KIC: Kuwaiti Stocks Maintained Performance in September

The Kuwait Financial Center (Markaz) revealed in its monthly report on market performance for September 2026 that the Kuwait Stock Exchange maintained its performance during September, recording a milder decline compared to other regional markets. This occurred amid an unfavorable investment climate 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 of Kuwait, coinciding with stalled peace efforts between the United States and Iran and the continued closure of the Strait of Hormuz.

The Kuwait Stock Exchange General Index fell by 1.3 percent during September, while the Main Market Index declined by 1.5 percent, and the First Market Index dropped by 1.3 percent. At the sector level, positive performance was limited to the insurance and healthcare sectors, which recorded gains of 11 percent and 4.5 percent, respectively, during the month.

The share of International Financial Consulting Holding Company led the First Market in terms of performance in September, rising by 36.7 percent following a change in ownership structure that increased Arzan Group’s stake in the company. It was followed by Kuwait Real Estate Company shares, which gained 3.7 percent, benefiting from the continued recovery of the Kuwaiti real estate sector, with property sales rising for the third consecutive month in August.

The non-oil private sector in Kuwait also continued its growth for the second consecutive month in August, as the S&P Global Purchasing Managers’ Index rose to 53.6 points, compared to 50.8 points in July, marking its highest level since February, supported by strong growth in production and new orders.

The local credit market performance rose by 0.9 percent month-on-month and 5.1 percent year-on-year in August, supported by the recovery in lending activity by banks and financial institutions, and the continued growth of credit extended to households by 0.7 percent monthly and 4.7 percent annually, and to companies by 0.4 percent monthly and 6.6 percent annually. Additionally, expatriate deposits increased by 0.7 percent month-on-month and 8.4 percent year-on-year. The Central Bank of Kuwait kept the discount rate at 3.50 percent, 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, allowing Sharia-compliant debt instruments to be included within the framework of government financing. The law is expected to contribute to expanding access to Sharia-compliant financing and accelerating the development of the debt market.

The Center noted in its report that Gulf markets declined during September, with the S&P Composite GCC Index falling by 3.7 percent, amid pressure on investor trends due to a less supportive interest rate environment for markets and escalating geopolitical tensions. The first interest rate hike by the US Federal Reserve since 2023 prompted most GCC central banks, including those in Saudi Arabia, the UAE, 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 percent, weighed down by geopolitical tensions, while leading shares declined, including those of Ma’aden and the National Commercial Bank, which lost 8.2 percent and 8.0 percent, respectively. In contrast, the two UAE markets were supported by strong activity in the non-oil sector. The Dubai Financial Market index rose by 2.1 percent, led by Emaar Properties and Emirates NBD, which gained 7.2 percent and 3.1 percent, respectively.

Emirates NBD renewed its efforts to acquire India’s IDBI Bank. The Abu Dhabi Securities Market index rose by 0.6 percent, supported by banking stocks, including Commercial Bank of Dubai and First Abu Dhabi Bank, which posted gains of 10.7 percent and 0.2 percent, respectively. Meanwhile, the Abu Dhabi Securities Exchange joined the SWIFT network, strengthening post-trade connectivity and facilitating international investors’ access to the UAE capital market.

On the Gulf economic activity front, non-oil sector purchasing managers’ indices (PMIs) in Saudi Arabia and the UAE rose in August, supported by improved demand and project activity. The Saudi index climbed to 53.8 points from 53.1 in July, marking a six-month high. The UAE index also rose to 55.3 points from 52.7 in July, recording its strongest reading since December 2024.