Wednesday, 10 August 2016

Deft handling steers the capital markets on the right course

Renowned financial investment companies in Kuwait have widened the scope of the equity capital markets to strategic advantage for businesses.

A dominant trend seen in previous years was the lack of an organised equity capital market and derivatives products in the GCC markets – except for Kuwait. With a stronger reach and better control over the volatile GCC stock markets, Kuwait has a comprehensive market structure that encourages companies to raise equity and debt capital in a low risk, cost-effective environment. Unlike in other GCC countries, Kuwait’s capital market is also strong on the derivatives, futures contracts and options segments.

Deft handling of the capital market by reputed investment companies has also debunked the myth that businesses based here prefer to follow a ‘long-form’ asset liquidation strategy that prompts them to close when the markets decline and buy aggressively when they rise. Companies have been successfully dabbling in the Equities Capital markets (ECMs) with correct processes of raising capital through short sale activities and the right exposure to listings, both private and public.

How investment companies can help
The ECM is essentially the bridge between businesses and the financial institution. It is an environment that facilitates the raising of business funding for businesses with professional handling by financial institutions. This funding, in the form of equity capital, is raised through a range of solutions: from new issue allocation to distribution, and private to public placements or listings.
Similarly, financial companies’ and banks’ large investor base is instrumental in building the debt markets into one of the strongest in the GCC region.

Several successful companies in Kuwait have leveraged the expertise of reputed investment companies to make a mark in the capital market space. Businesses in the country have been able to maintain liquidity despite several downturns only with the correct handling of the ECM and debt market exposure offered by financial companies across a wide diversity of sectors.

Adroit management of ECMs helps bring more investment and investors into the capital market arena. In recent years, reputed financial institutions in the country have helped the domestic ECM space mature well.

The best services in the debt capital markets

The debt markets ecosystem has certainly shaped up well in Kuwait and contributed immensely to companies’ financial success in several ways. Reputed financial companies in Kuwait have been instrumental in arranging fixed income securities for MENA-based businesses, offering advisory roles to organise Sharia-compliant and conventional debt solutions for clients’ capital requirements.