Sectors’ Liquidity (January – September 2019)

What applies to the liquidity deviation of boursa Kuwaiti markets in general also applies to its sectors’ liquidity deviation. There are five sectors whose liquidity accuracy can be judged, while there are seven sectors whose liquidity, i.e. value of their trading, is very low. The five liquid sectors reaped 96.77% of the boursa liquidity in the first nine months of the current year and increased their liquidity from their liquidity share in the first nine months of 2018 to about 92.85%, while the share of non-liquid sectors decreased from 7.15% for the same period in 2018 to about 3.23% this year.The banking sector took the lead among active sectors in terms of liquidity volume and its growth rate between the first three quarters of 2018 and 2019. It collected 63.19% of boursa liquidity for the past part of this year compared with 51.99% for the same period of 2018. In terms of its trading value, its liquidity increased from KD 1.538 billion until the end of September 2018 to KD 3.833 billion  until the end of September 2019 -more than doubled- or increased by 149.2%. The increase in its liquidity contributed to the rise in its market capitalization value between the two periods by about 21.7% for this sector to achieve the highest gains of Boursa Kuwait. Its share of boursa liquidity exceeded its contribution to its value of about 58.97%. 

The second-largest sector in liquidity which shares the banking sector in its high rise in its absolute liquidity and its contribution to liquidity exceeds its contribution to the market capitalization value is the telecom sector. It gained about 12.89% of the boursa liquidity for the past part of this year (10.08% for the same period of 2018), and its absolute liquidity between the two periods increased from KD 298.4 million to KD 782 million with growth in absolute liquidity by 162.1%. 

The other three liquid sectors, all of which achieved an absolute increase in their liquidity, all lost in their relative contribution to them. Their contribution to the market capitalization value of bourse was higher than their contribution to their share from liquidity. Quite to the contrary, five other sectors whose contribution to the boursa liquidity since the beginning of the year did not exceed 0.88%, i.e. less than 1%; the highest was the Consumer Goods Sector scored KD 21.3 million liquidity. The lowest was the Technology Sector which scored only KD 65,000. The contribution of the five sectors to the value of the market capitalization value scored about 3.9%. Two other sectors, namely, the Basic Materials Sector and the Consumer Services Sector, share the five non-liquid sectors by 1.65% and 0.70% respectively of the total boursa liquidity since the beginning of this year; we believe that filtering that sector and   reducing   the   number of its non-liquid companies is a deserved goal.