Emerging Equity Trading Trends for 2026

Property costs have come under pressure after a period of strong growth, with recent data from the Dubai Land Department revealing a drop in home loan deals and money sales. Nonetheless, we believe the threat of a lasting migrant outflow and an extreme slump in the property sector is low.

As an enduring US-Iran deal takes shape, the fallout from the dispute has actually tightened up regional financial conditions, exposing vulnerabilities through capital outflows, broader bond spreads, and weaker investor sentiment. The majority of GCC sovereigns carry relatively little financial obligation and funding threats are therefore limited in the UAE, the central bank's liquidity management has actually relieved instant issues.

That stated, Bahrain has had the ability to depend on assistance from neighbours, consisting of Saudi Arabia and the UAE, and it successfully raised $1bn from an oversubscribed sovereign bond sale this month, marking the very first offering from the region given that the war started. High-frequency financial data underscore the strain on local public financial resources from the dispute.

ANSR July GCC PRs 50DR+

Positioning Regional Portfolios for 2026 Trends

In Saudi Arabia, the deficit spending more than doubled to SAR125.7 bn, or about 9% of GDP in Q1, driven by a decline in oil earnings and a surge in costs, especially on aids, reflecting contingency expenses tied to the regional environment and a velocity of Vision 2030 costs. In Qatar, the crisis brought oil and gas profits to a stop, swelling the budget deficit to the biggest given that 2017.

GCC inflation dynamics remain irregular, with food rates the primary source of upward pressure and inflation in this category conditioning in Kuwait, Oman and Qatar. By contrast, food inflation remains relatively subdued in Saudi Arabia, most likely reflecting the mitigating impact of its bigger domestic food production base and greater supply-chain resilience.

We continue to see cost pressures as largely transitory rather than a sign of a continual inflationary cycle. Accordingly, we expect typical inflation to alleviate to 2.1% y/y in 2027 as short-lived supply-side pressures dissipate. With near-term inflation elevated and transit through the Strait most likely set to resume gradually, we expect the United States Federal Reserve to keep interest rates on hold till December, and regional rate policies to follow match.

We expect Iran's GDP to shrink by 10.8% this year (we forecast a 9.4% contraction 3 months ago). Oil production and exports, which provide vital revenue and FX inflows, have been curtailed by the United States marine blockade, while non-oil activity has been seriously hit. In Iraq, oil exports have collapsed to a drip and we're anticipating GDP to agreement by around 22% this year, with a sharp 33% rebound in 2027 as oil exports normalise.

By contrast, Syria continues to reintegrate into the international economy after more than a years of civil war. We anticipate GDP development to average 9.6% over 2026-2027, supported by renewed financial investment, especially in banking and energy, monetary reforms, and the gradual resuming of regional trade links.

Future Business Landscape of the GCC

The World Bank has slashed its 2026 development projection for Middle East economies, saying total GDP development in the area is expected to slow from an estimated 3.6% in January to 1.8% for 2026. The closure of the strategic Strait of Hormuz, and damage of energy and public facilities, had interfered with markets, increased monetary volatility, and compromised the 2026 growth outlook, the World Bank Group said in its Economic Update for the Middle East, North Africa, Afghanistan and Pakistan.

The April 2026 World Bank's Macro Poverty Outlook anticipates that the region's aggregate (omitting the Iran) GDP growth will decrease to 1.8 percent in 2026, below 4.0 percent approximated for 2025. The 2026 projection has actually been devalued by 2.4 portion points given that the January projections, reflecting the unfavorable impacts of the continuous conflict.

Saudi Arabia: Forecast was devalued by 1.2 percentage points because January. Growth is now anticipated to slow from 4.3% in 2025 to 3.1% in 2026, noting that Saudi Arabia's outlook remains the greatest among Gulf economies. United Arab Emirates: Growth forecast for the UAE has actually fallen by 2.7 portion points given that January.

Qatar: Notably, growth forecast for the Qatari economy has actually seen a sharp decrease of 11.0 portion points given that January. The economy is now anticipated to tape-record a contraction of 5.7%, below an estimated development of 5.3%, due to serious blockage to melted gas products. Qatar is an essential gamer in the global energy market, with an international market share of liquefied gas (LNG) supplies ranging between 20% and 21%.

Kuwait relies totally (100%) on the Strait of Hormuz to export its unrefined oil and derivatives. Subsequently, closing the strait would indicate a total shutdown of the country's financial lifeline, instantly stopping income inflows to the state budget plan. Bahrain: Development forecast for Bahrain's economy has actually decreased by 1.8 percentage points considering that January.