The GCC markets experienced cumulative net foreign inflows exceeding $50 billion for the first time in August 2024, indicating the region’s increasing attraction to international investors. The GCC area has drawn net foreign inflows totaling $4.7 billion over the last 12 months, with Saudi Arabia leading the way at $4 billion and the UAE coming in second at $2 billion.
Growing investor confidence drives growth
August saw significant net foreign inflows of $892 million into the GCC’s equity markets, mostly from Saudi Arabia and the United Arab Emirates. Following a $310 million outflow in July, the Kingdom saw a notable recovery, reporting a $612 million net inflow. In the meantime, inflows into the UAE totaled $270 million, a minor decrease from $372 million in July.
Furthermore, Kuwait recorded positive inflows of $67 million, while Qatar maintained its negative trend with a $56 million net outflow.
Even though emerging markets saw net outflows in August, the GCC continued to perform strongly, which is why foreign investors are becoming more and more drawn to it. According to Iridium’s monthly analysis, these movements were probably mostly driven by positive sentiment, as corporates saw a new peak in earnings call sentiment, which was a reflection of strong financial performance and rising investor and analyst confidence.
With a net inflow of $892 million in August 2024 compared to $128 million in August 2023, this indicates a notable yearly improvement and increased investor confidence in the area.
Saudi Arabia’s recovery boosts regional market
Growth was greatly aided by Saudi Arabia’s recovery from earlier this year’s volatility, which included a $597 million withdrawal in April. This highlights Saudi Arabia’s significance as a catalyst for capital flows in GCC markets.
However, Oman faced persistent difficulties, with net outflows of $938 million in 11 of the previous 12 months. Like other countries, Qatar also suffered, with withdrawals occurring in 7 of the previous 12 months, resulting in a $431 million negative balance.
The UAE is also becoming more powerful, and this data confirms Saudi Arabia’s dominance as the primary source of foreign capital flows in the GCC markets. But Oman and Qatar still struggle, constantly falling short in their efforts to draw in and hold on to foreign capital.
