While global investors weigh tariffs and rate decisions, the Middle East’s biggest equity story is the widening gap between its two largest markets. Saudi Arabia’s main index is down over 8% year-to-date, closely tracking Brent crude’s slide. Meanwhile, stocks in the United Arab Emirates are rallying: Dubai’s benchmark has jumped about 18%, and Abu Dhabi’s is up nearly 10%.
The UAE’s momentum is fueled by strong economic momentum and a booming real estate sector. Dubai apartment prices have soared 122% in five years, according to Deutsche Bank, with rents up nearly 50%. That strength is feeding into the initial public offering pipeline, with a wave of property-linked companies, including contractors and online real estate platforms, preparing to list.
Investor confidence has also rebounded after two solid listings this year — a residential REIT and a technology firm — helping to shake off jitters from a string of underwhelming debuts in late 2024.
“There is a significant amount of demand locally these days so the Middle East is really becoming an option for companies to list,” Miguel Azevedo, vice chairman for Citigroup Inc.'s investment banking business in the Middle East and Africa, said in an interview with Bloomberg Television. “We have the right level of demand, the right level of pricing, the transactions are doing very well in the aftermarket.”
Over in Saudi Arabia, the region’s busiest IPO venue with over $3 billion raised this year, sentiment has cooled. Recent listings like Flynas and Specialized Medical have underperformed, adding to investor caution amid oil-driven fiscal headwinds.
That’s prompted a shift toward a more “rational” tone in a market known for lofty valuations, said Rami Sidani, head of frontier investments at Schroder Investment Management. “There’s no longer that assumption that every IPO is going to pop on day one. That’s part of the market maturing,” he said.
To be sure, deal flow in the kingdom remains robust, with a mix of state-backed and private firms preparing listings.
“I think it will be a busy second half,” Citigroup’s Azevedo said, noting his firm is working on a “very big” transaction in Saudi Arabia. “No one has to buy Middle East but everyone wants to buy Middle East.”
Nikita Turkin, Barclays’ head of equity capital markets for Central and Eastern Europe, Middle East and Africa, expects a healthy pipeline across the Gulf over the next 12–18 months, especially as geopolitical tensions, such as the Israel-Iran conflict, appear to be easing.
Even quieter markets are stirring, with Kuwait set to see a rare convenience-store IPO. The country’s main index is up around 19% this year, as investors cheer moves by the ruler to advance long-stalled economic reforms.
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