Strategy Note /

Kuwait’s crown passes to 83-year-old successor amid fiscal challenges

  • Immediate succession is smooth but appointment of next Crown Prince requires...

  • ...Balancing rival branches of the royal family and obtaining approval from obstructionist Parliament

  • Ahead are high fiscal deficits, scheduled election and end of EM index upgrade inflows

Kuwait’s crown passes to 83-year-old successor amid fiscal challenges
Hasnain Malik
Hasnain Malik

Strategy & Head of Equity Research

Tellimer Research
29 September 2020
Published byTellimer Research

The death of the Emir means that: the crown now passes to Crown Prince Nawaf Al-Ahmad Al-Jaber Al-Sabah (aged 83); the royal family will have to balance the interests of its two branches (Al-Ahmad and Al-Salem) to settle on a new Crown Prince; and the traditionally obstructionist, populist Parliament will have to approve that appointment.

At a time of high fiscal deficits, the absence of a debt law, an upcoming scheduled election and the end of inflows related to the MSCI EM index upgrade imply a difficult time ahead for the equity market.

We remain cautious on Kuwait and prefer Qatar (with its low fiscal break-even oil price) in the GCC, and cheaper Kazakhstan among the global oil exporters.

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