Amr Hussein Al-Alfi

Although the Kuwait Stock Exchange is the oldest stock exchange in the Gulf, it took time to transform from a state of weakness to strength, and from a government legacy to one of the stock exchanges that investors in the region are currently following.

In this series of reports, we review market developments and what is new about it, and we begin in the first part with a lengthy historical overview of the market.

Markets and Indices

The Kuwait Stock Exchange has four market indices :

1. The first market index includes companies with large market capitalization and high liquidity.
2. The Main Market Index ( BKP ) covers shares of companies with average market capitalization or low liquidity.
3. The Kuwait All Share Index (General Market Index) is the broadest measure, tracking every listed company.
4. BK Main 50 Index   It is the latest benchmark index, tracking the 50 most liquid companies in the market.

What is being traded?

• Company shares.
• Real Estate Investment Trusts ( REITs ) .

However, the size of the listed funds market in Kuwait is still very small compared to markets such as Saudi Arabia and the UAE, as it has been customary in Kuwait for most collective investment funds to be distributed off-exchange through banks and investment companies, rather than being traded directly on the stock exchange, and there are no ETFs on the stock exchange.

Market start

Historically, Kuwait established the first official stock exchange in the Arabian Peninsula, following the oil boom of the early 1960s. At that time, a small number of Kuwaiti traders began trading stocks among themselves.

But the government gave this activity a legal form in October 1962, when it issued a law to regulate securities transactions and laid the foundation for the stock exchange in its current form.

Key Stations

• 1962 – Legal Basis: Kuwait issued the first law regulating stock transactions - the first formal securities framework in the Gulf region.
• 1977 – The first speculative crash: A rapid, leveraged rise in poorly regulated stock trading, resulting from liquidity generated by rising oil prices, speculation by individuals, and weak market oversight, led to a market crash and pushed speculators into informal markets. This prompted stricter oversight, but speculator activity moved to a parallel market (the Al-Manakh market) instead of being eliminated.
• 1982 – The Climate Crash: The climate market, an informal and unregulated exchange located in an air-conditioned garage, attracted speculators, leading to massive trading volumes. Asset prices became detached from fundamentals, and paper wealth ballooned, making the climate market, according to reports, the third-largest stock exchange in the world by nominal market capitalization, after the United States and Japan. Leveraged trading using post-dated checks with expiration dates months from the date of execution exposed $94 billion in unsecured liabilities, triggering a technical default across a significant portion of the banking system.
• 1983 – Kuwait Stock Exchange officially established: In August 1983, an Amiri decree announced the establishment of the Kuwait Stock Exchange as an independent institution under the supervision of an executive committee.
• 1986 – Activation of the Kuwait Clearing Company: KCC was appointed as the clearing and settlement agent, giving the stock exchange its first modern post-trade infrastructure.
• 2009 – Nasdaq Partnership: The Kuwait Stock Exchange announced a technology partnership with Nasdaq, signaling its intention to upgrade its trading systems. At that time, the market capitalization was US$122.3 billion, ranking second in the Gulf region after Saudi Arabia.
• 2010 – Establishment of the Capital Markets Authority ( CMA ): The Capital Markets Authority was established to provide independent and internationally compliant regulation - separating oversight from government ministries for the first time.
• 2016 – Kuwait Stock Exchange replaces Kuwait Stock Exchange: A private company, Kuwait Stock Exchange (established in 2014), officially takes over trading operations from the government-owned Kuwait Stock Exchange.
• 2019-2020 – Full Privatization and Upgrade to FTSE Index: A 44% stake in the Kuwait Stock Exchange was sold to a consortium of companies in 2019, followed by an initial public offering (IPO) of 50% to Kuwaiti citizens in 2020. The IPO was oversubscribed 8.5 times, making the Kuwait Stock Exchange the first privately owned stock exchange in the Arab world. FTSE Russell upgraded Kuwait to its Emerging Markets Index.
• 2020 – Inclusion in MSCI Emerging Markets Index and Self-Listing: Kuwait joined the MSCI Emerging Markets Index. The Kuwait Stock Exchange also listed its shares on the exchange in September 2020, a rare instance of self-listing.
• 2025-2026 – Bonds and Sukuk Platform: Following the issuance of the Kuwaiti Public Debt Law of 2025 and Capital Markets Authority Resolution No. 38 in April 2026, Boursa Kuwait officially established the first trading platform dedicated to bonds and sukuk, including the regulatory and technical infrastructure for listed fixed-income securities.
• December 2025: The Kuwait Stock Exchange's market capitalization reached KWD 53.2 billion, with 140 listed companies (34 on the Premier Market and 106 on the Main Market). The All Share Index rose by 21% in 2025, with an average daily trading value of KWD 107.6 million. Approximately two-thirds (64%) of the exchange's trading value came from institutions.

(Prepared by: Amr Hussein Al-Alfi, Edited by: Yasmin Saleh, Reviewed before publication by: Shaimaa Hefzy)

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