GCC Capital Markets Newsletter – 1Q26

GCC markets diverged in Q1 26 amid heightened geopolitical tensions, with Oman and Saudi Arabia outperforming on stronger earnings, elevated oil prices, and resilient investor sentiment, while Dubai, Bahrain, Qatar, and Kuwait declined due to regional conflict concerns and Strait of Hormuz disruption risks. Macroeconomic conditions remained relatively resilient, supported by infrastructure spending and non-oil sector momentum, although rising bond yields, supply disruption risks, and IMF growth downgrades weighed on investor sentiment and the near-term GCC outlook.