ABSTRACT
This chapter discusses the development of the Kuwaiti stock market, in an attempt to trace its relations to the structure of the Kuwaiti economy while focusing on its peculiarities and the factors affecting its operations. Stocks are a form of financial assets used for the financing of the modern economy. The impact of oil on the domestic economy remained minimal, almost confined to the contribution of the oil revenues to the budget and public expenditure. The surge of international and domestic inflation in the mid-1970s pushed individuals to switch from fixed-income securities to other forms of wealth, especially land, thus confirming the trend of price increases. In Kuwait the financial assets market behaves so independently that it appears quite remote from other real markets. In addition to the structural imbalance of the economy, it is important to pin-point also the inadequacy of the institutional set-up in the Kuwait stock market.
