Riyadh –  SNB Capital, a regional financial institution, recently projected in a report that the benchmark All Share Index (TASI) of the Saudi Exchange (Tadawul) would trade between 11,300 to 13,300 points (pts) in 2025, reflecting a dividend yield of 2.5%-3%.

The estimates are based on SNB Capital’s earnings expectation and forward P/E range. Moreover, the bottom-up approach based on SNB Capital’s PTs indicates a fair value of 13,000.

The market earnings, meanwhile, are expected to grow by c8.0% year-on-year (YoY), led by a strong earnings growth momentum from banks and healthcare sectors.

SNB Capital further factors in earnings improvement for food and beverage (F&B) and consumers segments.

It added: “The main swing factor remains energy and petrochemicals as the performance remain a function of various global macro drivers.”

The Saudi economy is expected to grow by 4.6% in 2025, driven by strong growth in non-oil GDP.

SNB Capital said: “We believe the ongoing economic reforms, ambitious government strategies/initiatives, acceleration in mega/giga projects, and the vital role played by the national funds will remain the main drivers.”

It further believes the impetus will come from lower interest rates as it will increase the attractiveness of equities against other asset classes and improve the overall liquidity in the market.

With the upcoming timeline of the major events, SNB Capital also believes investments on infrastructure and key associated projects will become the primary focus from 2025f onward. Furthermore, lower interest rates would increase the attractiveness of high dividend yielding stocks.

The research entity prefers banks, manpower solutions, construction and tourism sectors, noting that its top picks are Alinma Bank, Saudi Awwal Bank (SAB), Al Mawarid Manpower Company, SAL Saudi Logistics Services Company, Riyadh Cement, and Jamjoom Pharmaceuticals Factory Company (Jamjoom Pharma).

Looking ahead, the story in equity markets is split between attractive markets with high valuations (such as India) and those with structural challenges and low valuations (such as China). SNB Capital believes Saudi is at an unrivaled position driven by inspirational vision, strong growth potential and attractive valuations.

Furthermore, World Cup 2034, Expo 2030, and Asian Cup 2027 make ‘Saudi Hosting The World’ a key theme that underpins Saudi’s role as a global hub and providing further catalyst to the great potentials offered by Vision 2030 and the delivery of the first phase of various mega projects.

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