SNB Capital says fund managers hold mixed views towards Tadawul in Q4 2022

SNB Capital said that investment fund managers in Saudi Arabia still have a mixed outlook towards the Saudi Exchange (Tadawul) in Q4 2022, in continuation of their view of Q3 2022. 

In a survey conducted on fund managers, the brokerage said that the managers' opinions were divided between a positive, neutral and negative outlook.  

The percentage of managers with a positive outlook rose from 30% in Q3 2022 to 37% in Q4 2022, while the percentage of managers with a negative view declined from 35% to 30%. 

SNB Capital pointed out that most investors believe that interest rates (two probable hikes in 2023) and inflation will be the main factors driving the market, followed by fluctuations in oil prices. 

The majority of investors expect oil prices to range between $70 and $79.9 a barrel in 2023. 

The brokerage added that 30% of fund managers indicated that the market is valued at less than its fair value, the highest percentage recorded with SNB Capital. In comparison, 47% of managers have a neutral view. 

The fund managers' views of the most positive sector changed from the banking sector in the last quarter to the construction sector, while their views of the most negative sectors were for petrochemicals and retail. 

SNB Capital indicated that fund managers that maintained liquidity levels above 30% witnessed a significant rise quarter-on-quarter, while managers whose cash level was less than 5% of their assets decreased from 35% in Q3 to 23% in Q4 2022. 

For the second quarter in a row, respondents preferred value strategies, while momentum and medium capital are the least preferred strategies. 

The brokerage further indicated that 37% of managers felt that the economic expansion had reached its peak, while 70% expected market profit to see single-digit growth in 2023.  

SNB Capital indicated that fund managers’ expectations for the growth of the Saudi economy stood at 3.1% for 2023.