"Al-Shal": No noticeable negative impact of the war on the performance of the Kuwait Stock Exchange

The Al-Shal weekly economic report monitored the performance of Kuwait Stock Exchange sectors during the period from before the outbreak of the US-Iran war to the present. It noted that the war does not appear to have had a significant negative impact on the performance of various stock market sectors. Most sector indices recorded positive performance between the last trading day before the US-Iran war, February 24, 2026, and September 15, 2026, although performance varied among them. What remains unknown is the magnitude of the positive performance these sector indices would have achieved had the war not occurred, particularly the banking sector index, which carries the highest weight in contributing to the market capitalization of listed companies.

At the sector level, the report clarified that the best-performing sector was technology, with its index rising by approximately 1,455.6%. However, its contribution to the stock market’s capitalization is marginal, not exceeding 0.3%. The second-best performing sector was insurance, with its index rising by approximately 35.8%. This increase is understandable, as rising risks due to the war inevitably lead to higher insurance premiums. The third-best performing sector was basic materials, with its index rising by approximately 26.4%. This increase is also justified, as supply chain disruptions and demand outpacing supply inevitably drive prices up.

Following the notable performance of the top three sectors, Al-Shal pointed out that eight other sectors recorded positive but moderate to weak gains. The telecommunications sector led these with index gains of approximately 11.3%. The real estate sector index gained approximately 9.9%, the financial services sector gained approximately 7.3%, the healthcare sector gained approximately 5.3%, and the consumer goods sector gained approximately 4.9%. Three other sectors recorded modest gains: the energy sector gained approximately 3.8%, the industrial sector gained approximately 2.7%. Notably, the banking sector’s modest gain of approximately 1.2% warrants further verification and analysis to determine whether its direct cause is the heightened geopolitical events, the local economic environment affected by the war, or other factors.

Conversely, losses were limited to only two sectors. The consumer services sector index lost approximately 1.2%, while the utilities sector lost approximately 4.9%. These losses remain within reasonable bounds. At present, we do not have a definitive explanation for the varying performance of stock market sector indices. However, it can be said that the performance of these indices has been better than expected, considering the scale of the war’s impact on public finances and the economy.