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Kuwait Stock Exchange

New Changes and Implementations

May 2012

Table of Contents

1. Old and New systems 4

2. New Trading System X-stream 8

3. Sector Classification 11

4. Kuwait 15 Index 13

5. New Website 15

Appendix

A. Securities on the Main Market 19

B. KSX15 25

1. Old and New Systems

New system will be in effect on 13th May

4

Differences between the Current System (KATS) and the New System (X-Stream)

Quantity Units will be eliminated and the minimum tradable unit will be one share, therefore eliminating the Odd-Lot Market.

After eliminating the Odd-Lot Market and integrating it with the Regular Market, the minimum commission value in the Market will become 2 KD and the commission ratios will remain as follows: – (0.125 %) for traded values up to KD 50,000 of the total value of the client’s trades. – (0.1 %) for traded values above KD 50,000 of the total value of the client’s trades.

The clearing commission (500 Fils per each trade) will not be charged for trades with a value less than KD 50.

Similar to the current opening auction, an auction will be held at the close of trading with a pre-auction period (without matching) of two minutes, where orders cannot be cancelled or modified.

Auctions will use the common "Price/time" priority rather than the current "time/price" priority for matching during the auctions.

The current 5 minutes waiting time for order modification and cancellation during continuous trading will be eliminated.

Having a new feature of increasing the order quantity which will result in losing the order time priority.

The following information is general for all market participants and investors

Source: Kuwait Stock Exchange

5

Having a new feature of entering orders with Duration Conditions as follows: – Good for session (Continuous Trading) – Good till Cancel (GTC) – Good till Date (GTD)

After eliminating the Quantity Units, the maximum limit on order size will be 5,000,000 shares.

In addition to the current Market by Price (MBP) order book, there will be a new Market by Order (MBO) order book where individual orders are provided.

In the new system, the Forward Market will be an order-driven market instead of the current behavior where Market Makers enter quotes.

Forward Market trades will be executed at the best price for the investor rather than being executed at the price chosen by the broker as it is currently.

After eliminating the Quantity Units, the minimum and maximum quantity limits on Forward trades will be as follows: – Min Forward trade Qty = 5,000 shares – Max Forward trade Qty = 100,000 shares

In the new system when there is a corporate action on a security, all pending orders (with duration GTD/GTC) will be cancelled automatically by the system at the end of the day.

Differences between the Current System (KATS) and the New System (X-Stream) (Cont’d)The following information is general for all market participants and investors


6

In the new system, the Previous price is changed when the Reference price is changed (due to a corporate action for example), and there is a new price named the Unadjusted Previous price which is fixed.

Orders with duration “good till date” or “good till cancel” that are outside the price limits on the next day will not be accepted into the order book and will be as “unplaced” orders. Such orders will remain unplaced with their original priority until the reference price moves and the order price becomes within the limits. An unplaced order can also be cancelled or modified by the broker at any time.

In the new system the Price Index Values will be shown with 2 decimal places, however in the current system it is shown with only one decimal place.

In the new system the Forward Market Prices will be shown with 3 decimal places, however in the current system it is shown with only one decimal place.

In the new system when suspending a security, the existing orders for that security will remain in the order book and the broker has the ability to cancel his orders, however in the current system all the orders available for a suspended security will be cancelled by the system.

The following information is general for all market participants and investors

Differences between the Current System (KATS) and the New System (X-Stream) (Cont’d)


2. New Trading System X-Stream

"Board Lots" and the "Odd-Lot Market" will be eliminated and the minimum tradable unit will be one share.

The maximum limit on order size will be 5,000,000 shares.

The minimum commission value in the Market will become 2 KD and the commission ratios will remain as follows: – (0.125 %) for traded values up to KD 50,000 of the total value of the client’s trades. – (0.1%) for traded values above KD 50,000 of the total value of the client’s trades.

An auction will be held at the close of trading with a pre-auction period (without matching) of two minutes, where orders cannot be cancelled or modified.

Auctions will use the common "Price/time" priority for matching.

5 minute waiting time for order modification/cancellation is eliminated.

Introduces a new feature of increasing the order quantity (which will result in losing the order priority).

When there is a corporate action on a security, all pending orders (with duration GTD/GTC) will be cancelled automatically by the system at the end of the day.

Forward Market trades will be executed at the best price for the investor rather than being executed at the price chosen by the broker.

After eliminating the Quantity Units, the minimum and maximum quantity limits on Forward trades will be as follows: – Min Forward trade Qty = 5,000 shares – Max Forward trade Qty = 100,000 shares

New Trading System X-StreamThe new trading system "X-stream" is one of NASDAQ OMX's products which have been operated in more than 15 countries worldwide.

Properties of the new trading system

8 Source: Kuwait Stock Exchange

New Trading System X-Stream (Cont’d)

Order Duration Description

Day The order is valid throughout the trading day on which it was entered.

Session The order is good only for the current trading session. The order is cancelled at the end of the current session and it is only supported during the Continuous Trading session.

Good till Cancelled (GTC) The order is good until a cancellation is submitted or until 90 days have passed whereupon the order is automatically deleted.

Good till Date (GTD)

The order is good until the end of the last session on the specified date whereupon it is automatically cancelled. The maximum duration of a GTD orders is 90 days from when entered.

Immediate or Cancel (IOC) The order must execute immediately and fill as much as possible or it is cancelled.

X-stream provides investors with various time spans that can be applied to orders. The below table lists the available order duration


3. Sector Classification

11

Sector ClassificationThe charts in this template have been created with the correct default settings and can be reused by changing the datasheet. Refer to the Shape Gallery within the (Tools) menu for a list of predefined charts.

Sector Breakdown According to Number of Companies

ICBNumber Sector Name Sector

codeIndustry Name Industry

Code

1 Oil and Gas 0500 Oil and Gas 0001

2 Basic Materials 1000 Basic Materials 1000

3 Industrials 2000 Industrials 2000

4 Consumer Goods 3000 Consumer Goods 3000

5 Health Care 4000 Health Care 4000

6 Consumer Services 5000 Consumer Services 5000

7 Telecommunications 6000 Telecommunications 6000

8 Utilities 7000 Utilities 7000

9 Banks 8300 Banks 8000

10 Insurance 8500 Insurance 8000

11 Real Estate 8600 Real Estate 8000

12 Financial Services 8700 Financial Services 8000

13 Investments Instruments

8980 Investments Instruments

8000

14 Technology 9500 Technology 9000

15 Parallel 9900 Parallel 9000

• The system for classifying stocks that has been chosen by KSE isthe Industry Classification Benchmark (ICB).

• The Industry Classification Benchmark (ICB) is a definitive systemcategorizing over 70,000 companies and 75,000 securitiesworldwide.

• The ICB classification method allocates each company to aclassification according to the nature of its business, which isdetermined by its source of revenue or where it derives themajority of its revenue. ICB has four levels, of which KSE shallpublish the top two.

• In accordance with the launch of X-stream with a base value of1,000 for price weighted Sector Indices and 500 for marketweighted Sector Indices.


4. Kuwait 15 Index

13

Kuwait 15 Index

The KUWAIT 15 index is reviewed periodically to cater for the demands of index stability, invest ability and low transaction costs, while maintaining a high correlation with the underlying market

The KUWAIT 15 index is a market capitalization weighted index

The index includes the 15 highest ranked companies according to liquidity and size

The index constituents are reviewed and selected semi-annually to reflect the most liquid and highest market capitalization values in the market

The index can serve as a basis for index linked products such as index derivatives, indexed funds, exchange traded funds (ETFs) and structured products

The index is highly correlated with KSE all-share market capitalization index

Selection process of the Kuwait 15 Index Constituents: – Select the 50 most traded companies by turnover according to measured liquidity – These companies are then ranked by market capitalization – The 15 highest ranked companies in step 2 are selected to the index for the next coming period – At the time of the periodic review, KSE publishes a reserve list of three to five ranked companies

The KUWAIT 15 index is the KSE Flagship Index.

General Informati

on:

Ticker Code:

Index Universe:

Index Launch Date:

Base Value: Currency:

Review Dates:

Index Rules:

KSX 15 KSE All-share Index

In accordance with the launch of X-stream

1,000 Kuwaiti Dinar

May and November

Will be available shortly


5. New KSE Website

New KSE Website

Benefits of the new KSE Website:

Ease of saving and retrieving information and data, from anywhere in the world

Increased data and information security

Will support different service levels for different users and subscribers

Greater potential for more sophisticated support for investors

To access the new website prior to KSE going live with the new Trading System, please use the link below:

http://webtest.kuwaitse.com

The new KSE Website is a completely new platform for KSE to communicate with all market participants. It facilitates both free and paid-for services and can support more sophisticated data exchange mechanisms


New KSE Website- Snap ShotsThe new KSE Website is a completely new platform for KSE to communicate with all market participants. It facilitates both free and paid-for services and can support more sophisticated data exchange mechanisms


Appendix A. Securities on the Main Market

Securities on the Main Market


Appendix B. KSX15

Kuwait 15

30/11/2011 KSX15

Ticker Sec ID Liquidity Market Capital Market Cap Liquidity Weighted Cap Weighted Weighted to Weighted to

Rank Rank Liquidity Total Market Cap Total Market Liquidity

NBK 101 205,550,600 4,511,806,630 1 1 23.79 18.76 16.18 9.65

ZAIN 605 146,607,500 3,919,856,542 2 2 20.67 13.38 14.06 6.88

KFIN 108 139,925,475 2,420,136,612 3 3 12.76 12.77 8.68 6.57

GBK 102 48,158,450 1,329,082,254 4 12 7.01 4.39 4.77 2.26

BOUBYAN 109 30,209,950 1,031,458,836 5 18 5.44 2.76 3.70 1.42

CBK 103 23,421,650 979,457,206 6 24 5.16 2.14 3.51 1.10

NMTC 613 15,275,700 957,662,244 7 36 5.05 1.39 3.43 0.72

ALMUTAHED 105 20,776,000 912,778,209 9 26 4.81 1.90 3.27 0.98

BURG 107 64,084,650 684,199,749 10 9 3.61 5.85 2.45 3.01

MABANEE 413 60,716,300 488,950,836 12 10 2.58 5.54 1.75 2.85

AGLTY 603 85,393,230 403,032,133 13 6 2.12 7.79 1.45 4.01

KPROJ 205 36,526,900 388,242,889 14 14 2.05 3.33 1.39 1.71

NIND 501 93,749,170 356,151,996 15 5 1.88 8.55 1.28 4.40

CABLE 505 12,759,300 310,698,339 17 46 1.64 1.16 1.11 0.60

KIB 106 112,747,860 274,891,568 18 4 1.45 10.29 0.99 5.29

Total 15 1,095,902,73518,968,406,043 100.00 100.00 68.02 51.43

BPCC 514 47,534,550 271,656,000 19 13

ALAFCO 642 67,960,200 257,324,618 20 8

ALQURAIN 526 33,910,680 239,800,000 21 15

KSX15


ReserveCompanies

efficiency, renewable energy & mitigation

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Citi works with its clients in greenhouse gas intensive industries to evaluate emerging risks from climate change and, where appropriate, to mitigate those risks.

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