Gulf equities continue their third-month ascent, fueled by heightened investor confidence
Gulf Stock Markets Post Third Consecutive Month of Gains
The Gulf stock markets continued their upward trend in July 2025, with gains led by Dubai and supported by optimism about accelerating economic growth, abundant market liquidity, attractive equity valuations, and positive earnings expectations for Q2 2025.
The MSCI GCC index overall gained 2.2% for the month, with Dubai leading the GCC markets with a standout 7.9% gain. Oman and Qatar also posted strong gains of 6.2% and 4.8% respectively. However, Saudi Arabia and Bahrain underperformed, with Saudi Arabia's Tadawul All-Share Index declining 2.2% in July and year-to-date down 9.3%, mainly due to investor concerns around the Kingdom's project market and oil prices near $70 per barrel. Bahrain saw a slight decline of 1.5% year-to-date.
The gains were supported by heightened investor confidence fueled by liquidity and valuation attractiveness in most Gulf markets. Global factors such as US inflation jitters and underwhelming earnings reports globally contributed to mixed signals but did not derail the Gulf’s upward trend. Notably, Saudi Arabia led Gulf IPO activity in Q2 2025, reflecting strong investor demand despite the stock market dip.
In terms of market capitalization, Abu Dhabi's market capitalization saw the largest jump, reaching $839 billion, while Saudi Arabia accounted for a significant loss of $308 billion in market capitalization in the first seven months. Kuwait's market capitalization stood at 52.3 billion dinars at the end of July, with banks accounting for 63.6% of market value.
Trading values in Gulf markets rose 12% in July to $53 billion, with Saudi Arabia accounting for 54% of the total trading value. Monthly trading value in the Qatar Stock Exchange reached $2.59 billion, down 6% from June. The Main Market Index in Boursa Kuwait advanced 5.8%, benefiting from strong activity in smaller-cap companies, while Premier Market stocks in Boursa Kuwait rose 1.16% and accounted for nearly half of the monthly liquidity.
The market capitalization of Gulf stock markets increased to $3.93 trillion in July 2025. Easing geopolitical tensions in the Middle East and oil prices remaining above $70 per barrel also contributed to the positive developments. Boursa Kuwait posted moderate gains in July, with the General Market Index rising 1.92%. Abu Dhabi's market recorded a 4.15% gain in July, marking four consecutive months of growth.
Inflation figures rose to 2.7% year-on-year in June. Price-to-earnings (P/E) ratios in Gulf markets average 16.1x, with Kuwait's at 18.4x, Saudi Arabia at 15.3x, Abu Dhabi at 21.9x, Dubai at 11x, Qatar at 12.9x, and Bahrain at 9.4x. The Federal Reserve is awaiting further data before deciding on interest rate cuts, a decision that could influence global markets.
In summary, the Gulf stock markets continued their positive trend in July 2025, with Dubai leading the way and Oman and Qatar also posting strong gains. Saudi Arabia and Bahrain underperformed due to sector-specific concerns and cautious investor sentiment. The market capitalization of Gulf stock markets increased to $3.93 trillion, with Abu Dhabi seeing the largest jump and Kuwait's market capitalization standing at $52.3 billion. Global factors and US inflation jitters contributed to mixed signals, but did not derail the Gulf’s upward trend.
Personal-finance decisions can be influenced by the trend in the Gulf stock markets, as they posted a third consecutive month of gains in July 2025, with the market capitalization increasing to $3.93 trillion. This upward trend was led by Dubai, Oman, and Qatar, although Saudi Arabia and Bahrain underperformed. Investors might consider the attractive equity valuations and positive earnings expectations in these markets for their business or personal-finance strategies.
