GCC foreign inflows fall under $1 billion in January 2025 amid heightened investor selectivity: Report

The latest report indicates a significant decrease in foreign investor inflows into Gulf Cooperation Council (GCC) stock markets in January 2025, recording $939 million. Data from investor relations consultancy Iridium Advisors shows that this figure is lower than the $1.04 billion in December 2024 and the $1.42 billion in November 2024, suggesting a cooling trend.

Saudi Arabia led with net inflows of $694 million, followed by Kuwait with $133 million and the United Arab Emirates with $115 million. Qatar remained largely neutral with inflows of $8 million, reversing the outflows of $43 million in December, indicating a potential stabilization. While inflows remain positive, the recent slowdown suggests that foreign investors are becoming more cautious when allocating assets, possibly due to global economic uncertainties.

As of January 2025, Saudi Arabia remained the leader in cumulative foreign inflows, totaling $33.49 billion, almost double the $17.61 billion of the UAE. The UAE, which was the largest beneficiary of inflows in 2024, has seen its growth momentum slow, indicating that investors are re-evaluating valuations after a strong performance last year. Meanwhile, Kuwait has shown steady growth with cumulative inflows of $4.41 billion, while Qatar is the least attractive market for foreign capital, with unstable capital flows over the past year, totaling $3.31 billion.

The January foreign capital flow data shows that while foreign investors remain engaged in the GCC markets, their strategies have become more cautious. Saudi Arabia's dominance in cumulative inflows highlights long-term investor confidence in its market. Iridium Advisors believes that the recent slowdown in the UAE indicates that investors are increasingly sensitive to valuations, emphasizing the need for strategic communication. The agency recommends that companies prioritize clearly communicating their growth strategies, capital allocation, and financial performance to maintain foreign investor interest. As market conditions change, investor relations teams should proactively articulate their value propositions and actively engage with foreign investors, the report concludes, highlighting the importance of transparency and proactive engagement.