GCC equity markets are projected to deliver returns between 12% and 13% in 2025, First Abu Dhabi Bank (FAB) said in its latest 2025 global investment outlook report.

The growth will be supported by a recovery of key sectors, such as petrochemicals, as well as financial and geopolitical stability.

In addition, the expected earnings growth of 11.1% this year and a price-to-earnings ratio of around 15.18x will support the double-digit returns, including dividends.

Many stocks are offering higher dividends, which appear attractive as the first quarter 2025 dividend season approaches, especially in a declining interest rate environment, the bank said.

FAB maintains a positive outlook on the GCC market, favouring Dubai, followed by Abu Dhabi and Saudi Arabia.

Dubai’s stock market delivered a year-to-date return of 30.57% as of December 16, 2024, while Abu Dhabi registered a marginal decline of -1.12%.  

Corporate earnings have remained robust throughout 2024 and are anticipated to continue in 2025, further supporting market performance.

Any positive resolution on the geopolitical front could provide an extra boost to the region’s market trajectory, the bank noted.

FAB stated that the GCC’s strategic focus on economic diversification, infrastructure development, and technological advancement positions the region as an emerging investment hub.

(Edited by Bindu Rai; bindu.rai@lseg.com)