Saudi market shows resilience in Q1 2025 despite global volatility: Report
RIYADH — Saudi Arabia's stock market showed resilience in the first quarter of 2025 despite global volatility, with the Tadawul All Share Index (TASI) finishing the period nearly flat at -0.1%, according to Riyad Capital's latest market report.
The outlook for the remainder of the year remains positive, underpinned by expected earnings growth, steady IPO momentum, and robust non-oil economic activity.
Riyad Capital forecasts low-to-mid single-digit growth for the Saudi market in 2025. The anticipated recovery will be supported by strong earnings from banks, telecom, media, and technology (TMT) sectors, healthcare, and newly listed firms. The analysts expect two interest rate cuts in the latter half of the year to further lift investor sentiment and market activity.
Although turnover dropped by 34% year-on-year in 1Q25 to SR5.9 billion per day, sentiment is projected to recover in H2 2025. The market currently trades at a forward price-to-earnings (P/E) ratio of 14.8x, offering a 39% discount to its five-year average — making it attractively valued relative to peers.
The IPO pipeline continues to gain momentum. In the first quarter alone, three companies — Derayah, Entaj, and Masar — were listed on the main market, raising nearly SR4 billion collectively. The report highlighted that listings span diverse sectors including manufacturing, financial services, and aviation.
The parallel Nomu market saw six IPOs, with a total offered value of SR228.7 million. While the Nomu index slipped 1% in the quarter, investor appetite remains healthy as companies increasingly use it as a stepping stone to the main market.
Telecom and banking sectors drove positive attribution to index performance, while energy and utilities acted as drags. Among top gainers for Q1 were SRMG, Anaam, and Red Sea Global, each recording sharp rebounds from their 52-week lows. On the flip side, companies like Masar and Dar Al Arkan saw double-digit declines from their previous highs.
The sector performance also painted a mixed picture: media and entertainment surged 15%, utilities gained 13%, while real estate management and development dropped 9%, and banks fell 4%. Notably, large-cap stocks outperformed small- and mid-caps during the quarter.
Saudi Arabia's growing presence in emerging markets is evident from its increased weight in the MSCI Emerging Markets Index — from 2.5% in 2019 to 4.2% in 2025. The Kingdom now trades at a 39% P/E discount to its five-year average while offering a 3.9% dividend yield, further enhancing its investment appeal.
Globally, Saudi stocks slightly outperformed developed and emerging markets, with TASI down just 0.1% compared to a -2% drop in developed markets and a 2% gain in EMs.
Inflation in the Kingdom is forecast to remain contained at 2.5% in 2025. GDP growth is estimated at over 3%, with non-oil sectors expected to expand more than 4%.
The population increase, particularly from rising expatriate numbers, is also likely to support demand across housing, services, and consumer goods.
The report highlighted challenges in the oil sector amid soft crude prices. Riyad Capital's in-house Brent crude forecast stands at $68/bbl for 2025. Meanwhile, geopolitical and trade uncertainties — such as the U.S.'s sweeping 10% import tariff and additional levies on China and Europe — have already affected market sentiment globally.
Saudi exports remain heavily skewed toward Asia, with China and India accounting for 15% and 9% of total exports, respectively. The UAE is a key non-oil export destination, absorbing 23% of that segment.
On April 6, TASI experienced a sharp 6.8% drop, marking the 14th time in 15 years that it has endured a 20% drawdown. Historically, such declines have been followed by positive six-month returns over 75% of the time, with an average gain of 12%. Moreover, weak first quarters have often preceded full-year gains for TASI in eight of the past 10 years.
© Copyright 2022 The Saudi Gazette. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Middle East Eye
2 hours ago
- Middle East Eye
Bank of America says Saudi Arabia preparing for 'long and shallow' oil price war
Saudi Arabia is batting down the hatches for a "long and shallow' oil price war, in part to clip the wings of US shale energy companies, the Bank of America's top commodities expert said. 'It's not a price war that is going to be short and steep; rather, it's going to be a price war that is long and shallow,' Francisco Blanch, the bank's head of commodities research, told Bloomberg in an interview on Monday. Saudi Arabia led an alliance of energy producers dubbed Opec+ in April to boost supply. The decision was a U-turn for Saudi Arabia, which for years had pushed Opec+ to cut production in a bid to lift energy prices. Saudi Energy Minister Abdulaziz bin Salman went so far as to warn market speculators that they would be 'ouching like hell' if they doubted his willingness to starve the oil market of supply. However, energy analysts had been warning for more than a year that Saudi Arabia was in an untenable position. The kingdom was doing the heavy lifting to keep supplies low, while other countries were benefiting from higher prices. New MEE newsletter: Jerusalem Dispatch Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters Saudi Arabia has also surrendered market share in Asia to Iran and Russia. 'They've (Saudi Arabia) done this price support already by themselves for three-plus years,' Blanch said. 'They're done with that.' The United Arab Emirates won concessions to lift its production quotas in recent years. Abu Dhabi wants to pump more of its oil faster, with an eye towards a time in the future when energy demand peaks. Why Saudi Arabia can spend more money than it makes, even as oil prices drop Read More » In April, energy analysts also said Saudi Arabia's decision to boost output was taking aim at Iraq and Kazakhstan, two Opec+ members who were exceeding their Opec+ production quotas. Because Saudi Arabia is richer and is able to quickly extract oil, analysts say it can endure a prolonged slump better than poorer Opec+ members. The Bank of America's analysis points to another target: the United States. The US has become energy independent thanks to a boom in shale oil production over the last 15 years. The US is not a member of Opec, and American production has surged. Oil and gas production in the US hit a record high in December 2025. Saudi Arabia has been issuing a historic amount of debt to make up for budget shortfalls caused by lower oil prices. The kingdom is already scaling back mega-projects like Neom and tightening its purse strings on consulting firms that have raked up a windfall advising on Crown Prince Mohammed bin Salman's Vision 2030 agenda to remake Saudi Arabia's economy. The worst-case scenario for Saudi Arabia is that oil prices spiral further down, risking a price war like the one that erupted in 2020 between Russia and the kingdom during the coronavirus pandemic.
Channel Post MEA
8 hours ago
- Channel Post MEA
Wipro Establishes Its Middle East Regional Headquarters In Riyadh
Wipro Limited has announced the relocation of its Middle East regional headquarters from Al Khobar to Riyadh, Saudi Arabia. The new office in Riyadh was inaugurated in a ceremony attended by the Wipro executive team, employees, and customers. This is the latest addition to Wipro's growing presence in the region, which includes offices in Riyadh, Al Khobar, Jeddah, and Jubail. 'The inauguration of Wipro's new regional headquarters in Riyadh marks a significant milestone that contributes to accelerating the growth of the Kingdom's digital economy,' said Mohammed AlRobayan, Deputy Minister for Technology at the Ministry of Communications and Information Technology (MCIT). 'This also underscores the attractiveness of Saudi Arabia's digital business environment. We value the company's investment in developing national competencies, in line with the objectives of Saudi Vision 2030 and enhancing the Kingdom's position as a global technology hub.' In addition to this new office opening, Wipro recently signed a Memorandum of Understanding (MoU) with Prince Mohammad Bin Fahd University (PMU) to establish a Center of Excellence (CoE) in Riyadh. This partnership aims to upskill local talent by providing academic training in advanced technologies, hands-on experience, and access to Wipro's resources. The CoE will focus on equipping young Saudi nationals with future-ready skills, creating a talent pool that can add value to organizations and the kingdom. 'The establishment of our new regional headquarters in Riyadh reaffirms our commitment to supporting the dynamic business landscape in the Kingdom of Saudi Arabia,' said Vinay Firake, CEO – Asia Pacific, India, Middle East & Africa (APMEA), Wipro Limited. 'This strategic move, combined with our ongoing involvement in supporting the goals of the Kingdom, aligns with our vision of driving sustained growth and a future-ready workforce in the region. This commitment is strengthened by the recent appointment of Mohamed Mousa as our new Managing Director for Wipro Middle East out of our Riyadh headquarters, which will further advance our decades-long presence in the Middle East.'
Campaign ME
12 hours ago
- Campaign ME
Hessa Al Sudairy joins Publicis Communications KSA as Executive Creative Director
Publicis Communications KSA, the creative hub of Publicis Groupe Middle East has appointed Hessa Al Sudairy as Executive Creative Director. In this role, Al Sudairy will collaborate with the Leo Burnett and Saatchi & Saatchi offices across the Kingdom to further strengthen their creative vision across a diverse and growing client portfolio. She brings over 15 years of experience in the region, with a strong track record of developing campaigns for both Saudi Arabia's leading brands and global powerhouses. Her work spans sectors including telecom, tech, banking and finance, FMCG, and automotive, with a portfolio that features global and regional brands including Apple, stc, Almarai, Red Bull, Volkswagen, and several top financial institutions. Al Sudairy joined Leo Burnett early in her career as a copywriter and now returns to lead the creative charge in a market that continues to evolve rapidly. Bassel Kakish, Chief Executive Officer, Publicis Groupe ME&T, said, 'Hessa's return comes at a pivotal moment for our creative ambitions in Saudi Arabia. She brings the right mix of creative leadership, market understanding, and collaborative energy that our clients value. We're excited to have her back.' Publicis Communications KSA claims her creative approach combines strategic thinking with cultural relevance. She has also been known for delivering ideas that are both impactful and grounded in insight. Fizo Younis, Chief Creative Officer, Publicis Communications KSA & Egypt, said, 'You're only as good as the people you work with, and Hessa raises the bar. Her creative excellence speaks for itself, but it's who she is as a person that makes working with her such a joy. Can't wait to see how she leads our teams in KSA to new heights. Commenting on her appointment Al Sudairy said, 'It's thrilling to return to a dynamic, ever-evolving group that places integration at the heart of its offering, and to bring that to the region's most exciting market, KSA.' Her award winning work has been recognised by Dubai Lynx, Loeries, Effies, WARC and D&AD, and she has previously served as a juror for Dubai Lynx and the Clio Awards. Her appointment aims to reflects the agency's focus on strengthening its creative leadership across the region and deepening its commitment to the Saudi market.
