Volatility in 2025 should not detract from the achievements made by Gulf Cooperation Council (GCC) equity markets in the last five years, nor cloud opinion concerning the opportunities for investors in a maturing market. While short-term fluctuations have captured headlines, the real story is one of remarkable transformation and enduring potential.
Over the past five years, the GCC’s capital markets have experienced profound transformation. Ambitious economic diversification agendas, sweeping regulatory reforms and rapid digitalization have redefined the region’s investment landscape, fueling unprecedented interest from both domestic and international investors.
Gains Made
These deliberate strides have yielded significant results. Aggregate market capitalization across GCC exchanges rose from USD 2.03 trillion in 2022 to over USD 4.2 trillion by the end of 2024, driven by a wave of initial public offerings (IPOs) and the expansion of the non-oil sector. Government-backed projects in tourism, technology and infrastructure continue to attract regional and global capital. The financial sector itself has become a magnet for international institutions, with global banks and asset managers establishing or expanding their presence in Dubai, Abu Dhabi and Riyadh.
Sustained economic expansion and growing investor confidence have been underpinned by a combination of high oil prices, fiscal surpluses and crucially, a determined policy shift towards economic diversification and capital market deepening. This intentional evolution is shaping the region’s resilience and its prospects for long-term growth.
Regulatory reforms, such as the tightening and standardization of free-float requirements for IPOs, have enhanced market liquidity and attracted institutional investors. The liberalization of foreign investment rules has been significant in simplifying access and improving appeal for foreign capital.
Performance in 2025
The strength of the GCC IPO market in 2024 was unmistakable, with a record 53 listings raising USD 13.7 billion, up from 46 IPOs and USD 10.5 billion in 2023. However, hopes of sustaining this pace faded in early 2025 as volatility took hold across global markets. The fortunes of the regional stock exchanges have been mixed: the Tadawul All Share Index, the GCC’s largest and most liquid, posted a year-to-date return of -8.62% by mid-July; Kuwait’s All Share Index, meanwhile, has been the GCC’s top performer with a return of 18.88%, attributed to strong sectoral gains, especially in technology and insurance and a robust pipeline of IPOs and listings.
While IPO activity in the GCC during the first half of 2025 remained robust, notable shifts emerged compared to previous years. Saudi Arabia maintained its dominance, accounting for 22 of the 25 IPOs and raising USD 2.86 billion—an 85% share of total GCC IPO proceeds and a 36% increase in value over H1 2024. In contrast, the UAE experienced a significant decline, with only two listings – Alpha Data, which raised USD 163 million, and Dubai Holding’s REIT, which raised USD 584 million—a fall of 43% from a total USD 1.32 billion raised in H1 2024. Oman’s Asyad Shipping Company was the only IPO in Oman, raising USD 333 million and achieving the highest post-listing gain in the region.
Total IPO proceeds reached USD 3.45 billion over 25 IPOs, down from USD 3.6 billion over 23 IPOs in the same period in 2024. This decrease suggests a trend toward smaller deal sizes.
A Move Towards Greater Market Maturity
Viewed more broadly, a decrease in average deal size is not necessarily negative. It often signals a more discerning market, with investors increasingly favoring companies with strong fundamentals and credible growth prospects.
Historically, GCC capital markets have been characterized by high retail participation, limited analyst coverage, and a focus on large-cap, often state-linked companies. These trends are receding. The investor base is becoming more institutionalized, with sovereign wealth funds, pension funds, family offices and regional asset managers playing a larger role. These investors typically employ more sophisticated, research-driven investment strategies, which has led to increased analyst coverage and improved corporate guidance. This, in turn, enhances transparency and encourages investment decisions grounded in a deeper understanding of company prospects.
Effectively communicating the merits of a company has become more vital–a clear and consistent investor relations approach can significantly boost a company’s appeal to stakeholders. The recent Alpha Data IPO in the UAE, though modest in size, is said to have outperformed expectations due to strong investor confidence in, and understanding of, the company’s fundamentals.
Greater institutional involvement also bodes well for the long-term health of the market. Sovereign wealth funds’ capital recycling programs and consistent allocations to regional asset managers, plus wealth creation among family offices, have all contributed to a more stable and mature investor base. This has fostered a healthy supply-demand dynamic and increased long-term participation. While short-term gains still attract some retail investors and hedge funds, the prevailing trend is toward a more strategic, long-term investment approach, which aligns with the region’s broader economic ambitions.
The scale of ambition within the GCC remains undiminished, with each country’s economic vision driving continued progress. The achievements of the last five years are likely to be repeated and emulated, accelerating the region’s alignment with global best practices. Regional and international players continue to show strong interest–IPOs remain consistently oversubscribed and foreign investors have been net buyers of GCC stocks for six consecutive quarters through Q2 2025, underscoring sustained confidence in the region’s growth trajectory. The inclusion of GCC markets in global indices has further amplified both passive and active fund inflows, reinforcing the region’s growing prominence on the world stage.
Looking ahead to the remainder of 2025 and into 2026, the outlook for GCC equity markets is cautiously optimistic. A strong IPO pipeline, ongoing economic reforms and supportive macroeconomic conditions provide a solid foundation for continued growth. Risks persist–particularly those related to oil prices, global trade, and geopolitical tensions–but the GCC is well-positioned to maintain its momentum as a leading destination for IPOs and capital market activity. The region’s capacity to adapt to evolving market dynamics and capitalize on its unique strengths will be essential to sustaining this progress in the years ahead.
If the GCC continues to build on its recent reforms and ambitions, it stands not only to weather short-term volatility, but to emerge as a defining force in global capital markets.
