Boursa Kuwait surpasses five stock exchanges in GCC states

Gulf financial markets experience mixed performance

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KUWAIT CITY, Jan 28: According to the Al-Shall report, Boursa Kuwait surpassed five out of seven stock exchanges in the Gulf region in the number of listed companies, with the only exception being the Saudi market, reports Al- Jarida daily. As of the end of 2023, the number of companies listed on various Gulf exchanges stands at 232 in Saudi Arabia, 149 in Kuwait, 102 in Abu Dhabi, 95 in Muscat, 71 in Dubai, 51 in Qatar, and 42 in Bahrain. The Saudi market notably leads in terms of the sheer number of listed companies. Liquidity concentration is a prominent aspect in the Gulf stock exchanges, except the Saudi market.

The report highlights the concentration reaching a maximum of 92.5 percent for the 10 most liquid companies on the Bahrain Stock Exchange, followed by 83 percent for the Muscat Stock Exchange, 75.9 percent for the Dubai market, 66.6 percent for the Abu Dhabi market, 62.1 percent for the Qatar Stock Exchange, and 60.7 percent for Kuwait. The Saudi market, in contrast, exhibits a lower concentration, with its share not exceeding 30.2 percent. The report raises concerns about the unhealthy phenomenon of liquidity concentration among the top 10 companies in the Gulf stock exchanges. It emphasizes the need for periodic analysis and review to address potential risks and corrections.

Although the Boursa Kuwait appears to have a slightly lower concentration, when factoring in its superior number of listed companies, the concentration level is higher compared to other Gulf exchanges. This poses a risk of corrections and raises concerns about potential issues arising from exceptionally highly liquid companies. The report also touches upon Kuwait’s historical trend of high popularity in stock exchange listings, resulting in undue premiums on the prices of listed companies. In the absence of these premiums and with the climate crisis changing market dynamics, the report predicts an acceleration in withdrawal rates from listing, potentially reducing the percentage of liquidity concentration.

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