Foreigners’ Holdings in the Kuwaiti Banking Sector

The world’s stock markets are in a state of extreme volatility as concerns about the performance of the global economy have coincided with a substantial rise in sovereign and private debt and the high rise in stock prices after a long time of cheap money abundance. As Boursa Kuwait has become open to foreign indirect investment, we believe it is important that we monitor its behavior regarding its investments therein. Under the troubled situation currently, the follow-up will be repeated at close

periods, perhaps weekly according to our assessment of the performance of world stock markets. We have to point out that all that is published about foreign investment at the stock market comes from Boursa Kuwait website and once a week, and only for the banking sector. We believe it should be available about all listed companies on a daily basis.Available figures on foreign investments in Kuwaiti banks, and contrary to expectations, indicate that these investments rose in their absolute value from the lowest point at KD 1311 million achieved on September 18, 2019 by 8.07% of the capitalization value of the sector to about KD 1485 million or about 8.74% of the capitalization value of the sector as of October 9, 2019. This confirms what we stated earlier that these investments are going in opposite direction to the behavior of local investors so far. The need to publish daily information about them is important because it serves two purposes. The first one is protective as the negative forecasts currently prevailing in the world may result in the withdrawal of those hot funds at an inappropriate time. Knowing the matter when it happens and the local investor’s participation at an early stage might limit it and reduce its harm. The second positive purpose is in case of the stability or even the increase of these investments, knowing that information prevents speculation about the withdrawal of foreigners or mitigates the impact of the rumor climate, which may support the local investor’s confidence, which is still weak.

The world today is competing for a piece of information in terms of the speed of its access and in terms of its significance. Trading information is the easiest and the need for it to guide the decision making is a crucial necessity. We do not see a single reason for publishing it once a week and about only one sector.