Thursday, 22 January 2026
Equity markets across the Gulf region experienced a change in foreign investor behaviour during the final quarter of 2025, with overseas investors reducing their exposure after a period of strong inflows earlier in the year. Market data compiled by regional analysts indicates that net foreign transactions moved into negative territory during the quarter, reflecting more cautious positioning amid softer market conditions and lower energy prices .
The pullback was visible across most Gulf exchanges, although not uniformly. Markets in Saudi Arabia and Oman continued to attract net inflows from abroad, partially offsetting broader regional outflows. In contrast, exchanges in Abu Dhabi, Kuwait, Bahrain and Qatar recorded net selling by foreign participants, with Abu Dhabi accounting for the largest share of withdrawals during the quarter .
Despite the weaker fourth quarter, the overall picture for 2025 remained constructive. Over the full year, international investors still added to their positions across Gulf markets, although at a slower pace than in previous years. Saudi Arabia remained the main destination for foreign capital, followed by Abu Dhabi and Kuwait, while Dubai and Qatar also ended the year with modest net inflows. Oman and Bahrain were the only markets to record net foreign reductions on an annual basis .
Short-term trends within the quarter highlighted differing dynamics between markets. Saudi Arabia and Oman saw consistent foreign interest throughout the final three months of the year. Dubai, meanwhile, shifted from selling pressure earlier in the quarter to renewed inflows toward year-end. Other markets displayed more mixed patterns, while some, including Kuwait and parts of the UAE, experienced steady foreign outflows over the same period .
Trading activity across the region continued to evolve alongside these capital flows. The number of shares changing hands increased year on year, indicating sustained participation, although the overall value of transactions declined, reflecting weaker price performance in some of the largest markets. Sector-level data suggests that financial institutions and property-related companies remained among the most actively traded, while industries such as materials and telecommunications saw reduced turnover toward the end of the year .
Taken together, the data points to a year in which foreign investors remained engaged with Gulf equity markets but adopted a more selective and cautious approach as 2025 progressed, with outcomes varying significantly by country and sector.
