Over the past three years, Gulf trading desks have been transformed by rising foreign investment, a growing hedge fund presence, and Saudi Arabia's continued efforts to open its capital markets. Brokers that once relied heavily on voice-led, relationship-driven trading are investing in electronic execution infrastructure and algorithmic tools to keep pace with changing trading flows.

“The MENA desk has stopped being a relationship business with technology bolted on and has become a technology business with relationships overlaid,” said Amr Elshamy, managing director and head of electronic trading at EFG Hermes, which runs one of the largest securities brokerage and execution franchises in the Middle East and North Africa region. EFG Hermes offers high-touch, low-touch, and pure electronic execution, all run off the same infrastructure. A significant share of the firm’s trading flow is now executed electronically.

The demand behind the shift is measurable. MSCI and FTSE Russell's addition of Saudi Arabia to their emerging markets indices in 2019 drove inflows of roughly $50 billion. In February, Saudi Arabia removed the final barrier, scrapping the Qualified Foreign Investor framework and opening its exchange, Tadawul, to all foreign investors.

Foreign investors increased their activity ahead of the change. Foreign net buying reached SR5 billion ($1.33 billion) in January, the highest since level since 2022, excluding special events. Foreign investors accounted for 41.7 percent of total market purchases, compared to 5.6 percent in 2018.

The result, says Nabeel Albloushi, regional head of markets and securities services, Middle East, North Africa, and Turkey (MENAT), at HSBC Bank Middle East, is a market that "has become more local but also more global at the same time.” The resulting trading flows also behave differently: “The MSCI and FTSE reviews move enormous, concentrated flow through a very small number of days, and increasingly through the closing auction rather than continuous trading," said Elshamy.

Brokers and other market participants say they have expanded electronic execution in response to changing client demand, although the extent of the adoption varies by market and asset class.

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“In 2023, many desks were still largely issuance-led, with a heavy focus on IPO execution," Albloushi said. "Today, they operate much more like full-spectrum capital markets platforms.” Beginning in 2025, EFG Hermes deployed benchmark algorithms across GCC markets and Egypt, and it’s now expanding into Bahrain and Oman ahead of proven demand. "If you wait for the demand to be fully proven before you build, you've already lost the client who moved first," Elshamy said. The more surprising shift is that local institutions, which are historically voice clients by default, are actively demanding participation-of-volume (POV) and volume-weighted average price (VWAP) trading strategies, a change happening faster than many market participants expected.

Different types of investors now operating in the region are also behind the changes. Some are opening offices in Gulf financial centers rather than trading exclusively from London, New York, or Asia.

Hedge funds registered in the Dubai International Financial Centre (DIFC) passed 100 in December, doubling from 50 at the start of 2024, with 81 firms in the billion-dollar club. Assets under management in Abu Dhabi Global Market (ADGM) grew 57 percent in the first quarter of 2026 alone, with new firms representing more than $4.4 trillion in global assets.

But gaps remain, and many are structural rather than technological. Securities lending is “really only just becoming investable at scale, and really only in Saudi so far,” said Elshamy, adding that true colocation remains concentrated in Riyadh. The wish lists of most international players are consistent: omnibus trading, lower fees, simpler auctions, and an executable shorting regime. The gap between having the technology and having the market structure to support it remains a key challenge. Market participants say the firms pulling ahead are increasingly treating market structure as a front-office priority.

The Gulf trading desk of 2026 looks less like a trading floor and more like a small, highly technical execution-and-infrastructure team. While market participants say the transition is still underway, electronic execution and trading technology are playing an increasingly central role in how Gulf markets operate.