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Riyad Capital reiterated its positive view on the Saudi market for 2025, despite the recent volatility in the local, regional, and global markets, the firm said in a report. 
The brokerage expects TASI to see low to mid single-digit growth for 2025.
Riyad Capital anticipated profit growth in 2025, led by the banking, telecommunications and technology, and healthcare sectors, in addition to newly listed companies.
The report noted that despite expected inflationary pressures due to tariffs, it expects two interest rate cuts by the end of 2025, which will positively impact market performance.
The analyst firm believes that IPO momentum is to continue in the main market and Nomu in 2025, indicating that in Q1 2025, three IPOs have already been completed in several sectors such as manufacturing, financial services and aviation.
Despite the decline in Q1 2025 turnover by 34% year-on-year (YoY) to SAR 5.9 billion per day, Riyad Capital expects the turnover to improve in the second half of the year, particularly as market sentiment improves and uncertainties subside.
TASI trades at a forward PE of 14.8x, which is a substantial discount to the five-year average, the report stated.
The oil sector in the economy may face challenges due to lower crude oil prices Riyad Capital noted, indicating that its in-house average Brent crude estimate for 2025 stands at $68 a barrel.
For 2025, the Kingdom’s overall GDP growth is seen to be over 3%, while non-oil growth will remain strong above 4%, the brokerage added.
Saudi Arabia’s population growth plans remain in place and recent data shows an increase in the number of expatriates coming into the Kingdom, which would drive demand for housing, goods, and services, the analyst firm said.
Furthermore, the report pointed out that inflation remains under control, with CPI likely at 2.5% in 2025.
Meanwhile, Riyad Capital expressed that its forecasts for the banking sector are positive for 2025, while forecasts for the energy and basic materials sectors are neutral. The following table shows Riyad Capital’s forecasts for the Saudi market by sector in 2025:
Riyad Capital’s Forecasts for the Saudi Market by Sector in 2025
Sector
Estimates
Banking
Positive
Energy
Neutral
Basic Materials
Neutral
Healthcare Pharma
Positive
Retail
Positive
Utilities
Positive
TMT
Positive
Transport
Positive
IT Services
Positive
Food Beverages
Neutral
Riyad Capital – Saudi market 29/04/2025
Tadawul trading screen
Riyad Capital reiterated its positive view on the Saudi market for 2025, despite the recent volatility in the local, regional, and global markets, the firm said in a report.
The brokerage expects TASI to see low to mid single-digit growth for 2025.
Riyad Capital anticipated profit growth in 2025, led by the banking, telecommunications and technology, and healthcare sectors, in addition to newly listed companies.
The report noted that despite expected inflationary pressures due to tariffs, it expects two interest rate cuts by the end of 2025, which will positively impact market performance.
The analyst firm believes that IPO momentum is to continue in the main market and Nomu in 2025, indicating that in Q1 2025, three IPOs have already been completed in several sectors such as manufacturing, financial services and aviation.
Despite the decline in Q1 2025 turnover by 34% year-on-year (YoY) to SAR 5.9 billion per day, Riyad Capital expects the turnover to improve in the second half of the year, particularly as market sentiment improves and uncertainties subside.
TASI trades at a forward PE of 14.8x, which is a substantial discount to the five-year average, the report stated.
The oil sector in the economy may face challenges due to lower crude oil prices Riyad Capital noted, indicating that its in-house average Brent crude estimate for 2025 stands at $68 a barrel.
For 2025, the Kingdom’s overall GDP growth is seen to be over 3%, while non-oil growth will remain strong above 4%, the brokerage added.
Saudi Arabia’s population growth plans remain in place and recent data shows an increase in the number of expatriates coming into the Kingdom, which would drive demand for housing, goods, and services, the analyst firm said.
Furthermore, the report pointed out that inflation remains under control, with CPI likely at 2.5% in 2025.
Meanwhile, Riyad Capital expressed that its forecasts for the banking sector are positive for 2025, while forecasts for the energy and basic materials sectors are neutral. The following table shows Riyad Capital’s forecasts for the Saudi market by sector in 2025:
Riyad Capital’s Forecasts for the Saudi Market by Sector in 2025
Sector
Estimates
Banking
Positive
Energy
Neutral
Basic Materials
Neutral
Healthcare Pharma
Positive
Retail
Positive
Utilities
Positive
TMT
Positive
Transport
Positive
IT Services
Positive
Food Beverages
Neutral
