Kuwait: Kuwait Financial Centre “Markaz” recently released its Monthly Market Review report for the month of October 2022. Kuwait’s All Share Index witnessed an increase in October, posting a monthly gain of 3%. Among Boursa Kuwait’s sectors, Industrials sector gained the most at 8.7%, while Energy (Oil & Gas) and Basic materials sectors lost 4.4% and 5.0% respectively for the month. Among Premier Market stocks, Agility and Gulf bank gained the most for the month, rising by 17.4% and 14.3% respectively. Integrated Holding Company and KIPCO fell the most for the month at 14.2% and 11.3% respectively. Kuwait Capital Markets Authority approved the merger between Educational Holding Company and Boubyan Petrochemical Company with share exchange ratio of 3.01 shares of Boubyan Petrochemical for each share of Educational Holding Company.

Central Bank of Kuwait has announced that it will be testing a new “Buy Now, Pay Later” (BNPL) product within its regulator sandbox framework ahead of its launch in the local market. At the end of August 2022, Kuwait bank lending to residents in the private sector increased by 9.4% y/y. World Bank revised Kuwait’s real GDP estimates to 8.5% for 2022, up from the earlier estimate of 5.7%. IMF revised its forecast of Kuwait GDP to 8.7% in 2022 from 8.2% forecasted earlier.

Regionally, most of the GCC Markets ended negative, while S&P GCC composite index increased by 2.3% for the month. Among the GCC markets, Abu Dhabi and Saudi Arabia equity indices increased the most, gaining 6.8% and 2.3% respectively. The recovery in the performance of GCC markets compared to the previous month was driven by rising oil prices. Oil prices hiked on back of OPEC+ decision to cut production by 2 million bpd from November. Qatar and Oman equity indices posted a decline of 2.2% and 3.6% respectively over the same period.

UAE’s non-oil private sector maintained its growth in September but at a slightly slower pace than August. UAE’s Mashreq Bank has reportedly received bids from companies to purchase stake in its payment unit. The shares of Burjeel Holdings (Abu Dhabi) were oversubscribed by 29 times and it raised AED 32 billion through IPO priced at AED 2 per share. Saudi Arabia’s 2023 budget has estimated public revenues at SAR 1.12 trillion, and expenditures at SAR 1.11 trillion, with an expected surplus of SAR 9 billion. Saudi Arabia’s non-oil private sector continued to expand in September, recording a PMI of 56.6. Saudi Arabia's inflation rose 3.1% y/y in September, driven by higher food costs, rents, and rising utility costs. According to Qatar Financial Centre, Qatar’s non-oil sector has continued to grow in September, but at a slightly slower pace than August. Qatar’s inflation increased 6.03% y/y in September due to World Cup-related demand.

Developed markets’ performance was positive during the month of October with MSCI World and S&P 500 gaining 7.1% and 8.0% respectively. Hopes of a potential slowdown in the rate of tightening by U.S Fed resulted in positive sentiment among the investors. While industrials and energy stocks outperformed, tech stocks such as Amazon.com, Meta, and Microsoft declined during the month. The U.S economy rebounded strongly in Q3 2022 as the GDP rose 2.6% during the period, higher than market expectations. The growth was fueled by the narrowing trade deficit as a result of reduced domestic demand. The UK's consumer price index was up 10.1% y/y in September —higher than the 9.9% inflation rate registered in August.  U.K’s GDP contracted by 0.3% in August due to a decline in industrial output. On October 25, 2022 Rishi Sunak assumed office as the Prime Minister of United Kingdom. The election of Rishi Sunak brought some positive sentiment to the markets as the previous government led by Liz Truss proposed a change in fiscal policy, increasing fears in financial markets. European Central Bank (ECB) raised its policy rate by 75 bps to 1.5% and plans to scale back its balance sheet size in an attempt to bring inflation to 2% levels. Eurozone inflation increased by 10.1% y/y in September, compared to 9.1% y/y increase in August. China’s stock market declined on account of currency weakness and indications of economy losing strength.

Oil prices marked a sharp increase by 7.8% for October 2022, extending the yearly gains to 21.9%. Oil prices soared as a result of the OPEC+ decision to cut production by 2 million bpd, its deepest cut since 2020. According to Saudi Arabia’s energy minister, the decision was taken in response to the increasing interest rates by U.S Fed. OPEC+ and IEA have revised down the oil demand for rest of 2022 and 2023 citing rising inflation, economic downturn and lockdown restrictions in China. Gold prices fell in October, dropping 1.6% to 1,633.12 $/oz on account of persistent inflation and declining U.S dollar.