Report: Speculation, Profit-Taking, Interest Rates, and FTSE Russell Review Were Key Market Variables Last Week

Kuwait City, September 19 (KUNA) -- Kuwait’s stock market indices concluded their weekly trading on Monday amid continued speculation and profit-taking on selected shares, with banks leading the activity due to the repercussions of the Central Bank of Kuwait’s decision to keep interest rates unchanged at 3.5 percent, as well as the semi-annual review of the FTSE Russell index for certain listed stocks.

The market opened the week’s trading session with mixed movements, recording liquidity of approximately 123 million Kuwaiti dinars (about $376.3 million), distributed across 45,315 million shares through 2.758 million transactions. Strong activity was observed in targeted shares in the First Market, which accounted for 51 percent of total liquidity, while the Main Market absorbed the remaining 49 percent.

Regarding the performance of the 13 sectors, the opening session saw nine sectors rise, led by the Technology sector with a gain of 4.54 percent, while three sectors declined, led by the Energy sector with a drop of 0.46 percent. The Utilities sector remained stable.

On Monday, indices continued their gains for the second consecutive day, led by the Main Market, albeit with a slight decline in circulating liquidity compared to the previous session. Liquidity reached 121.8 million dinars (about $372.7 million), and general market indices closed with a noticeable rise. Nine out of 13 sectors advanced, led by Technology with an 8.20 percent increase, while three sectors fell, led by Consumer Goods with a 0.26 percent decline. The Utilities sector remained stable, as in the opening session.

Notably, during the second trading day of the week, the market capitalization of listed companies surpassed a new record high of approximately 54.045 billion dinars (about $165.3 billion). This occurred amid selective trading in leading shares and small-to-medium-sized stocks targeted by investment groups seeking quick returns before the close of the third quarter of the year.

The mid-week session outlined the methodology of speculation, with trading continuing on the share of one of the Takaful insurance companies, making it one of the most prominent speculative stocks in the market. Profit-taking occurred on many shares amid anticipation of the FTSE Russell review, which explains the reasons for injecting more liquidity.

Main indices fluctuated during the session due to anticipation of the Federal Reserve’s decision on monetary policy regarding interest rates. Six sectors rose, led by Technology with a 5.26 percent gain, while seven sectors declined, led by Healthcare with an 8.99 percent drop.

Wednesday’s session saw a new record for liquidity, reaching 144.2 million Kuwaiti dinars (about $442.6 million), despite profit-taking dominating shares that continued to see intense activity. Main indices varied at the close of trading as investors awaited the Federal Reserve’s monetary policy decision. Six sectors rose, led by Healthcare with an 8.35 percent gain, while six sectors fell, led by Technology with a 3.21 percent decline. As usual, the Utilities sector remained stable.

Traders expressed anticipation regarding the US Federal Reserve’s decision, alongside the execution of the FTSE Russell review. FTSE Russell, one of the world’s leading providers of competitive indices and financial market classifications, plays a pivotal role in directing foreign investment liquidity flows toward emerging markets, which may be accompanied by investment flows benefiting market movement.

The week’s close saw the implementation of the semi-annual FTSE Russell review for Kuwaiti stocks. This included downgrading Jazeera Airways’ share from the small-cap list to the micro-cap list. It also involved adding shares of Al-Anzima Al-Automatica (Automated Systems), Inovest, Al-Tijara wa Al-Invest Al-Aqari (Real Estate Trade and Investment), and Trolley for General Trading to the micro-cap list, while removing shares of Burqan for Well Drilling, Trading and Maintenance, Kuwait Cement, and Kuwaiti for Factory Construction and Contracting from the same list.

The week’s final session began with marginal gains, as traders expressed relief following the Central Bank of Kuwait’s decision to maintain the interest rate, which reduces the cost of funds. The Central Bank of Kuwait kept the discount rate at its current level of 3.5 percent, affirming that the country’s monetary and financial stability remains strong and that monetary trends align with local economic conditions, which had a positive impact on market trading at the end of the week. The bank also confirmed that the discount rate would remain at 3.5 percent, noting that this level reflects a balanced monetary policy approach between supporting growth and curbing inflationary pressures.

Notably, during the week’s trading, the Main 50 Index continued its rise for the seventh consecutive week, reaching new record highs, driven by the approaching announcement of financial results for the third quarter of the current year. The market capitalization of shares at the end of the week’s trading stood at 53.3 billion dinars (about $163.6 billion), representing a weekly decline of 0.33 percent compared to 53.5 billion dinars (about $164.2 billion) at the close of the previous week.

For his part, a report issued today by Al-Shal Consultancies stated, “It does not appear that the war has had a noticeable negative impact on the performance of various stock market sectors. Most sector indices achieved positive performance for the period between the last working day before the US-Iran war, February 24, 2026, and September 15, 2026, although performance varied among them.”

The report added, “What we do not know is the extent of the positive performance of those sector indices had the war not occurred, specifically the banking sector index, which carries the highest weight in contributing to the market capitalization of listed companies.”

The report noted that the best-performing sector was Technology, whose index rose by approximately 145.6 percent, “but its contribution to the market capitalization is marginal, not exceeding 0.3 percent.” The second-best performing sector was Insurance, whose index rose by approximately 35.8 percent, a rise that is understandable given that rising risks due to the war necessitate higher insurance premiums.

It added that the Basic Materials sector ranked third in performance, with its index rising by approximately 26.4 percent, another justified rise given supply chain disruptions and demand outstripping supply, which must lead to price increases.

The report indicated that eight sectors achieved positive performance ranging from average to weak, led by the Telecommunications sector with index gains of around 11.3 percent. The Real Estate sector achieved gains of around 9.9 percent, Financial Services gained around 7.3 percent, and Healthcare gained around 5.3 percent.

It stated that the Consumer Goods sector achieved gains of around 4.9 percent, while three other sectors achieved modest gains: Energy gained around 3.8 percent, and Industry gained around 2.7 percent.

The report added, “What deserves some verification and analysis is the modest gains of the Banking sector, which amounted to around 1.2 percent, and whether the direct cause is the heat of geopolitical events, the local economic environment due to the war, or other reasons. Only two sectors achieved negative performance: the Consumer Services sector index lost around 1.2 percent, and the Utilities sector recorded losses of around 4.9 percent, though their losses remain within expected limits.”

The report concluded its analysis of market performance by pointing out that it currently lacks an explanation for the varying performance of stock market sector indices. However, it can be said that the performance of stock market sector indices was better than expected, considering the volume of repercussions of that war on public finance and the economy. (End) M.K.A. / T.M.A.