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Shredd Chat #2 - Post From BondLadys Corner player46] NBK Makes Custody Breakthrough Posted on 22 February 2013. Tags: Custodian Bank, ISX, National Bank of Kuwait In a move that is likely to mark the start of a new era for the Iraq Stock Exchange (ISX), National Bank of Kuwait (NBK) has begun offering custody services for ISX-listed shares through its 80%-held subsidiary Credit Bank of Iraq. This is arguably the most important step forward for the ISX since the implementation of electronic trading in 2009. At last the door is open for large institutional investors to enter the Iraqi market. (See this post for more on the significance of the custody issue.) Credit Bank of Iraq received a custody license at the end of last year and just “went live” in January. ... So far the business has focused on custodying shares from the Asiacell IPO but they are now set up to custody all the existing names as well. NBK will be an acceptable counterparty both for institutional investors and (as a subcustodian) for global custodians. With about US$ 58 billion in assets, it is Kuwait’s largest bank and also one of the largest in the Middle East. It has also been on Global Finance magazine’s list of the world’s fifty safest banks for the past six years and is the top rated bank in the region. In addition, NBK’s custody services now cover not only Iraq but also the GCC and Egyptian markets—an important consideration for institutions looking for a “one-stop shop.” With a custodian of this caliber on board, the ISX is now in a position to mobilize significant amounts of foreign capital. This is important not only because the listed companies will have greater access to financing but also because increased participation by international investors will incentivize the introduction of best practices at local financial institutions. NBK’s custody breakthrough is thus a breakthrough not only for the Kuwaiti bank and its clients but for Iraq’s capital markets as well. LINK [dezertheat] what do they mean when they use the word custody? [shredd] At last the door is open for large institutional investors to enter the Iraqi market. player46 this part is key: With a custodian of this caliber on board, the ISX is now in a position to mobilize significant amounts of foreign capital. let me explain something ok? [player46] you bet. please do.. [shredd] a custodian don't sweep the floors, a custodian in a healthy market economy is essential. imperative. needed etc ... this is what they do: they hold assets, safely, for them to accrue interest to be easily traded to and from portfolios just not any entity can be a custodian, they must be a financial institution with substantial security substantial compliance and substantial administrative support via systems, controls so, my bank is one of the top three in the world and just like this statement says: With a custodian of this caliber on board, the ISX is now in a position to mobilize significant amounts of foreign capital. the door is open for SAFE efficient trading and holdings of scuritized debt. a super article player and tyvm for bringing it in [lightingcslt] shredd ty they are ready now [shredd] see? this lands at a time when we are seeing all the pieces of the puzzle come in there has been talk about the need for custodial services remember back last fall when we went over banking and finance laws it was in there but this shows us the first big one to step up, so, in layman's terms..... we've see it addressed that investment can happen but now...... we see a safe haven for assets to sit once invested that is what is meant by custody [player46] ty so much for the clarification... [shredd] you got it player! [gaffi347] Shredd Would that be bonds? [shredd] not just bonds though equity too any certificated asset [lightingcslt] Shredd so the big guns are ready to play with them now [shredd] lightingcslt yes, this is evidence of what we've been saying so many players ready to join in when the time was right and these players aren't gonna come to the table too early and now that their confidence in iraq is obvious, what is their motivation? profit via fees, short term investments, etc. [lightingcslt] Shredd like you said profits [shredd] yup, get in line [player46] they they have progressed farther than we knew apparently... [shredd] player46 yes exactly, too many people think the only indication of what is going on is the news articles but this is one of those that shows us a lot has been going on to come to this point [lightingcslt] behind closed doors [player46] what a nice surprise... we are ready as far as banking is concerned... imo... [shredd] again great artice Shredd-out again
