Executive Summary
Kuwait equities outperformed regional peers in 2025 till date, driven by a projected economic rebound, ongoing reforms, a solid fiscal position, low public debt, and rising liquidity in the stock market. This robust run could draw foreign fund managers, who are currently underweight on Kuwait and GCC stocks relative to their weightages in the MSCI Emerging Markets Index. Four SWFs from the GCC feature in the global top 10 SWF rankings by size, with each of them having their own distinct investment strategy. Some of them enjoyed strong returns in recent years due to their high exposure to North American equities. With market uncertainty looming post-Trump’s re-election, it’ll be intriguing to see how GCC SWFs tweak their allocations in 2025. The relationship between Oil and Natural Gas prices has remained murky in the recent past, with their price correlation fading from 0.6 a decade ago to near zero now. The oil to gas price ratio, calculated as oil price per barrel divided by gas price per MMBtu, is currently around 19:1, which is much higher than pre-2008 when it averaged 10:1, reflecting energy parity. Natural gas’s cleaner credentials make it more attractive as a commodity than oil from a long-term perspective as energy shifts green, but success hinges on export infrastructure. Qatar’s Liquified Natural Gas (LNG) expansion may give it an edge, while the U.S. and Canada capitalize on rising global demand.
