Kuwait's bourse fell to a six-week low on Sunday as the suspension of several companies for failing to comply with listing regulations prompted retail investors to sell. Most other regional share markets also declined.
The Kuwaiti regulator suspended trading in three companies, two of which saw their losses exceed 75 percent of capital. The move came sooner than expected; in the past, the regulator has often waited until the end of March before suspending companies which infringed rules at the end of the past year, traders said.
The Capital Market Authority has launched a drive to clean up the market, but its stricter approach may in the short term at least hurt sentiment in a market that has been largely retail-driven.
"The higher risk of companies being suspended by the regulator has raised the impetus for retail investors to sell," said Fouad Darwish, head of brokerage services at Global Investment House.
"People are not willing to buy at lower levels, like they used to, because of a lack of liquidity."
The Kuwaiti stock index lost 0.7 percent, slumping for a fifth consecutive session to its lowest finish since January 14. Kuwait is the worst-performing market in the Gulf Cooperation Council this year.
In Egypt, the benchmark index shed 0.6 percent, easing off Thursday's 65-month high in mild profit-taking. The market has gained 19.1 percent in 2014, partly on expectations that army chief Field Marshal Abdel Fattah Al Sisi will run for president.
Last week, after a surprise government reshuffle, officials said Sisi would retain his position as defence minister, which he might need to vacate to run for the presidency. The matter will be clarified after a draft election law is finalised.
"There is euphoria in the market, which is 80 percent driven by retail investors, due to the upcoming elections," said Islam Batrawy, Cairo-based head of regional equity sales at NBK Capital. "That means more speculation and less fundamental trading."
In Saudi Arabia, the index shed 0.2 percent, easing off Thursday's multi-year high. Shares in real estate developer Jabal Omar bucked the trend and surged 8.9 percent to a record high in what analysts said was retail-investor driven speculative activity; in the last few days, money has poured into real estate-related shares.
In the United Arab Emirates, Abu Dhabi National Energy Company (TAQA) tumbled 4.7 percent after announcing a consortium in which it owns 51 percent would buy two Indian hydroelectric power plants in a deal worth $1.6 billion. The deal expands TAQA's reach but exposes it to the Indian economy, which has recently been unstable.
Dana Gas rose 1.2 percent after it announced plans to start upgrading an Egyptian plant that would increase its output by 25 percent. Its decision may indicate confidence that it will recover more of the hundreds of millions of dollars owed to it by Egypt.
Abu Dhabi's measure slipped 0.3 percent, down for a second session since Wednesday's five-year high. Dubai's bourse lost 0.9 percent; it has essentially traded sideways since hitting a five-year high on February 17.
A company named Marka, describing itself as a "retail and F&B company", said on Saturday that it planned to conduct the first initial public offer on Dubai's main stock market for five years in a AED275m ($75m) deal.
However, when or whether that plan might go ahead remains unclear; contacted by Reuters, a spokeswoman for the company was unable to give details of the plan or the company's business, or identify its owners.
In its statement, Marka said it was still "under establishment"; Dubai Financial Market rules require companies to have been incorporated for at least two years before they can list.
In Qatar Mesaieed Petrochemical, the market's first new listing since 2010, fell by its daily limit of 10 percent for a second straight day. The stock soared 450 percent in its debut on Wednesday on the back of retail investor buying, valuing the stock at nearly three times levels which analysts consider fair.