Stakeholders urge KIA to revitalize troubled financial derivative instruments

As Kuwait endeavors to strengthen its financial landscape and attract diverse investments, stakeholders are urging the Kuwait Investment Authority to spearhead initiatives aimed at revitalizing troubled financial derivative instruments.

With the market yearning for greater options and tools for local and foreign investors, 2024 is seen as a crucial year for the actual launch and activation of approved instruments, albeit with an emphasis on avoiding monopolistic commission rates that could hinder market access, reports Al-Jarida daily.

In response to the KIA call for the recovery of contributions from listed companies, there are demands for flexibility in repayment schedules. Companies are seeking the latitude to fulfill their obligations while maintaining operational stability, particularly until the conclusion of existing contracts. The Authority’s requirement for companies to liquidate shares obtained as contributions in a manner that doesn’t disrupt market dynamics further underscores the need for pragmatic solutions.

While some companies have promptly initiated partial payments in good faith, others may require additional time to fulfill their commitments. This process is expected to unfold gradually, with companies prioritizing the return of funds to uphold strategic relationships with the Authority and sustain their standing as valued clients.

Moreover, stakeholders highlight the need to leverage recovered funds to support the success of languishing financial instruments that have been approved but remain inactive. Despite the approval of instruments such as overdraft facilities and equity lending and borrowing, their implementation has been delayed, leaving Kuwait’s market lagging behind regional counterparts.

In this context, the proactive role of the KIA is deemed vital in catalyzing strategic transformation within Kuwait’s financial sector. By leveraging its track record in facilitating successful credit and sales initiatives, the Authority can pave the way for broader industry adoption, spurring market growth and innovation.

As Kuwait navigates its financial evolution, stakeholders emphasize the imperative of proactive measures and collaborative efforts to invigorate the derivatives market, ensuring it remains competitive and aligned with international standards.

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