Gulf stock exchanges are growing in importance, but they’re still a long way from becoming capital market hubs -Fitch

Gulf stock exchanges have grown into a meaningful alternative to bank financing, but they remain too concentrated and too thin to serve as full capital market hubs, Fitch Ratings said, noting that GCC stock markets had a combined market capitalisation of roughly USD 4 trillion in mid‑2026 while debt capital markets totalled about USD 1.2 trillion outstanding at the end of 1H 2026, 42% of which was sukuk.

"Gulf exchanges are becoming a real alternative to bank lending, but they are still too concentrated and too thin to work as full capital market hubs," Fitch Ratings said in a note.

Fitch highlighted severe concentration in the region’s two largest exchanges. The Abu Dhabi Securities Exchange (ADX) derives around 60% of its market capitalisation from five companies, while the Saudi exchange — which accounts for about 63% of total GCC market cap — is dominated by Saudi Aramco, which alone represents roughly 65% of the kingdom's market value. By market share, ADX holds about 18% of GCC market cap and the Dubai Financial Market (DFM) about 7%.

Debt markets remain largely international. Most GCC hard‑currency sukuk and bonds are listed offshore, with the London Stock Exchange hosting more than half of global USD sukuk issuance and 95% of those listings coming from the Middle East. Nasdaq Dubai is a notable regional outlier: it lists more than 28% of global outstanding sukuk and over USD 140 billion in debt.

Fitch attributed the slow growth of domestic debt markets to a corporate funding culture that still favours bank lending. Saudi Arabia stands out as an exception, with a more developed local‑currency debt market underpinned by SAR sovereign sukuk issued to build a domestic yield curve. That market is set to widen materially: SAR government sukuk will join JPMorgan’s GBI‑EM index from 2027, a change expected to boost foreign inflows into riyal paper issued in Riyadh.

• Foreign investor participation in Saudi primary sovereign issuance climbed to 15% in 1H 2026 from 12% in 2025.
• GCC debt capital markets reached USD 1.2 trillion outstanding at end‑1H 2026; 42% of that was sukuk.
• Nasdaq Dubai lists more than 28% of global outstanding sukuk and over USD 140 billion in hard‑currency debt.

The diagnosis comes amid a weak year for equity issuance in the UAE. Major potential listings have been paused or shelved — Dubai Holding, EGA and Binghatti put IPO plans on hold, Al Habtoor withdrew its DFM listing entirely, and Airtel Money opted to pursue a London flotation, citing regional unrest. In Saudi Arabia the slow patch is also visible: the market closed 1Q 2026 with just four IPOs raising a combined USD 296.6 million, the weakest first quarter for IPO proceeds since 2018.

Bankers and analysts expect a recovery later in 2026 and into 2027, though the form of that rebound may differ across markets. In the UAE, follow‑on offerings are anticipated to lead a reopening rather than a flood of new listings; in Saudi Arabia, the Capital Market Authority’s consultation on bank‑guaranteed IPOs is being watched as a test of whether regulators can restore investor appetite after recent underwhelming listings. Private companies are also considering listings: delivery app Ninja is reportedly eyeing a Tadawul IPO of up to USD 1 billion by late 2026 or early 2027.