Summary
Al-Marzouq: FTSE Russell’s inclusion of KFH Capital REIT in its small- and micro-cap index is an important development that brings unitholders more flexibility and liquidity.
Al-Marzouq: An important development that brings more flexibility and liquidity to unitholders. The fund’s properties are income-generating and its distributions reach 5% a year, paid monthly in Kuwaiti dinars.
The Chief Executive Officer of KFH Capital, the investment arm of Kuwait Finance House (KFH) Group, Abdulaziz Nasser Al-Marzouq, said that FTSE Russell’s inclusion of KFH Capital REIT in its small- and micro-cap index confirms the distinction of KFH Capital’s investment products, noting that the inclusion qualifies the fund to attract foreign liquidity from global investors who rely on these indices to make their buying decisions.
As part of its periodic review of its emerging-market indices, including Boursa Kuwait, FTSE Russell added KFH Capital REIT, which has traded on Boursa Kuwait since September 2020 as the first licensed and listed income-generating real estate investment trust, to its small- and micro-cap index alongside three other Kuwaiti companies, effective from the close of 14 March 2024.
In a press statement, Al-Marzouq added that the index inclusion is expected to bring more flexibility and liquidity to the units of the fund, which aims to generate cash returns by investing in leased, income-generating properties across the various real estate sectors, ensuring limited risk and continuous rental cash flows. He noted that the fund, with capital of KD 54 million, pays its unitholders monthly cash distributions in Kuwaiti dinars, distributing no less than 90% of net collected income on a monthly basis.
He said the inclusion is an important milestone in the fund’s journey, coming three years after it began trading on Boursa Kuwait, a period in which it achieved good results and delivered distributions of up to 5% a year, paid monthly. He stressed that the fund benefits from experienced professional management reflecting KFH Capital’s expertise in the local real estate market, and that it holds a diversified portfolio of commercial, investment and other properties, not limited to a single sector but following the best available opportunities to benefit from developments across the local real estate market.
Joining global market indices such as FTSE brings many expected benefits for any security, most notably increased trading activity as more investors take an interest, which makes the security more attractive, reduces its volatility and creates opportunities for its holders. Index inclusion also allows performance to be tracked and easily compared with other companies in the same sector.
Index providers apply specific criteria and controls when promoting companies, such as capital, number of shares, type of ownership, liquidity and trading volumes, and shareholder returns.