RIYADH: Foreign investors sold a net $2.3 billion of Gulf Cooperation Council stocks in the third quarter of 2026, the largest quarterly outflow since records began in 2019, according to a new report.
Local investors cushioned the blow with net buying of $760.7 million, reversing second-quarter net selling of $921.2 million, investment firm Kamco Invest said.
In Saudi Arabia, local investors switched to net purchases of SR5.6 billion ($1.49 billion), compared with net sales of SR5.8 billion previously, led by institutions, which recorded SR5.9 billion in net purchases, the analysis showed.
“GCC equity markets witnessed divergent trends during Q3-2026, reflecting the impact of geopolitical developments on market conditions, investor sentiment, corporate earnings, and sectoral performance across the region,” the release said.
Saudi strength
GCC investors also bought a net $323.3 million of Saudi stocks, more than in any other regional market, Kamco said.
The Kingdom accounted for five of the region’s 10 most-traded stocks, led by Saudi lender Al Rajhi Bank at $6.6 billion and Aramco at $3.7 billion, the report said.
Year to date, foreign investors remained net buyers of SR6.7 billion in the Saudi market, despite third-quarter net sales of $1.5 billion that followed purchases of the same size in the second quarter, the alanysis added.
Arab News previously reported that the Tadawul All Share Index had risen 5.1 percent in August, outperforming Gulf peers on stronger oil prices, earnings and easing geopolitical tensions.
Expert view
Vijay Valecha, chief investment officer at brokerage firm Century Financial, told Arab News that rising regional geopolitical risks drove the sell-off.
“For international investors, the concern was not simply higher oil prices, but the possibility that expanding hostilities could disrupt exports, weaken business confidence and affect corporate earnings,” he said.
He highlighted that the Kingdom’s fiscal buffers and the East-West Pipeline to the Red Sea were helping curb the disruption.
Valecha noted that reforms such as scrapping the Qualified Foreign Investor requirement remain relevant to long-term investors, and that GCC markets were expected to show strong momentum in the fourth quarter.
Market reforms
In January, the Capital Market Authority’s board approved opening the main market to all foreign investors from Feb. 1, a move it said would broaden participation and enhance liquidity.
In July, Kamco reported that Saudi Arabia had been the only GCC market with net foreign buying in the second quarter.
Regional picture
Foreign net selling reached $414.3 million in Dubai, $284.1 million in Kuwait, and $36.1 million in Abu Dhabi.
In Oman it stood at $26.5 million, and $21.8 million in Bahrain, while Qatar saw net buying of $10.9 million, the report stated
Over nine months, foreign investors sold a net $1.1 billion across the GCC, versus net buying of $11.7 billion a year earlier, while quarterly trading value fell 14.4 percent to $135 billion, Kamco said.