Pact on linking bourses in Kuwait and Bahrain

Kuwaiti and Bahraini stock exchanges signed a pact opening the way for cross-trading between the two bourses and hosting cooperation in other areas, a Bahraini official said.

The agreement was signed on the Sept 27, between Hisham al Otaibi, Kuwaiti Stock Exchange (SKE) general manager, and the director of the Bahrain Stock Exchange (BSE), Sheikh Ahmed al Khalifa, a BSE spokesman said.

"They have decided to from a committee to follow up the application of this agreement," the spokesman added.

The committee chaired by Sagaq al Rokaibii, secretary general of the Arab Union of stock exchanges, who also signed the agreement will submit a report to the stock exchange chiefs on progress in three months.

The agreement paves the way for a Kuwaiti clearing company and a Bahraini commercial bank to set up a share settlement system that will make it easy for investors in one market to trade directly on the other.

Bahraini and Kuwaiti investors can already buy shares on either bourse, but face a time delays that includes sending checks and certificates via couriers without immediate guarantees that a deal has gone through.

The agreement also calls for the exchange of corporate information. Kuwait has similar cross trading agreements with Lebanon and Egypt. Rokaibi said last week that Kuwait plans to sign further agreements with other Arab markets, including the Gulf bourses of Oman and Qatar.

The Kuwaiti bourses has a market capitalization of about $25 billion with daily trading of about $100 million, while the Bahraini stock exchange has a market capitalization of about $6 billion and daily trading of about $2 million.