Strategy Note /
Saudi Arabia

SNB Capital Fund Managers Survey Results: Q2 22

  • The majority of fund managers have a bullish market outlook in Q2 22, in line with Q1 22

  • Despite their bullish views, the majority of managers (52%) indicated that the market is overvalued in Q2 22

  • Around 24% of fund managers kept their cash levels during the quarter at less than 5%

SNB Capital
23 May 2022
Published by

The SNB Capital Fund Managers’ Survey is a quarterly report that summarises the results of a survey sent to local, regional and international fund managers. The survey aims to collect data regarding institutional investors’ views on the Saudi economy and the equity market, and compares it with the results of the previous surveys. It also considers the outlook of various sectors in the market, the anticipated coming catalysts and cash levels. This anonymous survey was sent to one designated fund manager at each participating institution.

  • TASI outlook and valuation: The majority of fund managers have a bullish market outlook in Q2 22, in line with Q1 22, while neutral investors represented 38% (vs 42% in Q1 21). Investors maintained their belief that oil price movement will be the main market driver with an average oil price of US$90-US$99.9, followed by interest rates and inflation, in-line with the previous surveys. Moreover, 34% of the managers expect daily volumes to remain constant at Q1 22 levels of SAR8.5bn in the coming period.

  • Outlook on TASI sectors: Despite their bullish views, the majority of managers (52%) indicated that the market is overvalued in Q2 22, while 10% of respondents believed it is undervalued. In comparison, 62% believed that the market is fairly valued and 35% said its overvalued in Q1 22. Fund managers are bullish on the Banking, Healthcare and Construction sectors while they are most bearish on Insurance, Consumers and Petrochemicals.

  • Asset allocation trends: Around 24% of fund managers kept their cash levels during the quarter at less than 5%, a decrease from last quarter’s level of 46%. Fund managers with cash levels of 6-10% represented c38% of the respondents compared to c23% in Q1 22. Participants believe that value strategies will outperform in the coming period while momentum and balanced are the least preferred strategies.

  • Economic recovery and GDP expectations in 2022f: In-line with Q1 21, 45% of the managers expect full economic recovery from COVID-19 to occur in 2022f. Also, c45% believe that the economy reached a peak while 41% believe that the economy is in a recovery phase. Regarding Saudi economic growth, 48% of the participants expect the economy to grow by more than 7.5% in 2022f.