#Kuwait Stocks Outshine Gulf Peers as Ruler Pushes for Reforms - Bloomberg

Kuwait Stocks Outshine Gulf Peers as Ruler Pushes for Reforms - Bloomberg

Kuwaiti stocks are outpacing their Gulf peers this year, with banks driving a rally built on optimism that long-delayed economic reforms are gaining traction.

The Boursa Kuwait Premier Market has jumped 11% this year, more than four times the pace of gains in neighboring Dubai and twice as much as MSCI Inc.’s emerging markets gauge.

The buzz around Kuwaiti equities is a wager that moves by ruler Sheikh Mishaal Al-Ahmed Al-Sabah to clear obstacles holding back government spending will work. He suspended parliament for four years last May to end political deadlock, with a spinoff of that expected to be legislation allowing the OPEC member to sell its first bonds since 2017.

The potential for other reforms in areas like property finance have helped power a surge in banking stocks. Boubyan Bank KSCP, Burgan Bank SAK and Warba Bank KSCP are all up at least 18% this year.

“The mortgage law is expected to accelerate growth for Kuwait banks’ retail franchises,” said Jaap Meijer, head of research at Arqaam Capital in Dubai.

Kuwaiti stocks also have the attraction of less-demanding valuations than the average of Gulf peers. Kuwait’s benchmark index trades at 14.1 times forward earnings, which is below an average of 15.7 times over the past five years.

Plus, the Kuwait index could potentially win an upgrade from secondary to advanced emerging-market status in index compiler FTSE Russell’s September review. While that won’t trigger higher passive inflows, it would boost sentiment.

There are risks to the positive picture: legislative reforms may still take longer than investors like and a boost to the Kuwaiti bourse’s standing in the emerging-market universe may prove elusive.

For now, the mood is upbeat enough to draw investors and raise the prospect of additional listings as companies look to benefit from the confident tone.

“The current market conditions augur well for initial public offerings, so we will not be surprised if we see a couple of IPOs this year,” said Junaid Ansari, director of Investment Strategy and Research at Kamco Invest in Kuwait City. “And IPOs support market performance in general.”

Most Gulf markets in red on tariff war worries | Reuters

Most Gulf markets in red on tariff war worries | Reuters

Most stock markets in the Gulf ended lower on Thursday amid U.S. tariff uncertainties, although First Abu Dhabi Bank drove the Abu Dhabi index higher.

Market anxiety persisted with escalating trade tensions spark fears of slowing economic growth, following U.S. imposition of 25% tariffs on imports from Mexico and Canada, along with additional duties on Chinese goods.

Saudi Arabia's benchmark index (.TASI), opens new tab dropped 0.7%, weighed down by a 2.3% fall in Saudi Telecom Company (7010.SE), opens new tab, while oil giant Saudi Aramco (2222.SE), opens new tab retreated 1.1%.

Aramco is in the early stages of considering a potential bid for BP's (BP.L), opens new tab lubricant business Castrol, Reuters reported on Wednesday, citing a person with knowledge of the matter.

On Tuesday, Aramco reported a drop in annual profit and signalled it will slash its dividend payouts by nearly a third this year to $85.4 billion.

Among other losers, Mouwasat Medical Services (4002.SE), opens new tab plunged 9.3%, as the firm saw a decline in 2024 profit.

The Saudi index posted its second weekly loss of 2.5%.

Dubai's main share index (.DFMGI), opens new tab closed 0.7% lower, with blue-chip developer Emaar Properties (EMAR.DU), opens new tab losing 1.8%.

However, Mashreqbank (MASB.DU), opens new tab climbed 1.5%, a day before going ex-dividend.

The Dubai bourse moved lower, continuing its sideways movement amid uncertainty around current levels. Most sectors performed negatively, particularly the real estate and financial sectors, said Hani Abuagla Senior Market Analyst at XTB MENA.

In Abu Dhabi, the index (.FTFADGI), opens new tab nudged 0.1% higher, helped by a 0.8% gain in the country's biggest lender First Abu Dhabi Bank (FAB) (FAB.AD), opens new tab.

FAB is planning to split its operations into four new divisions in a bid to strengthen its business in the Gulf and boost shareholder returns, two sources familiar with the matter said.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab added 0.2%, with EFG Holding (HRHO.CA), opens new tab advancing 4.2%.

Egypt's inflation rate is forecast to have tumbled to 14.5% in February, as the exceptionally high price increases of the last two years are no longer reflected in the statistics, according to a poll released on Wednesday.