A special economic report shows a significant portion of companies listed on the Kuwait Stock Exchange are trading at prices well above their book value, highlighting growing valuation gaps driven largely by uneven liquidity distribution.
According to a study by Al-Shall Consulting Company, 35 listed firms, representing 25.2 percent of the market, are trading at more than double their book value. In addition, 53 companies, or 38.1 percent, are priced between one percent and 99 percent above their book value.
Based on financial data for 2025 and market prices at the end of March 2026, the report found that 88 companies, around 63.3 percent of all listed firms, are currently trading above book value, reports Al-Rai daily.
In contrast, 51 companies, accounting for 36.7 percent of the market, are trading below book value. Among them, 32 firms are discounted by up to 29 percent, while 14 companies are trading at deeper discounts ranging from 30 percent to 49 percent. Notably, five companies (3.6 percent) are experiencing severe valuation gaps, with their market prices falling more than 50 percent below book value.
The report noted that the number of undervalued companies has risen compared to the end of 2025, when only 40 firms (28.8 percent) were trading below book value. This shift is largely attributed to declining liquidity levels.
Liquidity distribution remains highly concentrated. During the first quarter of 2026, about 79.7 percent of total market liquidity was directed toward the premier market, up from 56.4 percent in 2025. Within that segment, half of the companies captured 81.9 percent of liquidity, leaving just 18.1 percent for the remainder.
Across both the premier and main markets, half of all listed companies attracted approximately 97 percent of total liquidity, while the other half shared a mere 3 percent. This imbalance has inflated stock prices for some smaller firms while suppressing valuations for others.
Overall market liquidity declined sharply by 44.6 percent in the first quarter of 2026 compared to the same period in 2025, despite a strong 79.2 percent increase recorded over the full year of 2025 versus 2024.
Reflecting these trends, the general index of the exchange fell by 5.5 percent by the end of March 2026 compared to year-end 2025 levels, after posting gains of around 21 percent last year. The report linked the decline to reduced liquidity and ongoing geopolitical uncertainties.
It concluded that persistent disparities between market prices and book values continue to affect a large number of listed companies, with liquidity concentration remaining a key driver of these imbalances.
