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Why GCC investors are prioritising discipline over momentum
GCC investors are moving beyond momentum trades, focusing on fundamentals, liquidity discipline and long-term resilience as institutional capital reshapes portfolio strategies and risk assessment
- PUBLISHED: Thu 28 May 2026, 5:04 PM
GCC investors are undergoing a structural shift in how they deploy capital, moving away from short-term, momentum-driven trades toward a more disciplined, fundamentals-led approach that prioritises resilience, liquidity and long-term value creation.
Market participants say this transition reflects both external pressures and a maturing regional investment landscape, as institutional capital deepens and scrutiny over asset quality intensifies.
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Hichem Djouhri, Senior Executive Officer at ASB Capital, said the change is being driven by a “gradual reset” in how investors approach risk after navigating tighter global financial conditions and heightened volatility. “That combination has reduced the effectiveness of momentum-led strategies and pushed investors to focus on what can hold value through different phases of the cycle,” he said.
As a result, investors are focusing increasingly on sustainable fundamentals, particularly “cash flow quality and visibility”, balance sheet resilience and sensitivity to external drivers such as oil prices and global trade flows, according to Djouhri.
This recalibration is also reshaping how growth is evaluated. Gautam Jain, member of SC Ventures, said regional investors are not abandoning growth but are becoming more selective about where they allocate capital. “The question is no longer simply, ‘Is this a high-growth opportunity?’ It is, ‘Is this solving an inevitable problem and can we access it before everyone else?’” he said.
He added that investor focus has shifted from “short-term trades to strategic, long-term exposure”, with greater emphasis on governance, scalability and commercial relevance.
Liquidity, traditionally associated with ease of exit, is also being redefined across the GCC. Jain said it is now increasingly linked to the depth and strength of the surrounding ecosystem. “In venture capital, liquidity starts much earlier than exit. It starts with governance, structure, institutional partners and companies built around real demand,” he said.
Djouhri echoed this evolution, noting that liquidity is being assessed more precisely depending on investor type. For institutional investors, it is about the ability to scale positions without moving prices, while private wealth players focus more on execution costs and bid-ask spreads.
Investors are also applying a clearer liquidity premium, rewarding assets with deeper participation and transparent pricing while demanding higher returns from less liquid opportunities.
At the portfolio level, rising institutional participation is driving more structured and diversified strategies. Djouhri said investors are increasingly balancing equities with fixed income, private markets and liquidity buffers to manage volatility and capture income.
This is coupled with longer holding periods and greater focus on downside risk, reflecting a shift toward resilience rather than concentrated bets.
Jain said this evolution is also changing the way portfolios are constructed, with investors taking a more thematic and long-term view. “The portfolio question is shifting from ‘How much risk can I take?’ to ‘Which long-term growth opportunities can I not afford to miss?’” he said.
Underlying these changes is a broader alignment with global investment standards, marked by stronger due diligence, higher selectivity and increased scrutiny of valuations.
Djouhri said investment decisions are now being underwritten with far greater rigour, with closer attention to governance, transparency and financial disclosure. Assets that meet these standards are attracting more stable capital, while weaker issuers are being repriced.
Jain added that this shift is a sign of a more investable region. “Global standards do not dilute regional ambition. They make it more investable,” he said.
Together, these trends point to a GCC investment landscape that is becoming more institutionalised, disciplined and resilient — with long-term value, rather than short-term momentum, increasingly defining where capital flows.
Associate Editor Somshankar Bandyopadhyay brings more than three decades of experience to the KT newsroom. Currently, he manages the news production of the business section, ensuring that the top economic and business news of the day reaches its readers.