- The UAE experienced a notable recovery in foreign capital in May 2024, securing $680.4 million in net inflows after a previous month’s outflow.
- Abu Dhabi led the surge with $686 million in net foreign capital inflows, solidifying its position as a top destination for investment in the region.
- Dubai, despite experiencing consistent net outflows in May, maintained a positive year-to-date performance with $323 million in net inflows.
- Saudi Arabia demonstrated resilience with $224 million in year-to-date net inflows, underscoring its stable economic fundamentals amid global economic challenges.
- Kuwait showed positive growth with $190 million in net inflows year-to-date, while Qatar faced challenges with net outflows totalling -$125 million.
In May, the UAE emerged as a leader in foreign capital net inflows, securing $680.4 million. This marked a significant recovery from April, when the UAE had recorded a net outflow of $48.6 million.
The reversal came amid regional tensions and a challenging global economic climate characterized by higher interest rates. According to figures from Iridium, a Dubai-based consultancy, the UAE’s year-to-date inflows now total $1.67 billion.
Abu Dhabi Takes the Lead
Abu Dhabi drove the surge with net foreign capital inflows of $686 million in May, a sharp increase from April’s -$19 million.
This performance underscored Abu Dhabi’s strong position in the region, making it the top destination for foreign investment. For the year-to-date, Abu Dhabi leads with $1.344 billion in net inflows.
Dubai’s Performance
In contrast, Dubai’s foreign capital situation remained less buoyant, with net outflows of $30 million in May, consistent with April’s figures. Despite this, Dubai’s year-to-date net inflows stand at $323 million, securing its position as the second-largest recipient in the region.
Saudi Arabia’s Steady Inflows
Saudi Arabia followed Dubai with net inflows of $224 million year-to-date. This figure highlights Saudi Arabia’s resilience, despite occasional outflows.
The kingdom’s ability to maintain a steady flow of foreign capital underscores its robust economic fundamentals.
Mixed Results in Kuwait and Qatar
Kuwait and Qatar showed mixed results. Kuwait posted net inflows of $190 million year-to-date, demonstrating positive growth. Conversely, Qatar faced net outflows of -$125 million, reflecting challenges in attracting foreign capital.
Positive Trend in GCC Equity Markets
In May 2024, the GCC equity markets collectively recorded a net inflow of $616.7 million, with the four GCC Emerging Markets—Kuwait, Qatar, Saudi Arabia, and the UAE—achieving a higher net inflow of $636.2 million.
Iridium noted that the GCC equity markets have been highly volatile over the past three quarters, influenced by geopolitical instability.
After experiencing significant inflows in mid-2023, the markets saw steep outflows, especially in October 2023, following the Israel-Gaza conflict, and in December 2023 and April 2024, amid continued regional tensions and failed ceasefire talks.
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