Saudi Arabia’s benchmark index has a decent upside potential for 2024 from the current level, supported by earnings growth and higher liquidity, Aljazira Capital said in a report.

“We estimate a fair value of 13,123 points as a case-based 19.0X P/E applied to our earnings estimate for 2024,” the brokerage said in a note.

“Our base case fair value indicates an upside of 13.1% from the current level,” it added.

Tadawul All Share Index (TASI) closed 2023 at 11,967 points.

After underperforming the broader market in 2023, large caps will take center stage this year due to attractive valuations.

Moreover, blue chips will see increased foreign institutional investor flows, the report said.

Aljazira Capital has a positive outlook on banking, retail, software & services, telecom and tourism sectors.

Some of its top picks are Al Rajhi Bank, Alinma, Jarir, Solutions, Saudi Telecom, Mobily, Seera, Yamama Cement, SABIC and Sipchem.          

(Editing by Brinda Darasha; brinda.darasha@lseg.com)