The Kuwait Stock Exchange, which has been hitting record highs, is enjoying unprecedented levels of interest from western institutional investors and rich individuals as the impact of a new tax law takes effect.

In spite of a long political wrangle between parliament and government, which on Monday led to the entire Kuwaiti cabinet submitting its resignation, the country is emerging as another attractive Middle Eastern market play for investors seeking access to the oil-fuelled boom in the Gulf and insulation from the intensifying turmoil in the US and Europe.