Saudi inflation edges up to 1.9% in September

By the Editorial Team · Saturday, October 17, 2026

Foreign investors pulled a net $2.3 billion out of GCC stock markets in Q3 2026, the largest quarterly outflow since 2019, though local investors partially offset this with $760.7 million in net purchases, particularly in Saudi Arabia where institutional buying surged. This shift comes amid ongoing geopolitical risks, but Saudi Arabia's recent market reforms and strong fundamentals are expected to boost investor confidence and market momentum in the coming quarter.

Foreign investors withdrew a net $2.3 billion from Gulf Cooperation Council (GCC) stock markets in the third quarter of 2026, marking the largest quarterly outflow since such records began in 2019, according to a recent report by investment firm Kamco Invest. However, local investors helped offset these outflows by purchasing a net $760.7 million during the same period, reversing a second-quarter trend of net selling totaling $921.2 million.

In Saudi Arabia specifically, local investors shifted to net buying of 5.6 billion Saudi riyals ($1.49 billion) in the third quarter, compared with net sales of 5.8 billion riyals previously. This shift was largely driven by institutional investors who accounted for net purchases valued at 5.9 billion riyals. GCC investors also showed a particular preference for Saudi stocks, acquiring a net $323.3 million worth, more than in any other regional market.

The report highlighted that Saudi Arabia dominated regional equity trading, with five of the ten most-traded stocks in the GCC coming from the Kingdom. Leading the list were Saudi lender Al Rajhi Bank, with $6.6 billion in trades, followed by energy giant Aramco at $3.7 billion. Despite the third quarter’s foreign investor net selling of $1.5 billion in Saudi markets, year-to-date data showed foreign investors as net buyers with total purchases amounting to 6.7 billion riyals, balancing out the quarterly fluctuations.

The broader GCC equity markets experienced divergent trends in the quarter, influenced by geopolitical developments affecting market conditions, investor sentiment, corporate earnings, and sectoral performance, the report noted. The Saudi Tadawul All Share Index had previously risen 5.1 percent in August, outperforming its Gulf peers, supported by stronger oil prices, improved corporate earnings, and a reduction in geopolitical tensions.

Vijay Valecha, chief investment officer at brokerage Century Financial, attributed the recent sell-off by international investors to escalating regional geopolitical risks. He explained that foreign investors were concerned not only about rising oil prices but also the potential for increased hostilities to disrupt exports, dampen business confidence, and impact corporate profitability. Nonetheless, Valecha pointed to Saudi Arabia’s fiscal reserves and the strategic East-West Pipeline to the Red Sea as mitigating factors limiting such disruptions.

Valecha also emphasized the importance of recent market reforms for long-term investors, including the removal of the Qualified Foreign Investor requirement. The Kingdom’s Capital Market Authority had approved the opening of its main stock market to all foreign investors starting February 1, 2026, a move intended to broaden market participation and enhance liquidity. These reforms appear to be generating optimism that GCC markets, particularly Saudi Arabia’s, could register strong momentum in the fourth quarter.

Earlier in the year, Saudi Arabia was the only GCC country to record net foreign buying in the second quarter, reflecting its relative resilience amid regional uncertainties.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.