Fund managers optimistic on Q2 2022: SNB Cap survey

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Most fund managers in Saudi Arabia adopted a bullish market outlook for Q2 2022, in line with Q1 2022, SNB Capital said in a fund managers survey.

Investors still believe that the oil price movement will be the main market driver at an average oil price of $90- $100 per barrel, followed by interest rates and inflation.

Moreover, 34% of fund managers expect daily volumes to remain unchanged at Q1 2022 levels of SAR 8.5 billion over the coming period.

Despite their positive views, the majority of managers, or 52%, indicated that the market will be overvalued in Q2 2022, while another 10% believe it is undervalued.

Fund managers painted a positive outlook for the banking, healthcare and construction sectors, though they are most bearish on insurance, consumers and petrochemicals.

Nearly 24% of fund managers see their cash levels at less than 5% during the quarter, versus the Q1 2022 level of 46%.

Participants believe that value strategies will outperform over the coming period, while momentum- and balanced-focused strategies were the least preferable.

Fund managers, of which 41% see the Saudi economy as already in a recovery phase, expect full economic recovery from COVID-19 this year, with the economy currently at its peak.

As many as 48% of participants project the Saudi economy to grow by more than 7.5% in 2022, according to SNB Capital.