Date: 27/04/2026
Time: 7:37 AM
Consumer services sector in Boursa Kuwait witnessed mixed performance during the first quarter of 2026 and beginning of second quarter, amid fast profit-gaining and regional geopolitical developments that cast a shadow over performance on the stock exchange.
Despite this "volatile" environment, some sector stocks showed relative resilience, supported by operational factors and dividends that made them lucrative for investment.
This performance reflects a state of caution and anticipation among investors, particularly with emergence of speculative trading in several stocks, alongside the impact on sensitive sub-sectors such as aviation and retail resulted from economic changes and supply chain disruptions.
Companies in the sector, including aviation, hotels, education, fuel supply, are divided into three price tiers: dinar-level stocks, stocks trading below one dinar, and a third category priced between 105 and 300 fils, making them accessible to different groups of traders.
Kuwaiti economists told KUNA in separate statements that consumer services stocks showed flexible movements in some components during the first quarter and early second quarter, despite pressure on sales affecting many of them, especially during weekly closings aimed at quick profit-gaining.
Ibrahim Al-Failakawi said speculative performance was the most prominent feature of the sector's stock movements, particularly among small investors, attributing this to the ease of entry and exit in these stocks, as well as their affordable price levels.
Al-Failakawi described the sector's performance in the first quarter of 2026 as "modest," with the exception of one airline stock and another consumer services company operating in small-scale retail, due to their strong performance compared to other stocks that experienced speculative movements recently as a result of rapid profit-taking pressures.
He noted that some sector stocks relied in their trading on dividends and support generated by activities during the first quarter, emphasizing that operational stocks remain the most influential factor in the sector's movement.
Al-Failakawi said geopolitical developments would put pressure on many of these companies' stocks during the current quarter, noting the aviation sector has been globally affected, including Gulf airlines.
Meanwhile, Deputy Head of Investment at Kuwait Investment Company, Fawzi Al-Dhefiri, said the sector recorded mixed performance during the first quarter of 2026, as its index declined by about 8.5 percent, affected by a sharp drop in March amid escalating geopolitical tensions and the outbreak of war, during which the index lost around 8.2 percent.
Al-Dhefiri added that the traded value of the sector's stocks reached about 135 million Kuwaiti dinars (approximately USD 413 million) during the first quarter, representing about 3.6 percent of the total market trading value.
He pointed to early signs of improvement at the beginning of the second quarter, coinciding with easing of tensions, as the sector index rose by 7.2 percent up to April 20, helping reduce its losses to around two percent.
Al-Dhefiri emphasized that the sector's performance would remain tied to geopolitical developments, given the sensitivity of its components, such as aviation and retail, to economic conditions and demand trends, noting the sector's direction would depend on whether tensions ease or escalate and their impact on consumer confidence and economic activity.
For his part, Daryoush Redhaei, Head of Research at Al-Shall Consulting, told KUNA expectations for the sector's performance in the second quarter were linked to a complex landscape involving two main factors: cash dividends and their market impact, and regional geopolitical variables and their reflection on operational performance.
Redhaei added that 10 companies in the sector achieved profits in 2025, compared to one company that recorded losses. The sector's total profits reached about KD 111.9 million (approximately USD 342.4 million), compared to KD 90.5 million (about USD 277 million) in 2024, an increase of KD 21.4 million dinars, or 23.6 percent, boosting its performance and credibility among investors.
He noted the sector has entered the dividend season, supported by strong financial results for 2025, as eight out of 11 companies announced their intention to distribute dividends: four offering cash dividends only, two offering bonus shares only, and two offering mixed distributions.
He expected that the entitlement to cash dividends, much of which is concentrated in April and May according to the stock exchange's historical pattern, would lead to what he called entitlement gap phenomenon, where stock prices face limited selling pressure after the entitlement date before rising again as liquidity is reinjected into the market.
He added that the timing of bonus share distributions provided the sector with an additional boost to operational liquidity without pressuring cash balances.
However, the variation between cash and bonus distributions may lead to dual investment behavior, as some institutional investors reinvest profits within the sector, while some individuals opt to liquidate, potentially causing limited volatility during the second quarter.
He emphasized that the sector's distributions, representing 3.3 percent of the total market value of the exchange, contribute to supporting overall liquidity cycles, as a large portion is reinvested within the market, providing support to the general index.
He explained that regional developments were casting a shadow over expectations, in light of IMF estimates issued in April 2026 indicating that countries in the region were affected by disruptions in the Strait of Hormuz, including a decline in non-oil activity and pressures on supply chains.
He pointed out that these repercussions have directly affected companies in the sector that rely on imports, through higher costs and shipment delays, in addition to rising consumer goods prices due to disruptions affecting about 70 percent of the region's food imports, alongside increased shipping and insurance costs.
In contrast, he noted that companies relying on local services, such as entertainment, media and telecommunications, enjoy a relatively higher margin of protection, reinforcing the divergence in sector performance between domestic companies and import\distribution companies.
Redhaei expected the sector to follow a dual path during the second quarter: relative stability or gradual improvement in trading supported by dividend liquidity, against pressures on profit margins of import companies due to rising supply costs.
He concluded that oil prices and the speed of containing disruptions in the Strait of Hormuz would remain the most influential factors in determining the sector's direction in the current period.
The number of companies listed in the consumer services sector reached 11 by the end of the first quarter of 2026, with a total market value of about KD 1.64 billion Kuwaiti (approximately USD five billion), representing 3.3 percent of the total market, compared to KD 1.85 billion (about USD 4.8 billion) at the end of December 2025, an increase of 3.7 percent, following growth of 10.4 percent during 2025 compared to 2024.