Muhannad Al-Sanee: 611 companies trading on the OTC platform
CEO of almowazi.com Muhannad Al-Sanee, said that the number of companies listed on the OTC trading platform is 611, all of which are registered with Kuwait Clearing Company, out of which 88 are traded on the continuous trading system and 523 are trading through the special transactions system.
Al-Sanee said in an exclusive statement to Al-Qabas Newspaper that the aggregate capital of the 88 companies listed on the first platform of its kind in the region stood at KWD 1.4 billion, representing 10% of unlisted companies’ capital in Kuwait.
He pointed out that the aggregate capital of unlisted companies in Kuwait ranges between KWD 13-15 billion, expecting an increase in the number of listed companies in the OTC market to 150, during the year for several considerations, the most important of which is that there is no fees for listing and companies in the OTC market are not subject to the CMA’s control in terms of standards of governance.
The companies listed on the platform are 24 holding companies, 27 service companies, 15 investment companies, 14 real estate companies, 9 industrial companies and 3 food companies, including 23 voluntarily withdrawn and delisted companies.
He stated that Boursa Kuwait Company only included 23 voluntarily withdrawn and delisted companies and excluded companies under liquidation or subject to any legal disputes among shareholders or with creditors.
He said that the OTC platform is divided into two divisions: the continuous market through which the newly listed companies are traded, and the second division for private transactions through which the rest of the companies are traded, noting that Kuwait Clearing Company keeps records of more than 800 companies. Other companies not listed on the OTC market trade through the current system in place.
He pointed out that trading in the OTC market only requires a set of a broker’s account and the availability of sufficient cash to buy stocks. The settlement cycle will be t + 0.
Al-Sanee pointed out that the main beneficiaries of the presence of the OTC market are as follows:
• Brokerage firms: The proportion of their commission on transactions increased by about 3 folds compared to the old system, thus increasing their. The commission is split equally between the brokers, clearing companies and Boursa Kuwait.
• Boursa Kuwait and Clearing Company: They share 50% of the commission of OTC market transactions, 48% for the clearing company and 2% goes to the stock exchange.
• Banks: The existence of the platform provides a reliable mechanism for evaluating unlisted shares, which makes it easier for banks to take decisions on financing customers against these types of shares and provides them with a good opportunity to liquidate those shares in the event of default.
• Investors and Shareholders: Listing the company's shares on the platform provides an easy and reliable way to buy shares of unlisted companies and gives shareholders an easy opportunity to liquidate their positions.
• Investment Companies: They may valuate unlisted shares owned by their clients according to market prices and not according to nominal value, as is currently the case. They may open new portfolios for unlisted stocks, which will increase diversification, and increase investment alternatives to clients.
• Audit firms: They are able to meet the requirements of IFRS 9 and 15 by adopting market prices instead of relying on book value, which increases the accuracy of the financial statements of listed companies holding unlisted shares.
• Ministry of Justice: the availability of market prices facilitates the tasks handled by the Execution Department in administering auctions to liquidation equities based on the closing price without having to repeat the process more than once. Previously, the processes were delayed several times due to auctioning equities at higher value exceeding its actual price.
Al-Sanee revealed that “almowazi.com” has communicated with 15 bond issuers in Kuwait to list their instruments on the platform, which is expected to commence soon. He pointed out that SMEs have a great opportunity to list their shares if they are converted into joint stock companies and meet all required conditions.
“almowazi.com” adds new and exclusive services
Muhannad Al-Sanee, CEO of almowazi.com praised the launch of the OTC system as a culmination of regulatory efforts to develop the capital markets and support economic growth. “We have added new and exclusive services to almawazi.com to position it as the main OTC platform to cater to the needs and requirements of the growing and diverse customer base including financial institutions, banks, auditors, investors, shareholders, traders and brokers”.
Al-Sanee confirmed that all relevant information and related services are provided on the website in both Arabic and English to serve the largest segment of investors both locally and internationally, in line with the recent upgrade of Boursa Kuwait and its inclusion on FTSE Russell’s emerging markets index.
Shedding more light on the new services offered by almowazi.com, Al-Sanee mentioned that the new platform shall provide OTC live prices through a direct feed from Boursa Kuwait and will integrate those prices with the historical data. Moreover, the website will provide financial analysis option to obtain more accurate financial results, as more companies adopt greater transparency measures, disclosing their quarterly and annual financial statements through almawazi.com to easily reach their investors through the website. The platform also contains a brief overview of Kuwaiti bond transactions, which will be introduced to the OTC system in the future.
Al-Sanee also pointed out that the website and the mobile app offers a number of services for those seeking to obtain accurate data and financial results according to latest accounting standards, including technical analysis and OTC prices listed according to market capitalization, in addition to introducing numerous advanced services.
Al-Sanee highlighted that in appreciation of all the efforts exerted by Boursa Kuwait to develop the new OTC infrastructure, Almowazi.com fully cooperated with the bourse’s executives for over a year to provide an advanced platform for this new system. almawazi.com will complement a promising system that provides services to a large segment of local and international investors; thus contributing to the creation of an organized and sophisticated economic and investment environment.
مصدر الخبر: Alqabas