Tadawul-listed firms PE ratio at 16.46 in March: Jadwa

An uptick in earnings by Saudi Tadawul-listed firms helped push the combined price-to-earnings (PE) ratio down in March, Jadwa Investment said in latest report on Saudi Arabia.

The Tadawul All Share Index’s (TASI) current PE ratio of 16.46 is slightly below its two year average of 16.67, as a result of recent earnings growth, the research firm said.

“Comparatively speaking, whilst TASI PE is trading at higher rate to regional peers, it is cheaper than a number of emerging markets and some developed markets,” it added.

On a sector-basis, meanwhile, only a few sector PEs are trending significantly higher than the overall average, with real estate development, media and diversified financials performing higher.

Jadwa Investment also noted TASI’s sharp rise in March, with the index touching a two-and-half-year highs on the back of expectations of inclusion into the FTSE Russell Secondary Emerging Market (EM) Index.

“Once (the) inclusion is completed, by December 2019, Tadawul could attract approximately $5.4 billion in passive inflows,” it said.

Meanwhile, most sectors ended the month with a significant rise, in line with TASI’s positive performance during March.

Food and beverages, materials, and telecommunication were the best performers.

Only three sectors saw declines: diversified financials, health and services, and, commercial and professional services, the report said.