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The sector also faced wider macro headwinds, consisting of a more mindful policy background in China and international risk-off belief driven by geopolitical stress and higher energy costs. Thematic ETFs Struggled for the a lot of part, particularly those connected to carbon and high-growth technology, as assessment pressures and international rate dynamics weighed on performance.
The petrochemical ETF significantly outshined. Flows in Q1 2026 were modest and highly concentrated, reflecting selective allowance instead of broad market participation. Regardless of weak performance, ETFs recorded $27.1 million in net inflows, with just a small number of items attracting new capital. This indicates that investors were targeting particular exposures, while lowering or turning out of others.
Trading activity remained constant, with average 30-day volumes around 33,000 shares, concentrated in a handful of bigger and more liquid ETFs. Most activity appears to have actually occurred in the secondary market, enabling financiers to change positions without significant primary productions or redemptions. While current geopolitical occasions have actually resulted in more financial pressure on GCC nations, the region remains durable and well capitalized to handle the scenario.
In January, Boreas launched its S&P Global High-end UCITS ETF, including a specific niche thematic direct exposure focused on international luxury and customer brand names. ETFs by the CMA for cross-listing on ADX.
Q1 2026 revealed some progress connecting to ETFs in the GCC. We anticipate more international and thematic ETFs to list in the GCC throughout 2026. While the conflict has actually impacted sentiment and prices during the quarter, it has actually driven more volume and interest in regional properties.
Regardless of ongoing geopolitical stress and security dangers across the Middle East, the economies of the Gulf Cooperation Council (GCC) have actually continued to show durability, maintaining favorable development momentum in the last few years. While disputes in the larger area and worldwide economic unpredictability stay a structural restriction, GCC countries have actually so far limited their effect on domestic financial efficiency through strong fiscal positions, policy connection, and sustained financial investment.
3.2 percent growth in 2025, accelerating to 4.5 percent in 2026. Sees momentum improving, with GCC output development forecasted to increase from 1.7 percent in 2024 to 3.3 percent on average in 2025, showing a shift towards more positive overall conditions.
How Shared Solutions Are Driving Digital Improvement in the GulfThe IMF's World Economic Outlook (October 2025) jobs worldwide growth relieving to 3.1 percent in 2026, with advanced economies around 1.5 percent and emerging market and establishing economies simply above 4 percent. On that comparison, a 4.44.5 percent GCC growth would position the region materially ahead of the world average and slightly above (or broadly in line with) the emerging-market aggregate, enhancing the GCC's status as a relatively high-growth pocketprovided that regional risk conditions remain consisted of and reform momentum holds.
Information from the GCC Statistical Center show that non-oil sectors currently account for more than 73 percent of total GDP, a share that has continued to increase as governments expand investment in services, facilities, and technology. According to Oxford Economics, non-energy activity across the GCC is projected to grow by around 4.1 percent in 2026, supported by strong labor markets, enhancing credit conditions, and increasing investment in technology and AI-related infrastructure.
Public-sector investment and reform stay main to sustaining this trend. Policy steps intended at bring in foreign direct investment, alleviating foreign ownership guidelines, expanding capital markets, and supporting private-sector participation continue to underpin non-oil growth and lower the region's exposure to oil rate volatility. While hydrocarbons no longer dominate the development outlook, oil earnings are anticipated to play a supportive function in 2026.
3.2 percent development in 2025, accelerating to 4.5 percent in 2026. Sees momentum improving, with GCC output development predicted to rise from 1.7 percent in 2024 to 3.3 percent on average in 2025, showing a shift towards more favorable overall conditions.
The IMF's World Economic Outlook (October 2025) jobs international development reducing to 3.1 percent in 2026, with innovative economies around 1.5 percent and emerging market and establishing economies simply above 4 percent. On that comparison, a 4.44.5 percent GCC growth would position the region materially ahead of the world average and a little above (or broadly in line with) the emerging-market aggregate, enhancing the GCC's status as a fairly high-growth pocketprovided that regional threat conditions remain contained and reform momentum holds.
Information from the GCC Statistical Center show that non-oil sectors already represent more than 73 percent of overall GDP, a share that has actually continued to rise as federal governments broaden investment in services, infrastructure, and innovation. According to Oxford Economics, non-energy activity across the GCC is predicted to grow by around 4.1 percent in 2026, supported by strong labor markets, improving credit conditions, and increasing financial investment in technology and AI-related infrastructure.
Public-sector investment and reform stay central to sustaining this pattern. Policy measures focused on bring in foreign direct financial investment, easing foreign ownership rules, expanding capital markets, and supporting private-sector involvement continue to underpin non-oil expansion and lower the region's direct exposure to oil rate volatility. While hydrocarbons no longer control the development outlook, oil earnings are anticipated to play a helpful role in 2026.
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