Wednesday, 7 January 2026
Global equity markets closed 2025 with one of their strongest performances in recent years, but Gulf Cooperation Council (GCC) markets once again underperformed global peers amid oil price weakness and heightened regional geopolitical risks, according to a report by Kamco Invest .
The MSCI World ACW Index rose 20.6% in 2025, marking its best annual performance in six years, supported by interest rate cuts, resilient economic growth, strong corporate earnings and a continued rally in artificial intelligence-related stocks. Emerging markets outperformed developed peers, with the MSCI Emerging Markets Index gaining 30.6%, while Asian equities posted their strongest year since 2017. Precious metals also recorded exceptional gains, with gold and silver reaching their highest annual increases since 1979. In contrast, crude oil prices fell sharply, declining 18.5% over the year and closing at USD 60.9 per barrel.
Against this global backdrop, GCC equity markets delivered modest returns. The aggregate MSCI GCC Index rose just 1.6% in 2025, following a 0.7% increase in the previous year. Kamco Invest attributed the subdued performance to a combination of regional geopolitical tensions, including conflicts in Gaza and instability in neighboring countries, as well as the sustained decline in oil prices. Despite these pressures, non-oil economic activity across the region remained resilient, supported by an estimated USD 4 trillion project pipeline and continued foreign investor participation.
Performance across individual GCC markets varied significantly. Oman emerged as the strongest performer in the region, with its benchmark index rising 28.2%, marking one of the best equity market performances globally in 2025. Kuwait followed with a gain of 21.0%, driven by a broad-based rally across large- and mid-cap stocks, while Dubai’s market advanced 17.2%, supported by strong trading activity and a buoyant real estate sector. Abu Dhabi, Qatar and Bahrain recorded mid- to low-single-digit gains over the year.
Saudi Arabia stood out as the weakest market in the region, with the Tadawul All Share Index falling 12.8%, its largest annual decline since 2015. The downturn reflected investor concerns over falling oil prices, regional geopolitical developments and weakness in large-capitalization stocks, particularly in the energy, materials and utilities sectors. Shares of Saudi Aramco declined 15% during the year, contributing significantly to the market’s overall performance.
Sector performance across the GCC was mixed. Telecommunications, banking and diversified financials were among the few sectors to record double-digit gains, helping to partially offset broader market weakness. In contrast, consumer durables, insurance and utilities posted steep declines, reflecting both sector-specific challenges and heavy exposure to the Saudi market.
Trading activity across GCC exchanges showed uneven trends. While some markets, such as Kuwait, Abu Dhabi and Dubai, recorded strong increases in volumes and values traded, activity declined sharply in Saudi Arabia amid weaker investor sentiment. At the regional level, foreign investors remained net buyers of GCC equities during the year.
Kamco Invest noted that while 2025 was marked by volatility and underperformance relative to global markets, key structural drivers in the GCC—such as economic diversification, infrastructure investment and steady non-oil growth—continued to provide underlying support. However, the report emphasized that oil price trends and regional stability remain critical factors shaping market performance going forward .
