GCC Capital Markets Newsletter – 2Q26

GCC markets diverged in Q2 26 amid geopolitical uncertainty and oil-price volatility, with Dubai and Bahrain outperforming on resilient economic activity, stronger property and banking stocks, and improved liquidity, while Saudi Arabia and Oman underperformed amid geopolitical concerns, profit-taking and weaker sector performance. Global equities remained strong, led by Asian and emerging markets and supported by AI optimism and resilient earnings, while MSCI GCC underperformed amid oil price volatility weighed on sentiment. GCC bond yields eased as geopolitical risk premiums reversed, while real estate activity remained resilient across Qatar and Saudi Arabia. However, prolonged Strait of Hormuz disruption risks, elevated shipping and insurance costs, and expectations of weaker oil supply remained key risks to the near-term GCC outlook.