BLOMINVEST says Q4 2025 results reprice sectors, sees varying Q1 2026 profits

Abdullah Al-Rashoud, Managing Director and CEO of BLOMINVEST

Abdullah Al-Rashoud, Managing Director and CEO of BLOMINVEST, said companies’ fourth-quarter results and management guidance will play a key role in resetting sector valuations in the coming period.

In an interview with Argaam, he highlighted expectations for significant variation in profit growth across sectors during the first quarter of 2026, which is driving the investment firm to adopt a highly selective stock-picking strategy aimed at achieving the best returns for investors.

Al-Rashoud noted that BLOMINVEST’s current strategy moves away from random growth, instead focusing on sectors with clear quality and profitability.

At the forefront is the infrastructure sector, including cable, pipe, and transformer companies, leveraging the strong demand driven by electricity interconnection, energy and water projects, and rapidly accelerating national infrastructure projects aligned with Vision 2030 goals, the top executive explained.

The banking sector is likely to maintain strong profit levels despite the current liquidity tightness in the banking system. However, BLOMINVEST favors banks with strong liquidity positions, solid loan portfolios, and growth in retail lending, he added.

Moreover, the mining sector is deemed a promising investment opportunity, particularly given companies directly benefiting from rising prices of gold, silver, and certain commodities, along with cost discipline and production capacity expansion.

He noted that these factors, combined with the sector’s relatively lower sensitivity to oil price fluctuations, enhance its investment appeal in the short to medium term.

Al Rashoud also expects that allowing investment from all categories of foreign investors, followed by the removal of ownership restrictions once implemented, will attract significant institutional capital inflows.

“This will likely boost liquidity levels and enhance pricing efficiency in the Saudi market by relying more on fundamental analysis rather than short-term speculation. Over the medium term, this is expected to deepen global institutional participation, reduce random volatility, and align prices more closely with fair value and real earnings growth of listed companies,” he said.

Commenting on the impact of allowing full ownership by foreigners and the accelerating real estate projects on property asset valuations, Al-Rashoud explained the real estate investment sector has been in a wait-and-see mode pending the issuance of the new foreign ownership law and clarification of targeted geographic areas. Therefore, this step represents a strategic development that would boost market vitality and attractiveness.

He also emphasized that the importance of regulation lies in its ability to expand and diversify available real estate products and offer broader options for both local and international investors, helping increase investment flows, foreign capital inflows, and competitiveness in the Saudi real estate market moving ahead.

Additionally, Al-Rashoud highlighted that oil price stability within a range that supports the Kingdom’s state budget remains a key factor for the Saudi market’s performance during Q1 2026, particularly with the continued acceleration in capital spending on Vision 2030 projects.

“Oil prices will remain a central factor not only because of their contribution to government revenues, but also due to their impact on investor sentiment and stock market returns, following the significant decline in the Tadawul index in 2025 compared to global markets,” Al-Rashoud said.

The trajectory of global interest rates and related projections related to potential monetary easing by the US Federal Reserve play another key direct factor affecting investor risk appetite, stock valuations, and the performance of some sectors, especially banks, according to Al-Rashoud.

He reiterated that over the long term, Saudi Arabia is well positioned to become a global hub for artificial intelligence data processing, driven by abundant gas supplies and low energy costs. This is expected to support the growth of local infrastructure companies and enable them to play a central role in building large-scale data centers within the Kingdom.