Foreign investors pulled a net $2.8 billion from Middle East and North African equities during the third quarter of 2026, a sharp increase from $500 million in the preceding quarter, according to EnterpriseAM’s coverage of Mashreq Capital’s latest regional outlook.
The report, published on October 16, said Mashreq Capital also lowered its full-year regional equity return forecast to 5–7%, from 6–8%, as investment conditions became more challenging.
Saudi Arabia Accounts for Largest Share of Withdrawals
Saudi equities recorded $1.5 billion in net foreign withdrawals during the quarter, reversing the previous quarter’s inflows. Kuwait and Dubai also experienced foreign selling, while flows into Abu Dhabi and Qatar were broadly balanced.
The figures show that overseas investors adjusted their exposure differently across regional exchanges rather than withdrawing uniformly from every market.
Regional Stock Markets Follow Different Paths
Investment performance also varied considerably. UAE equities advanced during the third quarter, while Qatar’s market declined. Oman remained a strong performer over the year to date.
Mashreq Capital maintained a preference for the UAE and Oman while taking a more cautious position on Qatar and Kuwait. Its outlook favoured selected businesses linked to energy infrastructure and logistics.
Security Concerns Add to Investor Caution
More recent trading has highlighted the pressure facing regional markets. Reuters reported that most Gulf exchanges declined on October 15 as renewed Houthi threats against Saudi Arabia increased concerns about further disruption.
Saudi Arabia’s benchmark fell 0.3%, while Qatar’s index dropped 1.2%. Dubai and Abu Dhabi also registered losses. These October movements occurred after the quarter covered by the foreign-flow figures, but indicate that geopolitical uncertainty has continued to influence trading.
Corporate Earnings Become a Key Focus
Company results are another factor investors are watching as they reassess regional exposure. In its September foreign-flow analysis, Iridium Advisors said earnings discussions would focus on whether companies could meet their full-year guidance and how changing conditions might affect their outlook for 2027.
The latest figures point to a more selective investment environment across MENA equities. Foreign selling has increased, but differences in market performance and capital flows show that investors continue to distinguish between countries, sectors and individual companies.
