Global Market Portfolio 2025

The Gulf's capital transformation

The Gulf region is emerging as a global investment hub, driven by capital reforms and inclusion in global indices. Rapid growth in IPOs, sukuk, and private equity is attracting diverse investors. Despite limited accessibility, strategic shifts signal long-term potential.

17 September 2025 5 min read

Frederic Dodard, CFA, FRM

Head of Portfolio Management, ISG, EMEA

Amy Le, CFA

Investment Strategist

The Middle East became part of the global investment opportunity in the 2010s when it was included in several global indices. Since 2019, the Middle East has had growing relevance in the Global Market Portfolio (GMP), and it is now important to consider not only public assets, but also private equity and private credit in the region.

We also analyzed the size of sukuk markets across different countries, recognizing it as one of the region’s fastest-growing segments. While the investable market size in the Gulf Cooperation Council (GCC) remains relatively low—due to factors such as high ownership concentration and foreign investment restrictions, the region is undergoing significant economic transformation. These developments are steadily increasing its weight in the GMP and opening up new investment opportunities across sectors and countries.

The Gulf region is still underrepresented

Despite investment advancements in recent years, the size of the investable market remains limited in the Middle East region, particularly in the GCC. The region has the lowest ratio of investable versus total equity market capitalization, at 24% (Figure 1). For perspective, this ratio is 34% for global emerging markets, and 83% for developed markets.

Figure 1: Investable assets in Middle East lowest among regions

As of Q1 2025

USD Billion
	Total equity market cap	Investable equity market cap	Ratio, Investable vs. Total
Total ME	3,294	792	24%
EM	27,002	9,111	34%
DM	89,742	74,123	83%
Global	116,744	83,234	71%

Source: LSEG, Bloomberg, Thomson Reuters, PreQin, World Gold Council, FactSet, State Street Investment Management, as of March 31, 2025.

Several factors contribute to high ownership concentration and limited foreign investment access in certain sectors categorized as strategic. For instance, Saudi Arabia has the largest total equity market capitalization in the region, valued at USD 2.6 trillion as of March 2025, with Aramco accounting for approximately two-thirds of this figure.

As illustrated in Figure 2, Saudi Arabia’s investable market capitalization was USD 373 million, or 15% of the total equity market capitalization of the Middle East as of March 2025, due to the majority of Aramco shares being retained for strategic purposes.

Figure 2: Saudi assets dominate the Middle East Portfolio

As of Q1 2025

USD Billion
	Total equity market cap	Investable equity market cap	Ratio, Investable vs. Total
Behrain	15	-
Egypt	14	7	51%
Israel	329	241	73%
Jordan	21	-
Kuwait	127	80	63%
Lebanin	-	-
Morocoo	87	19	22%
Oman	17	-
Qatar	146	71	49%
Saudi Arabia	2,540	373	15%
UAE	652	127	19%
Total ME	3,294	792	24%
EM	27,002	9,111	34%
DM	89,742	74,123	83%
Global	116,744	83,234	71%

Source: Thomson Reuters, Bloomberg, PreQin, World Gold Council, State Street Investment Management, as of March 2025.

The Middle East Global Market Portfolio now includes more non-traditional assets

As of March 2025, the combined investable market capitalization of equities, bonds, private equity, and private debt in Middle Eastern countries stood at USD 2.2 trillion, representing 1.2% of the GMP. This marks a substantial increase from Q4 2019, when the aggregate capital amounted to only USD 677.0 billion.

USD Billion
	Corporate IG	Corporate IG (hard currency)	Government HY (hard currency)	Government bonds (local currency)	Government bonds (hard currency)	Quasi-sovereign or agency (local currency)	Quasi-sovereign or agency (hard currency)	Inflation-linked bonds (both local and hard currency)	Total bonds	Sukuk (hard currency)	Sukuk (local currency)	Equity	Private equity	Private credit	Total
Bahrain	-	0.2	1.4	1.1	24.5	-	4.3	-	31.5	9.3	-	5.8	0.1	0.1	46.8
Egypt	-	1.9	-	13.6	22.8	-	-	-	38.3	-	-	7.1	-	-	45.4
Iraq	-	0.4	0.4	-	1.0	-	-	-	1.8	-	-	-	0.0	-	1.8
Israel	6.4	6.6	17.4	37.8	-	0.1	1.7	102.3	172.3	-	-	241.1	45.9	1.0	460.3
Jordan	-	-	-	8.7	6.0	-	-	-	14.7	-	-	4.5	0.9	-	20.1
Kuwait	0.3	10.3	1.6	-	3.7	-	3.3	-	19.2	4.4	-	80.2	0.1	-	103.9
Lebanon	-	-	-	8.5	2.4	-	-	-	10.9	-	-	-	0.5	-	11.4
Morocco	0.1	-	4.6	47.7	5.7	-			58.1	-	-	19.3	-	-	77.4
Oman	-	-	1.7	1.3	25.1		5.6	-	33.7	5.8	0.2	10.3	0.0	-	49.9
Qatar	0.1	15.2	1.1	2.3	39.6		19.1	-	77.4	3.3	3.6	71.2	0.2	-	155.7
Saudi Arabi	0.4	65.2	6.3	-	130.6		69.9	-	272.4	70.9	81.7	373.0	16.0	0.2	814.2
UAE	-	53.9	12.4	-	93.0	0.0	76.0	-	235.4	41.6	1.1	127.0	4.6	0.6	410.2
Others	-	-	-	-	-	-	-	-	-	7.5	-	-	11.9	0.2	19.6
Total ME	7.2	153.7	46.9	121.0	354.5	0.1	179.9	102.3	965.6	142.9	86.6	939.4	80.1	2.2	2,216.8

Source: LSEG, Thomson Reuters, Bloomberg, PreQin, World Gold Council, State Street Investment Management, as of March 31, 2025.

Issuance activity is on the rise

Within the broad equity market, the Middle East currently accounts for 1.1% of the global equity market capitalization, compared to 0.7% and 0.2% as of Q2 2024 and Q4 2019, respectively.

The Middle East initial public offering (IPO) market demonstrated resilience in 2024, underpinned by ongoing governmental initiatives across countries such as the UAE, Saudi Arabia, and Oman. IPO proceeds in the region increased to USD 13.0 billion in 2024, representing a 15.0% rise from the USD 11.3 billion recorded in 2023.

Oman has notably witnessed several high-profile IPOs since 2023, including the listing of OQ Exploration and Production SAOG—the exploration and production arm of state-owned energy company OQ—which generated USD 2 billion in capital. This transaction marked the largest IPO in Omani history, and ranked among the most significant offerings in the Middle East during the previous year. This positive trend persisted into 2025, exemplified by Asyad Shipping, a subsidiary of the Asyad Group, which launched its IPO in early March and successfully raised over USD 330 million (Figure 3).

Similarly, the Middle East bond market continued to grow robustly in 2024, with Saudia Arabia leading the region in bond issuance. As of March 2025, the bond market reached USD 1.2 trillion, with 19.2% of Middle East countries’ bond market capitalization in sukuk and the rest in traditional bonds. Saudi Arabia accounted for almost 66.5% of the sukuk in the region, followed by UAE with 18.6%, while other countries accounted for the remaining 14.9%.

Government bonds make up the largest share of the Middle East market portfolio, followed by quasi-sovereign and agency securities. Corporate investment grade, inflation-linked, and high-yield bonds comprise smaller portions of the total market value (Figure 4).

Among individual countries, Saudi Arabia commands the largest share of Middle East bonds at 35.6%, followed by the United Arab Emirates at 23.3%.

Alternative investments are gaining importance as the investment landscape evolves. Private equity in the region has generally grown since 2019, with assets under management rising from USD 36.0 billion in Q4 2019 to USD 80.1 billion by Q1 2025. This growth was fueled by both local and international investors, especially in the infrastructure and technology sectors.

The private credit market is harder to quantify due to limited data, but companies increasingly use private debt for financing. By Q1 2025, the private debt market reached an estimated USD 2.2 billion—double its 2019 size—driven mainly by sovereign wealth funds and family offices.

The GCC investment proposition

Overall, the Middle East has made substantial progress in expanding its role in global investment markets. From robust IPO activity to the growth of bond and alternative investment markets, the region is becoming increasingly investable. While challenges such as limited market float and regulatory constraints remain, ongoing economic reforms and strategic initiatives are paving the way for future growth. For investors, the Middle East offers a dynamic and evolving landscape with significant long-term potential. For more, see our Global Market Outlook.

USD Billion
	Corporate IG	Corporate IG (hard currency)	Government HY (hard currency)	Government bonds (local currency)	Government bonds (hard currency)	Quasi-sovereign or agency (local currency)	Quasi-sovereign or agency (hard currency)	Inflation-linked bonds (both local and hard currency)	Total bonds	Sukuk (hard currency)	Sukuk (local currency)	Equity	Private equity	Private credit	Total
Bahrain	-	-	0.9	-	18.92	-			19.82	4.87		-	0.16	0.10	24.95
Egypt	-	-	-	-	-	-			-			-	-	-	-
Iraq	-	-	0.7	-	3.77	-			4.47			-	-	-	4.47
Israel	-	5.0	20.5	-	-	-		77.63	103.13			-	27.04	0.62	130.79
Jordan	-	-	-	-	3.26	-			3.26			-	0.43	-	3.68
Kuwait	-	8.2	0.8	-	4.89	-			13.89	1.03		-	0.17	-	15.09
Lebanon	-	-	-	-	7.36	-			7.36			-	0.56	-	7.92
Morocco	-	-	-	-	-	-			-			-	-	-	-
Oman	-	-	3.8	-	24.9	-			28.70	4.18		-	0.05	-	32.92
Qatar	-	15.5	0.5	-	41.98	-			57.98	4.55		31.78	0.16	-	94.47
Saudi Arabi	-	13.6	3.0	-	74.86	-			91.46	23.69		88.10	7.40	0.13	210.77
UAE	-	39.5	8.8	-	44.07	-			92.37	30.50		20.51	-	-	143.38
Others	-	-	-	-	-	-			-	8.44		-	1-	0.17	8.61
Total ME	0.0	81.8	39.0	0.0	224.0	0.0		77.6	422.4	77.3		140.4	80.1	1.02	677.04

Source: LSEG, Thomson Reuters, Bloomberg, PreQin, World Gold Council, State Street Investment Management, as of March 31, 2025.

Issuance activity is on the rise

Equity

Within the broad equity market, the Middle East currently accounts for 1.1% of the global equity market capitalization, compared to 0.7% and 0.2% as of Q2 2024 and Q4 2019, respectively.

Bonds

Alternatives

The GCC investment proposition

Disclosure

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