The continued rise in pledging activity throughout 2025 points to several key trends:
- Higher liquidity needs among companies and investors, prompting them to use investment portfolios as collateral.
- Sustained momentum in bank lending secured by securities, reinforcing its role as a major financing tool in the local market.
- Evidence of financial pressures in certain sectors, or alternatively, expansion in investment projects requiring additional financing.
The value of pledged shares on the Kuwait Stock Exchange recorded a significant surge in 2025, rising by 21.4 percent — an increase of 467.12 million dinars — to reach 2.65 billion dinars at the end of November, compared with 2.183 billion dinars at the end of December 2024.
Stock exchange data also shows that the total number of pledged shares climbed by 7.37 percent, or about 427.3 million shares, during the first 11 months of the year, reaching 5.796 billion shares, up from 5.369 billion in the same period, reports Al-Rai daily.
In contrast, the number of banks and companies with pledged shares declined from 145 to 142, a drop of 2 percent, between December and November.
Pledged shares function like any other collateral used to secure debt. They are deposited with the clearinghouse based on their market value at the time the pledge is established, and the pledge is lifted once the debt is repaid. If the borrower defaults, the creditor has the right to sell the pledged shares to settle outstanding obligations.
Banking stocks topped all sectors in the value of pledged shares, with 1.699 billion dinars covering approximately 2.969 billion shares.
The list was followed by:
- Real Estate: 430.16 million dinars, 1.316 billion shares
- Investment: 116.66 million dinars, 451.19 million shares
- Consumer Services: 100.96 million dinars, 71.93 million shares
- Utilities: 68.6 million dinars, 440.29 million shares
- Industry: 49.42 million dinars, 84.28 million shares
- Insurance: 47.52 million dinars, 187.5 million shares
- Telecommunications: 44.37 million dinars, 80.24 million shares
- Basic Materials: 39.21 million dinars, 62.96 million shares
- Healthcare: 28.87 million dinars, 40.86 million shares
- Consumer Goods: 18.12 million dinars, 38.55 million shares
- Energy: 6.66 million dinars, 5.3 million shares
Pledged shares serve as a safety net for portfolios and investment funds with large, concentrated positions, shielding them from the risk of sudden liquidation.
The increase in pledged-share value during the first 11 months — up 21.1 percent, reflecting gains of 9.187 billion dinars — was driven primarily by the rise in the market value of listed companies.
Market capitalization reached 52.763 billion dinars at the end of November, compared with 43.576 billion dinars the previous December.
As the year draws to a close, pledged shares are expected to see heightened activity. Portfolio managers typically focus on year-end sessions, which play a critical role in determining the market value of strategic positions, evaluating fund performance, meeting regulatory requirements, and making key decisions on repositioning or seizing new investment opportunities.
