UAE leads as GCC foreign inflows cross $60 billion milestone

A new report released on Thursday indicated strong foreign inflows into the Gulf Cooperation Council (GCC) stock markets in February 2025, with net inflows reaching $2.47 billion, a significant acceleration from $939 million in January. This notable increase suggests growing investor confidence in the region's markets, fueled by positive economic indicators.

The UAE led with inflows of $2.47 billion, followed by Saudi Arabia ($352 million) and Kuwait ($304 million). Qatar, however, experienced outflows of $212 million, while Oman saw even larger outflows of $446 million. These figures reflect shifts in investor capital allocation across different markets, potentially influenced by varying economic performances and investment opportunities.

Compared to the same period last year, foreign inflows more than doubled, increasing from $890 million in February 2024 to the current level. This growth momentum is part of an overall acceleration, with cumulative foreign inflows exceeding $60 billion, up from $50 billion in August 2024 and $30 billion in March 2022. Index inclusions, corporate earnings growth, and increased allocations to GCC markets by global emerging market funds likely supported this growth.

Saudi Arabia continues to lead the region with cumulative foreign inflows of $34 billion, followed by the UAE ($20 billion), Kuwait ($4.7 billion), and Qatar ($3.1 billion). Qatar's capital flows have been less stable. Abu Dhabi and Dubai stood out among the UAE's emirates, with net foreign inflows of $2.26 billion and $208 million in February, respectively. Cumulatively, Abu Dhabi's net inflows stand at $15.9 billion, while Dubai's are at $4.2 billion.

The Iridium report stated, "Companies in strongly performing markets should seize this opportunity to enhance investor confidence by clearly updating business strategies and future growth drivers. For markets experiencing outflows, including Oman and Qatar, concerns regarding liquidity, earnings visibility, or macroeconomic risks should be addressed." The report further added, "As foreign investors become more active in asset allocation, proactive communication with investors will be key to securing stable, long-term foreign capital."