Fawzi Al-Dhufairi, Assistant Vice President of the Investment Research Unit at the Kuwait Investment Company, said that the decline of the Premier Market index in the Kuwait Stock Exchange by about 3.4% since the beginning of the year, compared to a rise of the Main Market index by about 6.8%, reflects the dominance of speculative liquidity during the past period, suggesting that this picture may change with the announcement of second-quarter results.

In an interview with Al Arabiya Business, he explained that active investors were the main driver of liquidity in the Main Market, but corporate results, if they show an ability to overcome the repercussions of regional tensions, could push liquidity back to leading and operational stocks, noting that recent trading sessions have witnessed the beginning of a shift towards bank stocks, especially National Bank of Kuwait and Kuwait Finance House, in preparation for the results and distribution season.

Regarding the banking sector, Al-Dhufairi expected stable performance without major surprises, noting that the high price-to-earnings ratio of Kuwait Finance House is historically significant, while the slowdown in loan growth remains the most prominent challenge for the sector, considering that the approval of the real estate finance law could be the main driver of bank growth in the future.

He affirmed that cash distributions will remain a strength for Kuwaiti companies, especially banks, noting that the market maintained its distribution policy even during the Corona crisis, which reinforces expectations of their continuation. He also suggested that the real estate sector will witness greater activity in the coming period, supported by new projects.

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