Executive Summary
Most GCC markets were green in September 2025, as the S&P GCC Composite index registered a 4.1% gain for the month, primarily driven by strong sentiment for Saudi markets (+7.5%) amid reports that the Capital Markets Authority is considering allowing foreign investors to own majority stakes in listed companies. Overall performance was partially weighed down by decline in oil prices for the month amid concerns over increase in pace of reversal of OPEC+ production cuts from November. The Saudi stock market (TASI) has underperformed expectations off late due to concentration in commodity sectors tied to oil prices. Excluding these reveals stronger performance in other sectors, such as banking and industrials. Currently, the market appears attractive, trading at a below-average P/E, suggesting potential for significant returns. In addition, Saudi Arabia's strong liquidity, active IPO pipeline, and potential easing of foreign ownership limits could lead to substantial foreign investment inflows and make it a compelling investment opportunity, especially for active investors.
