RIYADH: Most Arab stock exchanges closed the second quarter of 2026 on the up, even as the Arab Monetary Fund’s composite index slipped 0.16 percent, its latest quarterly bulletin shows.
Arab equity markets broadly advanced during the quarter, with 13 of the 16 exchanges tracked by the AMF recording gains. Tunisia led the rally with a 29.28 percent jump, ahead of Egypt’s EGX30, which climbed 11.40 percent, and the Dubai Financial Market, up 9.59 percent.
Damascus, Palestine, and Bahrain, in addition to Casablanca, Amman and Kuwait posted solid gains, while Muscat recorded the steepest pullback at 8.09 percent after a strong first quarter.
Oil prices were a key swing factor behind the quarter’s regional divergence. Brent crude fell sharply as the US-Iran war that had driven prices higher earlier in the year began to de-escalate.
The US Energy Information Administration reported Brent averaging $85 a barrel in June, down $22 from May, following a June 18 US-Iran agreement to reopen the Strait of Hormuz. The decline pressured energy and petrochemical stocks in Gulf markets, even as it eased import costs for oil-importing economies elsewhere in the region.
The AMF report attributed the modest composite decline to a single dominant market rather than a broad downturn, noting the index “recorded a slight decline of about 0.16 percent ... affected mainly by the drop in the Saudi financial market,” even as 13 other bourses advanced.
Market capitalization and trading activity
Total market capitalization across Arab exchanges edged down 0.59 percent to $4.3 trillion, even though 14 of 16 markets posted higher valuations.
Abu Dhabi’s exchange recorded the largest capitalization gain, adding $30.81 billion on the back of strong performances from industrials, financials, and telecoms, as well as banks and real estate stocks under the FTSE ADX 15 index. Dubai followed with a $23.14 billion increase, while Egypt added $10.36 billion.
Trading value across the region rose 8.7 percent to $292.46 billion, driven largely by heightened activity in Egypt, Saudi Arabia and Kuwait.
Trading volumes surged 166.82 percent to 610.61 billion shares, an increase the report attributes chiefly to an exceptional spike in Iraq’s market, where large block trades executed through matched orders in May inflated share counts without necessarily reflecting proportionate gains in overall trading activity.
Sector and macro drivers
Sectoral performance diverged across the region: banking, real estate and financial services stocks supported several markets, while energy, basic materials and petrochemicals came under pressure as oil prices retreated through May and June.
Global monetary policy also stayed a factor, with central banks broadly split; the Bank of Japan and European Central Bank raised rates by 25 basis points each, while the US Federal Reserve held its target range at 3.50–3.75 percent and most Gulf central banks, whose currencies are pegged to the dollar, kept rates unchanged.
Outlook
The AMF flagged continuing geopolitical tensions, volatile oil prices, and unresolved global trade disputes as the key risks facing Arab markets in the coming quarter, alongside the trajectory of global interest rates, which remain particularly consequential for sectors most sensitive to financing costs.
