MOST Middle Eastern stock markets fell on Sunday, with Kuwait’s main index leading losses after S&P Global Ratings cut the government’s credit rating last week.
The Boursa Kuwait Premier Market Price index lost as much as 4.7%, with Kuwait Finance House, National Bank of Kuwait and Ahli United Bank dropping more than 3.9%. Kuwait was downgraded one level to AA-, with S&P maintaining a stable outlook.
Lower oil prices in 2020 and 2021 will have negative economic and fiscal implications for Kuwait given its high reliance on exports, the ratings company said. On top of that, the country has lagged behind the reform momentum seen elsewhere in the region, the statement added.
Kuwait stocks will be added to MSCI Inc.’s emerging-markets benchmark in May. That is expected to trigger inflows from foreign investors. The benchmark tracking large caps in Kuwait is down 27% this year, contrasting with a 32% jump in 2019. It’s the second biggest drop in the Gulf this year after Dubai.
S&P also revised outlooks to negative from stable for several U.A.E. banks, including First Abu Dhabi Bank PJSC, and said that the coronavirus pandemic could see Dubai property prices falling to levels seen 10 years ago. – Bloomberg