Kuwait Stock Exchange general index rose by 21% in 2025

Kuwait, State of Kuwait: Kuwait Financial Centre (Markaz) revealed in its 2025 Market Performance Report that the Kuwaiti market was the second best performing market in the Gulf region during 2025, registering growth of 21% , following the Omani market, which achieved a rise of 28.2%. This performance reflects improved profits for listed companies, particularly in the banking sector, along with the continued momentum of economic reforms, growing interest from foreign investors, and positive macroeconomic expectations. The market benefited from a supportive macroeconomic environment, characterized by strong non-oil economic activity, accelerated credit growth, and a higher pace of project awards, with a focus on expediting the implementation of "Kuwait Vision 2035" projects. Additionally, the Central Bank of Kuwait's interest rate cuts contributed to boosting investor confidence and improving market liquidity levels. The general market index (price return) rose by 21% during 2025, while the total return index recorded growth of 25.3% , driven by a 19.9% increase in the Kuwaiti Banks Index. In the banking sector, Warba Bank and Kuwait International Bank topped the list of best-performing stocks, achieving total returns of 66.7% and 60.8%, respectively. Warba Bank recorded net profits of KD 38.5 million during the first nine months of 2025, representing year-on-year growth of 159%. The bank's share price also saw a significant rise during the middle of the year, driven by the announcement of potential merger discussions with Gulf Bank. National Bank of Kuwait and Kuwait Finance House also achieved total returns of 22.7% and 21.3%, respectively, during the year, supported by continued strong earnings.

The report from Al-Markaz stated that the Kuwait Stock Exchange's main market index rose by 20.2% during 2025, while the Premier Market index grew by 21.2%. On a monthly basis, the main market index saw a slight decline of 0.2% in December 2025, due to profit-taking by investors. Among Premier Market stocks, GFH Financial Group and Kuwait Real Estate Company topped the list of best-performing stocks, achieving total returns of 115.2% and 70.4%, respectively, during the year. The rise in GFH Financial Group's share price was supported by its share buyback program, according to disclosures issued by the Kuwait Stock Exchange, in addition to the group's stable financial performance. Regarding listing activities, Action Energy, a company specializing in oilfield services, was listed on the First Market on December 17, 2025. The company offered 260 million shares, representing 45.9% of its capital, at a price of 212 fils per share, resulting in the collection of approximately 55 million Kuwaiti dinars (US$179.25 million).

In December 2025, the Central Bank of Kuwait followed the US Federal Reserve's monetary policy moves and reduced its key discount rate by 25 basis points to 3.5%. This was the third cut by the Central Bank of Kuwait since the US Federal Reserve began its monetary easing cycle in September 2024, bringing the Central Bank of Kuwait's cumulative rate cuts to 75 basis points, compared to a cumulative 175 basis points cut by the US Federal Reserve during the same period.

The report indicated that most Gulf markets, with the exception of the Saudi market, ended the year with positive gains, supported by the strong performance of leading stocks and interest rate cuts during the second half of 2025. However, the S&P GCC Composite Index recorded a slight decline of 1.5% year-on-year, impacted by a 12.8% drop in the Saudi stock market index during the year. On a monthly basis, despite a 0.9% decline in the Saudi stock market index, the S&P GCC Composite Index rose by 1% in December 2025, supported by interest rate cuts and positive economic data from the United States. The Saudi market's performance was affected by several factors, most notably the decline in oil prices and tighter liquidity levels in the banking sector, in addition to the inability of new listings to match the strong performance of 2024 listings. The slowdown in the implementation of some mega-projects also contributed to increased uncertainty regarding the progress of efforts to diversify the non-oil economy. In this context, Saudi Aramco recorded a 10.5% loss for the year, due to declining profits amid fluctuating oil prices. In the banking sector, the National Commercial Bank (NCB) and Al Rajhi Bank achieved annual returns of 20% and 5.4%, respectively. In the UAE, the Dubai Financial Market (DFM) index rose by 3.6% in December 2025, bringing the market's annual gains to 17.2%, supported by continued strength in the real estate and tourism sectors. Emirates Integrated Telecommunications Company (EITC) recorded a 39.7% return for the year, driven by positive earnings results, the adoption of a digital infrastructure ready for artificial intelligence technologies, and the successful completion of a secondary offering of 7.55% of its total share capital. The company achieved net profits of AED 2.18 billion during the first nine months of 2025, representing a year-on-year growth of 14.6%, fueled by continued growth in its mobile, fixed-line, and ICT solutions segments. Emaar Properties achieved a total return of 18.3% during the year, supported by sales growth and the launch of several major projects. The Abu Dhabi market index recorded returns of 6.1% during 2025, along with a monthly increase of 2.5% in December. Leading stocks, particularly First Abu Dhabi Bank and Etisalat, achieved total returns of 34.1% and 17.7%, respectively, during the year. In Qatar, the market index rose by 1.8% during 2025, supported by natural gas prices, while corporate earnings results limited market gains. The Omani market led the Gulf markets in performance, achieving a 28.2% increase during the year, driven by ongoing efforts to diversify the non-oil economy and implement regulatory reforms in capital markets.

Central banks in the Gulf Cooperation Council (GCC) countries followed the US Federal Reserve's monetary policy moves in December 2025. In this context, the Saudi Central Bank reduced its repurchase agreement (repo) rate by 25 basis points to 4.25%. Similarly, the Central Bank of the UAE lowered its overnight deposit facility rate by 25 basis points to 3.65%, while the Qatar Central Bank reduced its repo rate to 4.1%.

The report noted that global markets ended 2025 on a positive note, with the MSCI World Index and the S&P 500 rising by 19.5% and 16.4%, respectively, during the year. However, the S&P 500 ended December 2025 with a flat performance that leaned slightly downward, amid concerns about the valuations of artificial intelligence (AI) companies, despite partial support from the US Federal Reserve's interest rate cuts and continued strong consumer spending. The positive market performance throughout the year was driven by the continued outperformance of technology stocks, growing optimism about AI-led growth, resilient valuations, and an accommodative interest rate environment. In this context, the Nasdaq Composite rose by 20.2% during 2025, supported by growth in technology company earnings and increased investor appetite for significant spending on AI technologies. In October 2025, Nvidia's market capitalization surpassed $5 trillion after the company announced strong demand for its artificial intelligence chips and plans to build seven supercomputers for the US government. On the monetary policy front, the US Federal Reserve lowered its target range for the federal funds rate by 25 basis points to 3.5-3.75% at its December 2025 meeting, citing persistently high inflation and increasing downside risks related to the labor market. In emerging markets, the MSCI Emerging Markets Index rose 2.7% in December, ending the year with a robust 30.6% gain. In China, stock markets surged 18.4% in 2025, buoyed by government stimulus packages and renewed confidence in both the consumer and business sectors.

The real GDP of the United States grew at an annualized rate of 4.3% in the third quarter of 2025, compared to 3.8% in the second quarter of the same year, exceeding estimates of 3%. This growth was supported by a significant increase in consumer spending. Regarding inflation, the US Consumer Price Index (CPI) came in below analysts' expectations, registering 2.7% year-on-year in November 2025, compared to 3% in September, reflecting a gradual easing of inflationary pressures. In fixed-income markets, the yield on the 10-year US Treasury note declined by 40 basis points to 4.18% in 2025, driven by interest rate cuts by the US Federal Reserve and the continued downward trend in inflation, although it remained at relatively high levels. However, the yield remained volatile throughout the year, falling to 3.97% in mid-October, due to uncertainty surrounding the Federal Reserve's monetary policy path and the mixed results of economic indicators.

The report by the Center addressed oil prices (Brent crude), which ended 2025 at $60.85 per barrel, marking an 18.5% decline compared to the previous year. This decrease resulted from a combination of factors, most notably concerns about increased market supply, weak global oil demand growth, OPEC+'s gradual easing of its production cuts, and a decline in geopolitical risk premiums at various points throughout the year. Conversely, oil prices received temporary support at the beginning of 2025 due to US sanctions on Russian oil, ongoing tensions between Russia and Ukraine, potential supply disruptions through the Strait of Hormuz, and US restrictions on Venezuelan exports. In this context, OPEC+ decided to suspend production increases during the first quarter of 2026, after pumping approximately 2.9 million barrels per day into the market since April. The International Energy Agency (IEA) projected that global oil supply would exceed demand by approximately 3.84 million barrels per day in 2026, reflecting continued structural pressures on market balance. Gold prices performed positively in 2025, closing at $4,314.12 per ounce, representing an annual gain of 64.4%. This rise was driven by increased demand for gold as a safe-haven investment amid escalating geopolitical and economic uncertainty, coupled with continued strong purchases by central banks.

The Center concluded its report by noting that the outlook for global stock market performance in 2026 hinges on a number of key factors, primarily monetary policy decisions in the United States, global geopolitical developments, potential changes in international trade tariffs, and the performance of major technology companies amidst the continued momentum surrounding artificial intelligence technologies. In this context, US Federal Reserve officials have indicated their expectation of implementing one interest rate cut in 2026. As for Gulf stock markets, performance in 2026 is expected to be determined by the banking sector's earnings results, the pace at which OPEC+ completes its rollback of oil production cuts, the continuation of economic reforms in the region, and geopolitical developments in the Middle East.

About Kuwait Financial Centre "Markaz "

Kuwait Financial Centre (K.S.C.P.) “Markaz” was established in 1974 and has become one of the region’s leading financial institutions in asset management and investment banking. As of September 30, 2025, Markaz managed assets totaling KWD 1.61 billion (USD 5.28 billion). Markaz was listed on the Kuwait Stock Exchange in 1997. Over the years, Markaz has achieved significant milestones by redefining innovation in financial services, creating unique investment vehicles and opening new investment avenues tailored to investor needs. These include the Markaz Premium Returns Fund – Mumtaz, the first local equity mutual fund; the Markaz Real Estate Fund, the first open-ended real estate investment fund in Kuwait; the Opportunity Financial Fund, launched by Markaz in 2005, the first options fund in the Gulf region; and the Gulf Momentum Fund, the first fund of its kind to invest in Kuwait and the Gulf markets using the momentum methodology.

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