks.
The Board of Directors of the Central Bank may specify for Islamic Banks all or some of the
following:
a. The maximum value of operations pertaining to a specific activity;
b. The maximum limit of a bank's equity holdings in companies that it incorporates,
participates in establishment, or owns shares therein; and the rules and regulations
thereof, in addition to the maximum limit of a bank's participation in any single
project;
c. The maximum limit of a single customer's liability to the bank while granting a
relative advantage to subsidiaries of the bank according to the conditions laid down
by the Central Bank;
d. The amount of funds that must be invested in the local market;
e. The portion of deposits with the bank that must be deposited in cash with the
Central Bank;
f. The rules and regulations that must be observed in a bank's relationship with its
customers, and between its customers and shareholders.
26 | P a g e

Without prejudice to the provisions of this Law, Islamic banks shall not own or deal in private
residential buildings and plots in the State of Kuwait with the exception of those:
a. Acquired or dealt in for the purposes of executing finance operations that have been
agreed to or are being concluded with customers in accordance with the methods
and forms of funding that are in compliance with the Islamic Shari'ah principles;
b. Required for the conduct of their business or for the accommodation or recreation
of their staff;
c. Acquired by reversion of title in settlement of others' unfulfilled obligations towards
them, provided that these are sold off within a period not exceeding three years
from the date of reversion. The said period, however, may be extended by a
decision of the Board of Directors of the Central Bank, when necessary.
Unless otherwise stipulated in this section, Islamic banks shall be subject to the provisions of
this Law without prejudice to the Islamic Shari'ah principles.
27 | P a g e

Banking Sector in Kuwait
Regulatory steps to enhance and diversify the economic activity are likely to provide a solid
base for sustained economic growth. The conducive macroeconomic environment and
increased government and private sector spending is likely to give a further fillip to bolster
economic growth. The biggest beneficiary from the strong economic growth is the financial
and banking sector.
Significant mega projects in the oil and gas sector underpinned the strong growth in the
banking sector. The increasing demand for and supply of raw materials, consumables and
other consumer items resulted in trading sector too registering strong growth. Real estate
sector continues to expand as more real estate development projects are already under
implementation or are in the pipeline. Consolidated assets of local banks grew by 24.9% y‐o‐
y to reach KD27.0bn at the end of 2006, thanks to the credit facilities to residents growing by
26.3% to KD14.9bn. During the period 2003‐06, the consolidated assets of local banks grew
at a CAGR of 12.8% from KD18.8bn in 2003 to KD27.0bn in 2006
Local Banks
Commercial banks
• National Bank of Kuwait (NBK)
• Commercial Bank of Kuwait (CBoK)
• Gulf Bank (GB)
• Al‐Ahli Bank of Kuwait (ABK)
• The Bank of Kuwait & the Middle East (BKME)
• Burgan Bank (BB)
• The Branch of the Bank of Bahrain & Kuwait
• The Branch of the BNP Paribas Bank
• The Branch of HSBC Middle East Bank
• The Branch of the National Bank of Abu Dhabi
• The Branch of Citibank of New York
Specialized banks
• Kuwait Real Estate Bank (KREB)
• Industrial Bank of Kuwait
Islamic Banks
• Kuwait Finance House (KFH)
• Boubyan Bank (Boubyan)
28 | P a g e

Liability Mix of Banks
Private sector deposits (both sight deposits in KD and quasi‐money) continued to register
strong growth during the last three years. Private sector deposits increased from KD9.9bn in
2003 to KD15.3bn in 2006, recording CAGR of 15.5% as compared to the overall liabilities of
local banks’ growth of 12.8% during the same period. The contribution of private sector
deposits to total liabilities increased from 52.7% in 2003 to 56.6% in 2006. Sight deposits
increased from KD2.1bn in 2003 to KD2.9bn in 2006, registering CAGR of 11.0% for the
period under review. Proportion of sight deposits to total liabilities declined marginally from
11.3% in 2003 to 10.7% in 2006. Quasi‐money deposits increased from KD7.8bn in 2003 to
KD12.4bn in 2006, CAGR of 16.7% for the period 2003‐06. Share of quasi‐money deposits to
total liabilities increased from 41.4% in 2003 to 45.8% in 2006. Own funds increased from
KD2.0bn in 2003 to KD3.1bn in 2006, registering a CAGR of 15.9% for the period under
consideration. Contribution of own funds to overall balance sheet size of local banks
increased from 10.7% in 2003 to 11.6% in 2006. The local inter‐bank deposits to
consolidated balance sheet of local banks declined from 13.6% in 2003 to 4.8% in 2006.
Amount in KD mn 2003 2004 2005 2006

Assets
Cash 91 75 106 149
Sight Deposits with CBK 108 175 112 50
Time Deposits with CBK 348 126 440 926
CBK Bonds ‐ ‐ 124 356
Claims on Government
Public Debt Instruments 2,232 2,146 2,085 1,989
Debt Purchase Bonds 818 604 378 176
Claims on Private Sector
Other Local investments 959 1,019 1,109 1,215
Credits Facilities to Residents 8,419 9,867 11,827 14,934
Foreign Assets 2,425 3,192 3,794 5,246
Local Interbank Deposits 2,914 1,405 1,014 1,291
Other Assets 498 535 622 659
Total Assets 18,814 19,144 21,612 26,989

Liabilities
Private Sector Deposits
Sight Deposits in KD 2,117 2,643 3,149 2,894
Quasi ‐ Money 7,790 8,481 9,359 12,370
Government Deposits 634 842 996 1,434
Foreign Liabilities 1,925 1,822 2,260 3,117
Own Funds 2,009 2,311 2,800 3,130
Local Interbank Deposits 2,561 1,369 853 1,302
Other Liabilities 1,778 1,676 2,195 2,742
Total Liabilities 18,814 19,144 21,612 26,989
Consolidated Balance Sheet of Local Banks in Kuwait
The overall deposits, which includes both private sector as well as Government deposits
increased from KD10.5bn in 2003 to reach KD16.7bn in 2006, recording CAGR of 16.6% for
29 | P a g e

the period under review. For the year ended 2006, these deposits increased from KD13.5bn
in 2005 to KD16.7bn in 2006, a y‐o‐y growth of 23.7%. Private sector deposits increased from
KD9.9bn in 2003 to KD15.3bn in 2006, registering CAGR of 15.5% for the period 2003‐06. The
share of private sector deposits to total deposits declined from 94.0% in 2003 to 91.4% in
2006. On the other hand, Government deposits registered a CAGR of 31.3% from KD634mn
in 2003 to KD1,434mn in 2006. Contribution of Government deposits to total deposits
increased from 6.0% in 2003 to 8.6% in 2006.
Asset Composition of Banks
Credit facilities to residents during the period under review grew at a CAGR of 21.0% from
KD8.4bn in 2003 to reach KD14.9bn in 2006. The deployment by way of credit facilities to
residents increased during this period resulting in its contribution to consolidated assets of
local banks increase from 44.8% in 2003 to 55.3% in 2006. Foreign assets too witnessed
strong growth during the period 2003‐06, as it registered a CAGR of 29.3% as it grew from
KD2.4bn in 2003 to reach KD5.2bn in 2006 resulting in higher contribution towards overall
consolidated assets of local banks. Share of foreign assets to consolidated assets of local
banks increased from 12.9% in 2003 to 19.4% in 2006. Credit facilities to residents increased
by 26.3% y‐o‐y in 2006 as compared to the previous year. Deployment towards this segment
increased from KD8.4bn in 2003 to reach KD14.9bn in 2006, recording CAGR of 21.0%.
Within this segment, credit for personal facilities and real estate contributed 62.8% of the
total credit facilities to residents in 2006. The contribution of these two segments was at
57.9% in 2003.
Amount in KD mn 2003 2004 2005 2006

Trade 1,072 1,276 1,371 1,702
Industry 442 447 468 606
Construction 633 592 770 1,070
Agriculture and Fishing 49 23 19 36
Non-bank Financial Institutions 650 781 933 1,427
Personal Facilities
Consumer loans 749 736 789 756
Installment Loans 1,558 2,075 2,448 3,167
Purchase of Securities 755 908 1,248 1,637
Other Loans 380 451 653 527
Real Estate 1,434 2,030 2,539 3,288
Crude Oil and Gas 73 55 52 51
Public Services 1 0 5 5
Other 623 495 534 662
Total 8,419 9,867 11,827 14,934
Sectoral Distribution of Balances of Utilized Cash Credit Facilities to Residents
Credit to personal facilities grew at a CAGR of 20.9% from KD3.4bn in 2003 to reach KD6.1bn
in 2006, resulting in share to total credit facilities at 40.8% in 2006. Deployment towards real
estate sector grew at a CAGR of 31.9% from KD1.4bn in 2003 to reach KD3.3bn in 2006. The
30 | P a g e

proportion of real estate to total credit facilities to residents increased from 17.0% in 2003
to 22.0% in 2006. Within personal facilities, deployment towards installment loans and loans
for purchase of securities contributed 78.9% of the disbursement by way of personal
facilities. Installment loans and loans for purchase of securities contributed 67.2% of the
total personal facilities in 2003. Installment loans as percentage of the total credit facilities
to residents were 18.5% in 2003, which increased to 21.2% in 2006. Similarly, loans for
purchase of securities as percentage of total credit facilities to residents increased from 9.0%
in 2003 to 11.0% in 2006.
Kuwait Banking Sector Risks Management
Banks in Kuwait benefited from strong economic growth during the last three years on the
back of high oil prices and production. The strength of domestic demand continues to fuel
momentum in non‐oil activities. Growth of the private sector is on the back of increased
investment in infrastructure and expansion projects.
Government’s efforts to diversify the economy and improve the investment climate through
regulatory and structural measures in various sectors augur well for the banking sector.
Buoyancy in the capital market activity helped banks register strong profitability by way of
enhanced fee income and gains on their investment portfolio. Despite the correction in
regional markets in 2006, banks continued to register earnings growth on the back of strong
core banking business.
On the funding side, banks are increasing their branch network in order to enhance its
deposit base. We believe the growth in time deposits is likely to remain strong over the next
two years as banks structure innovative products coupled with higher rates offered. In order
to support loan growth, banks will require increasing their deposit franchise. Most banks
witnessed a surge in their cost of funds in 2006, as banks were offering higher rates on term
deposits to attract depositors. As a consequence, their cost of funding has increased. With
the demand for funds being strong due to strong economic growth and massive
infrastructure projects in different sectors, we expect banking sector’s growth to remain
strong.
The near‐term view for the Kuwaiti banks is likely to be influenced by developments in the
domestic economy, fluctuations in the oil price and the level of public spending. High oil
prices are resulting in high liquidity in the banking system and increased government
spending. Going forward, buoyant operating environment, increased government spending
and positive business and consumer sentiment are likely to be the key drivers for the
banking sector.
In a nutshell, core underlying banking income is likely to remain strong. Government thrust
towards providing further impetus to economic growth is likely to benefit the banking
sector. In our opinion, the long‐term outlook for the banking sector is positive on the back of
buoyant core banking activities
31 | P a g e

Kuwa
ait Financia
al Sector
Kuw
wait Sttock Exch
hange
e
The Kuwait Stock Exchaange (KSE) is the national stock market
m of The State of Kuwait.
Although seeveral share holding commpanies (such h as NBK in 1952) existeed in Kuwaitt prior to
the creation
n of the KSE, it was not u
until Octoberr 1962 that aa law was paassed to orgaanize the
country's sto
ock market.
The Kuwait SStock Exchannge is also am
mong the firrst and largesst stock exch
hanges in the
e Persian
Gulf region, and is now gaining prom
minence as o most potentially important in the
one of the m
world.
• The Kuwait Stocck Exchange shall enjoy an independ dent judicial personality with the

right of litigatio
on in a mod
de facilitating the performance of iits functionss for the
purppose of realising the objectives of itss organizatio on in the besst manner w within the
scoppe of regulattions and law ws governingg the Stock Exxchange opeerations.
• The Stock Exchaange shall within
w its acttivity act to direct and rrationalize dealing in
stoccks and securrities, within n the scope o of its powers in order to d develop and stabilize
dealing in securities in a maanner securin ng safe, easyy and accurate transactio ons so as
to avoid any con nfusion in deealings.
• The Stock Exchaange, in pursuance of th he research and the studies conclud ded by it
and its follow up p of the secu urity dealing process shaall render appropriate ad dvice and
opinnion to the competent
c g
government authorities regarding th he financial status of
the Stock Exchange member companiess and means of promotin ng their efficiency for
realization of their relevant objectives.
• The Stock Exchange shall participate
p with
w the com mpetent autthorities in order to
realize coordination and inteegration among the financial and thee economic activities
and the capital m movement so as to assist in achieving the economic and the financial
deveelopment an nd stability of the state.
• The Stock Exchaange staff shall continue to develop the systems and the me ethods of
dealing in securrities, besidees introducin ng modern teechniques su uch as those e applied
dvanced stocck markets for the purpo
in ad ose of achievving a sound financial possition for
the Kuwait Stockk Exchange o on both, regiional and international leevels.
• The Stock Exchaange shall acct to encourrage saving, promote invvestment aw wareness
amo ong citizens, protect depositors and d create meeans for investment of funds in
secuurities, in a mmanner beneeficial to the economy
Listed Co
ompanies at KSE
BA
ANKS
10
01 NBK Nattional Bank o
of Kuwait
10
02 GBK Gulf Bank of Ku
uwait
10
03 CBK Commmercial Bank of Kuwaitt
10
04 ABK Al‐A
Ahli Bank of Kuwait
32 | P a g e

Kuwa
ait Financia
al Sector
10
05 BKME Ban
nk of Kuwait and the Mid ddle East
10
06 KIB Kuw
wait Internattional Bank
10
07 BURG Burrgan Bank
10
08 KFIN Kuw
wait Financee House
10
09 BOUBYAAN Bouubyan Bank K.S.C.
IN
NVESTMENTT
20
01 KINV Kuw wait Investm
ment Compan ny
20
02 FACIL Com mmercial Facilities Comp pany
20
03 IFA Inteernational Fiinancial Adviisors
20
04 NINV Nattional Investtments Comp pany
20
05 KPROJ Kuw wait Investm
ment Projectss Company
20
06 AINV Al‐AAhleia Holding Companyy
20
07 COAST Coaast Investme ent and Deveelopment Company
20
08 TII Thee Internationnal Investor ((KSCC)
20
09 SECH Seccurities Housse K.S.C.C
21
10 IIC Ind
dustrial Invesstments Com mpany (KSCC))
21
11 SGC Seccurities Grouup Company (KSCC)
21
12 IFC Inteernational Fiinance Comp pany (K.S.C.C
C)
21
13 MARKAZZ Kuw wait Financiaal Centre S.A
A.K.C
21
14 KMEFIC Kuw wait and Midddle East FINN. INV. CO. KSSCC
21
15 IIG Inteernational In
nvestment Group K.S.C.C C
21
16 AIG Areef Investmen nt Group (KSC CC)
21
17 TID Thee Investmentt Dar Co. (KSSCC)
21
18 ALAMAN N Al‐AAman Investtment CO. K.S.C.C
21
19 ALOLA Firsst Investmennt Company ((K.S.C.C.)
22
20 ALMAL Al‐Mal Investm ment Compan ny (K.S.C.C.)
22
21 GIH Gulf Investmen nt House (K.SS.C.C.)
22
22 AAYAN Aayyan Leasing aand Investment CO. (K.S.C.C)
22
23 BAYANIN NV Bayyan Investme ent CO. K.S.C
C.C.
22
24 GLOBALL Glo
obal Investment House K K.S.C.C
22
25 OSOUL Oso oul Investmeent CO. K.S.CC.C
22
26 GULFINV VEST Gulfinvest Interrnational K.SS.C.C.
22
27 KFIC Kuw wait Financee and Investmment CO. KSC C
22
28 KAMCO KIP
PCO Asset Maanagement C Company KSC ‐ KAMCO
22
29 ILIC Inteernational Leeasing and Innvestment C CO.
23
30 KTINVESST Kuw wait Invest C
CO. (HOLDING G) K.S.C.C
23
31 NIH Nattional Internnational CO. ((HOLDING)
23
32 ISKAN Housing Financce CO. S.A.K.C C
23
33 MADAR Al‐Madar Finan nce and Invesstment CO.
23
34 ALDEERA A Al‐Deera Holdin ng CO. K.S.C..C
23
35 ALSAFATT Al‐SSafat Investm
ment CO. K.SS.C.C
23
36 BURGAN NGRP Burrgan Group H Holding CO. K.S.C.C
23
37 EKTTITAAB Ektttitab Holding CO. K.S.C.CC
33 | P a g e

238 QURAINHLD Al Qurain Holding CO.

239 SOKOUK Sohouk Holding CO. S.A.K.C
240 ALMADINA Al‐Madina for Finance and Investment CO.
241 NOOR Noor Financial Investment K.S.C.C
242 TAMINV Al‐Tamdeen Investment CO. K.S.C.C
243 EXCH Kuwait Bahrain International Exchange CO
244 DAMACKWT Damac Kuwaiti Holding CO. K.S.C.C.
245 KSHC Kuwait Syrian Holding CO K S C HOLDING
246 STRATEGIA Strategia Investment CO. (K.S.C.C.)
INSURANCE
301 KINS Kuwait Insurance Company
302 GINS Gulf Insurance Company
303 AINS Al‐Ahleia Insurance Company
304 WINS Warba Insurance COMPANY
305 KUWAITRE Kuwait Reinsurance COMPANY K.S.C.C.
306 FTI First Takaful Insurance COMPANY K.C.S.C
307 WETHAQ Wethaq Takaful Insurance COMPANY K.C.S.C.
REAL ESTATE
401 KRE Kuwait Real Estate COMPANY
402 URC United Real Estate COMPANY
403 NRE National Real Estate COMPANY
404 SRE Salhiah Real Estate COMPANY
405 PEARL Pearl of Kuwait Real Estate COMPANY
406 TAM Tamdeen Real Estate COMPANY
407 IIPC International Investment Projects CO KSC
408 AREEC Ajial Real Estate Entertainment CO. KSCC
409 MREC Al‐Massaleh Real Estate CO. [K.S.C.C]
410 ARABREC Arab Real Estate CO. (K.S.C.CLOSED)
411 UREC Union Real Estate CO. (KSCC)
412 ERESCO Al‐Enma'a Real Estate CO. (K.S.C.CLOSED)
413 MABANEE Mabanee Company ( S.A.K.C )
414 INJAZZAT Injazzat Real Estate Development CO (K.S.C.C.)
415 JEEZAN Jeezan Holding CO. K.S.C.C
416 INVESTORS Investors Holding Group CO.KSCC
417 IRC International Resorts CO. K.S.C.C
418 ALTIJARIA The Commercial Real Estate CO. K.S.C.C
419 SANAM Sanam Real Estate CO. K.S.C.C
420 AAYANRE A'ayan Real Estate CO. S.A.K.C
421 AQAR Aqar Real Estate Investments CO. S.A.K.C
422 ALAQARIA Kuwait Real Estate Holding CO. K.S.H.C
34 | P a g e

423 MAZAYA Al‐Mazaya Holding CO. S.A.K.C

424 ADNC Al‐Dar National Real Estate CO. K.S.C.C
425 THEMAR Al‐Themar International Holding CO.
426 GRAND Grand Real Estate Projects (K.S.C.C)
427 TIJARA Tijara and Real Estate Investment CO. KSCC
428 TAMEERK Tameer Real Estate Investment CO. K.S.C.C
429 ARKAN Arkan Al‐Kuwait Real Estate CO. K.S.C.C
430 SAFATGLB Safat Global Holdings K.S.C
431 ARGAN Alargan International Real Estate CO.
432 ABYAAR Abyaar Real Estate Development CO. KSCC
433 MUNSHAAT Munshaat Real Estate Projects CO K.S.C.C
434 FIRSTDUBAI First Dubai for Real Estate Development
435 KBT Kuwait Business Town Real Estate CO.
INDUSTRIAL
501 NIND National Industries Group (HOLDING)
502 PIPE Kuwait Pipes Industries and Oil Services
503 KCEM Kuwait Cement Company
504 REFRI Refrigeration Industries COMPANY
505 CABLE Gulf Cable and Electrical Industries COM
506 SHIP Heavy Engineering and Ship Building CO.
507 MARIN Contracting and Marine Services COMPANY
508 PCEM Portland Cement Company
509 PAPER Shuaiba Industrial CO. (K.S.C.C)
510 MRC Metal and Recycling CO.
511 KFOUC Kuwait Foundry CO. (S.A.K.C)
512 ACICO ACICO Industries CO.[K.S.C.C]
513 UIC United Industries CO. (K.S.C.CLOSED)
514 BPCC Boubyan Petrochemicals CO. (K.S.C)
515 GGMC Gulf Glass Manufacturing CO. K.S.C.C
516 HCC Hilal Cement CO. (KSCC)
517 ALKOUT Alkout Industrial Projects CO. (K.S.C.C)
518 KPAK Kuwait Packing Materials MANUFACTURING
519 KBMMC Kuwait Building Materials MANUFACTURING
520 NICBM National Industries COMPANY
521 ROCKS Gulf Rocks COMPANY S.A.K.C.
522 EQUIPMENT Equipment Holding Company K.S.C.C.
523 MENAHOLD Mena Holding CO. K.S.C
524 NCCI National Company for Consumer Industries
525 GYPSUM Kuwait Gypsum MANUFACTURING & TRADING CO
526 ALQURAIN Qurain Petrochemical INDUSTRIES CO.K.S.C
527 SALBOOKH Salbookh Trading CO. K.S.C.C.
528 IKARUS Ikarus Petroleum INDUSTRIES CO. K.S.C.C.
35 | P a g e

SERVICES
601 KCIN Kuwait National Cinema
602 KHOT Kuwait Hotels COMPANY
603 AGLTY The Public Warehousing Company
604 SHOP Kuwait Commercial Complex COMPANY
605 ZAIN Mobile Telecommunications COMPANY K.S.C
606 SENERGY Al Safat Energy HOLDING COMPANY K.S.C.C
607 EDU Kuwait Educational Services COMPANY
608 IPG Independent Petroleum Group
609 CLEANING National Cleaning CO. (S.A.K.C)
610 SULTAN Sultan Center Food CO. (KSCC)
611 AGHC Al‐Arabi Group HOLDING CO. (K.S.C)
612 TRANSPORT The Transport and Warehousing Group CO. (K. S. C.)
613 NMTC National Mobile Telecommunications KSC
614 KGL Kuwait and Gulf Link Transport CO. (KSCC)
615 CABLETV Kuwait Cable Vision (S.A.K.)
616 ASC Automated Systems Company (K.S.C.C)
617 NAPESCO National Petroleum Services CO. K.S.C.C.
618 KCPC Kuwait Company for Process Plant CONS.&CONT
619 KSH Kuwait Slaughter House CO. K.S.C.C
620 EYAS Eyas For Higher and Technical Education
621 HITSTELEC Hits Telecom Holding CO. K.S.C
622 ALSAFWA Al‐Safwa Group CO. K.S.C.C HOLDING
623 HUMANSOFT Human Soft HOLDING CO. K.S.C.C
624 KPPC Privatization Holding Company
625 NAFAIS Nafais Holding Company K.S.C CLOSED
626 NSH National Slaughter House CO. K.S.C.C
627 AREFENRGY Aref Energy HOLDING CO. K.S.C.C.
628 SAFWAN Safwan Trading and Contracting CO. K.S.C.C
629 GPI Gulf Petroleum Investment (S.A.K.C)
630 GFC Gulf Franchising HOLDING CO. K.S.C.C.
631 TAHSSILAT Credit Rating and Collection K.S.C.C.
632 MAYADEEN National Ranges COMPANY K.S.C.C.
633 ABAR Burgan Well Drilling (K.S.C.C.)
634 IFAHR IFA Hotels and Resorts CO. K.S.C.C
635 CGC Combined Group Contracting CO (S.A.K.C)
636 JEERANH Jeeran Holding CO. S.A.K.C
637 PAPCO Palms Agro Production CO. K.S.C.C.
638 SAFTEC Al‐Safat TEC HOLDING COMPANY K.S.C.C
639 MTCC Mushrif Trading and Contracting CO.
640 UPAC United Projects Group K.S.C.C
641 ABRAJ Al‐Abraj Holding CO. S.A.K.C
642 ALAFCO Aviation Lease and Finance CO. K.S.C.C
643 MHC Al‐Mowasat Holding CO. S.A.K.C
36 | P a g e

644 MASHAER Haj and Umrah Services Consortium CO KSCC

645 OULAFUEL Oula Fuel Marketing COMPANY K.S.C
646 VILLAMODA Villa Moda Life Style K.S.C.C
647 FUTURE Future Communications CO. GLOBAL K.S.C.C
648 NETWORK Network Holding CO. K.S.C.C
649 HAYATCOMM Hayat Communications CO. K.S.C.C
650 MUBARRAD Mubarrad Transport CO. K.S.C.C.
651 MUNTAZAHAT Kuwait Resorts COMPANY K.S.C.C.
652 ATC Advanced Technology COMPANY K.S.C.C
653 YIACO Yiaco Medical CO. K.S.C.C
654 JAZEERA Jazeera Airways CO. K.S.C.
655 SOOR Soor Fuel Marketing CO. K.S.C
656 KNA Kuwait National Airways CO. K.S.C.
657 FUTUREKID Future Kid Entertainment and Real Estate
FOOD
701 CATTL Livestock Transport and Trading COMPANY
702 DANAH Danah Alsafat Foodstuff COMPANY
703 POULT Kuwait United Poultry COMPANY
704 FOOD Kuwait Food Company (AMERICANA)
705 UFIG United Foodstuff Industries Group CO.
706 KOUTFOOD Kout Food Group K.S.C.C.
NON‐KUWAITI
804 SCEM Sharjah Cement and Industrial Development
805 GCEM Gulf Cement COMPANY
806 QCEM Umm Al‐Qaiwain Cement INDUSTRIES COMPANY
807 FCEM Fujairah Cement INDUSTRIES COMPANY
808 RKWC Ras Al Khaimah CO. FOR WHITE CEMENT(PSC)
809 ARIG Arab Insurance Group B.S.C.
810 UGB United Gulf Bank (B.S.C) E.C
811 EKHOLDING Egypt Kuwait Holding CO. (S.A.E)
812 BKIKWT Bahrain Kuwait Insurance CO. BSC
813 GFH Gulf Finance House E.C.
814 CIB Commercial International Bank (EGYPT)
817 INOVEST Inovest (B.S.C)
818 AUB Ahli United Bank B.U.C
819 BBK Bank of Bahrain and Kuwait B.S.C
820 ITHMR Ithmaar Bank B.S.C
37 | P a g e

PARALLEL MARKET
2003 BAREEQ Al‐Bareeq Holding CO. K.S.C.C.
2004 REAM Real Estate Asset Management CO. (REAM)
2005 AFAQ Afaq Educational Services CO. K.S.C.C.
2006 ALSHAMEL Al‐Shamel International HOLDING CO. KSCC
2007 SAFRE Al Safat Real Estate CO. K.S.C.C
2008 AJWAN Ajwan Gulf Real Estate CO.(K.S.C.C)
2009 MENA Mena Real Estate COMPANY (K.S.C.C)
2010 SPEC Specialized Group HOLDING CO. (K.S.C.C)
2011 MASAKEN Al Masaken International Real Estate REAL ESTATE DEV. CO.
2012 DALQAN Dulaqan Real Estate CO. K.S.C.C.
2013 ALEID Al Eid Food CO. (K.S.C.C)
2014 MIDAN Al‐Maidan Dental Clinic CO. (K.S.C.C)
2015 FLEX Flex Resorts and Real Estate CO. (K.S.C.C)
2016 ALMUDON Al Mudon International Real Estate CO (K.S.C.C)

Brokerage Firms
• Al‐Etehad Union Securities Brokerage Co
• EFG‐Hermes IFA Brokerage
• Al‐Muthana Financial Brokerage Co
• Al‐Robaeya Brokerage
• Al‐Seef Brokerage Co
• Al‐Sharq Financial Brokerage Co
• Al‐Arabi Brokerage Co
• K.I.C Financial Brokerage Co
• Watani Financial Brokerage Co
• KFIC Financial Brokerage Co
• Al‐Waseet Financial Business Co
• Al‐Wataniya National Finance Brokerage Co.
• First Securities Brokerage Co
• Al‐Awsat Middle East Financial Brokerage Firm Co
Trading Cycle in Kuwait Stock Exchange
1. Open an account at the Kuwait Clearing Company (KCC).
2. A Copy of the civil identification, the name of the bank the client deals with (3 K.D
for individuals, 5 K.D for corporate).
3. Choose one of the registered Brokerage Firms in KSE.
4. When issuing a selling order, share certificates should be presented the following
day after the transaction.
5. When issuing a buying order, payment should be submitted to the broker the
following day before 11:00 am if the client’s balance with KCC is insufficient.
38 | P a g e

6. Commission is calculated 1.250 K.D for each one Thousand K.D, commission is
calculated 1 K.D for each one Thousand K.D for transaction of Fifty Thousand K.D
and above.
7. A cheque will be issued by KCC in favor of the client every Sunday and Wednesday.
8. KSE account is accredited 500 fils for each executed transaction.
9. Share prices can fluctuate 5 pricing units daily according to its category.
Note: The One Kuwaiti Dinar is equivalent to 1,000 fils. The price& share are not permitted
to increase or to decrease more than 5 units per day.
Example: A share with a value of 300 fils cannot increase more than 325 fils or decrease less
than 275 fils daily during its daily trading.
The Rules and Conditions
Listing Shareholding Companies in the Official Market
After the perusal of the Amiri Decree issued on 14/08/1983 organizing the Kuwait Stock
Exchange.
And the Decision no (35) of the Minister of Commerce and Industry for the year 1983 issuing
the by laws of KSE.
And the KSE Committee Decision no (3) for the year 2004 concerning the rules of listing
companies in the Official Market and the Parallel Market.
And the KSE Committee Decision no. (7) for the year 2005 to add two conditions to the
listing conditions.
And the market committee’s decision no (1) for the year 2007 concerning the rules and
conditions for listing shareholding companies in the official market.
And the approval of the market committee in its meeting no (9) dated 2/11/2008.

The following has been decided:
Article 1: The rules and procedures annexed with this resolution shall be enforceable
regarding the application form for listing shareholding companies in the market as well as its
revision and its determination.
Article 2: This law shall be enforceable from the date of its issuance. It shall be published in
the official gazette and shall cancel all resolutions that collide with it. The market director
must implement it.
39 | P a g e

Article (1)
The shareholding companies requesting listing of their shares in the Official Market shall
satisfy the following conditions.
Article (2)
The company’s issued capital should be fully paid and should not be less than (10) million
Kuwaiti Dinars or any equivalent amount in foreign currency, and the shareholders’ equity
rights shall not be less than 115% of the weighted average of the paid‐up capital in each of
the last two fiscal years, according to the annual audited financial reports prior to the listing
request from the financial auditor and approved by the company’s general assembly.
Article (3)
The company’s shares shall be tradable according to the law under which they were
established taking into account that the period required to trade shareholders’ or founder's
shares is not less than that required in the Kuwaiti commercial companies law for trading the
shares of shareholders and founder's in Kuwaiti shareholding companies.
Article (4)
The company shall have achieved net profit in the last two fiscal years, and the yearly net

profit shall not be less than 7.5% of the weighted average of the paid‐up capital at the end of
each fiscal year.
Article (5)
If the listing request is from a closed company which had increased its capital more than 50%
during a single fiscal year, a period of one year should have passed from the last date of the
capital increase’s notice.
Article (6)
If the listing request is from a closed company which had changed its legal structure from a
limited liability company to a closed shareholding company, a period of three years should
have passed from the date of notice in the commercial registry of the change of structure.
Article (7)
30% of the company’s capital should be distributed to a number of shareholders according
to the schedule guide authorized by market committee where the ownership of each one
isn’t below two trading units according to the book value of the latest fiscal year. In case the
company can’t provide this percentage, 30% the company’s capital shall be offered for
private placement by a specialized company independent from the company that requested
listing.
40 | P a g e

Article (8)
The company should attain the approval of its general assembly to list its shares in Kuwait
Stock Exchange.
Article (9)
The company’s board members shall pledge to adhere with all the rules and regulations set
by Kuwait Stock Exchange, and to provide KSE management with all the required data and
information provided that this information is correct and reliable.
Article (10)
The company shall provide its shareholders’ registry to the clearing company and adhere
with all the instructions issued by KSE in this regard.
Article (11)
A non‐Kuwaiti company should be listed in its country of origin stock market.
Article (12)
Any company wishing to enlist will be subjected to a reserve of 25% of its paid‐up capital at
the clearing chamber for a period of 2 years from the enlisting date. The names of
shareholders owning this percent will be specified with the knowledge of the company’s
board of directors.
Article (13)
The company shall pay a registration fee of 10,000 Kuwaiti Dinars and an annual subscription
fee of (0.05%) of the company’s paid‐up capital but not exceeding 50,000 Kuwaiti Dinars.
Article (14)
The company shall fulfill KSE listing procedures during four months from the date of
notification of Market approval which shall be considered void in case of incompliance with
this period.
Article (15)
In addition to the fulfillment of all the listing rules in the articles above, the market
committee has the right to authorize or reject listing of a company in light of the company’s
profits, financial status, its importance to the national economy and the success in achieving
its objectives; for that sake it is permitted to request from the proposed company any
reports or extra information including turning to any specialized party to study these reports
41 | P a g e

and information, in case the committee decides to reject the listing request it must enclose a
reason.
Participation of NonKuwaitis in Kuwaiti Shareholding Companies
Referring to the commercial companies law issued in the law no. 15 for year 1960 and all
amended laws thereto;
And persual to the law no. 32 for year 1968 concerning the monetary and the Central Bank
and the monetary profession and all amended laws thereto;
And persual to the Amiree Decree no. 31 for year 1990 with regards to regulating the trading
in securities and the establishment of mutual funds;
And following the law no 2 for year 1999 concerning the promulgation of interests in
securities in the shareholding companies.
And following the law no 20 for year 2000 relevant to the approval for non‐Kuwaitis to own
securities in Kuwaiti shareholding companies.
And perusal to the Decree issued in August 14 1983 concerning organizing Kuwait Stock
Exchange.
And following the Decree issued on August 8, 1984 governing registration of brokers and
their assistants in Kuwait Stock Exchange.
And relating to the Decree issued on December 27 1986 with regards to organizing the
settlement of the trading activity and the Clearing Company in the Kuwait Stock Exchange.
And following the internal bylaws of Kuwait Stock Exchange issued by the ministerial
resolution no. 25 for year 1983.
And after the ratification of the Council of Ministers. It has been decided upon the following:
Article (1)
In implementing the jurisdiction of this resolution, the following terms and expressions
indicated will have the confronting meaning:
• Non‐Kuwaitis: Any individual person or company (entity) not carrying the Kuwaiti
nationality and is investing his capital in Kuwait shareholding companies.
• Shareholding Companies: Kuwaiti Shareholding Companies enlisted in Kuwait Stock
Exchange and which non‐Kuwaitis own shares in or may attain approval to
participate in its establishment.
• Trading: Buying and selling shares of shareholding companies enlisted in Kuwait
Stock Exchange according to the provisions dealt with in the Exchange.
42 | P a g e

• Establishment: The right to establish shareholding companies through participating
in its establishment where subscription in its capital is considered as establishment.
• Clearing and Settlement: Settling liabilities accrued on all procedures undertaken in
Kuwait Stock Exchange and specifying the position of parties through the Clearing
Chamber.
• Ownership and Consolidated Management: Any economic or juristic affiance
through ownership or management, and is considered as a kind of consolidated
ownership and management:
o Anything owned from shares in the shareholding companies by the investor
personally or being a guardian for his minors.
o Anything acquired by the individual establishment owned by the investor
and the companies that are affiliated partners in.
o Financial companies owned by the investor exceeding 50% percent of it’s
capital or those that are under his domination and that is according to what
is specified by the IAS.
o Any economic or juristic relation associated to the investor granting him the
right to dominate over and that is according to what is specified by the IAS.
• Overlaping interests: Any interest that may permit one party to dominate over or to
excersice impressive influence over another party in the event of taking financial and
operative decisions. This will be according to the following:
o The relation‐ship between the investing company’s Board of Directors and
the principal shareholders and owners, i.e., anyone that possess 5% or more
of the capital.
o Distinctive management parties in the investing company (manager of the
executive team and the deputy executive manager, his assistants and the
executive managers and all managers with corresponding degree).
o Subsidiary companies which the investor owns more than 50% of it’s capital
or dominates over.
o Associated companies which mean companies that the investor owns 20%
of its capital and has impressive influence (effect) over.
Article (2)
With consideration of the jurisdiction of article no. 3 of this resolution it is permitted for
non‐Kuwaitis to own and trade shares of shareholding companies listed in Kuwait Stock
Exchange according to the regulation indicated in this resolution. They will also be granted
the permission to join in establishing public shareholding companies according to the
determined procedures in this regards applied to Kuwaitis in this regards.
Article (3)
The non‐Kuwaiti investor shall be permitted to own and to trade in bank share. He will be
conditioned to attain the approval of the Central Bank of Kuwait if this investor wishes to
own more than 5% of the capital of any bank. This applies to any individual or group of
investors connected by juristic or economic means either by mutual ownership or by
43 | P a g e

consolidated management or by joint interest will be considered as a single investor entity.
It is prohibited for non‐Kuwaiti investors to exceed the ownership of 49% in the capital of
any individual bank, except after attaining a preceding approval from the Council of
Ministers, and after consulting of the Central Bank of Kuwait.
Article (4)
Trading in shares which are allowed for non‐Kuwaitis to own, will be through the brokers
registered at the Kuwait Stock Exchange according to the provisions governed at the
Exchange.
Article (5)
It is prohibited for non‐Kuwaitis to buy or sell shares which are permitted for them to own
outside the premises of Kuwait Stock Exchange. It is also prohibited for companies whose
shares are sold and bought to register any trading action outside the Exchange to registering
transaction in its records, accordingly.
Article (6)
Companies which acts as portfolio managers will be required to provide the Kuwait Stock
Exchange with a monthly report comprising the selling and buying activity it had undergone
through for each non‐Kuwaiti client. The Exchange Administration will have the authority to
investigate over the authenticity of those reports if it sees necessary.
Article (7)
Non‐Kuwaitis will have the privilege of voting and nominating rights in the shares they own
in the Kuwait shareholding companies in addition to the rights guaranteed by law for
shareholders in those companies.
Article (8)
Aside from what has been mentioned above all laws, Decrees, bylaws, resolutions,
regulations and provisions carried out at the Kuwait Stock Exchange with relation to trading
in securities, settling liabilities, transfer of ownership and announcements of interest in
shareholding Companies will be applied to non‐Kuwaiti investors.
Article (9)
Kuwait Stock Exchange will handle within specialized area all operations conducted for the
account of non‐Kuwaitis on shares listed in the Exchange as well as analyzing and studying
the effect of these operations on the performance of the market.
44 | P a g e

Kuwait Stock Exchange Analysis
Opening and Closing Stock
Open 6991.111111 Close 6995.7

High 7008.711111 Low 6950.177778
Value 55267375.56 Deal 6182
Wt. Index 384.0544444
An analysis of Kuwait Stock Exhange for the period of january 1, 2010 to January 13, 2010
carried out during the prepartion of this report.
Sector wise average opening and closing stock is shown below;
Open Close
Banking 8359.2 8357.1375
Investment 5536.125 5528.375
Insurance 712.7875 2886.35
Real Eatate 2788.6625 2792.1
Industrial 5408.8375 5419.35
Services 14751.4875 14790.325
Foods 4221.525 4247.4375
Non‐Kuwaities 7273 7270.9625
Mutual Finds 0 2764.1
Parallel Markets 1080.3875 1234.3
The analysis shows that the higest stock in the market is Services, Banking and Non‐
Kuwaities sector respectively. Mutual Funds sector beared a zero opening stock during the
analysis period.
16000
14000
12000
10000
8000
6000 Open
4000 Close
2000

45 | P a g e

Highest and Lowest Stock
High Low
Banking 8385.6125 8275.45
Investment 5564.3875 5481.7875
Insurance 1065.7125 700.4
Real Eatate 2800.125 2771.475
Industrial 5420.925 5365.6125
Services 14819.475 14668.85
Foods 4258.175 4198.4875
Non‐Kuwaities 7286.775 7222.7
Mutual Finds 0 0
Parallel Markets 925.8375 924.3625
16000
14000
12000
10000
8000
6000 High
4000 Low
2000
Volume and Value Analysis
Banking Vol Value Deal

Investment 6734375 4637756.25 259.625
Insurance 167563750 16375510 1905.125
Real Eatate 191875 79943.75 8.5
Industrial 139266875 10167056.25 1143.25
Services 12224687.5 3715345 478.5
Foods 117889375 17800291.25 1990.625
Non‐Kuwaities 8310625 1513802.5 188.5
Mutual Finds 34033125 3117221.25 393.75
Parallel Markets 0 0 0
100000 11595 3
46 | P a g e

Value
20000000
18000000
16000000
14000000
12000000
10000000
8000000
6000000 Value
4000000
2000000
0
47 | P a g e

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a. Provide emergency finance to Islamic banks for a period not exceeding six months

Amount in KD mn 2003 2004 2005 2006

Amount in KD mn 2003 2004 2005 2006

• The Kuwait Stocck Exchange shall enjoy an independ dent judicial personality with the

238 QURAINHLD Al Qurain Holding CO.

423 MAZAYA Al‐Mazaya Holding CO. S.A.K.C

644 MASHAER Haj and Umrah Services Consortium CO KSCC

The company shall have achieved net profit in the last two fiscal years, and the yearly net

Open 6991.111111 Close 6995.7

Banking Vol Value Deal

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