Stock Exchange Experiences Increased Trading and Liquidity During June 2025, Yet Persisting Discrepancies Remain
The Kuwait Stock Exchange (KSE) demonstrated strong performance in June 2025, with its All Share Index rising by 4.2%, contributing to a year-to-date gain of 14.8%. This rally was primarily fueled by the easing of geopolitical tensions in the Middle East and improving investor sentiment, factors that also boosted the broader GCC markets.
Key sectors driving gains included consumer staples (+9.1%), real estate (+7.7%), and banks (+6.2%), with notable share price increases in Kuwait International Bank (+15.9%) and Burgan Bank (+8.7%).
However, the KSE's performance was not without challenges. Liquidity concentration was observed among a small number of companies, a trend influenced by investor preference for blue-chip and high-performing stocks, insider and institutional buying, the market structure, and ongoing corporate events.
This results in liquidity being concentrated in a few large, well-known companies, impacting the overall capital markets by potentially leading to volatility and poor price discovery for less traded companies, limited market depth, risk of price manipulation, capital allocation issues, and growth implications for smaller companies with low liquidity.
In the first half of 2025, liquidity totaled KD 12.627 billion, with an average daily value of KD 108.9 million. The Premier Market (33 companies) attracted 72% of liquidity, with Kuwait Finance House (KFH) and Warba Bank leading at 19.9% and 12.6%, respectively.
The report concludes that the market's concentration of liquidity among a small number of companies remains a structural challenge. While the positive market environment in June 2025 supported a strong rally, it also poses risks of market segmentation and challenges for broader capital market development in Kuwait.
[1] Kuwait Times, "KSE Rises 4.2% in June 2025", June 30, 2025. [2] Al-Rai, "Liquidity Concentration in Kuwait Stock Exchange", July 5, 2025. [3] Arab Times, "KSE Performance Analysis for June 2025", July 8, 2025. [4] Kuwait Finance House, "KFH Leads in Liquidity in H1 2025", July 10, 2025.
All these factors, including the strong performance of certain key sectors like consumer staples, real estate, and banks, and the notable increases in share prices of Kuwait International Bank and Burgan Bank, have contributed to the rising KSE, signifying the health of the Kuwaiti business and investing landscape. However, the report highlighted a structural challenge: the concentration of liquidity among a few large, well-known companies in the KSE, which could potentially lead to volatility and poor price discovery, limiting market depth, and risk of price manipulation, capital allocation issues, and growth implications for smaller companies with low liquidity, making broader capital market development in Kuwait a complex endeavor.
