Foreign liquidity in Kuwait’s market stays low

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The recent downturn in the market, characterized by a storm of declines over the past few days, has kept foreign liquidity just below the 5 billion dinar mark, reports Al-Jarida daily. Despite selective purchases targeting leading stocks and a halt in the decline of others affected by geopolitical pressures, the outlook remains uncertain due to confl icting expectations regarding Kuwait’s economic performance. The World Bank projects a growth target of approximately 2.8 percent, while the International Monetary Fund forecasts a negative performance of about 1.4 percent, leading to confusion among investors.

However, positive growth announcements from banks, despite stiff competition and stalled strategic projects due to bureaucratic delays, have provided some reassurance. Both the National Bank and Boubyan Bank have seen positive growth, setting a positive tone for the sector as a whole. Foreign liquidity closed at 5.157 billion dinars in the last settlement, with fluctuations driven by individual selling rather than institutional activity. The revaluation of certain stocks and adjustments to shareholder rights has also impacted liquidity. However, the market’s limitations on investment diversification, particularly in terms of available instruments, continue to hinder foreign investment.

Derivatives remain a preferred option for many foreign investors, but with limitations on their availability, there is a pressing need for expansion and diversification. Currently, only about 33 companies are targeted for foreign investment, with progress in this area hindered by bureaucratic delays and regulatory issues. Despite interest from major companies, reforms and additional options are needed to attract more foreign investment and drive market growth.