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Investment fund managers’ outlook on the Saudi market grew more optimistic in 2Q 2024 with bullish views rising to 47% from 41% in the preceding quarter, Argaam reported, citing a survey of fund managers by SNB Capital. Meanwhile, neutral views by investment fund managers for the quarter decreased to 44% from 48% while bearish views decreased to 9% from 11%.
Some 54% of managers plan to increase their exposure to Saudi equities, while 38% expect their exposure to remain “broadly unchanged.” Managers are cutting their allocation to cash so they can load up on equities, SNB Capital noted, saying that 85% of respondents currently have cash at less than 10% of assets under management.
Driving appetite: The perception of that the market is undervalued, a sentiment held by 20% in 2Q up and just 11% in the preceding quarter.
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Market drivers: Fund managers expect interest rates and inflation to remain key market drivers, with 85% of those surveyed forecasting one rate cut this year. Oil prices are projected to stay between USD 80-90 per barrel in line with current levels, according to the survey.
Fund managers see the banking sector as a top performer this year, with the ins. sector next in line. The Kingdom’s tourism industry is also viewed with optimism on the back of ongoing efforts by the government to boost tourist arrivals. Managers are less optimistic about healthcare than the previous quarter, but still expect it to be a source of IPO flow. The majority of fund managers see the petrochemicals sector as the weakest-performing sector this year.
