Tadawul trading screen
SNB Capital expected Saudi Arabia’s Tadawul All Share Index (TASI) to trade between 9,900-12,000 points in 2023.
In a report, it added that this came based on its expectations for profit and price-to-earnings (P/E) ratios, noting that its forecasts reflect 3.1-3.7% cash yields.
The brokerage also stated that, given its target prices (TPs), the fair value of the index is 11,400 points.
Key factors likely to affect the index this year are an economic recession, the reopening of China's economy after the COVID shutdowns, initial public offering (IPO) activity, major Saudi projects, Federal Reserve decisions, oil prices and liquidity, according to the report.
SNB Capital also said that its top picks from Saudi stocks are Saudi Aramco, stc, Alinma Bank, Saudi Basic Industries Corp. (SABIC), Abdullah Al Othaim Markets Co. and Leejam Sports Co. (Fitness Time).
The brokerage added that such a choice of stocks came with a view of profit, a strong balance sheet and attractive valuations. However, it deemed the banking, telecommunications and tourism sectors as generally appealing.
SNB Capital projected the Saudi economy to grow by 3.1% in 2023, amid continued strong growth in non-oil GDP.
The ongoing economic reforms, ambitious government strategies and initiatives, acceleration in mega projects and the vital role played by national funds will be the main driver of the economy, safeguarding against a potential global recession, it added.
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