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market liquidity as well improve the capital strength and
corporate governance of Kuwaiti banks. The exchange is now
planning a venture capital market as a feeder for main market
listings.
HSBC
Kuwait hosts one of the oldest stock markets in the Middle
East, and HSBC can trace its lineage here back to at least 1959,
three years before the exchange first opened for business. As
befits a steady presence over such a long period, the overall
average outcome for the bank is unchanged on a year ago. Value,
the principal weakness in 2018, remains an issue. Though one
client has a complaint (“Disclosure requirements of KYC/AML
must be simplified”), it is neither an unusual one nor borne out
by the scoring.
B A N K S
I N
F R O N T I E R
M A R K E T S ]
securities depository (CSD) has expanded beyond securities
safekeeping and settlement into asset servicing, mutual fund
administration and repo. Two years ago, it bought the technol-
ogy to build a central counterparty clearing house (CCP) from
London-based GMEX Group. However, Midclear serves a local
stock market whose performance more or less stood still for six
years before declining sharply last year. Responses are too few
for a rating.
Standard Chartered Bank
There is at last a credible challenger to the incumbent here,
and one with equivalent geographical reach. Though SCB does
not collect as many responses as its regional rival in Kuwait,
the scores are outstanding in every field bar one, liquidity
management.
Citi
The American bank opened for business here in 2011 to sup-
port clients enticed by the liberalisation of the Kuwait Stock
Exchange (it was re-branded as Boursa Kuwait in 2016 as part
of the privatisation process, finally accomplished this year).
Although investment opportunities here are burgeoning, Citi
has not attracted enough responses to be assessed. Predictable
strengths in asset safety, settlement and liquidity management
are still visible.]
First Abu Dhabi Bank
The product of the 2016 merger between two banks in the
United Arab Emirates, First Gulf Bank and National Bank of
Abu Dhabi, First Abu Dhabi Bank is present in Kuwait. Users of
its custody services, which are led by bankers with experience
at the international custodians active in the Middle East, tend
to buy on a regional basis, including the Kuwait Boursa. They
reward the bank with exceptional scores. Unfortunately, there
are not enough of them to warrant a rating.
LEBANON
After the bank-financed construction and real estate boom was
brought to halt by the central bank at the end of 2017, economic
growth faltered. The economy, and especially the public financ-
es, are now staggering under the efflux of people from neigh-
bouring Syria. The regional crisis has certainly not encouraged
foreign investors, even of the intrepid kind, to increase their
exposure to Lebanese assets.
Midclear
This year marks the 25th anniversary of the establishment by
the Central Bank of Lebanon of the “custodian and clearing
centre” for Lebanese – and, more recently – non-Lebanese
financial assets. Financial services are an important source
of activity here and, since its foundation in 1994, the central
OMAN
The Muscat Securities Market (MSM), which is in the MSCI
Frontier Markets Index, has had a third dismal year in succes-
sion. Last year was the worst since the commodity bust of 2011.
Turnover was down too, squeezing settlement income. Like
every hydrocarbon-based economy, Oman is subject to the tyr-
anny of the oil price and has struggled to diversify. The public
deficit is proving intractable and growth is not high. Foreign
investment also tends to be direct and focused on the oil and
gas sectors.
HSBC
The overall outcome for HSBC is little changed on a year ago.
The strengths (settlement, asset servicing, client service) and
weaknesses (price) are much the same too. But then it was
more-of-the-same in the Oman stock market too. In fact, HSBC
will have felt the pain in more ways than one since its local oper-
ation – created in 2012 by the merger with Oman International
Bank (OIB) – is itself listed on the MSM.
Standard Chartered Bank
By comparison with its international rival, Standard Chartered is
a relative newcomer here – it can trace its history in Oman back
only 50 years – and, although respondents indicate the bank can
certainly settle their trades and collect their entitlements, they
are not sufficient in number for the bank to be assessed properly
as a sub-custodian in Muscat.
First Abu Dhabi Bank
The Oman arm of the 2017 merger between Abu Dhabi-based
First Gulf Bank (FGB) and National Bank of Abu Dhabi (NBAD)
Spring 2019
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