22/04/2026 05:52 AST
Foreign investors were net buyers of $1.47 billion in Gulf Cooperation Council equity markets in the first quarter of 2026, marking a sharp reversal from the net selling of $313.5 million in the previous quarter.
Saudi Arabia accounted for the largest share of foreign purchases, attracting $2.6 billion in net buying as international investors returned to the region amid ongoing economic reforms and improving sentiment, according to Kamco Invest's GCC Trading Activity Quarterly report.
The rebound in foreign inflows comes as Gulf markets enter 2026 with renewed investor interest, supported by resilient fiscal balances, ongoing diversification programs, and continued efforts to open capital markets to international participants.
Saudi Arabia has remained central to that trend, with reforms under Vision 2030 helping deepen market liquidity and broaden foreign access.
The renewed inflows reflect growing foreign participation across GCC exchanges at the start of the year, supported by policy changes and market liberalization efforts, particularly in the Kingdom.
"Five Saudi-listed companies ranked among the top 10 most traded GCC stocks by trading value in Q1-2026, emphasizing Saudi Arabia's continued dominance in regional equity markets," the report stated.
These included Al Rajhi Bank, Saudi Aramco, Saudi National Bank, as well as Alinma Bank, and Saudi Arabian Mining Co., according to the report.
While the first two months of the quarter saw consistent buying, March recorded a pullback, partially offsetting earlier gains.
Regional and international research points to continued support for GCC equities through 2026, underpinned by strong fiscal positions and reform momentum.
J.P. Morgan highlights sustained foreign inflows in emerging markets debt driven by index inclusion and stable currency regimes, while S&P Global notes that non-oil sector expansion and government spending are expected to support earnings growth across the region.
These forecasts were issued prior to the outbreak of the Iran war and may not fully reflect the potential impact of heightened geopolitical risks on regional markets.
According to Kamco Invest's recent report, Saudi Arabia's dominance was followed by Qatar and Oman, which recorded net foreign inflows of $232.5 million and $61.0 million, respectively.
In contrast, foreign investors remained net sellers in the UAE and Kuwait, with Dubai witnessing outflows of $654.0 million, followed by Abu Dhabi at $379.7 million and Kuwait at $343.4 million during the quarter.
The Kingdom's market performance was supported by continued progress under its Vision 2030 agenda, including the removal of Qualified Foreign Investor restrictions in February, allowing direct participation by both institutional and individual foreign investors.
Additionally, a new real estate law implemented in January granted foreign nationals the right to own property in designated zones, subject to regulatory approvals.
These measures contributed to sustained inflows into Saudi equities, signaling continued international confidence in the country's financial markets.
Trading patterns across the region showed mixed trends on a monthly basis. Dubai, Abu Dhabi, Saudi Arabia, and Qatar recorded consecutive foreign buying in January and February before shifting to net selling in March.
Oman, however, saw initial outflows followed by steady inflows through the remainder of the quarter, while Kuwait alternated between selling and buying before ending the quarter with net outflows.
The report also noted that broader market conditions influenced capital flows, including geopolitical tensions in the region, disruptions around the Strait of Hormuz affecting oil prices, and seasonal factors such as Ramadan and Eid holidays, which dampened trading activity.
Overall trading activity in the GCC reflected softer market conditions, with five of seven exchanges posting declines during the quarter.
Local investors were net sellers, while foreign investors absorbed these positions, resulting in the overall net inflows.
Total trading volumes fell 23.4 percent quarter on quarter to 77.1 billion shares, although the total value traded edged up slightly to $145 billion, supported largely by increased activity in Saudi Arabia, which accounted for more than half of total traded value in the region.
Arab News
Please wait...
