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GCC Stocks Drop on Geopolitical Pressure

GCC Stocks Drop on Geopolitical Pressure
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GCC Stocks Drop on Geopolitical Pressure

GCC Stocks Drop on Geopolitical Pressure

GCC stock markets dived on Monday trading amid increased geopolitical tension after Saudi and UAE oil tankers suffered “sabotage operations” near the Emirati territorial waters. They were also affected by the pressure of the US-China trade war.

The Saudi stock index dropped 3.55 percent, Abu Dhabi index 3.32 percent, Dubai Financial Market 3.97 percent and Kuwait Stock Exchange index 1.37 percent.

Saudi Arabia's benchmark index closed at 308.02 points lower at 8366.64 points on Monday, with trades worth more than SAR5.3 billion riyals ($1.4 billion).

More than 180 million shares were traded among more than 120,000 deals, with eight companies posting gains, while shares of 174 companies closed with decline.

The index of Saudi Nomu-Parallel Market closed Monday at 3424.31 points down 68.99 points and with tradings worth more than SAR2.5 million ($667 million).

The number of shares traded exceeded 140,000 among 134 deals.

In UAE, however, Dubai Financial Market index dropped by 3.97 percent, losing 104.29 points, to close at 2525.61 points.

Trading volume amounted to 231.1 million shares at a total value of AED300.1 million (about $82 million) after closing 4,599 deals for 36 shares.

In addition, eight sectors witnessed decline, headed by the goods sector by 7.49 percent, followed by real estate sector by 5.64 percent, investment sectors by 5.23 percent, insurance sector by 3.83 percent, banking sector by 3.49 percent, transport sector by 3.01 percent, services sector by 1.80 percent and communications sector by 0.98 percent.

The General index in Bahrain closed Monday at 1.416.15 points, down 11.56 points from the previous close, due to the decline in the indexes of commercial banks and investment, services and industrial sectors.

Bahrain Islamic Bank’s index closed at 758.79, down 19.52 points from its previous close.

Kuwait Stock Exchange ended its trading Monday with a decline in its general index by 59.5 points to reach the level of 5632.4 points, a 1.05 percent drop.

The total number of transactions of the index amounted to 125.9 million shares, through 5,826 transactions worth KD33.2 million (about $110 million).

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World Bank Warns of Long-Term Fallout from Regional Conflict

 A man walks carrying shopping bags in a local market in downtown Riyadh (AFP). 
 A man walks carrying shopping bags in a local market in downtown Riyadh (AFP). 
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World Bank Warns of Long-Term Fallout from Regional Conflict

 A man walks carrying shopping bags in a local market in downtown Riyadh (AFP). 
 A man walks carrying shopping bags in a local market in downtown Riyadh (AFP). 

Amid mounting geopolitical tensions and growing economic uncertainty, the World Bank has warned that any conflict in the Middle East, particularly between Israel and Iran, could have far-reaching and negative consequences for the region and beyond.

Speaking to Asharq Al-Awsat on the sidelines of the launch of the World Bank’s latest economic update for the Gulf Cooperation Council (GCC), Safaa El Tayeb El-Kogali, the Bank’s Regional Director for the GCC, stated: “Any conflict, especially in this region, can have long-lasting and adverse effects.” She noted that the fallout is not limited to energy markets alone, but also includes rising shipping costs, heightened inflationary pressures, and increased investor uncertainty.

While the World Bank’s latest report, which was released on June 1, does not reflect the most recent escalation in the region, El-Kogali emphasized that it is “still too early to fully assess the impact of the ongoing conflict.” She warned, however, that in such volatile conditions, investors tend to adopt a “wait-and-see” approach, delaying decisions until clarity and stability return.

Despite challenges in the energy market, El-Kogali highlighted the resilience of the Gulf economies, thanks to sustained efforts toward economic diversification. In 2024, while the oil sector contracted by 3% due to OPEC+ production cuts, non-oil sectors grew by 3.7%, helping drive overall GDP growth to 1.8% — a notable recovery from 0.3% in 2023.

The World Bank projects the GCC economies will grow by 3.2% in 2025 and 4.5% in 2026, supported by easing oil production cuts and continued strength in non-oil sectors. However, El-Kogali stressed that these projections remain vulnerable to global trade volatility, oil price swings, and the evolving regional security landscape.

To mitigate risks, she urged Gulf countries to accelerate structural reforms, reduce dependency on oil, and boost intra-regional trade. Growth, she added, will also benefit from steady contributions from exports, investment, and domestic consumption.

El-Kogali emphasized that short-term risks include reduced export demand, oil market fluctuations, and regional instability affecting tourism and investor sentiment. Over the long term, threats such as low productivity growth, slow economic transformation, and over-reliance on fossil fuels could hinder progress.

She concluded by recommending fiscal diversification, tax reforms, and stronger regional trade links to create more resilient and adaptive Gulf economies.