Kuwait Investment Company: Negative Performance for Gulf Markets in October

A report by Kuwait Investment Company stated that amid most markets facing selling pressure due to escalating regional geopolitical risks, ongoing tensions related to the war in the region, concerns about navigation and energy supplies through the Strait of Hormuz, alongside rising oil prices and growing expectations that interest rates will remain at elevated levels for longer due to global inflationary pressures, Gulf stock markets posted negative performance in October 2026. This was marked by a broad decline in major indices, although the severity of losses varied across markets.

The Abu Dhabi Securities Market led Gulf markets with the steepest decline in October, with its general market index falling by 6%. It was followed by the Saudi Tadawul index, which recorded a monthly loss of 4.97% due to escalating military tensions with Yemen. Meanwhile, the Qatar Stock Exchange recorded the smallest losses for the month at 1%. The Kuwait Stock Exchange’s general market index also declined by approximately 3.71%, and the Dubai Financial Market index fell by 3.18%. The Kuwait Stock Exchange’s First Market index dropped by about 3%. Consequently, the S&P GCC Index declined by approximately 4.78% in October 2026.

Monthly liquidity in Gulf stock markets also decreased in most markets during October 2026. Trading values fell by approximately 39.5% at the Kuwait Stock Exchange, 24.5% at the Dubai Financial Market, and 17.1% at the Abu Dhabi Securities Market. In contrast, trading values rose in the Saudi stock market, as well as in the Qatar and Muscat stock exchanges, by approximately 6%, 3%, and 39%, respectively. The Saudi stock market accounted for 54% of total Gulf exchange liquidity, followed by the Abu Dhabi Securities Market at approximately 14%, the Kuwait Stock Exchange at 12%, and the Dubai Financial Market at 8%.

Despite these challenges, Gulf markets demonstrated significant resilience in the face of geopolitical risks, supported by the strength of the financial sector, sustained high levels of government spending, and improved net profits for many leading companies. Liquidity flowed into the markets despite declining from 2025 levels, driven by foreign investment in Gulf exchanges, geopolitical tensions, and uncertainty.

In the first 10 months of the year, the Muscat Stock Exchange led Gulf stock markets by a wide margin in terms of returns, posting gains of 25%, supported by strong corporate financial results and rising investor confidence in market reforms. Meanwhile, other Gulf stock markets ended the period with average losses. The Qatar Stock Exchange faced significant pressure due to declining gas supplies, heightened geopolitical risks, and a 12% drop in corporate net profits, recording the largest losses among Gulf markets at 15%. It was followed by the Bahrain Bourse with an 11.4% loss, Tadawul at 5.4%, the Abu Dhabi Securities Market at 5.3%, the Kuwait Stock Exchange at 5.1%, and the Dubai Financial Market at 4.6%. As a result of these losses, the S&P Gulf Stock Markets Index recorded a loss of 2.8% in the first 10 months of the year.

The Kuwait Stock Exchange saw a decline in circulating liquidity levels during the first 10 months of 2026, amid profit-taking, investor caution regarding geopolitical developments, and rising investment risk levels. Total trading value reached approximately 15.6 billion Kuwaiti Dinars, a decrease of 24% compared to the same period in 2025.

On a sectoral level, the banking sector accounted for 27.7% of total market liquidity, equivalent to approximately 4.42 billion Kuwaiti Dinars (KWD). The majority of this was concentrated in shares of Kuwait Finance House, National Bank of Kuwait, and Gulf Bank, with trading values reaching approximately 1.83 billion KWD, 1.2 billion KWD, and 424 million KWD, respectively. In contrast, financial services companies and real estate companies recorded trading volumes of 4.55 billion KWD and 2.62 billion KWD, respectively, capturing 28.5% and 16.4% of total stock exchange turnover during this period.

According to market classification, First Market shares continued to dominate the largest share of circulating liquidity, holding approximately 63% of the total Kuwait Stock Exchange liquidity, equivalent to 10.1 billion KWD during the first ten months of the year. Meanwhile, the First Market Index declined by 6.4% during the period, compared to a 5.1% drop in the General Market Index, primarily influenced by the performance of the banking sector, whose index fell by approximately 5.2%, given the significant weight of bank shares within the First Market’s composition. Despite the index’s decline, First Market companies remain the main driver of the Kuwait Stock Exchange, with a market capitalization of approximately 42.5 billion KWD by the end of October 2026, representing about 83% of the total market capitalization of the exchange.

The Main Market, meanwhile, witnessed a greater decline in activity levels, with its trading value dropping by approximately 38% during the first ten months of 2026 to reach 6.3 billion KWD, accounting for 37% of total market liquidity. This reflects a retreat in speculative trading on several mid-cap and small-cap stocks, coinciding with heightened investment caution and reduced liquidity levels.

Notably, the decline in liquidity and speculation in the Main Market coincided with the Main Market Index achieving a positive performance of 1.8% during the first ten months of 2026. This indicates that the index’s performance was driven more by the revaluation of certain stock prices and improvements in their fundamental performance, rather than by a broad increase in speculative activity or growth in liquidity levels.

The market capitalization of the Kuwait Stock Exchange at the end of October 2026 stood at approximately 51.6 billion KWD, down by about 1.98 billion KWD from the end of September 2026. Consequently, year-to-date losses reached approximately 2.52 billion KWD compared to the end of 2025. This monthly decline resulted from an 834 million KWD drop in the market capitalization of the banking sector, pushing the sector’s year-to-date losses to 1.64 billion KWD. Additionally, the market capitalization of the financial services sector fell by 1 billion KWD, while the industrial and real estate sectors declined by 242 million KWD and 155 million KWD, respectively.

Market capitalization is distributed across 13 sectors, led by “Banks” with 31.3 billion KWD, representing a 60.72% share of the market. This was followed by the financial services sector with a 10.2% share, equivalent to a market value of 5.24 billion KWD, and real estate with an 8% share, equivalent to 4.13 billion KWD. The telecommunications sector accounted for 7.6%, equivalent to 3.91 billion KWD, while the industrial sector represented 4.68% of the Kuwait Stock Exchange’s market value.

The total market capitalization of Gulf stock markets fell by approximately $64 billion in October 2026, ending the month at around $3.74 trillion, driven by declines in the market capitalization of all Gulf exchanges, led by the Abu Dhabi Securities Exchange, Dubai Financial Market, and Kuwait Stock Exchange, which lost approximately $41 billion, $9.5 billion, and $6.5 billion, respectively. The Saudi stock market recorded a loss in its market value of about $3 billion, bringing its market capitalization to $2.43 trillion.

Year-to-date, the Saudi stock market remains the top gainer in market capitalization, with gains of approximately $79 billion, ending the month at $2.43 trillion. Meanwhile, the Abu Dhabi Securities Exchange recorded the largest losses at $74 billion, bringing its market capitalization to $662 billion, while the Qatar Stock Exchange lost $24 billion. Consequently, the combined loss in market capitalization for Gulf stock exchanges since the beginning of the year reached $26 billion.

Trading volumes in Gulf stock markets declined by 7% during the first 10 months of 2026, totaling $483 billion, amid geopolitical tensions and heightened risks. The Saudi stock market accounted for 54% of the total trading volume across Gulf stock markets in the first 10 months, with liquidity valued at $261 billion, down 14% compared to the same period in 2025.