Fadi Qanso

  Arab financial markets maintained their gains for the second consecutive month, delivering generally positive performance supported by improved investor sentiment amid global recovery trends, with the MSCI ACWI index posting gains for the fourth consecutive month, along with a number of encouraging economic and geopolitical developments .

  Global optimism supports gains

Positive developments regarding tariffs around the world, particularly between the United States and China, have contributed to easing trade tensions, diminishing uncertainty, and supporting cross-border investment flows. The easing of geopolitical concerns has also helped stabilize energy markets and lift regional stock indices .

Market optimism is buoyed by improved investor confidence in the energy and infrastructure sectors, continued recovery in the real estate and tourism sectors, and strong earnings from banks, utilities, and some industrial sectors in the second quarter of 2025, despite some pressure on the earnings of major energy and petrochemical companies .

The US Federal Reserve's decision to keep interest rates unchanged also contributed to optimism, while indicating a cautious stance regarding future rate cuts in an attempt to strike a balance between controlling inflation and maintaining market stability .

Market capitalization of Arab stock exchanges

The market capitalization of Arab stock markets reached $4.26 billion at the end of July, a monthly increase of 0.9%.

The increase was supported by a rise in the market capitalization of the Abu Dhabi Securities Exchange and the Dubai Financial Market by $19.1 billion and $17.6 billion, respectively, offsetting the impact of a $21.5 billion decline in the market capitalization of the Saudi Tadawul market .

Trading values and volumes

The total trading value increased by 17.3% to reach $89.0 billion in July 2025 compared to June, which witnessed the Eid al-Adha holiday .

Total trading volume reached approximately 101.0 billion shares in July, a monthly increase of 43.9%.

The number of transactions reached 15.7 million, a monthly increase of 17.4% compared to June, with Saudi stock market transactions increasing by approximately 18.4%, accounting for approximately 70% of the total number of transactions in the region .

Arab stock market indicators

The PS & Pan Arab Composite Index, which measures the performance of 11 stock markets in the region, rose 1.8% to 1,026.2 points at the end of July compared to June .

This positive performance coincided with a 2.2% rise in the MSCI GCC Index during the same period .

The Dubai Financial Market Index recorded the best performance among the Gulf markets, rising by 7.9%, followed by the Muscat Stock Exchange Index, which rose by 6.2%, while the Abu Dhabi Securities Exchange and Qatar Stock Exchange indices rose by 5.5% and 4.8%, respectively .

The Damascus Stock Exchange posted strong gains in July, following the resumption of trading activity in the first week of June, indicating a recovery in investor sentiment and renewed confidence in Syria's fragile economic recovery path despite ongoing structural and geopolitical challenges .

Saudi Trading

The Saudi Tadawul main index declined by 2.2% in July, reaching below the 11,000-point mark. Most sectors ended the month in negative territory, with the exception of the telecommunications sector, which recorded slight gains .

This decline is due to growing investor concern about the future of the projects market in the Kingdom, in parallel with the stability of oil prices around $70 per barrel .

Saudi Aramco's profits fell by 22% in the second quarter of 2025 compared to the previous quarter, marking the tenth consecutive quarterly decline, due to declining revenues amid lower oil prices .

In July, the Saudi Stock Exchange (Tadawul) witnessed the successful initial public offering of the Sports Clubs Company, with a total proceeds of SAR 257 million (equivalent to $68.5 million). The offering was oversubscribed 44 times for the institutional tranche and 6 times for the retail tranche, reflecting strong investor confidence in the Saudi market.

Dubai Financial Market

The Dubai Financial Market (DFM) recorded the best performance among GCC markets in July, with the price index rising 7.9%, marking its fourth consecutive monthly gain and boosting the index's cumulative return since the beginning of 2025 to 19.4%, the highest among the region's markets .

This was driven by a strong rise in the financial sector index by 12.1%, followed by the real estate sector index by 11.7%, and then the industrial sector index by 6.9%.

The financial sector index's growth was primarily due to the strong rise in share prices of companies with significant weightings in the index, such as Commercial Bank of Dubai, which rose 21.1%, and Emirates NBD, which rose 17.3%.

Dubai's real estate market maintained its strong momentum during the first half of the year, attracting approximately 95,000 investors, a 26% increase compared to the first half of 2024. This included 59,075 new investors, reflecting an expanding investor base .

In the same context, the number of real estate transactions reached 125,538, a 26% annual increase. The total value of these transactions reached AED 431 billion, or the equivalent of $117.4 billion, a 25% annual increase, indicating the strong momentum and growth in the real estate market.

Muscat Stock Exchange

The Muscat Stock Exchange recorded the second-best performance among GCC markets in July, with the MSX30 index recording a 6.2% monthly gain, driven by renewed investor confidence amid economic diversification efforts and market reforms.

The Muscat Stock Exchange witnessed strong growth in trading values and volumes, amid intense institutional buying, particularly in certain stocks such as OQ Basic Products and Bank Muscat. This was supported by positive results from listed companies and strong performance from prominent names in the financial, services, and industrial sectors .

The Services Index led the performance with a strong monthly increase of 13.0%, supported by significant gains in the share prices of companies such as Omantel, which rose 33%, and Sembcorp Salalah, which rose 54.4%.

The financial sector index also rose by 3.4%, supported by the positive performance of a number of key components, such as the shares of the International Financial Investment Company (+26.2%) and Bank Muscat (+8.4%).

The industrial sector index recorded a 6.7% increase, reflecting the strong momentum in the performance of companies listed in this sector .

Cautious anticipation in August

Indicators for the first week of August point to expectations of modest or relatively weak performance this month, amid a series of worrying developments, including the US president's announcement of new tariffs on more than 66 countries, effective August 7, and an unexpected decline in US employment data. The S&P 500 recorded its largest daily percentage decline in more than two months on August 1.

Due to global market volatility and some economic risks, particularly the repercussions of US tariffs on the global economy, investors are expected to remain cautious throughout the month, closely monitoring economic and political developments at both the regional and global levels.

(Prepared by: Fadi Qanso, Assistant Secretary-General and Director of Research at the Federation of Arab Stock Exchanges, Economic Expert and University Professor, Edited by: Ahmed Ali, Reviewed before publication: Yasmine Saleh)

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