GCC equity markets are projected to generate returns between 12% and 13% in 2025, driven by earnings growth and stable financial and geopolitical conditions, according to First Abu Dhabi Bank’s (FAB) 2025 global investment outlook report.
The bank expects earnings to grow by 11.1% this year, with a price-to-earnings ratio of 15.18x supporting double-digit returns, including dividends. The ongoing recovery in key sectors such as petrochemicals and strong dividend offerings will further attract investors, particularly as the first-quarter dividend season approaches in a lower interest rate environment.
FAB maintains a positive stance on GCC markets, favouring Dubai, followed by Abu Dhabi and Saudi Arabia. Dubai’s stock market recorded a 30.57% year-to-date return as of December 16, 2024, while Abu Dhabi saw a marginal decline of 1.12%.
Corporate earnings remained strong throughout 2024 and are expected to continue their positive trajectory in 2025, reinforcing market performance. A favourable geopolitical resolution could provide additional momentum for the region’s equity markets.
FAB also highlighted the GCC’s strategic emphasis on economic diversification, infrastructure expansion, and technological development as key factors strengthening its position as an investment hub.
