Arab stock markets experienced varied performance in February 2025, reflecting the global economic challenges and geopolitical tensions. This mixed trend affected investor sentiment and market results across different countries in the region.
At the beginning of the year, Arab stock markets showed promise, driven by international market gains. Investor confidence was high, as the Arab Monetary Fund (AMF) reported a 0.97% increase in the composite index in January. However, the positive momentum faced significant setbacks in February. The composite index saw a slight decline of 0.06%, with seven out of ten markets experiencing losses.
Among the better-performing markets, Bahrain stood out with a 4.3% rise, while Kuwait and Tunisia also posted gains. On the other hand, Saudi Arabia and Palestine faced some of the most significant losses, with declines of 2.45% and 2.37%, respectively.
Despite these fluctuations, investor sentiment remains cautiously optimistic. Key markets such as Morocco and Egypt showed improvement, but Qatar, Muscat, and Amman faced downturns. Abu Dhabi’s market index fell slightly by 0.11%, reflecting mixed investor sentiment.
A sharp decrease in market liquidity marked the month. Trading volumes dropped by 26.73%, and the overall market capitalization of Arab stock exchanges shrank by 1.53%, with a $67.56 billion loss. The Kingdom of Saudi Arabia contributed significantly to this decrease, while Bahrain led the gains with a 4.27% increase.
The global economic landscape, including rising US tariffs, supply chain issues, and trade tensions, further complicated market performance. Additionally, the ongoing Russia-Ukraine conflict and concerns about inflation and global economic growth played a role in dampening investor confidence.
Sector-wise, markets in Kuwait, Dubai, and Egypt benefited from strong performances in the financial, consumer services, and telecommunications sectors. However, energy and technology stocks, particularly in Saudi Arabia and Qatar, struggled due to oil price volatility and geopolitical concerns.
In the coming months, market participants are hopeful that easing inflation and stabilizing oil prices could create a more favorable environment. However, global factors such as US monetary policy, trade restrictions, and geopolitical instability will continue to affect market trends.
