UAE stocks extend foreign investor exodus as Dubai leads GCC outflows in 2Q

Foreign investors continued to head for the exits on UAE stock markets in 2Q, with Dubai posting the GCC’s largest foreign outflows for the second straight quarter as regional tensions kept investors on edge, according to Kamco Invest’s GCC Trading Activity Quarterly Report (pdf). The Emirates recorded USD 828.8 mn in outflows during the period.

Foreign investors sold a net USD 641.5 mn worth of Dubai-listed shares, extending the USD 654 mn they offloaded in 1Q. Abu Dhabi also remained in negative territory, recording net foreign selling of USD 187.3 mn.

IN CONTEXT- Regional instability has put the UAE’s main exchanges under pressure since the start of the conflict. Oil pricing volatility, disruption in the Strait of Hormuz, international interest rate trends, and seasonal lulls have also all affected activity, despite the UAE’s solid economic fundamentals. Dubai is generally more exposed to disruption in the tourism, aviation, real estate, and global capital flows areas, key sectors for its market.

Trading activity also softened across both UAE exchanges. Dubai’s trading volumes fell 34.9% q-o-q, while Abu Dhabi posted the steepest decline in the GCC, with volumes dropping 41.8%. The value of shares traded also declined on both exchanges, even as total trading value across GCC markets rose 8.8% during the quarter.

Elsewhere in the region

Kuwait followed with USD 480.3 mn in net foreign selling, ahead of Qatar (USD 375.4 mn). Oman and Bahrain also posted net outflows, though on a smaller scale.

Saudi Arabia stood out as the region’s exception. It was the only GCC market to attract net foreign inflows during the quarter, drawing in USD 1.6 bn, while the rest of the region moved in the opposite direction.

The 1Q comparison: Overseas investors bought USD 1.5 bn of GCC stocks in 1Q, bringing 1H total purchases to USD 1.2 bn — an 83.1% y-o-y drop from 1H 2025.

Saudi Arabia also dominated the region’s most actively traded stocks. Five Saudi-listed companies featured among the GCC’s 10 most traded names by value in 2Q, led by Al Rajhi Bank with USD 6.9 bn worth of shares changing hands. Aramco ranked second at USD 6 bn, while Dubai’s Emaar Properties came in third at just under USD 6 bn.

More domestic backing: Despite the foreign exodus, GCC investors (barring Bahrain due to a lack of data) were net buyers in 2Q, clocking in USD 62.4 mn of purchases and reversing 1Q’s net sales of USD 269 mn. Investors from Saudi Arabia led the charge, helping offset net selling by GCC investors across exchanges in Dubai, Abu Dhabi, Qatar, and Kuwait.

In context

ICYMI- UAE stocks showed signs of recovery at the start of the month, clawing back their war losses. At the time, analysts told us that a reversal in regional geopolitical risks and improving investor confidence, resilient earnings from major banks, and government support measures were driving the rebound. Still, at the start of the conflict, experts said the UAE was likely to see capital outflows from foreign investors in the short-to-medium term.