Gulf and Arab Funds outperform Kuwait Stock Exchange, raising concerns about local market trends
Gulf and Arab funds managed by local investment companies have outperformed funds directed towards investing in the Kuwait Stock Exchange. This revelation has sparked questions about why the Kuwait Stock Exchange is not keeping pace with the trends observed in the rest of the Gulf and Arab markets, reported Al-Jarida Daily.
Despite encompassing the best banking sector performance and boasting regional and global companies, the Kuwait Stock Exchange has failed to match the lucrative returns achieved by Gulf and Arab funds. Traditional and Islamic funds managed by Kuwaiti companies have reported significant returns, ranging from 12.29% for the Al Ahli Gulf Fund to 3.8% for the Noor Islamic Gulf Fund.
On the other hand, local Kuwaiti funds have experienced losses, with the highest-loss funds ranging between 2.3% and 10.3%. This recurring scenario indicates a need to address the reality facing the Kuwait Stock Exchange. If left unattended, more liquidity will flow to the Gulf and Arab markets, further exacerbating the discrepancy in returns and hindering local investors’ opportunities to achieve profitable returns and obtain distributions. The market urgently requires a development and modernization workshop that extends beyond mere slogans and titles.
The Kuwait Stock Exchange has been stagnant since its privatization, failing to reflect the private sector’s imprint. Additionally, the market has witnessed an exodus of companies from the listing booth, impeding growth and experiencing a dearth in financial instruments. Despite approvals from supervisory authorities, many approved instruments remain ink on paper, lacking execution.
As the market enters 2024, it has yet to witness any new instrument deals, limiting transactions to direct cash buying and selling. To ensure the market’s performance improves, there is a need to diversify tools and market the stock market in a more professional manner. Addressing the problems and shortcomings plaguing the market is crucial, while reducing the pressure on brokerage companies burdened with high commissions and subscriptions is also imperative.
