An Economic and Empirical Evaluation of KSE Privatization: Impacts on Boursa Kuwait Equity Trading Behavior and Market Performance

Abstract

Boursa Kuwait has gone through some major structural changes and regulations adjustments designed to boost market liquidity, improve foreign investment, and market efficiency improvement. One of these changes is the privatization of Kuwait stock market which took place on April 2016. This article examines the impact of such a reform on investor behavior, and stock market performance. Through a combination of qualitative and quantitative methodologies, the study empirically models change to trading volume, closing prices and volatility patterns before and after the major reform initiatives were implemented. The study covers the period from April 2016 after the privatization until May 2025 and the period from January 2010 until the privatization date. The study investigates the impact of the privatization on the two market categories according to Boursa Kuwait classifications which are the premium market and the main market. The results indicate that the privatization process had a positive impact on market performance, return and trading behavior. The findings offer valuable insights for regulators, investors, and policymakers, underlining the positive impact of such a major stock market reform on Boursa Kuwait’s financial outcomes, market liquidity, and investor behavior.