Kuwait Parliament on Tuesday passed legislation to set up an independent regulator for Kuwait's stock market aiming to boost transparency in the Arab world's second largest bourse. Forty-eight members, including cabinet ministers, voted for the 165-article Capital Market Law while only one lawmaker voted against it. The law stipulates setting up an independent five-member Capital Market Authority whose main duties would be to ensure complete transparency and to prevent insider trading and other forms of illegal trading and fraud. Since its founding as the region's first bourse in the early 1970s, Kuwait Stock Exchange (KSE) has been run by a government-appointed administration that MPs said lacks the powers to ensure transparency. The law also calls for setting up a special tribunal for the stock market, and stipulates hefty jail terms and fines for a series of illegal practices. KSE has been the only bourse in the Gulf without a market authority as the law had taken many years to pass in parliament. MPs, who passed the law in principle two weeks ago, had complained of insufficient protection for small investors. The market has a capitalization of around 102 billion dollars and lists more than 200 local and foreign companies. KSE and the tiny Bahrain Stock Exchange were the only Arab bourses in the Gulf to record losses in 2009, with Kuwait dropping 10 percent. The market ended January almost flat. Moreover, Kuwait's parliament on Tuesday passed an economic development plan that authorizes the government to spend 30 billion dinars ($104 billion) on mega projects over the next four years. The plan calls for boosting the country's oil production capacity and modernizing oil facilities. Its ultimate goal is to turn Kuwait into a regional trade and financial centre and help reduce its dependence on oil revenues, which account for around 94 percent of total state income. The 2010-2014 plan initially projected spending of up to $129 billion but Kuwait's deputy prime minister for economic affairs told parliament the figure has been scaled down. Sheikh Ahmad Fahad Al-Sabah later said the spending figures “are only estimates that could be altered in accordance with needs.” The first such plan since 1986, it includes such projects as developing the new Silk City business hub at an estimated cost of $77 billion, as well as a major container harbour and a 25-kilometre (16-mile) causeway. It also includes a railway and metro system, other new cities and additional spending on infrastructure, particularly in health and education. The plan aims to boost the role of the private sector in an economy in which the public sector accounts for almost three-quarters of Gross Domestic Product. Parliament approved the plan just a day after the cabinet authorized capital spending of $16.6 billion in the first year of the plan. A further $7.7 billion will be spent by the private sector, according to Sheikh Ahmad. Meanwhile, Kuwait Finance House, the emirate's leading Islamic bank, said on Tuesday its 2009 profits dropped by 24 percent from the previous year due to the continued impact of the global financial crisis. KFH posted a profit of 118.7 million dinars ($412.7) last year compared to 157 million dinars ($545) in 2008, the bank said in a statement. In 2008, KFH profit fell by 43 percent. Chairman and managing director Bader Al-Mukhaizeem said the results were reached in a year “considered to be one of the most difficult since the financial crisis.
