Kuwait’s upgrade to index provider MSCI’s Emerging Markets Index puts the Middle East and North Africa (MENA) region firmly on the global investment map, according to Bassel Khatoun and Salah Shamma, Franklin Templeton Emerging Markets Equity. They consider the potential asset flows this move could bring, and weigh in on the opportunities they see for Kuwait and the wider MENA region.
富兰克林邓普顿新兴市场股票团队 Bassel Khatoun 及 Salah Shamma 认为，科威特升级进入指数编制机构摩根士丹利新兴市场指数，这意味着中东北非（MENA） 地区将稳居全球投资版图中。他们考量了此变动将带来的潜在资产流动，并阐述了科威特和更广大的中东北非地区的投资机会。
Kuwait stands on the cusp of a new era of investment. Its promotion to the MSCI Emerging Market (EM) Index this week puts the country in the cross hairs of deep pocketed global investors and roughly US$1.8 trillion that tracks the popular gauge.1 The upgrade is contingent on the introduction of a number of new regulatory mechanisms affecting international institutional investors before November.
科威特现正处于投资新时代的转折点。本周，其升级进入摩根士丹利新兴市场指数，资金雄厚的全球投资者和跟踪这一流行指数的约 1.8 万亿美元资本的目光均聚焦于科威特。 这一升级还取决于其是否能在十一月前引入一些影响国际机构投资者的新监管机制。
The significant liquidity surge that typically accompanies emerging-market promotion also means investors in Kuwait could find opportunities from a more institutionalized and liquid stock market.
Kuwait’s MSCI upgrade reflects the hard work that the country’s Capital Markets Authority has undertaken over the past two years to make its stock market more accessible and attractive to global investors. During this time, it has made tangible improvements to its clearing, custody, and settlement services, increased foreign ownership levels (FOL) and eased the process of setting up investor trading accounts.
科威特被纳入摩根士丹利新兴市场指数，反映出该国资本市场管理局(Capital Markets Authority)过去两年所做的艰苦卓绝的努力，目的是让全球投资者更容易进入科威特股市，使得该市场更具吸引力。在此期间，科威特对其清算、托管和结算服务做出了实质性的改进，提高了外资持股水平（FOL），并简化了投资者交易账户的设立程序。
According to MSCI, up to 18 Kuwaiti stocks will be eligible for the MSCI EM Index, with the inclusion basket likely to be concentrated in banks (c.70%).2 Actual implementation, however, will not take place until May 2020. While Kuwait has already been recognized as an emerging market by rival index providers FTSE Russell (FTSE EM) and S&P Dow Jones, the country’s inclusion in MSCI’s EM Index is a landmark deal and should represent Kuwait’s biggest-ever liquidity event.
摩根士丹利表示，多达 18 只科威特股票具备摩根士丹利新兴市场指数的资格，其纳入的一篮子股票可能以银行为主（约 70% ）。 然而，要到二零二零年五月才会真正实施。虽然科威特已被其他指数编制机构富时罗素和标准普尔道琼斯认定为新兴市场，但该国纳入摩根士丹利新兴市场指数仍具有里程碑意义，是科威特有史以来最大的流动性事件。
Initially, Kuwait’s MSCI EM weighting might amount to approximately 50 basis points, or 0.5%.3 Based on this representation, we anticipate likely total investor flows of about US$10 billion (US$2.5 billion in passive flows and US$7.5 billion in potential active flows).4 For context, over the past 12 months Kuwait has seen a total of US$1.9 billion of foreign inflows, driven primarily by the FTSE EM Index inclusion which took place over two phases in September and December 2018.5
Attractive Fundamentals Still Drive Kuwait’s Story
Upgrades aside, the fundamental case for investing in Kuwait may be worth considering. With substantial reserves, low levels of debt and a stable banking sector, Kuwait stands out in an emerging market context. When one adds to this a budget breakeven oil price of just US$49 a barrel for 2019 (the lowest by some margin in the region) and a “AA” credit rating by Moody’s, Kuwait could be considered a low beta, defensive investment destination.6
即便不考虑此次升级，投资科威特的基本面仍值得考虑。科威特拥有庞大的外汇储备，债务水平较低，且银行业稳定 ，在新兴市场环境中脱颖而出。如果再加上二零一九年每桶仅 49 美元的预算平衡油价（在一定程度上是该地区最低）和穆迪给予的 “AA” 信用评级，科威特或被视为一个贝塔系数较低、防御性较强的投资目的地。
Another factor in Kuwait’s growing appeal is its diversification story that’s gaining momentum. Kuwait continues to make significant progress in terms of fiscal and structural reforms and is committed to developing a dynamic and vibrant private sector. And while there is still some way to go, the results of Kuwait’s move to reduce the role of the public sector in the economy are encouraging, in our view.
The country is moving away from oil dependence by developing its infrastructure, investing in human capital and promoting private sector involvement. In the government’s Vision 2035 plan, it has developed a blueprint for a more sustainable future. To date, we’ve seen about US$60 billion of investment allocated under this plan, with the prospect of $100 billion more to come, providing an ample runway for growth. Kuwait’s Northern Gulf Gateway project alone is expected to add about US$220 billion to Kuwait’s gross domestic product.
该国大力发展基础设施、投资人力资源和促进私营部门参与，正逐步摆脱对石油的依赖。政府的二零三五年愿景规划为更可持续的未来制定了蓝图。目前，已为这一计划配资约 600 亿美元，未来或将追加 1,000 亿美元，这为增长提供了充足的支持。仅科威特北部海湾门户项目就有望为科威特的国内生产总值增加约 2,200 亿美元。
In our view, there is also a solid valuation argument to be made for Kuwaiti stocks. Despite trading at a 15% premium to emerging market peers, valuations remain reasonable. It is worth keeping in mind that the surge in liquidity that will likely accompany Kuwait’s MSCI EM inclusion does have the potential to stretch valuations further. Recent upgrades of the United Arab Emirates (UAE), Qatar, Pakistan and Saudi Arabia increased valuations significantly in the final year prior to inclusion.
我们认为，科威特股票也有可靠的估值论据。尽管与新兴市场同行相比有 15% 溢价，但其估值仍然合理。值得注意的是，继科威特被纳入摩根士丹利新兴市场后，其潜在的流动性大幅上升确实有可能进一步抬升估值。最近对阿联酋、卡塔尔、巴基斯坦和沙特阿拉伯的升级，均使其估值在升级前的最后一年出现大幅提升。
Moreover, we believe the earnings outlook for listed Kuwaiti companies supports a valuation premium. On average, Kuwait stocks are delivering 13.5% earnings per share growth coupled with a 4.8% dividend yield which is attractive within an emerging market context.7 On a sector view, we remain particularly upbeat about Kuwait’s banking sector, which is showing improving profitability on the back of falling provisioning and improving asset quality.
此外，我们认为，科威特上市企业的盈利前景能够支撑估值溢价。平均而言，科威特股票每股收益增长 13.5%，股息收益率为 4.8%，这在新兴市场环境下具有吸引力。 从行业的角度来看，我们非常看好科威特的银行业，由于供应量下降和资产质量提高，银行业的盈利能力正在提高。
Our view is that with Kuwait’s addition to the MSCI EM Index, combined with Middle East and North Africa (MENA)8 representation, will amount to approximately 5.2%, putting this region firmly on the global investment map.9 We would also expect more active money managers begin to look at the MSCI EM Index through a MENA lens, raising the possibility of a positive spillover impact for the region’s capital markets.
We believe Kuwait’s MSCI promotion is just reward for the range of transformational measures it has implemented to improve its capital markets. And although the pace and quantum of change in the country has, in the past, been slower than neighbors like the UAE and Saudi Arabia, Kuwait’s encouraging fundamentals should likely draw additional interest from emerging market investors.
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1. Source: MSCI, June 2019.The MSCI Emerging Markets Index captures large- and mid-cap representation across 24 emerging-markets countries. MENA representation in the index currently includes Qatar, United Arab Emirates and Egypt. Indexes are unmanaged and one cannot directly invest in them. They do not reflect any fees, expenses or sales charges. MSCI makes no warranties and shall have no liability with respect to any MSCI data reproduced herein. No further redistribution or use is permitted. This report is not prepared or endorsed by MSCI. Important data provider notices and terms available at www.franklintempletondatasources.com.
3. Franklin Templeton internal estimate, June 2019. There is no assurance that any estimate, forecast or projection will be realized.
6. Source: Moody’s Investor Service. According to Moody’s, obligations rated AA are judged to be of high quality and are subject to very low credit risk. In the world of investing, beta has traditionally been a measure of a security’s or portfolio’s volatility in comparison to the stock market as a whole. Today, the word “beta” is also used as shorthand to describe getting broad stock-market exposure, typically through investments that often track the S&P 500 and other major indexes.
资料来源：穆迪投资者服务。在穆迪的评级体系中，评级为 AA 的债务为高质量、低信贷风险债券。 在投资领域，贝塔系数一贯用于衡量证券或投资组合相较于整个股市的波动性的指标。如今，“贝塔”也用作描述广泛股市持仓的简写，通常通过跟踪标准普尔 500 指数和其他主要指数的投资实现。
8. The Middle East and North Africa region includes Kuwait, Saudi Arabia, UAE, Qatar and Egypt.
9. MSCI, Franklin Templeton internal estimate, June 2019. There is no assurance that any estimate, forecast or projection will be realized.