45% of fund managers ‘neutral’ on Saudi market: SNB Capital

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The outlook of 45% of fund managers on the Saudi market performance for Q1 2025 was mainly neutral, according to a survey by SNB capital.

Bearish sentiment rose from 16% in Q4 2024 to 32% in Q1 2025, while bullish expectations fell from 41% in Q4 2024 to 23% in Q1 2025, the brokerage added.

Most fund managers still see the market as fair-valued. However, views of an overvalued market declined to 10% in Q1 2025, from 19% in Q4 2024, while 29% consider it undervalued.

Oil prices remain the primary market driver in 2025, with crude prices expected to range between $65-69.90 per barrel this year, SNB Capital explained.

Fund managers remain bullish on the banking and technology sectors. Meanwhile, sentiment on construction has cooled to neutral in Q1 2025, from positive in Q4 2024.

On the other hand, views on the petrochemicals sector remained primarily bearish. Industry players’ recent earnings fell short of expectations of 61% of fund managers, compared to 48% who said banking results exceeded forecasts.

The technology sector remains the top pick for IPO allocations, SNB Capital noted.

In terms of investment strategies, while 50% of fund managers plan to boost exposure to Saudi equities, another 18% intend to cut holdings in Q1 2025, up from 8% in Q4 2024.

The brokerage noted that growth remains the favored strategy among fund managers, coupled with rising interest in asset values and waning preference for dividends.

The survey also indicated that 42% of fund managers hold less than 5% of assets under management (AUM) in cash. Meanwhile, those retaining 5-10% in cash rose to 39% in Q1 2025 from 28% in Q4 2024.

Elsewhere, views on the Nomu-Parallel Market were largely positive, though liquidity concerns persist. While 45% of managers showed low interest in Nomu, 49% reported strong or increasing engagement.

As much as 39% of fund managers eye stepping up their exposure to Nomu in Q1 2025, down from 50% in Q4 2024. Still, another 58% are expected to maintain their positions for the three-month period, with software and technology remaining the most attractive sectors in Nomu, SNB Capital concluded.