First ETF for Gulf region introduced by Lyxor and Coast

An exchange traded fund (ETF) focusing on Kuwait, known as Lyxor ETF Kuwait, has been launched by Lyxor Asset Management and Coast Investment & Development.

The EFT is the first to focus on the Gulf region. It offers the ability to access the Kuwait market through one single share traded on the London Stock Exchange with an annual total expense ratio of 0.65%.

Global institutional investors will have direct access to the Kuwait stock market through the ETF. The ETF will be linked to the FTSE Coast Kuwait 40 Index, which is representative of the Kuwaiti market.

The index is calculated by FTSE on behalf of Coast and was established in February 2007. Index constituents are chosen based on free-float market capitalisation and liquidity. At the end-June 2008, year-to-date performance was a positive 3.43% compared with a minus 12% performance by the FTSE100. Since inception in February 2007, the index has returned 30.71%.

The three main sector constituents of the index are banking (32%), IT and telecoms (22%) and investments (17%).

Kuwait is one of the best performing and stable markets in the Middle East, with performance up 600% since 2000. Fundamental and economic indicators show strong potential for growth in the near and medium time for investors.

Lyxor is the wholly-owned subsidiary of Société Générale and a European leader in ETFs. Coast, a financial institution in the Gulf region, was established in 1975 and is listed on the Kuwait Stock Exchange. Its current paid-up capital is KWD 62 million (S230 million) with total funds managed of over $3 billion.

Research shows positive outlook for Gulf region
Many institutional investors many have a positive long-term outlook towards the Gulf region and Kuwait and Dubai in particular, according to a survey* by Lyxor.

The study shows that almost half (45%) of institutional investors interviewed believe stock market returns in the Gulf region over the next five years will be good or excellent. Only 4% expect them to be poor.

Looking at the long term returns for the Kuwait stock market, 30% expect them to be good or excellent and only 5% expect them to be poor.

A good majority (70%) said the most attractive prospect of investing in Kuwait and the Gulf region in general is the potential for strong future growth there.

Over the next three years, half of those polled expect to increase their exposure to the region.

Long-term investment prospects (over five years, in per cent)

The EFT is the first to focus on the Gulf region. It offers the ability to access the Kuwait market through one single share traded on the London Stock Exchange with an annual total expense ratio of 0.65%.

Global institutional investors will have direct access to the Kuwait stock market through the ETF. The ETF will be linked to the FTSE Coast Kuwait 40 Index, which is representative of the Kuwaiti market.

The index is calculated by FTSE on behalf of Coast and was established in February 2007. Index constituents are chosen based on free-float market capitalisation and liquidity. At the end-June 2008, year-to-date performance was a positive 3.43% compared with a minus 12% performance by the FTSE100. Since inception in February 2007, the index has returned 30.71%.

The three main sector constituents of the index are banking (32%), IT and telecoms (22%) and investments (17%).

Kuwait is one of the best performing and stable markets in the Middle East, with performance up 600% since 2000. Fundamental and economic indicators show strong potential for growth in the near and medium time for investors.

Lyxor is the wholly-owned subsidiary of Société Générale and a European leader in ETFs. Coast, a financial institution in the Gulf region, was established in 1975 and is listed on the Kuwait Stock Exchange. Its current paid-up capital is KWD 62 million (S230 million) with total funds managed of over $3 billion.

Research shows positive outlook for Gulf region
Many institutional investors many have a positive long-term outlook towards the Gulf region and Kuwait and Dubai in particular, according to a survey* by Lyxor.

The study shows that almost half (45%) of institutional investors interviewed believe stock market returns in the Gulf region over the next five years will be good or excellent. Only 4% expect them to be poor.

Looking at the long term returns for the Kuwait stock market, 30% expect them to be good or excellent and only 5% expect them to be poor.

A good majority (70%) said the most attractive prospect of investing in Kuwait and the Gulf region in general is the potential for strong future growth there.

Over the next three years, half of those polled expect to increase their exposure to the region.

Long-term investment prospects (over five years, in per cent)

	Excellent/good	Average	Poor/very poor	Do not know
Kuwait	30	35	5	30
Dubai	40	25	5	30
Bahrain	20	25	20	35
Qatar	50	15	7	33

* Research conducted by Lyxor among 20 of the top 100 pension funds in the UK between July 1-3, 2008.