Kuwait Investment: Gulf Markets 'Resilient' in Facing Risks
Kuwait Investment Company report highlights the decline of Gulf markets in October 2026 despite their resilience
Translated by Qiyas from النهار — Original source
A specialized economic report indicated that most Gulf markets faced selling pressure due to escalating regional geopolitical risks, ongoing tensions related to the war in the region, and concerns about navigation and energy supplies through the Strait of Hormuz. These factors were compounded by rising oil prices and growing expectations that interest rates would remain at elevated levels for longer due to global inflationary pressures.
The report, issued by Kuwait Investment Company, regarding the performance of Gulf stock markets in October, noted that the Abu Dhabi Securities Market led the list of the most declining Gulf markets during October, with a 6% drop in its general market index. It was followed by the Saudi Tadawul index, which recorded a monthly loss of 4.97% amid escalating military tensions with Yemen. Meanwhile, the Qatar Stock Exchange recorded the lowest losses during 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 decreased by approximately 4.78% during October 2026.
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, improved net profits for many leading companies, and continued liquidity inflows into the markets, despite a decline from 2025 levels due to foreign investment factors 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. The rest of the Gulf stock markets ended the first 10 months of the year with average losses.
The Kuwait Stock Exchange witnessed 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 dinars, a 24% decrease compared to the same period in 2025.
At the sector level, the banking sector accounted for 27.7% of total market liquidity, equivalent to approximately 4.42 billion dinars. By market classification, First Market stocks continued to hold the largest share of circulating liquidity, accounting for approximately 63% of the Kuwait Stock Exchange’s total liquidity, equivalent to 10.1 billion dinars during the first 10 months of the year.
The total market capitalization of Gulf stock markets decreased by approximately $64 billion during October 2026, ending the month at around $3.74 trillion, due to declines in the market capitalization of all Gulf exchanges, notably the Abu Dhabi Securities Market, the Dubai Financial Market, and the Kuwait Stock Exchange, which lost approximately $41 billion, $9.5 billion, and $6.5 billion, respectively.
Year-to-date, the Saudi stock market remains the biggest winner in market capitalization, with gains of approximately $79 billion, ending the month with a market capitalization of $2.43 trillion. The Abu Dhabi Securities Market recorded the highest losses at $74 billion, ending the month with a market capitalization of $662 billion. The Qatar Stock Exchange lost $24 billion. Thus, the total loss in market capitalization for Gulf exchanges since the beginning of the year amounted to $26 billion.
Trading volumes in Gulf stock markets fell by 7% in the first 10 months of 2026, recording $483 billion, amid geopolitical tensions and rising risks. The Saudi stock market accounted for 54% of the total value of Gulf stock market trades during the first 10 months, with liquidity amounting to $261 billion, down 14% compared to the same period in 2025. The Kuwait Stock Exchange’s market capitalization stood at approximately KD 51.6 billion at the end of October 2026, down by about KD 1.98 billion from the end of September 2026, bringing its year-to-date losses to around KD 2.52 billion compared to the end of 2025. This monthly decline was driven by a KD 834 million drop in the market capitalization of the banking sector, pushing the sector’s year-to-date losses to KD 1.64 billion. Additionally, the financial services sector saw its market capitalization fall by KD 1 billion, while the industrial and real estate sectors declined by KD 242 million and KD 155 million, respectively.
