Fund managers have mixed views for Tadawul in Q3 2022: SNB Capital

Tadawul trading screen

Fund managers in Saudi Arabia held different opinions towards the Saudi Exchange’s (Tadawul) performance during Q3 2022 compared to the previous quarter, SNB Capital said.

In a survey, the research firm stated that some views were positive, others were neutral and negative. They believed that oil prices would be the main driver of the market, expecting oil prices to range between $80 and 89.9 a barrel. The market would also be driven by interest rates and inflation.

According to the survey, 35% of fund managers expected the average value of daily trades in H2 2022 to decrease compared to SAR 8.4 billion in H1 2022.

Nearly 50% of fund managers stated that the market was at its fair value in Q3 2022, while 39% indicated that the market was “overvalued” compared to the previous quarter of this year. In addition, 52% of managers said the market was “overrated”, while 38% indicated that the market valuations were “fair”.

The fund managers' views for the banking, construction, healthcare services and industry sectors are still positive, while their expectations for the consumer services sector were negative.

According to the report, about 35% of fund managers retained cash of less than 5% during the quarter, compared to 24% in the previous quarter. They pointed out that the number of fund managers who held cash of more than 30% increased from 8% in Q2 2022 to 14% in Q3 2022. Fund managers believed value strategies will outperform in the coming period, while momentum and growth strategies were the least-preferred options.

Around 43% of fund managers believed that the economic expansion reached its peak at present, while 35% expected that the economy is still recovering.

Regarding economic growth, 48% of respondents predicted the economy to grow by 3.5% in 2023.