Dubai, UAE — Foreign investors, including institutional and retail investors, were net sellers on GCC stock markets during Q4-2023, with net sales at US$1.3 billion as compared to US$1.6bn in net buying by foreigners during Q3-2023.
This came after foreign investors were net buyers consecutively for the last 14 quarters since Q1-2020, the year of the pandemic.
According to a recent report by Kamco Invest, some of the key factors that affected the flow of foreign money in the region included regional market trends, IPOs, geopolitical issues, the economic health of individual countries, and crude oil prices.
The quarterly data on trading activity on GCC exchanges showed all the exchanges recorded foreigners as net sellers during Q4-2023, barring Saudi Arabia, which showed foreigners as net buyers to the tune of US$640.3 million during the quarter, partially offsetting the overall net sales.
Foreign investors were the biggest sellers of Abu Dhabi stocks with net sales of US$975.4m during the quarter as compared to US$462.5m in net buy trades during the previous quarter.
Oman was next with net sales of US$712m by foreigners followed by Dubai and Kuwait exchanges with net sales of US$98.5m and US$ 81.6m, respectively.
The report revealed that the historical trend for trading by foreigners in GCC-listed stocks showed declines merely in two quarters over the last five years. Foreigners bought the most stocks during Q1-2022 with net buy transactions of US$11.0bn, reflecting a steep increase in buying mainly in Saudi Arabia and Qatar.
The yearly trend showed continued positive activity from foreigners on GCC exchanges during 2023, although total buying witnessed a steep decline during the year.
Foreigners were net buyers during the year with net purchases of US$2bn during 2023 as compared to US$20bn in net buying during 2022, resulting in a y-o-y decline of almost 90 percent.
This was also the smallest aggregate net buying by foreigners in at least over the last five years. Aggregate buying by foreign investors over the last five years stood at US$63bn with 2019 being the year with the biggest net buying by these investors to the tune of US$26.4bn.
In terms of trading activity on individual exchanges, the Saudi exchange witnessed the biggest net buying by foreign investors during 2023 at US$4.1bn followed by the Dubai exchange and Qatar exchange at US$ 1.3bn and US$ 0.46bn, respectively.
On the other hand, the Abu Dhabi exchange recorded the biggest net sales by foreign investors during the year at US$ 3.3bn followed by Oman and Kuwait with net sales at US$688.6 Mn and US$577.1m, respectively.
Furthermore, GCC investors in other GCC exchanges were net buyers during 2023. Net buy trades of GCC investors reached US$0.14bn compared to a net sale trade of US$0.36bn in 2022.
Qatar Exchange witnessed the biggest net buying by GCC investors during 2023 at US$424.0m followed by Saudi Exchange and UAE exchanges at US$325.1m and US$176.8m, respectively.
On the other hand, Kuwait and Oman’s exchanges recorded the biggest net sales by GCC investors in 2023 partially offsetting the overall buying by GCC investors. In terms of trend during 2023, aggregate trading activity by GCC Investors on other GCC exchanges peaked during May 2023 and hit the lowest trading month in December 2023.
In terms of aggregate trading activity, total GCC volume traded during the year declined by 9.2 percent to reach 237.3bn shares in 2023 as compared to 261.4bn shares in 2022.
Dubai topped the list with a gain of 26.2 percent to record 47.8bn in 2023 compared to 37.9bn in 2022, followed by Saudi Arabia with 16.6 percent to record 50.7bn in 2023 against 43.5bn in 2022. Abu Dhabi, on the other hand, declined from 73.7bn in 2022 to 49.7bn in 2023.
Similarly, the total value of shares traded during 2023 also declined and was largely broad-based, Dubai and Oman were the only markets that showed a gain in value traded while the rest of the markets declined during the year.
Aggregate value traded reached US$526.6bn during 2023 compared to US$686bn in 2022. Dubai reported the biggest increase in trading activity with value traded increasing from US$24.2bn in 2022 to US$26bn in 2023 resulting in a share of 4.9 percent compared to 3.5 percent in 2022.
Trading activity on the Saudi Exchange declined during the year from US$454.3bn in 2022 to US$352bn in 2023, but its share in aggregate GCC trading activity increased slightly from 66.2 percent in 2022 to 66.8 percent in 2023.
Top 10 GCC stocks by trading value
Five Saudi-based stocks ranked among the top 10 most traded GCC stocks by trading value in 2023. The aggregate traded value of the top 10 listed stocks in the GCC stood at US$112.8bn, accounting for 21.4 percent of the total value traded on the GCC exchanges during the year. International Holding Co. of Abu Dhabi topped the list by recording US$23.2bn in trades followed by Saudi Aramco at US$20.8bn and Al Rajhi Bank at US$20.3bn.