Kuwait Bourse Activates Fixed Income Market with 200 Million Dinars in KFH Sukuk Listing

Kuwait Bourse activated the fixed-income instruments market by listing Kuwait Finance House’s sukuk worth 200 million dinars, under the short name “KFH Tier 1 Tranche 3,” in the first listing on the “Bonds and Sukuk” fixed-income platform.

This achievement introduces a new asset class to the exchange and reinforces its role as an operator and developer of the Kuwaiti capital market, by providing a market infrastructure that enables institutions to list their financing and capital instruments and connects them with investors seeking opportunities.

The listing also represents a practical step in Kuwait Bourse’s strategy to transform into a multi-asset market, where equities and fixed-income instruments work together to serve the needs of the national economy. This will help the exchange enhance institutions’ ability to diversify funding sources and provide broader options to support their investment and expansion plans. It also offers investors instruments with varying rights, distributions, and structures, thereby strengthening their ability to diversify investment portfolios and choose tools that align with their investment strategies.

The “KFH” sukuk fall under the additional Tier 1 capital tranche. They are perpetual profit-sharing sukuk compliant with Islamic Sharia principles, with an initial profit distribution rate of 5.5% annually, distributed semi-annually according to the issuance terms.

The issuance was completed in May 2026, and its listing adds a presence in a regulated local market that enables trading in sukuk and monitoring of related information and disclosures, in accordance with approved regulations and the instrument’s characteristics.

The listing holds strategic importance in enhancing the attractiveness of the local market for Kuwaiti institutions when planning to issue debt instruments, and in strengthening the presence of related financial services within Kuwait. The existence of a bonds and sukuk market supports and develops activities associated with their issuance, such as legal and Sharia advisory services, credit analysis, and asset management. This allows for the utilization of national expertise and specialized skills, while retaining a larger share of the added value from these activities within the local market.

On this occasion, Bader Al-Kharafi, Chairman of the Board of Directors of Kuwait Bourse, said: “With the listing of KFH sukuk, the Bourse activates a new asset class in the Kuwaiti capital market and consolidates its role in leading the transition to a multi-asset market. This achievement establishes a new pathway that links capital with investment opportunities and enables institutions to finance their ambitions and enhance their competitiveness. Consequently, the capital market becomes an active partner in the growth of the national economy, and the strength and capabilities of its institutions are transformed into investments that support production and create sustainable value for Kuwait.”

Al-Kharafi added: “Kuwait Bourse invests in developing the capital market to enhance the economy’s growth capacity and enable institutions to access financing tools that support their projects and investment plans. Our strategy is based on building a market that keeps pace with business needs and stimulates the deployment of capital into productive investments, thereby enhancing the private sector’s contribution to economic diversification. With the activation of the fixed-income platform, we invite institutions to leverage this tool to diversify their funding sources, and we look forward to this listing marking the beginning of a continuous path of high-quality issuances that deepen the market and support economic development.”

Al-Kharafi continued: “On my own behalf and on behalf of the Board of Directors, I extend my sincere gratitude and appreciation to the Chairman of the Board of Directors of Bayan Al-Kharafi Group, as well as to the Board members and the executive management, for their confidence in the Kuwait Stock Exchange and their decision to list the sukuk. We are proud of the initiative of a leading national institution of Bayan Al-Kharafi’s stature to participate in the launch of this market, which reflects confidence in its capabilities and a commitment to its development. This partnership will provide significant momentum to the launch and serve as a model of integration between the banking sector and the capital market in the service of economic development.”

Al-Kharafi concluded: “We value the role of the Capital Markets Authority, the Kuwait Clearing Company, and all our partners in fulfilling the requirements of this stage. The integration of efforts has translated development plans into reality that serves market participants. We will continue to work, engage in constructive coordination, and cooperate with relevant parties, while strengthening governance, transparency, and institutional discipline to enhance the confidence of local and international investors. We aspire to elevate Kuwait’s status as a destination for listing and investment, and to strengthen the contribution of the capital market to economic diversification and to enabling institutions to lead long-term growth.”

For his part, Hamad Al-Marzouq, Chairman of the Board of Directors of Bayan Al-Kharafi Group, said: “The listing and trading of sukuk at the Kuwait Stock Exchange represent a historic achievement and an unprecedented development in the Kuwaiti capital market. We are proud that Bayan Al-Kharafi’s sukuk are the first fixed-income instruments listed on the Kuwait Stock Exchange, a step that confirms our confidence in the domestic market and our commitment to contributing to its development. The listing extends the Group’s expertise and leadership in issuing sukuk, and its dedication to developing Sharia-compliant capital instruments that meet financing and investment needs. We view the development of a domestic sukuk market as an opportunity to enhance integration between the banking sector and the capital market, enable institutions to diversify their funding sources, and consolidate Kuwait’s position in Islamic finance.”

Al-Marzouq added: “Kuwait has a solid base of institutions and specialized expertise in Islamic finance, which has contributed to strengthening the presence of Kuwaiti financial institutions in regional and global sukuk markets. Listing these instruments locally allows leveraging this expertise to build a market that responds to the actual needs of financing and investment. We look forward to our participation encouraging institutions to consider using sukuk within their plans, enhancing integration between the banking sector and the capital market, and supporting the competitiveness of the Kuwaiti financial sector.”

Al-Marzouq concluded: “We appreciate the cooperation of the Kuwait Stock Exchange, the Capital Markets Authority, the Kuwait Clearing Company, and relevant parties in completing the listing requirements. We reaffirm the Group’s commitment to continuing to contribute to initiatives that develop the Islamic finance industry and support Kuwait’s status and expertise in this field.”

He also added: “The listing of sukuk adds a new dimension to Bayan Al-Kharafi’s relationship with the local capital market, which has been ongoing since the listing of its shares in 1984. It also places the Group’s expertise in Islamic finance within a local experience that contributes to developing the use of sukuk and linking it to the needs of institutions and investors.”

The activation of the Bonds and Sukuk platform is based on the developments witnessed in the listing, trading, and disclosure frameworks for these instruments during 2026. These developments included amendments approved by the Capital Markets Authority in April regarding provisions related to listing and the ongoing obligations of issuers and obligors, alongside the adoption of relevant amendments to the Exchange’s rules. These steps provided a foundation for regulating the handling of a category of securities with characteristics that differ from those of equities.

In this context, Mohammed Al-Asimi, CEO of the Kuwait Stock Exchange, said: “The listing of Bayt Al-Malook’s sukuk marks the actual commencement of using the bonds and sukuk platform, and serves as a culmination of the work we have completed with stakeholders in the capital market ecosystem to accommodate fixed-income instruments. We focused on preparing the systems and listing and trading procedures, taking into account the nature of these instruments, by allocating an independent trading board for them, while coordinating with the Kuwait Clearing Company regarding clearing and settlement services, and with brokers to facilitate transactions through approved channels. Our responsibility lies in operating the platform efficiently, maintaining the integrity of its services, and ensuring that its procedures are clear to participants.”

Al-Asimi added: “Data on listed instruments and related disclosures are of fundamental importance in operating this market, given the differences in distribution dates, redemption terms, and other characteristics of each issuance. We are working to make information available through approved channels and to support relevant authorities in understanding and complying with continuous disclosure requirements. We also monitor the operational aspects of trading on the platform, and engage with brokers and market participants to address their needs, thereby supporting service continuity and enhancing user experience, and enabling investors to track their instruments based on clear information.”

He continued: “In the coming phase, we will work to facilitate the readiness of entities wishing to list, through direct communication with issuers, their advisors, and issue managers, clarifying relevant documents, requirements, and procedures. This will allow us to address technical inquiries before applications are submitted, and to organize the transition of the issuance to the listing phase and its subsequent obligations. We also hope to benefit from participants’ feedback to develop services and improve procedural efficiency, so that the platform meets the needs of future issuances and provides institutions with a practical pathway to leverage the fixed-income instrument market.”

Commenting on this, Khaled Al-Shamlan, CEO of Bayt Al-Malook Group, said: “The listing of the first sukuk issuance by the Kuwait Stock Exchange underscores Bayt Al-Malook’s pioneering role in enhancing and diversifying investment and financing instruments compliant with Islamic Sharia principles. This listing is an extension of the Group’s strategy aimed at strengthening capital management efficiency, aligning its resources with growth and expansion plans, while maintaining financial robustness and adhering to regulatory requirements, thereby supporting the bank’s ability to finance developmental projects and contribute to driving economic activity in Kuwait.”

He added: “The listing embodies the complementary roles of Bayt Al-Malook as an issuer and arranger of Islamic capital market instruments, and the Kuwait Stock Exchange as an organized platform for trading, disclosure, and market development, thereby enhancing the attractiveness of the local market and providing broader opportunities for investors and institutions. This achievement confirms Bayt Al-Malook’s continued leadership in launching innovative initiatives that expand the base of innovative Islamic investment products, as well as its support for the growth of the Kuwaiti capital market and the enhancement of Kuwait’s position as a regional financial hub.”

He concluded: “We appreciate the efforts of the entities involved in arranging and listing the issuance, and look forward to continuing cooperation with the Kuwait Stock Exchange and the market ecosystem in serving sukuk holders. The success of this experience highlights the importance of coordination between financial institutions and market service providers, and the utilization of local expertise in executing issuances that respond to financing and investment needs and support sustainable economic development.”

With this listing, the Kuwait Stock Exchange opens a pathway for companies and financial institutions that are exploring diversification of their funding sources or seeking instruments tailored to their capital needs. The exchange urges interested parties to liaise with it, as well as with listing advisors and issuance managers, to learn about the requirements of the Bonds and Sukuk Platform and to assess the opportunities for leveraging it within well-planned strategies. Preparation for this pathway involves selecting the instrument’s structure, identifying the target investor base, and organizing disclosure and communication responsibilities associated with the listing.

The presence of a local venue for listing fixed-income instruments also offers institutions an additional option to consider alongside decisions on issuance, financing timing, and currency. It enables treasury, finance, and advisory teams to operate within an ecosystem that brings together expertise in structuring, intermediation, and market services, thereby facilitating organized preparation and ongoing monitoring of issuances. The benefits of these options depend on the suitability of the instrument to the institution’s objectives, its capacity to meet its obligations, and the quality of information it provides to investors.

The Kuwait Stock Exchange continues to work on transforming this launch into a sustainable activity that attracts issuances from a variety of institutions and sectors, and strengthens the role of the capital market in financing the economy.

The listing of Al-Kotob Financial’s sukuk represents a foundational step in this direction, combining the initiative of a leading banking institution with a market infrastructure capable of serving new needs. Through expanding participation, developing services, and building trust, the exchange is advancing efforts to enable capital to access growth opportunities, enhance the private sector’s capacity for investment and production, and support a more diversified and competitive Kuwaiti economy.

The Bonds and Sukuk Platform allows investors to trade listed bonds and sukuk through licensed brokers, in accordance with applicable trading and disclosure rules, with prices determined by supply and demand. The significance of this framework becomes particularly evident after the issuance is completed, as it provides a secondary market through which transactions and information related to the instrument can be monitored.