Financial Sector Still Looking Weak

Kuwait remains one of the least promising investment climates in the Middle East, and the outlook for the private sector is one of diminishing competitiveness. There have been a couple of positive developments lately, including a forthcoming corporate benchmark bond issue for KIPCO, and the advancement of the financial regulation process. However, we continue to prefer Dubai for financial services, and Saudi Arabia for overall long-term growth prospects. Against this backdrop, we remain bearish Kuwaiti stocks, and could even see spikes higher in interbank rates, particularly if oil prices correct and global risk appetite

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