'Shal': Institutions and companies hold 67.2% of tradable shares in the stock exchange

- Individuals hold 30% of liquidity... Brokerage accounts 2.6% and Funds 0.5%

A specialized economic report stated that the institutional and corporate sector remains the largest participant in the Kuwait Stock Exchange, with its share rising to 67.2% of the total value of shares sold and 66.9% of the total value of shares purchased through September 30 of the previous year, compared to 61.3% and 62.9% respectively for the same period in 2025.

The "Al-Shal Consultations" report, released on Saturday, clarified, based on figures from the Kuwait Clearing Company regarding trading volume from the beginning of the year until September 30, 2026, that the institutional and corporate sector sold shares valued at 10.678 billion dinars (approximately 32.888 billion dollars), while purchasing shares valued at 10.627 billion dinars (approximately 32.731 billion dollars), making its net trading activity a net seller of approximately 51.386 million dinars (approximately 253.268 million dollars).

It added that the second largest contributor to market liquidity is the individual sector, whose share declined, accounting for 30.1% of the total value of shares purchased, compared to 35.3% for the same period in 2025, and 29.7% of the total value of shares sold, compared to 36.9% for the same period in the previous year.

The report noted that individual investors purchased shares valued at 4.784 billion dinars (approximately 14.734 billion dollars), while selling shares valued at 4.720 billion dinars (approximately 14.537 billion dollars), resulting in a net buying position of approximately 64.243 million dinars (approximately 197.8 million dollars).

It indicated that the third largest contributor to market liquidity is the brokerage accounts sector, whose share increased, accounting for 2.6% of the total value of shares sold, compared to 1.3% for the same period in 2025, and 2.6% of the total value of shares purchased, compared to 1.3% for the same period in the previous year.

It added that the brokerage accounts sector sold shares valued at 410.757 million dinars (approximately 1.265 billion dollars), while purchasing shares valued at 410.455 million dinars (approximately 1.264 billion dollars), resulting in a net selling position of approximately 302,000 dinars (approximately 930,160 dollars).

The report highlighted that the last contributor to market liquidity is the investment funds sector, which accounted for 0.5% of the total value of shares sold, the same percentage as the corresponding period in 2025, and 0.4% of the total value of shares purchased, compared to 0.5% for the same period in the previous year.

It mentioned that the investment funds sector sold shares valued at 75.752 million dinars (approximately 233.316 million dollars), while purchasing shares valued at 63.197 million dinars (approximately 194.646 million dollars), resulting in a net selling position of approximately 12.554 million dinars (approximately 38.666 million dollars).

The report stated that a characteristic of the Kuwait Stock Exchange is its continued status as a local exchange, with Kuwaiti investors being the largest participants, having purchased shares valued at 13.310 billion dinars (approximately 40.994 billion dollars), thereby accounting for 83.8% of the total value of shares purchased, compared to 84.7% for the same period in 2025.

It clarified that Kuwaiti investors sold shares valued at 12.969 billion dinars (approximately 39.944 billion dollars), accounting for 81.6% of the total value of shares sold, compared to 87.4% for the same period in 2025, bringing their net trading activity to a buying position of approximately 340.999 million dinars (approximately 1.050 billion dollars).

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 dollars), representing 16.8% of the total value of shares sold, compared to 10.8% 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 (around 7.339 billion dollars), representing 15% of the total, compared to 13.7% during the same period last year. Their net trading activity resulted in sales of approximately 291.461 million dinars (around 897.699 million dollars).

It noted that the share of investors from the Gulf Cooperation Council (GCC) countries in the total value of shares sold amounted to approximately 1.5%, compared to 1.9% during the same period in 2025, valued at 241.353 million dinars (around 743.367 million dollars).

The report mentioned that the value of shares purchased by investors from GCC countries reached approximately 191.814 million dinars (around 590.787 million dollars), representing 1.2% of the total, compared to 1.6% during the same period last year. Their net trading activity resulted in sales of approximately 49.538 million dinars (around 152.577 million dollars).

It pointed out that the relative distribution among nationalities changed compared to the previous period, with Kuwaitis accounting for approximately 82.7%, traders of other nationalities 15.9%, and traders from GCC countries 1.4%. This contrasts with the same period last year, when Kuwaitis accounted for approximately 86%, traders of other nationalities 12.3%, and traders from GCC countries 1.7%.

The report emphasized that the Kuwait Stock Exchange remained local, as local investors held the largest share, while interest from other investors outside the GCC countries still exceeded that of their counterparts within the GCC.

It clarified that the number of active trading accounts rose by approximately 20.6% between the end of December 2025 and the end of September 2026, compared to a 76% increase between the end of December 2024 and the end of September 2025.

It stated that the number of active trading accounts at the end of September 2026 reached approximately 57,472 accounts, representing 12.1% of the total accounts, compared to approximately 55,569 accounts at the end of August 2026, representing 11.7% of the total accounts, an increase of 3.4%.

Regarding the gap between stock prices and their book values, the report stated: “The share prices of listed companies in any stock exchange are expected to be directly proportional to the level of liquidity,” meaning that price levels are expected to rise as stock exchange liquidity increases.

It explained that stock exchange liquidity decreased by approximately 19.1% during the first nine months of 2026 compared to the same period in 2025, while it increased by approximately 79.2% during the full year of 2025 compared to its level in the full year of 2024.

It noted that the general index lost approximately 1.4% of its level at the end of December 2025 by the end of September 2026, after gaining approximately 21% during 2025. The index’s movement during the current year followed the same trend as liquidity, which aligns with logic, given the decline in liquidity and risks associated with geopolitical instability.

The report highlighted that many listed companies suffer from a negative gap, while some companies experience a wide gap between their market share prices and the book values stated in their audited financial statements.

It said that, considering the margins of differences between stock prices and book values in the first half of 2026, and the closing prices at the end of last September, it is clear that 40 companies, or approximately 28.8% of the total number of companies, have market share prices exceeding twice their book value. Meanwhile, the share prices of another 68 companies, or approximately 48.9% of the total number of companies, exceed their book value by percentages ranging between 1% and 99%. Thus, the share prices of 108 companies, or approximately 77.7% of the total number of companies, exceed their book value.

The report added: “The remaining 22.3% of listed companies, totaling 31 firms, are trading at a discount to their book value. Among them, 21 companies, or about 15.1% of listed firms, are trading at a discount ranging from 1% to 29%, while nine other companies, or approximately 6.5% of listed firms, are trading at a discount between 30% and 49% relative to their book values.”

It noted that one company exhibits what can be considered a wide gap between its book value and market price, with a discount exceeding 50%.

The report stated that the number of companies trading below their book value peaked at the end of 2025, reaching 40 firms, or about 28.8% of the total listed companies at that time. This gap may narrow somewhat as some investors increasingly favor cheap stocks, hoping to capitalize on potential price increases should geopolitical conditions improve.

It clarified that the persistent liquidity disparity between the two markets and among listed companies within each could be a contributing factor. Of the liquidity in the first nine months of 2026, 63.9% flowed into the First Market, raising its concentration share after it accounted for approximately 56.4% of total liquidity throughout 2025. Even within the First Market, half of its listed companies captured about 75.6% of its liquidity, leaving the other half with only 24.4%.

The report highlighted that half of the companies in both the First and Main Markets accounted for 91.9% of the bourse’s total liquidity, while the other half received just 8.1%. Consequently, the excess liquidity held by some small companies had a pronounced effect on the positive gap between their stock prices and book values, whereas the liquidity shortage among other companies kept the discount intact, albeit slightly narrowed in favor of their stock prices, which remained below book value.