Saudi Stocks Stage a Comeback

Saudi Stocks Stage a Comeback

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  • Following the largest monthly net redemptions in October, foreign investors are returning to Saudi stocks, with net inflows extending for a second week. November has seen a turnaround, with international traders buying 12.7 billion riyals ($3.4 billion) of Saudi stocks. Despite concerns arising from geopolitical tensions impacting Middle Eastern markets, attractive equity valuations in Saudi Arabia are drawing investors. 

  • Recent events had repercussions on regional markets last month, causing fluctuations in Saudi Arabia's Tadawul All Share Index. The uncertainty surrounding the situation even led to a temporary elimination of yearly gains at one point, impacting risk appetite. Despite these challenges, the benchmark has managed to recover, currently showing a 3.6% increase for the year, outperforming the MSCI Emerging Markets Index.

Why it matters

While Saudi Arabia's GDP contracted in Q3 due to reduced oil production, the non-oil economy, supported by diversification efforts, recorded gains. Crown Prince Mohammed bin Salman's investment in diversification plans, focusing on industries like tourism and manufacturing, remains a key driver of employment. “Saudi Arabia has a strong fundamental story and significant untapped potential.” said Junaid Ansari,​ director of investment strategy and research at Kamco Investment Company.


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