SNB Capital, in a recent report, said it continues to identify Alinma Hospitality REIT Fund and Al Maather REIT Fund as its top picks in the Saudi REIT sector, thanks to their low leverage and thus stable operating cash flows, as well as lucrative yields and valuations and exposure to attractive sectors such as tourism.
According to the brokerage, REITs are still under pressure, with their index falling 9.5% thus far, underperforming the market index.
In addition to the pressures resulting from the rise in interest rates, the weak performance is due to the redirecting investments to sectors with high returns, attractive new share offerings, in addition to uncertainty and weak sentiment towards the sector due to the lackluster performance and the continuous downward revision of earnings, and general pressures on the market, SNB Capital stated.
It expected that the decline in interest rates will lead to lower financing costs, and thus boost dividend payments, which will fuel the sector’s performance in the future, noting that this will have a gradual and not immediate impact.
SNB Capital, in a recent report, said it continues to identify Alinma Hospitality REIT Fund and Al Maather REIT Fund as its top picks in the Saudi REIT sector, thanks to their low leverage and thus stable operating cash flows, as well as lucrative yields and valuations and exposure to attractive sectors such as tourism.
According to the brokerage, REITs are still under pressure, with their index falling 9.5% thus far, underperforming the market index.
In addition to the pressures resulting from the rise in interest rates, the weak performance is due to the redirecting investments to sectors with high returns, attractive new share offerings, in addition to uncertainty and weak sentiment towards the sector due to the lackluster performance and the continuous downward revision of earnings, and general pressures on the market, SNB Capital stated.
It expected that the decline in interest rates will lead to lower financing costs, and thus boost dividend payments, which will fuel the sector’s performance in the future, noting that this will have a gradual and not immediate impact.
