'Investment fund lacks ability to stimulate market'
KUWAIT CITY: Kuwait is ready to face another financial crisis even if some institutions have yet to recover from the 2008 crisis and the situation of investment companies is not good, while the opportunities in the local market are scarce, reports Al-Seyassah daily quoting Deputy Executive Chairman of Investment Consultation and Research Department at KIPCO Asset Management Company (KAMCO) Zayyad Al-Qaisi.
Al-Qaisi pointed out Article 346 of the new financial market authority law obligates investment funds to invest not less than 75 percent of their capital to achieve their basic investment goals, while Article 347 states conditions for the investment fund to invest in financial stocks but not to own more than 10 percent of stocks from one source. He said the law is good but it might be difficult to implement, particularly the provisions related to bonds and special ownership of funds.
Asked about the work mechanism of KAMCO before and after the crisis, Al-Qaisi disclosed, "After the crisis, we tried to focus more on market research and studies, especially since we are now more concerned about the risks. We are also helping companies find ways to restructure their debts."
Admitting the investment fund lacks the ability to stimulate the market because its value (KD 811 million) is less than three percent of the total market value (KD 31 billion), Al-Qaisi believes there are two ways to stimulate the market -- availability of liquidity among the investors and profits of companies that will grow through the development projects of the government.
Al-Qaisi also touched on a number of issues, such as the role of the national portfolio in boosting the market and the projected profits for the second quarter this year.
© Arab Times 2011
