The UAE led the GCC region with foreign capital net inflows of $680.4 million last month, following a downward trajectory the month before, driven by heightening tensions in the Middle East and the challenging global economic climate.

Reversing April's net outflow of $48.6 million, the growth bolstered the UAE’s year-to-date inflow, bringing the total foreign capital contributions to $1.67 billion, as reported by Iridium.

Abu Dhabi took the lead in terms of net foreign capital inflows, with $686 million in May, a rise from April’s figure of $19 million, while Dubai’s net outflows remained at $30 million.

In year-to-date figures, Abu Dhabi maintained its leading position with $1.344 billion in net inflows, while Dubai ranked second in the region with $323 million.

Saudi Arabia followed Dubai with $224 million in net inflows, demonstrating resilience despite intermittent outflows, according to the report. In contrast, Kuwait and Qatar had mixed performances, with Kuwait recording net inflows of $190 million, while Qatar experienced net outflows totalling $125 million, Zawya reports.

Furthermore, in May of this year, there was a favourable trend in foreign capital flows in the GCC equity markets, with a net inflow totalling $616.7 million. 

The combined GCC Emerging Markets (including Kuwait, Qatar, Saudi Arabia, and the UAE) registered a higher net inflow of $636.2 million during the same period.

In addition, last month, GCC equity markets experienced considerable volatility in foreign capital flows over the past three quarters, largely influenced by geopolitical instability. 

Following significant inflows in mid-2023, the markets saw substantial outflows in the following months, particularly in October, following the start of the Israel-Gaza conflict. There were further outflows in December 2023 during Israel's incursion into Gaza and again in April after ceasefire negotiations failed.