KSE outlook bright in 2023 despite economic and geopolitical challenges

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KUWAIT CITY, Dec 29: The Kuwait Stock Exchange attracted liquidity of about 10.2 billion dinars during 2023, in clear evidence of the continued attractiveness of the Kuwaiti market, despite the economic and geopolitical challenges that the world witnessed during the past year, reports Al-Anba daily.

According to indicators the Kuwait Stock Exchange will welcome the new year 2024 amid 6 main stimuli that are expected to support its performance in terms of positive growth rates in market value and trading activity, the most prominent of which are the following:

— The change in monetary tightening policy by the US Federal Reserve and central banks around the world. , which will put stocks at the top of the list of investors’ options.

— Continuation of attractive prices to build new investment positions on many listed stocks, including leading and operating stocks.

— Expectations of exceptional performance for the banking sector, whose financial results for the first 9 months of 2023 showed a remarkable jump, which is expected to continue.

— Interim distributions (exceptional) from leading banks and companies, as 8 companies distributed about 320 million dinars for the first 6 months of 2023, and cash dividends are among the most important drivers of the stock market.

— The Capital Markets Authority, within the framework of completing the development process that has strengthened the state of optimism in the Kuwait Stock Exchange, intends to activate financial and investment tools that contribute significantly to increasing the volumes of liquidity flowing to the market, as the Capital Markets Authority intends to activate financial technologies related to securities-based crowdfunding and the automated investment advisor, effective from next January 2.

— The stability of Kuwaiti oil prices at $80 per barrel supports the economic situation through increased spending on capital projects, the effects of which extend to the stock market as a reflecting mirror of this economy. 

Measuring the annual performance of stock market indices, the primary market index declined 7.9% by the end of this year, losing 638 points to close at 7,477 points, down from 8,115 points last year, and the main market index lost 27 points, or 0.5 %, to close at 5,569 points, down from 5,596 points last year. The general index rose 475 points, or 6.5%, to close at 6,817 points, down from 7,292 points at the end of 2022.

The market value of the KSE decreased by about 6.4 billion dinars, or by approximately 14%, as 2023 trading closed at a market value of 40.259 billion dinars, compared to 46.7 billion dinars. 

At the end of 2022, the declines of the KSE will decrease significantly by more than half, especially since they include about 3.4 billion dinars, which constitute the market value of the shares of Ahli United Bank Bahrain, which was delisted after the KFH acquired all of its capital, while the rest of the declines are due to achieving market losses. Due to the expansion of sales operations for the purpose of making profits most of the trading periods.

The total liquidity flowing to the Kuwaiti stock market during the year amounted to 10.2 billion dinars, a decrease of 32%, with a daily average of 43 million dinars, a decline from 14.9 billion dinars last year, with a daily average of 61 million dinars, and 5 leading stocks accounted for the largest share of liquidity with the KFH shares leading with 2.3 billion dinars, followed by Watani with 936 million dinars, Agility with 585 million dinars, Zain with 480 million dinars, and Boubyan with 479 million dinars.

The performance of the stock market in 2023 was affected by several variables, the most prominent of which was the reflection of the negative repercussions of the American banking crisis that reared its head last March, which cast a negative shadow on the performance of global markets, Including the markets of the Gulf region. Oil prices also declined in the global market coinciding with the banking crisis.

Also among the factors that negatively affected the overall performance of the stock market was the global interest rate hike by the central banks of many countries of the world to confront the aggravation of inflation, as the interest rate hike reflected negatively on the financial markets due to the rise in financing costs for companies. 

The geopolitical conditions taking place in the region reinforced the fears that crystallized in the form of an expansion in selling operations in the financial markets in the region, including the KSE. 

The stock market also witnessed selling operations with the aim of reaping profits from stocks that were achieving price increases, especially blue-chip stocks, which had a noticeable impact on the performance of the index. The first market that includes most of the banks and major companies.

The Kuwait Stock Exchange indices were green in the closing session of 2023, which witnessed collective increases driven by the rise of the majority of stocks during trading, in addition to active trading in selected stocks, as the general market index rose 0.45% to 6817.29 points , and the market index The first market rose 0.5% to 7477.04 points, and the main market rose 0.25% to 5569.71 points.

The volume of liquidity circulated in the last session was about 50.7 million dinars, of which the first market acquired 37.68 million dinars, while 13.02 million dinars of liquidity were directed to the main market.

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