Report: Institutions and Companies Sector Accounts for 67.2% of Kuwait Stock Exchange Transactions

Kuwait City, Oct 10 (KUNA) -- A specialized economic report stated that the corporate and institutional sector remains the largest participant in the Kuwait Stock Exchange, having increased its share to 67.2 percent of the total value of shares sold and 66.9 percent of the total value of shares purchased through September 30, compared to 61.3 percent and 62.9 percent, respectively, for the same period in 2025.

The report by Al-Shal Consultancies, released on Saturday, cited figures from the Kuwait Clearing Company regarding trading volumes from the beginning of the year through September 30, 2026. It noted that the corporate and institutional sector sold shares worth 10.678 billion dinars (approximately $32.888 billion) and purchased shares worth 10.627 billion dinars (approximately $32.731 billion), resulting in a net selling position of approximately 51.386 million dinars (approximately $253.268 million).

The report added that the second-largest contributor to market liquidity is the individual investor sector, whose share declined. Individuals accounted for 30.1 percent of the total value of shares purchased (down from 35.3 percent for the same period in 2025) and 29.7 percent of the total value of shares sold (down from 36.9 percent for the same period in 2025).

It indicated that individual investors purchased shares worth 4.784 billion dinars (approximately $14.734 billion) and sold shares worth 4.720 billion dinars (approximately $14.537 billion), resulting in a net buying position of approximately 64.243 million dinars (approximately $197.8 million).

The third-largest contributor to market liquidity is the client accounts (portfolios) sector, which saw its share rise. This sector accounted for 2.6 percent of the total value of shares sold (up from 1.3 percent for the same period in 2025) and 2.6 percent of the total value of shares purchased (up from 1.3 percent for the same period in 2025).

The report added that the client accounts (portfolios) sector sold shares worth 410.757 million dinars (approximately $1.265 billion) and purchased shares worth 410.455 million dinars (approximately $1.264 billion), resulting in a net selling position of approximately 302,000 dinars (approximately $930,160).

The report highlighted that the fourth-largest contributor to market liquidity is the investment funds sector, which accounted for 0.5 percent of the total value of shares sold (same as the same period in 2025) and 0.4 percent of the total value of shares purchased (down from 0.5 percent for the same period in 2025).

It noted that the investment funds sector sold shares worth 75.752 million dinars (approximately $233.316 billion) and purchased shares worth 63.197 million dinars (approximately $194.646 billion), resulting in a net selling position of approximately 12.554 million dinars (approximately $38.666 billion).

The report stated that a characteristic of the Kuwait Stock Exchange is its continued status as a local market, with Kuwaiti investors being the largest participants. They purchased shares worth 13.310 billion dinars (approximately $40.994 billion), accounting for 83.8 percent of the total value of shares purchased (down from 84.7 percent for the same period in 2025).

The report clarified that Kuwaiti investors sold shares worth 12.969 billion dinars (approximately $39.944 billion), accounting for 81.6 percent of the total value of shares sold (down from 87.4 percent for the same period in 2025), resulting in a net buying position of approximately 340.999 million dinars (approximately $1.050 billion).

It pointed out that the share of other investors in the total value of shares sold amounted to approximately 2.674 billion dinars (approximately $8.235 billion), representing 16.8 percent of the total value of shares sold (up from 10.8 percent for the same period in 2025).

The report added that the value of shares purchased by other investors amounted to approximately 2.383 billion dinars (about 7.339 billion US dollars), representing 15 percent of the total (13.7 percent for the same period in 2025). Their net trading activity showed a sell-off of approximately 291.461 million dinars (about 897.699 million US dollars). It noted that the share of investors from Gulf Cooperation Council (GCC) countries in the total value of shares sold reached approximately 1.5 percent (1.9 percent for the same period in 2025), valued at 241.353 million dinars (about 743.367 million US dollars). The report stated that the value of shares purchased by GCC investors amounted to approximately 191.814 million dinars (about 590.787 million US dollars), representing roughly 1.2 percent (1.6 percent for the same period in 2025), resulting in a net sell-off of approximately 49.538 million dinars (about 152.577 million US dollars).

It pointed out that the relative distribution among nationalities had changed compared to the previous period, with Kuwaitis accounting for approximately 82.7 percent, other nationalities for 15.9 percent, and GCC investors for 1.4 percent, compared to 86 percent for Kuwaitis, 12.3 percent for other nationalities, and 1.7 percent for GCC investors in the same period last year. The report affirmed that the Kuwait Stock Exchange remained local, with the largest share belonging to local investors, and that interest from other investors outside the GCC countries still exceeded that of their counterparts within the GCC.

It highlighted that the number of active trading accounts rose by approximately 20.6 percent between the end of December 2025 and the end of September 2026, compared to a 76 percent increase between the end of December 2024 and the end of September 2025. It said that the number of active trading accounts at the end of September 2026 reached approximately 57.472 thousand, representing 12.1 percent of the total accounts, compared to approximately 55.569 thousand at the end of August 2026, which represented 11.7 percent of the total accounts for that month, marking an increase of 3.4 percent.

Regarding the gap between stock prices and their book values, the report stated, "It is assumed that the share prices of listed companies in any stock exchange are directly proportional to liquidity levels," meaning that price levels are expected to rise as stock exchange liquidity increases. The report clarified that stock exchange liquidity decreased by approximately 19.1 percent during the first nine months of 2026 compared to the same period in 2025, while it rose by approximately 79.2 percent for the full year 2025 compared to its level in the full year 2024.

It noted that the general index lost approximately 1.4 percent by the end of September 2026 compared to its level at the end of December 2025, after gaining approximately 21 percent in 2025. The index's movement during the current year followed the same direction as liquidity trends, which is logical given the decline in liquidity and justified by risks associated with geopolitical instability.

The report pointed out that many listed companies suffer from a negative gap, with some experiencing a wide gap between their market share prices and the book values recorded in their audited and supervised financial statements. It said that an examination of the margins between stock prices and book values for the first half of 2026 and the closing prices at the end of last September indicates that 40 companies, or approximately 28.8 percent of the total number of companies, have market share prices exceeding twice their book value. Additionally, approximately 68 other companies, or about 48.9 percent of the total, have market share prices exceeding their book value by percentages ranging between 1 and 99 percent. Thus, 108 companies, or approximately 77.7 percent, have market share prices exceeding their book value.

The report added, “The remaining 22.3 percent of listed companies, or 31 firms, are trading at a discount to their book value. Among them, 21 companies, or approximately 15.1 percent of listed firms, are trading at a discount ranging from 1 to 29 percent, while nine other companies, or about 6.5 percent of listed firms, are trading at a discount ranging from 30 to 49 percent relative to their book value.” It pointed out that one company suffers from what can be considered a wide gap between its book value and market price, with a discount exceeding 50 percent.

The report noted that the number of companies trading below their book value per share was higher at the end of 2025, reaching 40 companies, or approximately 28.8 percent of the total listed companies at that time. This narrowing of the gap may be attributed to some investors favoring cheaper stocks in hopes of profiting from potential price increases under improved geopolitical conditions.

It clarified that the continued significant disparity in stock market liquidity between the two markets, as well as within the companies of each market, may be a contributing factor. Liquidity in the first nine months of 2026 was concentrated 63.9 percent in the first market, increasing its share after it accounted for approximately 56.4 percent of total liquidity for the full year 2025. Within that market, half of its companies captured approximately 75.6 percent of its liquidity, leaving about 24.4 percent for the other half.

The report further indicated that half of the companies in both markets (the First and Main markets) accounted for approximately 91.9 percent of the stock exchange’s total liquidity, while the other half received only 8.1 percent. Consequently, the liquidity surplus of some small companies had a dominant effect on the positive gap between their prices and book values, whereas the liquidity shortage of other companies kept the gap, albeit slightly narrowed in favor of their prices, below their book values. (End) M.K.A. / N.W.F