The London Stock Exchange has welcomed the first Exchange Traded Fund (ETF) to offer access to Kuwait.

The Lyxor ETF Kuwait (FTSE Coast Kuwait ETF) will trade on the Main Market and is the first ETF on the Exchange to focus exclusively on the Middle East, reflecting international investors’ growing interest in the region.

The FTSE Coast Kuwait 40 Index is designed to represent the performance of the Kuwait Stock Exchange in real time. Companies listed on the Kuwait Stock Exchange are ranked by free-float adjusted market capitalisation and liquidity with the top 40 ranked companies entering as constituents of the index.

Daniel Draper, global head of Lyxor ETF, says, ‘We are seeing a growing interest for investment opportunities in the Gulf region. We chose to base this ETF on the FTSE Coast Kuwait 40 index because the index achieves diversification by reducing single stock risk with a broad-based exposure and by avoiding volatile performance of a single market or sector.’

The launch of this new fund takes the total number of ETFs on the London Stock Exchange to 147, covering equity and bond indices from around the world.

The total value traded in ETFs on the London Stock Exchange during the first half of 2008 was £13.6 billion, up 46 per cent on the same period last year.

Pietro Poletto, head of ETF and ETC markets at London Stock Exchange Group, says, ‘This launch is great news for investors as it provides them with the opportunity to access Kuwait’s fast growing banking, telecom and UT sectors while benefiting from the low-cost, instant diversification offered by ETFs.’