Center: Kuwait's private sector continues to grow for the third month

The Kuwait Financial Centre (Markaz) stated in its monthly report on market performance for October 2026 that the Kuwait Stock Exchange declined during the month, mirroring trends in other regional markets. Investor sentiment was affected by escalating security risks in the region, disruptions to maritime shipping traffic around the Strait of Hormuz, and the sharp downward revision by the International Monetary Fund of growth forecasts for Gulf Cooperation Council (GCC) countries.

The non-oil private sector in Kuwait continued its growth for the third consecutive month in September, with the S&P Global Purchasing Managers’ Index (PMI) registering 52.4 points, down from 53.6 points in August, when it reached a six-month high. The local credit market rose by 6.3% year-on-year in September, supported by broad-based lending growth, including a 5.1% annual increase in credit extended to households and a 6.7% annual increase for companies. Deposits by expatriates also grew by 10.8% annually, while inflation remained contained at 2.2% year-on-year in July.

In international debt markets, Kuwait raised $3.25 billion through the issuance of Eurobonds, attracting subscription orders worth $9.1 billion, reflecting strong investor confidence.

GCC equity markets declined in October, with the S&P Composite GCC Index falling by 4.8%. Investor sentiment was impacted by attacks on commercial vessels in the Strait of Hormuz, as October recorded the worst month for such incidents since monitoring began in 2017. Additionally, a wave of attacks on energy infrastructure and airports in Saudi Arabia raised concerns about the potential escalation of tensions in the region.

The Centre noted in its report that the non-oil sector in GCC countries continued to improve in September, despite the ongoing reflection of geopolitical tensions on economic data.

The Centre’s report highlighted that Brent crude oil prices rose by 13.6% in October to $117.64 per barrel, with crude trading above $110 per barrel in the second half of the month, near its highest level in six months.

October recorded the highest number of attacks on commercial vessels in the Strait of Hormuz since monitoring began in 2017, with at least 28 ships targeted, including 11 supertankers. Conversely, gold prices fell by 6.8% during the month to $3,875.02 per ounce, marking a one-year low, as the sharp rise in US Treasury yields increased the opportunity cost of holding gold, a non-yielding asset.

US Treasury yields declined in October after reaching multi-decade highs at the beginning of the month. The yield on 10-year bonds fell by 35 basis points to 4.94%, the 30-year bond yield dropped by 33 basis points to 5.31%, and the 2-year bond yield decreased by 32 basis points to 4.56%. The yield curve steepened further following the Federal Reserve meeting, with a slight increase in long-term bond yields, reflecting ongoing concerns about bond supply, alongside a widening of the fiscal deficit for fiscal year 2025-2026 to approximately 6% of GDP.