Foreign trading activity in the GCC stock exchanges remained positive during 2023, despite a sharp decline in the total purchase value.
Foreigners recorded net purchases during the year worth two billion US dollars, compared to 20 billion US dollars net purchases in 2022, an annual decline of 90%; according to the report issued by the Investment Research and Strategies Unit at Kamco Investment Company, today, Thursday.
He revealed that the value of net purchases by foreigners is the lowest level of total net purchases by foreigners in at least the past five years.
The total value of purchases by foreign investors over the past five years amounted to $63 billion, and the year 2019 was the most distinguished, with the value of net purchases by foreign investors reaching $26.4 billion.
As for trading activities in each stock exchange separately, the Saudi Stock Exchange witnessed the highest value of net purchases by foreign investors in 2023, which reached $4.1 billion, followed by the Dubai and Qatar Stock Exchanges with a value of $1.3 billion and $0.46 billion, respectively.
In contrast, foreign traders in the Abu Dhabi Stock Exchange recorded the highest net selling value among Gulf stock exchanges during the year, at $3.3 billion, followed by Oman and Kuwait with net selling valued at $688.6 million and $577.1 million, respectively.
On the other hand, the net value of Gulf investors’ trading amounted to $0.14 billion in 2023, compared to $0.36 billion in the previous year.
The contribution of Gulf investors in Qatar was the highest at $424 million, followed by Saudi Arabia and the UAE at $325.1 million and $176.8 million, respectively.
Trading activities of Gulf investors in the Kuwait and Oman stock exchanges declined during 2023, which partially compensated for the overall buying by Gulf investors.
The value of trading by Gulf investors peaked during May 2023, and recorded its lowest levels in the previous December.
Trading activities
In terms of trading activities, the total volume of shares traded on Gulf stock exchanges decreased by 9.2% during the year to reach 237.3 billion shares, compared to 261.4 billion shares in 2022.
The Dubai Stock Exchange took the lead with a 26.2% increase in the volume of traded shares, with 47.8 billion shares traded in 2023, followed by Saudi Arabia with a 16.6% increase with 50.7 billion shares traded, while the volume of traded shares on the Abu Dhabi Stock Exchange declined to 49.7 billion shares.
The total value of shares traded in 2023 also declined in general across almost all stock exchanges, with the Dubai and Oman stock exchanges being the only exceptions, recording growth in the value of shares traded, while the value of trading in the rest of the markets declined during the year.
The total value of trading reached $526.6 billion in the year, compared to $686 billion in 2022.
Dubai recorded the highest growth rate in trading activities, with the traded value rising to $26 billion, leading to its acquisition of a 4.9% share in the past year.
Saudi Arabia's share also increased from 66.2% in 2022, or $454.3 billion, to 66.8%, or $352.0 billion, in 2022.
First net sales in 15 quarters
Foreign investors, including institutions and individuals, recorded net selling in the Gulf stock markets during the last quarter of 2023, with net selling value amounting to USD 1.3 billion, compared to USD 1.6 billion for net buying during the third quarter of last year.
This came after foreign investors had recorded net purchases for 14 consecutive quarters since the first quarter of 2020.
Quarterly data on trading activities in the Gulf stock exchanges showed that all of them recorded net selling by foreigners, except for Saudi Arabia, where foreigners recorded net buying of $640.3 million during the quarter, which partially compensated for the overall rate of decline.
Key factors that have influenced foreign fund flows into the region include regional market trends, IPOs, geopolitical issues, the economic status of each country and crude oil prices.
Foreign investors were the largest sellers of shares listed on the Abu Dhabi Securities Exchange, with net sales of $975.4 million during the quarter, compared to net purchases of $462.5 million in the third quarter.
Oman came next with net selling of $712 million by foreigners, followed by Dubai and Kuwait bourses with net selling of $98.5 million and $81.6 million respectively.
The historical trend of foreign trading in Gulf stocks revealed a decline in only two quarters over the past five years, with foreigners buying the highest value of stocks during the first quarter of 2022, with a net purchase value of $11 billion, reflecting a sharp increase in buying mainly in Saudi Arabia and Qatar.
