This trend emerges as Lyxor, Société Générale’s wholly-owned subsidiary, launches the first ETF to focus on the region in partnership with Kuwait-based Coast Investment & Development Company.
The IFA research of 100 investment intermediaries conducted by George Street Research reveals a positive long-term outlook towards the Gulf region and Kuwait and Dubai in particular.
Thirty six per cent of intermediaries believe that stock market returns in Kuwait will be excellent or good in the short-term. This rises to 39 per cent in the medium-term and 40 per cent in the long-term.
Over the next five years, 5 per cent of intermediaries interviewed expect stock market returns from the Gulf region to be poor and 45 per cent expect them to be good or excellent.
Kuwait and Dubai are seen as offering the most attractive investment opportunities of all the main countries in the Gulf region, excluding Saudi Arabia.
The new Lyxor ETF Kuwait launched today offers investors access to the Kuwait market through one single share traded on the London Stock Exchange.
Linked to the FTSE Coast Kuwait 40 Index with 32 per cent weighted on banking, 22 per cent on IT and telecoms and 17 per cent on investments, the index has returned 30.71 per cent since its inception in February 2007.
Lyxor ETF global head Daniel Draper says: “We are seeing a growing interest from our clients for investment opportunities in the Gulf region.”
Coast Corporate Finance and Investment Services Group vice president Sulaiman T. Al-Abduljader adds: “While performance has been strong, up 600 per cent since 2000, the fundamental and economic indicators reveal strong potential for growth in the near and medium time horizons for investors. Empirical analysis also shows the diversification benefits the Kuwaiti market provides to a global equity portfolio making the ETF an attractive proposition for international and local investors.