Strategy Note /
Global

SNB Capital Fund Managers Survey Results | Q4 22

  • The fund managers’ market outlook remain split in Q4 22 between bullish, neutral and bearish.

  • Around 30% of the fund managers believe the market is undervalued, the highest level on our records.

  • Fund managers who kept the liquidity levels higher than 30% have increased substantially qoq from 0% to 17%

Iyad Khalid Ghulam
Iyad Khalid Ghulam

Head of Equity Research

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SNB Capital
13 December 2022
Published bySNB Capital

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 fund managers’ market outlook remain split in Q4 22 between bullish, neutral and bearish. However, bullish views increased from 30% in Q3 22 to 37% in Q4 22 and bearish views declined from 35% to 30%. Most investors believe that interest rates (2 more hikes in 2023f) and inflation will be the main market drivers, followed by oil price movements. The majority believe that oil prices in 2023f will be in the range of US$70-US$79.9, a shift from Q3 22 when the managers expected oil prices to be the main market driver with a price range of US$80-US$89.9. Moreover, 57% of the managers expect 2023f ADTV to remain in-line with the current Q4 qtd levels of SAR5.0bn.

  • Outlook on TASI sectors: Around 30% of the fund managers believe the market is undervalued, the highest level on our records. This is higher than 13% in Q3 22 and is compared to 47% with Neutral view. The managers changed their bullish sector views from Banking in Q3 22 to Construction in Q4 22. The sectors with the most bearish views were Petrochemicals and Consumers.

  • Asset allocation trends: Fund managers who kept the liquidity levels higher than 30% have increased substantially qoq from 0% to 17%. Meanwhile, managers with cash level of less than 5% of their assets decreased from 35% in Q3 22 to 23% in Q4 22. For the 2nd consecutive quarter, participants believe that value is the best strategy while momentum and mid-cap were the least preferred strategies.

  • Economy and GDP expectations in 2023f: Around 37% of fund managers believe that the economy reached the peak, and 70% expected market earnings to grow by a single digit in 2023f. Regarding Saudi economic growth, the majority of the managers believe the economy will grow by 3.1% in 2023f.