MORE THINGS TO LEARN AND PONDER FROM KUWAIT
By Kevin A. Stoda
Last week, the private sector took on the government of Kuwait and successfully forced the government to keep the Kuwaiti Stock Exchange (KSE) closed for at least five total days.
In the Kuwaiti system of politics, governance and constitutions, it took only a pair of disgruntled lawyers 9and investors), Adel Abduhadi and Khaled Al-Awadhi, to persuade the Kuwaiti courts to intervene and try to stave off more national losses of investment at the national stock exchange.
The FRIDAT TIMES stated, “Judge Najeeb Al-Majed issued the order to suspend trading immediately until the court can decide on the case. The court may extend the suspension or could reject it.”
Hundreds of disgruntled investors cheered both inside and outside the exchange at hearing the news of the closure.
Then again—perhaps not! Financial sector regulation has been poor globally.
However, with the world economic summit of 20 nations taking place in the USA this weekend, the timing is fairly important for this event. “The KSE has been in a freefall the past few months. It has lost 45 Percent since June 24 when it hit an all-time high of 15,654 points.”
The Kuwait court decision to accept this call for a freeze at the exchange stated that the court “found that the bourse management [had] failed to take any measure to confront the global crisis which has created havoc in the investments of traders in the market.”
On the other hand, the Kuwaiti government is every bit as slow-footed as the U.S. government, i.e. in terms of getting both the securities and financial sectors regulated properly as per law or mandates. NOTE: The Kuwait government has intervened to protect some financially strapped banks and local savers’ assets in recent weeks.
Therefore, it is certainly not certain that the record slide in the KSE will not continue.
Nonetheless, a breather for planning and preparing is always more helpful than allowing heady confusion in an unregulated market arena.
ANOTHER POINT TO PONDER THIS WEEK
Another point to consider from news reports this week in Kuwait is from the DAILY AL-WATAN.
In a front-page article entitled, “Islamist Urges Travel Ban on Young Men”, AL-WATAN writes that Islamist activists have recently “urged the Kuwaiti government to restrict the travel of young men under the age of 21 unless they obtain approval from the government as well as their parents.”