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The sector likewise faced more comprehensive macro headwinds, consisting of a more mindful policy background in China and international risk-off sentiment driven by geopolitical tensions and greater energy prices. Thematic ETFs likewise struggled for the most part, particularly those linked to carbon and high-growth technology, as valuation pressures and international rate dynamics weighed on efficiency.
The petrochemical ETF significantly exceeded. Flows in Q1 2026 were modest and extremely focused, showing selective allocation instead of broad market participation. In spite of weak performance, ETFs taped $27.1 million in net inflows, with only a little number of products drawing in new capital. This shows that financiers were targeting specific direct exposures, while decreasing or rotating out of others.
Trading activity stayed stable, with average 30-day volumes around 33,000 shares, focused in a handful of bigger and more liquid ETFs. The majority of activity appears to have actually happened in the secondary market, enabling financiers to change positions without substantial primary creations or redemptions. While current geopolitical events have led to more financial pressure on GCC nations, the area remains resilient and well capitalized to handle the circumstance.
In January, Boreas introduced its S&P Global Luxury UCITS ETF, adding a specific niche thematic direct exposure focused on worldwide luxury and consumer brand names. ETFs by the CMA for cross-listing on ADX.
Q1 2026 revealed some progress associating with ETFs in the GCC. We anticipate more global and thematic ETFs to list in the GCC during 2026. While the conflict has actually affected belief and costs during the quarter, it has driven more volume and interest in regional assets.
Despite ongoing geopolitical tensions and security risks throughout the Middle East, the economies of the Gulf Cooperation Council (GCC) have actually continued to demonstrate durability, maintaining positive growth momentum over the last few years. While conflicts in the larger area and worldwide economic uncertainty remain a structural constraint, GCC nations have actually up until now limited their impact on domestic financial efficiency through strong financial positions, policy continuity, and sustained financial investment.
3.2 percent development in 2025, speeding up 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 positive overall conditions.
Will Dubai Sustain Industrial Growth during 2026?The IMF's World Economic Outlook (October 2025) projects international growth alleviating 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 somewhat above (or broadly in line with) the emerging-market aggregate, reinforcing the GCC's status as a reasonably high-growth pocketprovided that local danger conditions stay contained and reform momentum holds.
Data from the GCC Statistical Center show that non-oil sectors currently represent more than 73 percent of overall GDP, a share that has continued to rise as federal governments expand financial investment in services, facilities, and technology. According to Oxford Economics, non-energy activity across the GCC is forecasted to grow by around 4.1 percent in 2026, supported by strong labor markets, enhancing credit conditions, and rising financial investment in innovation and AI-related facilities.
Public-sector financial investment and reform stay central to sustaining this pattern. Policy steps focused on drawing in foreign direct financial investment, easing foreign ownership rules, expanding capital markets, and supporting private-sector involvement continue to underpin non-oil growth and reduce the region's exposure to oil price volatility. While hydrocarbons no longer dominate the growth outlook, oil earnings are expected to play a supportive role in 2026.
The World Bank, on the other hand, jobs 3.2 percent development in 2025, speeding up to 4.5 percent in 2026. The IMF likewise sees momentum improving, with GCC output development projected to rise from 1.7 percent in 2024 to 3.3 percent on average in 2025, showing a shift toward more favorable total conditions.
The IMF's World Economic Outlook (October 2025) projects global growth relieving to 3.1 percent in 2026, with sophisticated economies around 1.5 percent and emerging market and establishing economies simply above 4 percent. On that contrast, a 4.44.5 percent GCC expansion would place the area materially ahead of the world average and slightly above (or broadly in line with) the emerging-market aggregate, strengthening the GCC's status as a reasonably high-growth pocketprovided that regional threat conditions remain contained and reform momentum holds.
Data from the GCC Statistical Center reveal that non-oil sectors already account for more than 73 percent of total GDP, a share that has continued to rise as federal governments broaden financial investment in services, infrastructure, and innovation. According to Oxford Economics, non-energy activity throughout the GCC is forecasted to grow by around 4.1 percent in 2026, supported by strong labor markets, improving credit conditions, and increasing financial investment in innovation and AI-related facilities.
Will Dubai Sustain Industrial Growth during 2026?Public-sector financial investment and reform stay main to sustaining this pattern. Policy steps intended at drawing in foreign direct investment, alleviating foreign ownership rules, broadening capital markets, and supporting private-sector participation continue to underpin non-oil expansion and minimize the region's direct exposure to oil cost volatility. While hydrocarbons no longer dominate the growth outlook, oil incomes are expected to play a helpful function in 2026.
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