Gulf exchanges gain importance as capital-raising channels: Fitch

Fitch Ratings said Gulf stock markets are becoming increasingly important sources of capital alongside bank financing, broadening issuers’ access to funding, supporting longer-term financing, and enhancing pricing transparency.

Exchange development remains uneven across the GCC, with high concentrations, limited product breadth, lower liquidity than in many developed and large emerging markets, and fragmented structures.

The agency said GCC stock markets had a combined market capitalization of about $4 trillion in September 2026, while GCC debt capital markets reached $1.2 trillion outstanding by the end of H1 2026 (sukuk share: 42%).

The Saudi Exchange (Tadawul) remained the region’s largest equity market in September 2026, accounting for around 63% of the total market capitalization of Gulf equity markets, followed by the Abu Dhabi Securities Exchange (ADX) with an 18% share and the Dubai Financial Market (DFM) with around 7%.

Fitch Ratings said it rates 24 TASI-listed entities, representing around 84% of its market capitalization as of August 2026.

All 24 entities have investment-grade ratings, while 96% carry a stable outlook.

Saudi Aramco accounted for around 65% of the Saudi market’s capitalization as of August 2026, highlighting the high level of concentration across regional markets.

Meanwhile, five entities accounted for around 60% of the ADX’s capitalization.

Fitch Ratings noted that Tadawul also has a more developed local-currency debt market than most other GCC exchanges, which have nascent local-currency debt markets with limited issuances to date.

Riyal-denominated sovereign sukuk issuances reflect Saudi government efforts to develop a domestic yield curve, improve local-market liquidity and reduce reliance on foreign-currency funding.

Listed riyal debt instruments are all in sukuk format to attract Islamic banks, which are key investors and hold most banking system assets.

Fitch Ratings expects Saudi Arabia’s riyal-denominated government sukuk to be included in the JPMorgan Emerging Market Bond Index from 2027 to attract additional foreign investment.

Foreign investors’ share of the Saudi sovereign’s primary debt issuances rose to 15% in H1 2026 (Q1 2026: 8%; 2025: 12%), despite Iran war-related volatility.

In the equity market, foreign ownership of the main market’s free float rose to 12.7% by the end of August 2026 (end-2025: 12.4%).

Saudi Arabia’s removal of the qualified foreign investor framework from February 2026 should broaden participation.

Across Gulf debt markets, Fitch Ratings said most Gulf equities are listed on local exchanges, while debt instruments—particularly hard-currency sukuk and bonds — are concentrated on offshore exchanges.

The London Stock Exchange lists over half of global US dollar sukuk at end-1H26, with 95% from the Middle East, mainly the GCC countries.

In the UAE, the Abu Dhabi and Dubai exchanges list mainly equities, while debt instrument listings are concentrated on Nasdaq Dubai.

Fitch Ratings added that Nasdaq Dubai is one of the leading markets for hard-currency sukuk listings, accounting for more than 28% of outstanding global sukuk by the end of H1 2026.

Total listed debt outstanding reached over $140 billion, around 70% of which was sukuk

The development of exchanges is important to GCC governments’ economic diversification agendas and efforts to deepen domestic capital markets, attract greater private-sector participation, and broaden foreign investor access.

However, the pace of domestic debt-market deepening is slowed by the region’s corporate funding culture, which is skewed towards bank financing.