Foreign investors flood Kuwait Stock Exchange, as local investors pull out
A Fresh Look at Kuwait Stock Exchange: Changing Tides of 2025
The latest trading data from the Kuwait Stock Exchange paints an intriguing picture of shifting investor behavior during the opening quarter of 2025. It appears that Kuwaiti investors have taken a step back, handing over the reins to overseas capital.
Kuwaiti investors shed a total of KD 232.2 million from the market between January and April, with a notable KD 15.05 million exit in April alone. Leading the charge were individual investors, who dipped KD 150.62 million, followed by institutional and corporate investors (-KD 49.8 million), client portfolios (-KD 22.64 million), and investment funds (-KD 9.13 million).
Meanwhile, foreign investors were keen to capitalize on the moment, boosting their holdings by KD 230.14 million in the first four months of the year, with KD 30.5 million added in April. This surge was primarily driven by institutions and companies, whose trading activity jumped by KD 235.66 million, while foreign individual investors saw a decline of KD 8.88 million, and foreign investment funds rose by KD 3.36 million.
Gulf investors displayed a mixed performance, making an overall gain of KD 2.07 million since the start of the year but losing KD 15.44 million in April. Institutional and corporate investors from the Gulf contributed KD 2.05 million, and investment funds rose by KD 1.58 million, while individual trading saw a drop of KD 2.54 million.
Reflecting these changes, the total number of active trading accounts dropped slightly during the first four months of the year. A dip of 1.5% saw the count dwindle from 22,537 in December to 22,198 by the end of April.
- Active Kuwaiti accounts fell by 2.35% (486 accounts), totaling 20,154.
- Active foreign accounts rose by 8.9% (145 accounts) to 1,773.
- Active Gulf accounts increased by 0.75% (27 accounts).
Additionally, the number of inactive accounts increased by 0.73% (2,990 accounts), hitting a total of 412,046.
- Inactive Kuwaiti accounts reached 390,200.
- Inactive Gulf accounts increased to 4,459.
- Inactive foreign accounts rose slightly to 17,353.
Theorizing about the reasons behind this shift, one might consider recent market developments. For instance, while the MSCI Kuwait Index saw a 11.4% surge in Q1 2025, driven by optimism surrounding reforms such as the approved public debt law and the impending mortgage law, an April 22 decline of 0.3% may have signaled short-term volatility. This volatility, coupled with profit-taking or sectoral adjustments, could have contributed to the exodus observed in Kuwaiti investors.
On the other hand, the continued optimism around Kuwait's reform momentum might explain the growing interest from foreign investors. As the stipulations of the debt and mortgage laws are expected to attract foreign capital, we may yet see even greater interest from foreign parties over time.
However, it's essential to clarify that available data does not explicitly support the notion of a large-scale exit by Kuwaiti investors or a corresponding increase in foreign participation in the Kuwait Stock Exchange during early 2025. Foreign interest, while potentially momentous in the long run, may not have materialized acutely by April 2025. In essence, foreign investment appeared to be prospective rather than realized during this period.
- Foreign investors, despite a potential long-term increase in interest, did not show acute realization of their investment in the Kuwait Stock Exchange by April 2025, as claimed by some theories.
- Contrary to speculation, the data does not support the notion of a mass exodus by Kuwaiti investors from the Kuwait Stock Exchange during the beginning of 2025.
- Despite a decline in Kuwaiti investor participation, Kuwait's reform momentum continued to attract foreign investors, with foreign individual investors seeing a slight drop, while institutions and companies saw a significant increase in their trading activity.
- In the first four months of 2025, foreign investors, primarily institutions and companies, surged their holdings in the Kuwait Stock Exchange by KD 230.14 million, capitalizing on the shift in investor behavior observed among Kuwaiti investors.
