(Bloomberg) — Kuwait has delivered more gains for stock investors than any other major market in the Middle East and Africa this year. But, after a rally driven mostly by bets on an anticipated upgrade, some traders sound ready to take their money elsewhere.

The oil-rich Gulf nation’s $103 billion stock market, similar in size to Ireland’s, has surged more than 40% in the past two years amid increasing expectations of an MSCI promotion to emerging from frontier status.

The New York-based index compiler obliged last month, saying the elevation will happen in 2020 pending some local enhancements and spurring a rally that lasted more than two weeks.

Kuwaiti lenders, regularly lauded by analysts as among the most resilient in the region, led gains that are now tempting some investors to take profit. The Premier Market index, composed of 19 of the biggest and most liquid shares, fell in two of the three sessions this week, paring its advance in July to about 6%.

Kuwait is trading “well ahead of its typical valuation,” with a “near all-time low in dividend yields,” said Adam Choppin, an investment officer at FIS Group in Philadelphia. An expected rate cut by the U.S. Federal Reserve is likely to put pressure on the dollar, which will flow through to the Kuwaiti dinar, he said. Plus, most foreign funds positioning for the upgrade are already in place, according to Choppin, who started the year with a neutral call on the country after being overweight in 2018.

“This feels like a good point to cash in any gains,” he said.

Here’s where Kuwaiti stocks stand:

• Foreigners have been major net buyers since mid-2017 as anticipation around upgrades increased. Local authorities stepped up reforms in the past two years, aiming to earn the promotions and attract international traders. The efforts paid off last year when FTSE Russell elevated Kuwait to emerging-market status.
• A London-listed ETF focused on Kuwait attracted record inflows in the week last month when MSCI made its announcement on the Gulf nation’s status.
• The decision has led some investors to question whether Kuwait will become a small fish in a big pond once the upgrade is implemented, reducing it to a blip on global investors’ radars. It is currently the largest member of MSCI’s frontier markets benchmark, but would represent less than 1% of the MSCI EM index.
• Even so, the $2.8 billion in passive investments expected to be spurred by the upgrade should be more than enough to counter frontier investor outflows of about $155 million, according to Mohamad Al Hajj, equities strategist at EFG-Hermes Holding in Dubai.
• Buying fueled by the buzz around Kuwaiti stocks has pushed the local index above a level that signals gains may have been overdone in 46 sessions this year. That’s already more “overbought” days than in all of 2018.

“There is risk to the Kuwait rally, as it appears to be largely technically driven,” said Asha Mehta, a senior portfolio manager at Acadian Asset Management LLC in Boston. “Corporates in general are showing limited growth and quality attributes, and valuations are stretched. However, the momentum could persist for some time given positive overall GCC sentiment and upward trending commodity prices.”

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