Kuwaiti stocks remain stable amid ongoing trade disruptions

The Kuwait Financial Center (Kuwait FinC) stated in its monthly report on market performance for September 2026 that the Kuwait Stock Exchange maintained its performance during the month, recording a milder decline compared to other regional markets. This occurred against a backdrop of an unfavorable environment for investors globally and regionally, under pressure from the first interest rate hike by the US Federal Reserve in over three years, a sharp rise in global bond yields, and interest rate increases approved by the central bank, coinciding with stalled peace efforts between the United States and Iran and the continued closure of the Strait of Hormuz.

The Kuwait Stock Exchange’s general index fell by 1.3% in September, while the main market index declined by 1.5% and the first market index dropped by 1.3%. By sector, positive performance was limited to the insurance and healthcare sectors, which posted gains of 11% and 4.5%, respectively, during the month.

Meanwhile, Kuwait’s non-oil private sector continued its growth for the second consecutive month in August, as the S&P Global Purchasing Managers’ Index (PMI) rose to 53.6 points, up from 50.8 points in July, marking its highest level since February. This growth was supported by strong expansion in production and new orders.

The local credit market’s performance increased by 0.9% month-on-month and 5.1% year-on-year in August, bolstered by a recovery in lending activity by banks and financial institutions. Credit extended to households continued to grow by 0.7% monthly and 4.7% annually, while credit to companies rose by 0.4% monthly and 6.6% annually. Additionally, deposits held by expatriates increased by 0.7% month-on-month and 8.4% year-on-year.

The Central Bank of Kuwait kept its discount rate at 3.50%, diverging from the trend of most of its Gulf Cooperation Council (GCC) counterparts, benefiting from the flexibility of the dinar’s peg to a currency basket.

On the public finance front, Kuwait issued a law for sovereign sukuk, enabling the listing of Sharia-compliant debt instruments within the framework of government financing. The law is expected to expand access to Sharia-compliant financing and accelerate the development of the debt market.

The Center noted in its report that Gulf markets declined in September, with the S&P GCC Composite Index falling by 3.7%, amid pressure on investor sentiment due to a less supportive interest rate environment and escalating geopolitical tensions.

The first US Federal Reserve rate hike since 2023 prompted most GCC central banks, including those in Saudi Arabia, the United Arab Emirates, Qatar, Oman, and Bahrain, to raise interest rates by 25 basis points, aligning with US monetary policy and increasing borrowing costs.

The Saudi market index fell by 6.2%, influenced by geopolitical tensions, with leading stocks such as Ma’aden and the National Bank of Saudi Arabia dropping by 8.2% and 8.0%, respectively. Conversely, the two UAE markets were supported by strong activity in the non-oil sector. The Dubai Financial Market index rose by 2.1%, led by Emaar Properties and Emirates NBD, which gained 7.2% and 3.1%, respectively. Emirates NBD also renewed its efforts to acquire India’s IDBI Bank.

The Abu Dhabi Securities Market recorded a 0.6% increase, supported by banking stocks, including Commercial Bank of Abu Dhabi and First Abu Dhabi Bank, which posted gains of 10.7% and 0.2%, respectively.

At the same time, the Abu Dhabi Securities Market joined the SWIFT network, enhancing post-trade connectivity and facilitating international investors’ access to the UAE capital market.