Kuwait

Kuwait stocks fell in November driven by sharp fall in oil prices

Kuwait, in line with the broader GCC market, ended the month in red, fuelled by sharp fall in oil prices. The growing fears over a new COVID-19 variant also led to profit taking at the end of the month. Market Performance & Key Metrics Source: Refinitiv, Boursa Kuwait All sectors, except Healthcare and Insurance, declined in November. Insurance was the top gainer, rising 7.6% followed by healthcare which recorded modest gains of 1.8%. Basic materials and Industrials sector indices registered...

Kuwait leads GCC markets in October

Kuwait was the best performing GCC market in October, supported by the rise in oil prices. The Boursa Kuwait All Share index registered gains for the eighth consecutive month, gaining 3.5% for the month and extended its yearly gains to 28.2%. Kuwait government had lifted precautionary restriction measures for COVID-19 from Oct 24, with certain conditions. Kuwait Market Performance Source: Refinitiv Among sectors, the Consumer Discretionary was the top gainer, rising 13.1% followed by Financial Services at 9.1%. Utilities sector...

What’s behind Kuwait’s increasing fiscal breakeven oil price?

For long, Kuwait’s fiscal breakeven oil price remained low and it had been a key strength for the economy. However, the situation is fast changing. Fiscal breakeven oil price can be defined simply as the oil price that balances an oil‐exporting country’s fiscal budget. Upon comparing a country’s fiscal breakeven oil price with the international oil price, one can gauge the fiscal health of the country. Lower fiscal breakeven oil price than the market price would lead to surplus and...

Kuwaiti banks – Earnings report Q2’2021

All major Kuwaiti banks reported their financial results for the second quarter of 2021. The Kuwait banking sector reported a healthy growth in net income after taxes for Q2’21 compared to that of Q2’20, mainly due to the reduction in provisions and impairment charges for bad loans that were recorded in the prior quarters due to higher expected credit losses. Due to historically low interest rates and increased provision for bad debts, profitability of the Kuwait banking sector was impacted...

Kuwait Luxury Retail – Evolving amid COVID-19

Kuwait boasts the presence of several major luxury brands such as Prada, Gucci, Louis Vuitton and Chaumet, Bottega Veneta etc. Ranking 13th in the world in terms of per capita GDP, its affluent and brand conscious population, young demography, and a growing population position Kuwait’s luxury retail market favorably. A dedicated luxury retail district in The Avenues, the largest mall in Kuwait, homegrown luxury brands like K7L and e-commerce players such as Chic Kuwait further highlight the uptake of luxury...

Kuwaiti banks – Earnings report 2020

All major Kuwaiti banks reported their financial results for the fourth quarter of 2020 and that of the whole year. As expected, all the banks reported a reduction in net profits for 2020 compared to that of 2019 mainly due to the increase in provisions and impairment charges for bad loans caused by COVID-19’s disruption to the economy. Exhibit 1: Earnings scorecard - Kuwaiti banks Source: Boursa Kuwait, Refinitiv, Corporate Disclosures Kuwaiti Banks continue to clean up their balance sheets...

Central Bank of Kuwait Allows Banks to Distribute 2020 Dividends

Central Bank of Kuwait (CBK) has been at the forefront and took various measures to limit the impact of COVID-19 pandemic on Kuwait economy and the banking sector. Some of the key measures taken by the central bank include reduction in discount rate to a historically low level of 1.50% from 2.75% and maximization of lending capacity of banks to provide financing by allowing use of capital conservation buffers (2.5% of capital) for capital adequacy ratio. In 2020, some countries...

MSCI includes Kuwait stocks in their Emerging Markets indices

Morgan Stanley Capital International (MSCI), the world’s largest index provider, reclassified Kuwait to ‘Emerging Markets’ status from ‘Frontier Markets’. The inclusion to the Emerging Market Index took place on Nov. 30, 2020 after market close, while the deletion of Kuwaiti securities from the Frontier Markets 100 index will be phased over five successive index reviews. The implementation was originally slated to take place in May 2020 but was delayed because of the COVID-19 pandemic. Seven Kuwaiti Stocks have been added...

Steep cut in project spending could depress Kuwait’s oil output

Oil majors around the world are scaling back their investment plans on the back of drastic fall in oil prices driven by lockdowns to curb COVID-19 and the current stagnation in prices. Kuwait had also announced plans to slash capital spending in its oil sector by around KD 700million from KD 3.7billion (USD 12.2billion) to KD 3billion (USD 9.9billion) during the 2020-2021 fiscal year due to a sharp rise in the country's budget deficits. State operator, Kuwait Petroleum Corporation (KPC)...

COVID-19 derails traditional Kuwait retailers

Kuwait’s retail sector is small in absolute terms when compared to regional peers like the UAE or Saudi Arabia. However, Kuwait has one of the highest concentrations of international retailers in the GCC, with luxury segment proving to be a major draw. The value of Kuwait’s retail market was KD 3.5bn or 9.1% of non-oil GDP, as of February 2018 (Oxford Business Group). Consumer preference towards international brands and better retail shopping experiences were exhibiting an upward trend until COVID-19...