Securities Exchange Reclaims Positive Trajectory, Generating 311 Million Dinars in Profits
Stock Market Rebound in Kuwait
In a compelling turn of events, the Kuwait Stock Exchange (KSE) came back strong on Tuesday, refuting the bearish sentiments driven by regional conflicts. After a significant loss of 1.87 billion dinars on Sunday, the market managed to recuperate more than half of its losses.
The trading floor retained a tranquil atmosphere, a testament to the market's resilience. All major indices ended in the green, according to Al-Rai daily. The Premier Market Index inched up by 0.62%, the General Market Index gained 0.65%, the Main 50 Index climbed 1.03%, and the Main Market Index advanced by 0.84%.
Eleven out of fourteen sectors reported positive gains, with the healthcare sector leading the charge with a surge of 5.02%. However, the energy sector suffered a setback, plummeting 2.06%.
The increased market liquidity, which rose by 4.4% to reach 107.76 million dinars, and surging trading volumes by 27.1% to 537.25 million shares, suggested renewed investor interest. Although the number of executed trades decreased slightly by 3.8%, the overall trading activity was robust.
The rebound in the KSE symbolizes robust investor confidence in Kuwait's economic fundamentals, fortified by the robust performance of listed companies. Kuwait's stock exchange has been among the world's top performers since the beginning of the year.
However, apprehensions still linger. Investors eagerly await the outcome of the U.S. Federal Reserve's monetary policy meeting, raising speculation about a potential interest rate cut that could brighten global market sentiments. Simultaneously, the specter of further regional escalation continues to cloud investor outlook.
Market players, particularly institutional investors, are starting to gravitate towards strategic accumulation, focusing on leading banking stocks. This shift is driven by expectations that the enacted public debt law and the forthcoming mortgage law will supercharge sector profitability. Speculative trading in small and mid-cap stocks, meanwhile, remains vigorous, dominating the session's most active and profitable shares.
Anticipation of first-half earnings reports, promising positive results, and companies' active pursuit of acquisition opportunities and expansion plans, both domestically and internationally, further fuels optimism concerning the market's long-term growth prospects.
Across the Gulf, market sentiments were more subdued. While Kuwait and Bahrain witnessed gains, other markets succumbed to pressure due to the regional conflict. Saudi Arabia's index dropped 1.4%, pulled down by losses in Al Rajhi Bank and Saudi Aramco. Dubai fell 0.6%, Abu Dhabi dipped 0.5%, Qatar and Oman each declined 0.5% and 0.3% respectively. Bahrain, meanwhile, rose 0.3%. In North Africa, Egypt's EGX30 index slipped 1%.
Despite the gloomy regional landscape, Kuwait's stock market has demonstrated that investor confidence, solid economic indicators, and shrewd economic policies can minimize the impact of external shocks—for now.
In 2021, the KSE displayed a mixed performance, navigating through local and global challenges. The market's resilience was underpinned by economic stability, prudent government policies, and sound market dynamics. Kuwait's substantial oil reserves, diversified economy, and proactive economic strategies have helped the country exhibit remarkable resilience against external shocks.
The resurgence of the Kuwait Stock Exchange (KSE), despite regional conflicts, showcases investors' confidence in Kuwait's economic fundamentals, particularly those of listed companies in the finance sector. As the market recovers from substantial losses, strategic accumulation of leading banking stocks by market players, such as institutional investors, indicates a focus on sectors expected to profit from enacted public debt and mortgage laws.
