Markaz: Kuwait Stocks Maintain Positive Momentum for Third Consecutive Month

Kuwait Financial Centre “Markaz” released its Monthly Market Review report for July 2025. Kuwait equity market continued to trend up for the third consecutive month, bringing YTD gains to 17.0% y/y. Kuwait’s All Share Index increased by 1.9% during the month, supported by broad based gains. Technology and telecommunication were the top gainers, rising 38.2% and 8.9% respectively.

The banking sector index increased 1.2% for the month. Among banking stocks, National Bank of Kuwait and Commercial Bank of Kuwait were the top gainers, rising 5.0% and 4.3% respectively during the month. National Bank of Kuwait’s net profit for H1 2025 rose by 7.8% y/y to KD 315.3 million, supported by rise in income from Islamic financing and non-interest income. Among Premier Market stocks, Kuwait Investment Company and Boursa Kuwait were the top gainers, rising 16.9% and 14.7% respectively during the month. Kuwait Investment Company has partnered with Goldman Sachs, to offer a new offshore credit focused investment product in Kuwait, managed by Goldman Sachs Asset Management. The company expects the initiative to generate annual returns of 8%-10%.

Boursa Kuwait’s net profit for H1 2025 has increased by 61.1% y/y to KD 15.1 million on the back of strong trading volume. The exchange has also announced plans to launch sukuk and bond trading in 2025, amid completion of technical tests for index funds and bond and sukuk market and ongoing preparation of regulatory rules.

Kuwait’s real GDP grew by 1.0% y/y in Q1 2025, supported by lower contraction in oil GDP and growth in non-oil segments such as financial intermediation and public administration. Kuwait’s consumer price index rose by 2.3% y/y in June 2025 with food and beverage price inflation increasing by 5.1% y/y.

The S&P GCC Composite index gained 1.6% in July 2025 amid easing trade tensions and positive corporate earnings in some markets. Except Saudi Arabia, all GCC markets ended the month in green. Saudi equity index decreased by 2.2% during the month, amid mixed earnings reports for H1 2025. Among Saudi blue chips, ACWA Power declined by 13.4% during the month, weighed by capital increase through rights issue and 24% y/y decline in the company’s net profits for Q2 2025. Abu Dhabi’s equity index increased by 4.1% in July 2025, amid strong corporate earnings from blue chips. Abu Dhabi Commercial Bank (UAE) gained 20.8% during the month, supported by 18% y/y growth in its pre-tax profit for H1 2025.

Dubai’s equity index gained 7.9% for the month, supported by broad-based gains. Emaar Properties (UAE) gained 17.3% for the month supported by reports of strong overall property sales in Dubai in H1 2025. Emirates NBD (UAE) gained 12.1% during the month, despite reporting a 9% y/y decline in net profit in H1 2025.  Qatar’s equity markets gained 4.8% for the month, supported by positive corporate earnings. Among Qatar’s blue-chip companies, Qatar Islamic Bank and Qatar National Bank gained 10.7% and 8.1% respectively. The banks’ net profit for H1 2025 has increased by 5.3% y/y and 3.0% y/y respectively.

Saudi Arabia’s GDP for Q2 2025 grew by 3.9% y/y, according to flash estimates from the country’s General Authority for Statistics. Non-oil activities grew by 4.7% y/y and oil activities grew by 3.8% y/y. The IMF has revised up its forecast of Saudi Arabia’s GDP growth in 2025 by 0.6 percentage points to 3.6% y/y on the back of sustained reforms and diversification efforts.

Global markets were positive during July 2025, supported by positive developments on the tariffs announced by the US administration and positive corporate earnings reports from major companies like JP Morgan, Alphabet, Microsoft etc. The MSCI World and S&P 500 indices rose by 1.2% and 2.2% respectively for the month. U.S signed trade deals with many trade partners such as EU, Japan and Indonesia. Nvidia hit USD 4 trillion market capitalization threshold on 9th July 2025, becoming the first stock ever to reach the milestone. The company’s stock has been rallying in recent months as it stands to benefit from the ongoing generative AI boom. MSCI EM index gained 1.7% during the month. Chinese equities rose by 3.7%, supported by better-than-expected Q2 2025 GDP growth of 5.2% y/y and optimism over U.S-China trade talks.     

U.S inflation was at 2.7% y/y in June 2025, up from 2.4% y/y reading in May 2025. Inflation in the country had been largely trending lower in 2025, after registering a 3.0% y/y increase in January 2025. However, June 2025’s CPI uptick has raised concerns that inflation has begun to reflect the impact of tariff measures. The U.S labor market added 147,000 jobs in June, up from 144,000 jobs added in May. However, about half the job gains were from the government sector with the private sector registering the smallest increase in eight months. The IMF has revised up global growth forecast to 3.0% y/y in 2025 in July, an increase of 0.2% compared to its April outlook, due to stronger than expected purchases ahead of tariff imposition. The fund has highlighted potential rebound in tariffs, geopolitical tensions and higher interest rates due to large fiscal deficits as persisting threats to global growth.

The yield on the 10-year US treasury notes rose 13 bps during the month to 4.37%. The U.S Fed held rates steady at 4.25%-4.5% in July 2025, citing elevated inflation and stable labor market. The Fed Chair opined that the rates were at appropriately restrictive levels and stated that no decision has been made about the course of monetary policy in September 2025.

Oil (Brent) prices closed the month at USD 72.5 per barrel, rising by 7.3% during the month. Iran’s suspension of cooperation with International Atomic Energy Agency, U.S’ pressure on Russia to end its war on Ukraine and U.S-EU trade deal supported prices during the month. However, prospect of increased supply due to continued acceleration in pace of unwinding of cuts by OPEC+, easing of U.S sanctions on Venezuela capped gains. OPEC+ plans to raise production by 548,000 barrels per day (bpd) in August 2025, up from 411,000 bpd monthly increase over May-July 2025. Gold prices closed at USD 3,290 per oz, down by 0.4% for the month. The commodity gained earlier in the month due to trade uncertainties but declined later in the month as trade tensions eased.

Progress in trade talks, imposition of new tariffs on few countries and their impact on inflation and upcoming corporate earnings reports are some key market movers that would be watched out for by the participants. While sustained and accelerated pace of unwinding of oil production cuts and steady non-oil economic growth are likely to favor the GCC region, impact of tariff developments on oil and corporate earnings would also be key determinants of market moves in the region.