GCC equity markets saw foreign investor inflows slow to $939 million in January, down from $1.04 billion in December and a sharper drop from November, Zawya has reported citing Iridium Advisors.
However, Iridium chief executive Oliver Schutzmann said the decline reflects investors being more selective, not a weakening of interest. He told Zawya that while factors like regional conflicts may have played a role, investors appear to be reassessing valuations rather than exiting.
The UAE, the top recipient of inflows in 2024, saw its momentum slow in January, attracting just over $115 million, Iridium data showed. Saudi Arabia led with $694m, followed by Kuwait at $133m.
Mr Schutzmann noted that while the UAE’s January inflows were lower than previous months, they were still up 19 per cent year-on-year, the strongest jump in the region. He added that corporate earnings and valuations will be key to the UAE’s performance this quarter.
Mr Schutzmann pointed out that foreign investor positioning in GCC equities remains high, at record levels, suggesting continued regional interest.
He said global emerging market funds are at peak allocation levels, particularly in Saudi Arabia and the UAE, but that a large portion of these funds remain under-exposed to the region, indicating room for further inflows.
However, he cautioned that investors, particularly in the UAE, may be approaching new allocations with more scrutiny after a strong run.
He said that fluctuating interest rates and a potential Trump presidency create uncertainty, but there’s no clear sign recent changes have driven investors out of the GCC.
Mr Schutzmann emphasised that foreign institutional investors typically have long-term investment horizons and aren’t likely to exit the market based on short-term fluctuations.
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