Foreign Holdings in the Kuwaiti Banking Sector

The banking sector comprising 10 local banks is the largest sector of Boursa Kuwait in terms of capital value. Its weight within the value of all Boursa companies as of August 14th 2019 was more than half, or about 52.5% of the total value. In addition to the high weight, the banking sector has two other advantages; one is its discipline and the professional supervision by the Central Bank of Kuwait. Therefore, it is sound and safe. The second is the high level of its liquidity. It captured what it deserves commensurate with its capital value, or about 52.4% of the Boursa liquidity since the beginning of the year until the end of last Wednesday’s session (14/08/2019).

Due to the above, it is the sector which is the most dominant on the Premier Market companies and the most attractive for listing in the global stock indices. Therefore, it had the highest level of liquidity of foreign indirect investment funds. As of 14th of August 2019, the foreigners’ share in the sector amounted to about 8%, according to the latest data published on the Boursa Kuwait website. Value of those contributions at the closing prices of that day is estimated at about KD 1.489 billion, or about US$ 4.893 billion. These contributions included all the ten local banks, though with large variation in the value and percentage of those holdings. The table below shows those contributions ranked from the highest to the lowest contribution percentage.

On the basis of the available data about foreigners’ ownerships, we have two comments. The first one is that Boursa Kuwait website publishes the data on the last working day of each week only once with the Central Bank of Kuwait as the source. We believe it would be better to publish it on a daily basis even if it covers the position in the previous working day. The second remark is that what is published covers only the foreign ownership in banks and the banking sector is the most important and most sensitive. We do not see any justification in the non-publishing of those ownerships in other companies. Information about other companies is available at the Clearing Company. What is not prohibited by the law about the ownerships in the banking sector is certainly lawful for everything else.