SNB Capital: 75% of fund managers see markets fairly valued

The insurance sector ranked as fund managers’ preferred sector through the end of 2026

SNB Capital said 75% of fund managers (the highest percentage since Q2 2023) believe the market is currently fairly valued, whereas only 11% (the lowest since Q1 2024) see the market as unfairly valued at present.

Based on a survey of fund managers, SNB Capital added that managers’ views on the Saudi market for the remainder of 2026 were evenly split, with bullish and bearish views at 35% each, while neutral views stood at 30%.

SNB Capital believed these results reflect a high level of uncertainty and market volatility. Moreover, most managers expect oil and petrochemical/refined product prices to return to normalize within six months after the end of the conflict. One-third of managers, however, think that it will take more than a year for prices to stabilize, especially for oil and refined products.

SNB Capital indicated that, going forward, managers expect the market in 2026 to be mainly affected by oil prices and the ongoing regional tensions. As for oil prices in 2026, the vast majority expect average oil prices to range between $80 and $94.9.

Top-Pick Sectors for Q2 2026

Regarding Q2 2026, SNB Capital said fund managers’ views varied as follows:

- Significant optimism for the insurance, technology, and energy sectors.

- Pessimism toward the consumer goods and tourism sectors.

- Neutrality toward the petrochemicals and telecom sectors.

The insurance sector is expected to be the best performer through the end of 2026.

Worst performer: Petrochemicals sector

Cash Retention:

SNB Capital said the level of cash held in fund managers’ portfolios points to lower market liquidity. In Q2 2026, cash allocations were as follows:

- 23% of managers held cash exceeding 20% of their portfolios, compared with 12% in Q4 2025.

- The percentage of managers holding cash below 5% declined to 33%, from 37% in Q4 2025.

Top Investment Strategy

SNB Capital stated that the preferred investment strategy shifted from a value focus in Q4 2025 to a growth focus in Q2 2026, cited by 64% of managers.

Participation in New IPOs:

A total of 46% of managers said their willingness to participate in such offerings depends on sector/company characteristics, while 28% expressed no interest in new IPOs.

Nomu Parallel Market in Q2 2026

- 63% of managers said Nomu Parallel Market is attractive, but liquidity remains a challenge.

- 19% of managers said the market is unattractive.

- 21% of managers showed increased interest in investing in the market, compared with 18% whose interest declined.

- 78% of managers plan to keep their investments in Nomu largely unchanged.

- 11% of managers plan to increase their investments.

- Managers maintained their preference for the software and technology sectors.