Foreign investors, including institutional and retail investors, were net buyers on GCC stock markets during Q2-2024 with net buying at $3.5 billion as compared to $1.5 billion in net buying during Q1-2024.

The trend remained positive since the start of the year with consecutive buying by foreign investors during the H1-2024 of the year, according to Kamco Invest, a regional non-banking financial powerhouse. The biggest buying was seen in Saudi Arabia with total net buying of $3.5 billion. UAE was next with Abu Dhabi exchange also seeing consecutive buying by foreigners that reached $766.6 million in Q2-2024.

Meanwhile, foreign investors were biggest sellers of Qatari stocks with net sales of $430.7 million during the quarter as compared to $67.1 million in net buy trades during the previous quarter.

Net buying in Bahrain highest

Kuwait was next with net sales of $296.0 million by foreigners followed by Oman and Dubai exchanges with net sales of $44.9 million and $25.4 million, respectively. Data for Bahrain showed net buying at $43.3 million, the highest level seen in 20 quarters during Q2-2024.

That said, the monthly trend showed Saudi Arabia and UAE witnessed net sell trades by foreign investors during April-2024 followed by net buy trades during the remaining two months. On the other hand, Qatar, Kuwait and Oman exchanges witnessed net sales by foreign investors during the quarter.

Some of the key factors that affected the flow of foreign money in the region included regional market trends, IPOs, geopolitical issues, economic health of the individual countries and crude oil prices. The quarter saw mixed trend in the equity market and skewed towards decliners as four out of seven exchanges reported declines during Q2-2024.

The expectations related to global interest rate changes also steered performance in the region. However, the seasonal selling pressure during the Eid Holidays resulted in a decline in the market during Q2-2024. As a result, local investors were net sellers during the month and these shares were grabbed by foreign investors resulting in a broad-based net buy trades by the latter.

Net buying

In terms of m-o-m performance, net buying value by foreign investors peaked during June-2024 with aggregate monthly net buying at $3.2 billion. May witnessed a decline with net buying at $596.5 million while April registered the net selling at $332.3 million.

Historical trend for trading by foreigners in GCC listed stocks showed declines merely in two quarter over the last five years. Foreigners bought the most stocks during Q1-2022 with net buy transactions of $11.0 billion, reflecting steep increase in buying mainly in Saudi Arabia and Qatar.

Trading by GCC investors (Excluding Bahrain due to unavailability of data) in GCC exchanges showed net buying during Q2-2024. Net buy trades of GCC investors reached $709.0 million in Q2-2024 compared to a net sale trade of $414.6 million in Q1-2024. Saudi Exchange witnessed the biggest net buying by GCC investors during Q2-2024 at $887.5 million followed by UAE exchanges at $285.8 million. On the other hand, Kuwait, Qatar and Oman exchanges recorded net sales by GCC investors in Q2-2024 partially offsetting the overall buying by GCC investors. In terms of monthly trend during Q2-2024, aggregate trading activity by GCC Investors on GCC exchanges peaked during June-2024 and hit the lowest trading month in May-2024.

Trading activity

In terms of the aggregate trading activity, total GCC volume traded declined by 14.0% q-o-q to reach 69.3 billion shares in Q2-2024 as compared to 80.6 billion shares in Q1-2024. All the GCC Exchanges reported a q-o-q decline in volume during the quarter barring Dubai and Bahrain. Dubai topped the list with a gain of 4.1% to record 11.7 billion in Q2-2024 compared to 11.3 billion in Q1-2024, followed by Bahrain with 171.6% to record 0.5 billion in Q2-2024 vs. 0.18 billion in Q1-2024. On the other hand, Saudi Arabia and Abu Dhabi declined by 27.8% and 12.5% billion in Q2-2024, respectively.

Similarly, the total value of shares traded during Q2-2024 also declined and was largely broad based. Bahrain was the only market that showed a gain in value traded while the rest of the markets declined during the quarter. Aggregate value traded reached $158.0 billion during the Q2-2024 vs. $202.0 billion in Q1-2024. Bahrain reported the biggest increase in trading activity with value traded increasing from $0.16 billion in Q1-2024 to $0.19 billion in Q2-2024.

Trading activity on the Saudi Exchange declined during the year from $154.5 billion in Q1-2024 to $117.5 billion in Q2-2024, similarly its share in aggregate GCC trading activity decreased from 76.5% in Q1-2024 or to 74.4% in Q2-2024. 

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