KUWAIT CITY, Dec 27: In the tumultuous year of 2023, Boursa Kuwait navigated a complex landscape rife with challenges that significantly impacted its overall performance. A confluence of factors, including economic and geopolitical considerations, cast a shadow over the market, with the repercussions felt keenly in its indices. Among the pivotal elements influencing this market turmoil were the persistent interest rate hikes by the US Federal Reserve, the ongoing Russia- Ukraine war, and, notably, the Israeli offensive on Gaza.

These multifaceted challenges collectively led to a substantial decline in the total value of listed companies by 14.8%, reflecting the resilience of the market amid a sea of uncertainties. The market’s journey throughout the year unveiled a narrative of struggle, with companies listed on the stock exchange witnessing a staggering loss of 6.92 billion dinars. This translated to a decrease in the total value of listed companies from 46.721 billion dinars at the end of December 2022 to 39.794 billion dinars. The year’s performance was emblematic of the influence of global economic uncertainties, underscored by a significant 7.6% drop in the general index.

Delving into specific market segments, the first market experienced a profound decline, with its value plummeting by 16% to 5.978 billion dinars from 37.389 billion dinars in December 2022. Similarly, the main market witnessed a 10.2% decrease, with its value decreasing from 9.332 billion dinars to 8.383 billion dinars. The stark contrast between the market’s highest point at the end of January 2023, reaching 46.608 billion dinars, and its lowest point in December encapsulates the turbulent trajectory it endured throughout the year.

Examining the performance indices, the general index faced a 7.6% decline, shedding approximately 559.2 points from 7292.12 points in December 2022 to 6732.88 points. The Premier Market Index encountered a 9.1% decrease, losing 742.6 points from 8115.6 points to 7372.99 points. Similarly, the main market index registered a 1.1% dip, losing approximately 63.8 points from 5596.7 points to 5532.9 points. The main market index 50 mirrored this contraction, losing 5.1% of its value as it fell by 296.1 points from 5719 points to 5422.91 points. The last quarter of 2023 further reflected the market’s struggles, with the total market value declining by 2.2% or about 899 million dinars. This decline was echoed in both the first market, which saw a 1.8% decrease (575 million dinars), and the main market, experiencing a 3.7% drop (323 million dinars). The general index faced a 2.2% decline, shedding 153.8 points, while the primary market index recorded a 1.97% decrease with losses of about 147.8 points.

On the flip side, the main index rose by 3.2%, gaining approximately 184.3 points, and the Main 50 index contracted by 5%, losing 287 points. As December unfolded, the market experienced a marginal upturn, witnessing a 1% increase in value (400 million dinars). The first market’s value grew by 1.1% (341 million dinars), and the main market experienced a 0.7% rise (59 million dinars). In this context, the general index achieved gains of 1.18%, or about 79 points, while the Premier Market Index saw a 1.1% increase, gaining about 81.3 points. The main index rose by 1.45%, adding about 79.5 points, and the Main 50 index recorded a 1.15% increase with 61.9 points. Experts dissecting the stock market’s 2023 performance highlight several influencing factors.

The global impact of the Federal Reserve’s decisions, ongoing geopolitical tensions, and the uncertainties surrounding the Israeli-Gaza conflict have collectively contributed to the cautious and hesitant atmosphere observed in trading during the last quarter. The outbreak of the Israeli war on Gaza, in particular, cast its shadow on multiple sectors, leading to ripple effects such as the rise in oil prices, shipping costs, and disruptions in supply chains.

Looking ahead, investors are poised for a new chapter in the market’s trajectory, eagerly anticipating annual financial statements, proposed profit distributions, and the launch of new investment tools. Despite the challenges of 2023, there is a growing sense of optimism for the coming year, driven by expectations of economic stimulation, the implementation of development plans and projects, and a concerted effort to diversify income away from oil dependence. Additionally, the potential reduction in interest rates by the US Federal Reserve emerges as a positive factor that could potentially benefit financial markets. While the Boursa Kuwait has weathered the storms of 2023, the resilience of its investors remains palpable. As the market prepares to embrace the uncertainties of the global economic landscape, it remains watchful for any geopolitical developments that may impact its dynamics in the times to come.
By Ahmad Fathi
Al-Seyassah/Arab Times Staff