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Foreign capital inflows in the GCC equity markets increased to $616.7 million in May, led by strong growth in the UAE and Saudi Arabia.
Equity markets in the GCC accumulated net inflows of $1.77 billion year-to-date, according to data by the Dubai-based management consultants and financial advisors Iridium.
The positive trend also resulted in a higher net inflow in the GCC Emerging markets, with Kuwait, Qatar, Saudi Arabia, and the UAE recording a combined inflow of $636.2 million.
The UAE led the region with the highest net inflow of $680.4 million, followed by Saudi Arabia with $169.3 million. However, both Kuwait (-$56.4 million) and Qatar (-$157.1 million) experienced net outflows.
Despite two markets underperforming, this month’s data reversed the negative trend observed in April 2024, which posted a total net outflow of -$596.7 million for the GCC, with Saudi Arabia recording the largest outflow of $409 million, followed by Kuwait ($97 million), the UAE ($48.6 million), and Qatar ($34.9 million).
At the time, Iridium had said the shifts were indicative of broader market responses to the danger of escalating tensions in the Middle East and the challenging global economic climate, particularly the impact of higher for longer interest rates.
In year-to-date inflow charts, the UAE maintained its lead, contributing $1.67 billion to the total. Saudi Arabia followed with $224 million in net inflows. In contrast, Kuwait and Qatar have reported mixed performances, with Kuwait posting modest net inflows of $190 million while Qatar experienced net outflows amounting to -$125 million.
Data further revealed the probability of an index rise after net inflows continued to be highest for the MSCI Saudi Arabia Index at 51%, followed by the MSCI Qatar Index at 37%, and both the MSCI UAE and MSCI Kuwait Indexes at 28%, emphasising the importance of foreign capital in driving market performance.
(Reporting by Bindu Rai, editing by Seban Scaria)
