Saudi Arabia's Tadawul All Share Index (TASI) recorded a 2.9 percent gain in the first six months of 2026, maintaining its year-to-date upward momentum, according to a report by Kamco Invest. The performance made the Kingdom the second-best-performing market in the Gulf Cooperation Council (GCC) region, trailing only the Muscat Stock Exchange, which surged 28 percent in the same period.
Regulatory Reforms and Market Liberalization Drive Growth
Saudi Arabia has intensified efforts to strengthen its capital markets through regulatory reforms, market liberalization, and new listings. These initiatives aim to position the Tadawul as a key funding source for businesses and a gateway for international investors, supporting Vision 2030's goal of building a diversified, private-sector-led economy.
June Decline Amid Regional Tensions
Despite the overall first-half gain, TASI declined by 2.5 percent in June compared to May, marking its third consecutive monthly drop. Kamco Invest attributed the decline to weaker investor sentiment due to uncertainty over US-Iran negotiations, lower oil prices, and expectations that the US Federal Reserve would maintain higher interest rates for longer. The report noted, "Saudi Arabia's TASI declined for the third consecutive month in June 2026, reflecting weaker investor sentiment amid a lack of clarity over the US-Iran negotiations and lower oil prices, as well as expectations that the US Federal Reserve would maintain higher interest rates for longer."
Despite the monthly decline, TASI remained the second-best-performing GCC market year-to-date with a 2.9 percent gain.
GCC Market Performance in June
The Dubai Financial Market General Index posted the largest monthly gain in the GCC, rising 3.4 percent in June, followed by the Bahrain bourse at 3.2 percent and the Abu Dhabi Securities Exchange at 1.1 percent. Boursa Kuwait fell 1.1 percent month-on-month, while Qatar's benchmark DSM Index dropped 3 percent. The Muscat Stock Exchange declined 3.2 percent in June, its second consecutive monthly drop after ten months of solid gains.
Global and Regional Factors Weigh on Markets
Kamco Invest reported that global equity markets declined in June as the initial impact of the war led to higher inflation and hawkish central bank signals, while geopolitical tensions between Ukraine and Russia escalated. Negative global sentiment also affected GCC markets, with the MSCI GCC index sliding 1.6 percent, nearly erasing all gains since the start of the year. The report added, "In addition, an acute regional geopolitical uncertainty tied to the US-Iran conflict and the Strait of Hormuz disruption added to the overall downward pressure on regional stocks. The decline was mainly seen in large-cap sectors including Real Estate, Materials, Banks and Energy, while defensive names in Utilities and Telecom sectors partially offset the overall decline."
