Challenges Ahead for Kuwait’s Investment Sector: Fraudulent Activities on the Rise

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KUWAIT CITY, May 5: The investment sector in Kuwait has faced significant challenges in recent years, leading to companies canceling securities and investment activities, withdrawing from the market, or transitioning into holding companies. This trend has raised concerns and highlighted the need for a comprehensive study and rebuilding of the market, reports Al-Jarida daily. One major issue is the imbalance in institutional financial forces within the market. Many investment companies have opted to cancel securities and investment activities due to the burdens and obligations they face, coupled with limited growth opportunities in the market.

This trend has had a significant impact on market indicators, particularly in the face of foreign sales on Agility shares, representing a substantial portion of shareholders’ equity. Furthermore, the lack of diversity in investment options and the inability of the market to absorb liquidity have exacerbated the situation. While the market previously relied on individuals, it has shifted towards institutionalism, with the dominance of funds and investment companies. However, this shift has not been accompanied by sufficient diversity in investment instruments or the ability to absorb large sales. The current vacuum in the market has created opportunities for fraudulent activities, with some individuals falling victim to scams promising high returns. Safe and reliable investment alternatives are needed to mitigate this risk and attract investors back to the market. Foreign investment in Kuwaiti markets has also seen fluctuations, despite strong foreign purchases in other GCC countries like the UAE. This highlights the need for qualitative development in available investment options to attract both foreign and domestic investors. Moving forward, there is a need to examine the root causes of the market’s decline and lethargy. Kuwait has taken institutional steps to transform into a financial center, with organized legislative frameworks in place. However, more concerted efforts and cooperation are needed to revitalize the financial sector, promote activity, and restore investor confidence. This may involve exploring new investment opportunities, revisiting regulatory frameworks, and fostering collaboration between key stakeholders in the market.

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