The Abu Dhabi Stock Exchange (ADX) emerged as the leader in foreign investment among GCC stock markets during the first quarter, according to a report.
Data from Kamco Invest indicated that foreign investors purchased shares worth $2.3 billion on ADX, surpassing Boursa Kuwait, which saw $705.6 million in foreign share acquisitions. The Dubai Financial Market secured third place with foreign investments totaling $343 million.
Across the GCC stock markets, foreign investors, comprising both institutional and retail categories, were net buyers in Q1-2025, with net purchases amounting to $2.8 billion, a slight decrease from $3.0 billion recorded in Q4-2024. “The year began positively, with consistent buying trends in the first two months, followed by a shift to net selling in March 2025,” noted the report authored by Junaid Ansari, Head of Investment Strategy & Research at Kamco, alongside Analyst Vineetha K. Yeluri.
The top three markets were closely followed by the Saudi and Bahrain exchanges, which reported net buy transactions of $252.3 million and $23.2 million, respectively. In contrast, Qatar and Oman reflected net selling figures, with losses of $421.0 million and $459.2 million for Q1-2025.
Analysis of the monthly trends revealed that Boursa Kuwait experienced continued foreign buying throughout the quarter. Alternatively, Saudi Arabia and the UAE recorded net foreign purchases in the first two months, which were followed by net selling in March 2025. Recently, the Saudi Capital Market Authority (CMA) announced that foreign investments would be allowed in Saudi-listed companies owning real estate in Makkah and Madinah, a strategy aimed at attracting foreign capital and enhancing liquidity for ongoing and future projects, according to the report. Moreover, Qatar experienced net foreign buying in January 2025, followed by net sales in the subsequent two months.
Conversely, the Oman exchange saw net sales by foreign investors for the quarter. “The Muscat Stock Exchange has introduced new investment initiatives involving collaboration with other exchanges to improve liquidity in various markets and stimulate increased local and international investments,” the report stated.
Key factors influencing the influx of foreign capital in the region included local market trends, IPO activities, geopolitical developments, the economic conditions of the countries involved, and crude oil prices. Overall, the equity market trend leaned towards declines, with six of the seven exchanges reporting downward movements during Q1-2025. Investor sentiment was affected by uncertainties related to US trade policies and a predicted slowdown in the US economy.
The series of announcements from the US government regarding tariffs on imports, along with counteractions from trading partners, cast a shadow on global economic growth expectations. “Seasonal selling pressures during the Eid Holidays contributed to the market downturn. Consequently, local investors became net sellers during the quarter, allowing foreign investors to acquire these shares, leading to broad-based net buying by them,” the report explained.
In terms of month-over-month performance, foreign investors recorded the highest net buying activity during February 2025, totaling $2.4 billion. January saw net buying of $833.8 million, while March experienced a drop, concluding with net selling at $518.4 million. “Historically, foreign trading in GCC-listed stocks has only seen declines in one quarter over the last five years. Foreign buying peaked in Q1-2022 with net transactions amounting to $11.0 billion, driven by significant increases in Saudi Arabia and Qatar,” the report indicated.
Within the Saudi market, local investors were net sellers in Q1-2025, amounting to SAR 945.6 million, a decrease from SAR 4.2 billion in net selling during Q4-2024. However, Saudi institutions were net buyers of SAR 102.8 million, which was more than counteracted by net selling of SAR 1.0 billion from retail investors. Non-GCC foreign investors recorded net buy transactions of SAR 2.4 billion during the quarter, partially offset by net sales from GCC investors at SAR 1.5 billion.
Trading activity by GCC investors (excluding Bahrain due to lack of data) exhibited net selling trends in Q1-2025, with total net sales reaching $482.3 million, a slight drop from $505.3 million in Q4-2024. Boursa Kuwait noted the largest net buying by GCC investors during Q1-2025 at $56.9 million, followed by Dubai with $12.4 million. In contrast, exchanges in Saudi Arabia, Abu Dhabi, Qatar, and Oman experienced net sales by GCC investors during this period, which partially offset the overall buying trend by GCC investors.