Fund managers cautiously optimistic about Saudi equity market in Q1 2023

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The fund managers are cautiously optimistic about the Saudi equity markets in the first quarter of 2023, Al Rajhi Capital said in a recent note.
 

In a survey, Al Rajhi Capital said that fund managers (43 votes), despite uncertainty, most fund managers believe that stock markets will be positive in Q1 2023.
 

On the other hand, 60% of the surveyed expected markets to witness positive performance, while 23% believe that the market will gain almost 5%. Also, seven out of 43 participants forecast market returns to be less than 5%.
 

Moreover, the cautious sentiment was also reflected in the preference for investment style that is a combination of both growth and value by 60% of participants.
 

In terms of sectors, most participants’ preference remained same as the last survey, with banks on top of the list followed by petrochemicals, and software & services and healthcare tied for the third position.
 

Although participants expressed concern over higher interest rates, they expected higher net interest margin and growth in corporate loans to be among key factors that support banks’ profitability during Q4 2022 and Q1 2023.
 

Fund managers are also negative on the capital goods as well as retail sectors.
 

On market size, fund managers preferred mid-caps and fixed income assets, Al Rajhi Capital added.