SNB Capital stated that fund managers' outlook for the Saudi market in Q3 2023 was equally split between bullish and neutral with bearish views.
Bullish and neutral views each represented 40%, while the bearish views increased to 20% compared to 10% in Q2 2023.
"Although most views indicate fair valuation, fund managers who believe the market is fairly valued decreased to 60% from 77% last quarter, while managers who believe the market is overvalued increased to 30% from 10% in Q2 2023," the brokerage stated.
Moreover, the managers remained bullish on the tourism and healthcare sectors and became less bearish on the petrochemicals.
On the other hand, they were mainly bearish on the Consumers sector.
For IPOs, the managers maintained their preference for Pharma and Healthcare as the most attractive sectors to participate in.
They also believe that oil prices, interest rates and inflation will be the main drivers of the market, expecting average oil prices to range between $80-89.9 a barrel in 2024. In addition, interest rates would be raised this year and beyond, to be followed by a temporary halt in 2024.
According to the report, 65% of the managers expect the market earnings to grow by a single digit YoY in 2024, while 25% expect earnings to remain flat YoY.