Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
Foreign investors continued to demonstrate strong confidence in the UAE’s capital markets during the third quarter of 2025, with both institutional and retail investors emerging as net buyers across Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM). The steady inflows reflected continued investor appetite for the region’s robust earnings performance and expanding economic base.
Data from the GCC Trading Activity Quarterly Report for Q3-2025 by Kamco Invest showed that foreign investors were net buyers to the tune of $798.7 million on ADX, while DFM recorded net foreign purchases worth $614.9 million during the same period.
Both exchanges saw consistent monthly net inflows throughout the quarter, underlining the strength and persistence of foreign participation in UAE equities.
Over the first nine months of 2025, the UAE consolidated its position as the most attractive market for foreign investors in the Gulf, with total net buying by international investors reaching $5.9 billion.
This represents the largest foreign inflow among GCC markets for the period, surpassing Saudi Arabia and Kuwait.
Market performance mirrored this positive investor sentiment. DFM’s main index advanced by 2.3% in Q3 compared to the previous quarter, driven by gains in banking, logistics, and real estate shares.
ADX posted a modest 0.6% rise, supported by strong performances from blue-chip energy, financial, and industrial stocks.
Both markets maintained foreign inflows across all three months of the quarter, a continuation of the trend that has defined the UAE’s capital markets since 2023.
Across the wider Gulf Cooperation Council (GCC) region, foreign investors were net buyers for the seventh consecutive quarter, underscoring the strong regional investment narrative. The GCC collectively recorded net foreign inflows of $4.8 billion in Q3-2025, up from $4.2 billion in the previous quarter.
For the first nine months of 2025, total net foreign buying across GCC markets rose 35.4% year-on-year, reaching $11.7 billion compared with $8.6 billion during the same period last year. The report attributed the continued momentum to a combination of improved earnings outlooks, economic diversification programmes, and regulatory measures aimed at broadening foreign ownership.
Saudi Arabia led the region in attracting foreign investments during the quarter, with net inflows of $2.8 billion, reflecting continued demand for shares of financial and industrial giants listed on Tadawul.
The UAE ranked second, followed by Kuwait ($283.3 million), Qatar ($267.2 million), and Bahrain ($22.9 million). Oman was the only GCC market to record foreign outflows, registering net selling worth $38.7 million during Q3.
In performance terms, the MSCI GCC Index advanced 4.6% in Q3-2025, closing the quarter at 767.9 points, marking its best quarterly gain in nine months.
Among individual markets, Oman emerged as the best performer, with its benchmark index surging 15.1% in Q3, driven by financials and industrials. Kuwait followed with a 4.0% gain, while Saudi Arabia added 3.0%, Qatar rose 2.8%, and DFM climbed 2.3%. ADX registered a 0.6% gain, and Bahrain edged up 0.2%, rounding out a broadly positive quarter across the Gulf.
Foreign inflows into GCC equities have been underpinned by regulatory and structural reforms aimed at deepening capital markets and enhancing transparency. In Saudi Arabia, authorities advanced plans to lift the foreign ownership cap on listed companies beyond the current 49%, a move that is expected to further enhance the market’s attractiveness ahead of major index rebalancing events.
