DUBAI: Kuwait’s stock market boom could run out of steam if the government doesn’t push ahead soon with long-delayed infrastructure projects aimed at diversifying the economy.

Turnover on the Kuwait Stock Exchange has tripled from six months ago as improved economic outlook have spurred hopes that mega-infrastructure projects will finally get off the ground.

The benchmark share index has risen 38 percent this year, driven by local retail investors mainly, with small cap stocks attracting the bulk of fund inflows.

The weighted share index, a better gauge of blue chips, has gained around 11 percent this year.

“It seems like we have hot money coming into the market,” said Fouad Abdulrahman Alhadlaq, deputy general manager at Al Dar Asset Management.

“Positive expectations toward the Kuwaiti economy and the market in particular are the main reasons pushing the index up. Irrespective of company financials, people have a belief, that the coming period will be positive for overall business.”

A more stable political climate has raised hopes that delayed projects such as a 30 billion dinar ($ 108 billion) economic development plan announced in late 2010 may now go ahead.

The plan includes building a new airport terminal, an oil refinery and hospitals, and is aimed at diversifying the economy and attracting foreign investment.

Stock market turnover reached 169 million dinars on May 10, its highest daily level since September 2009, according to stock exchange data.

Market turnover in April, for individual and institutional investors, totaled 2.68 billion dinars ($ 9.36 billion) compared with just 921 million dinars in October.

The ministry of public works signed a 738 million dinar contract in November for the construction of the Sheikh Jaber Al-Sabah Bridge over Kuwait Bay. The government also awarded the contract for a 1,500 megawatt gas-fired power and seawater treatment plant. But there has been little movement on infrastructure projects since.