Foreign investor participation witnessing surge at Kuwait Stock Exchange
In the heart of the Gulf region, Kuwait's stock exchange is experiencing a surge in foreign investment, thanks to a series of reforms and developments that are transforming the market. This positive trend, which began in 2025, is having a significant impact on market indicators, heralding a new era of growth and prosperity.
One of the key factors attracting foreign investors is the ongoing market reforms and infrastructure upgrades. As part of its Capital Market Development Program, Kuwait is introducing new financial instruments such as exchange-traded funds (ETFs) and Islamic bonds (sukuk). Additionally, the implementation of a Central Counterparty Clearing (CCP) system and other infrastructure upgrades aims to reduce operational risks and increase liquidity.
Regulatory alignment and transparency are also playing a crucial role. Efforts to align Kuwait's capital markets regulations with international standards are fostering trust among foreign investors, making Kuwait an attractive destination for capital, particularly in a region where other countries are also diversifying their economies.
The strategic location of Kuwait, coupled with its ongoing economic diversification efforts, makes it an attractive destination for foreign capital. The introduction of new financial instruments and the development of more sophisticated market infrastructure are expected to enhance liquidity and attract more foreign investors.
The rising foreign confidence in the Kuwait Stock Exchange (KSE) is reflected in the significant increase in active foreign accounts. This boost in foreign investments reached 442.36 million dinars in the first half of 2025. The number of non-Kuwaiti investors has risen by 17.1 percent compared to the same period last year, bringing the total number of investment portfolio clients to 4,825.
These factors are contributing positively to several key market indicators. The influx of foreign capital typically leads to higher stock prices and increased market activity, benefiting local companies listed on the exchange. By attracting more foreign investment, Kuwait can accelerate its economic diversification and reduce reliance on oil revenues, similar to other GCC countries.
The growing foreign participation has boosted market liquidity through direct investment and institutional activity linked to periodic global index reviews. From January through June 2025, the value of foreign transactions on the Kuwait Stock Exchange reached 12.71 billion dinars, carried out through approximately 2.47 million trades.
Foreign capital tends to flow into shares with strong fundamentals, contributing to more accurate valuations that reflect the operational strength of underlying businesses. Foreign investors are focusing on financial stocks, leading companies listed on the Premier Market, and some operational firms on the Main Market.
The growth in foreign participation has supported fair and efficient price discovery in the Kuwait Stock Exchange. Foreign investors now represent approximately 25 percent of the total client base on the Kuwait Stock Exchange. The Kuwait Stock Exchange has experienced an increase in foreign investor activity, with the Kuwaiti market positioning itself as a more dynamic and globally competitive investment destination with the availability of diverse financial instruments.
The expansion of financial products and services, such as exchange-traded funds (ETFs), bonds, sukuk, and financial derivatives, is expected to further bolster foreign confidence. The Kuwait Stock Exchange has seen increased legislative enhancements, including investor protections and reformed laws and regulations.
Kuwaiti stocks have been included in global indices, such as Morgan Stanley's MSCI, FTSE Russell, and Standard & Poor's, elevating its status as an emerging market. The growth in foreign participation has supported the Kuwait Stock Exchange's status as a more dynamic and globally competitive investment destination, positioning it to attract even more foreign investment in the future.
Foreign investors are attracted to Kuwait's stock exchange due to ongoing market reforms and the introduction of new financial instruments like exchange-traded funds (ETFs) and Islamic bonds (sukuk). This influx of foreign capital, which reached 442.36 million dinars in the first half of 2025, is contributing positively to key market indicators and fostering a more dynamic and globally competitive investment environment in Kuwait.
The diversification of financial products and services, such as ETFs, bonds, sukuk, and financial derivatives, is expected to further bolster foreign confidence in the Kuwait Stock Exchange, potentially attracting even more investment in the future.
