HSBC optimistic about Saudi market as attractive emerging market

HSBC has a positive outlook on the Saudi Exchange (Tadawul) as it is one of the most attractive emerging markets for long-term return on investment, said Camille Asmar, Head of Equity Sales, Europe & Emerging Markets at HSBC Global Banking and Markets.

In an interview with Argaam on the sidelines of the HSBC GCC London Conference, Asmar explained that this optimism is due to strong reform programs, clear structural frameworks, privatization programs, and economic diversification away from oil.

These factors make the Saudi market attractive to long-term investors, offering significant returns and dividends, Asmar said, adding that investors previously achieved very positive returns and attractive dividends.

HSBC is working to attract more foreign investments to the Saudi market through public offerings, including its recent contribution to the secondary offering of Saudi Arabian Oil Co. (Saudi Aramco).

Asmar mentioned that the financial sector experienced sell-offs this year, providing excellent investment opportunities. He also highlighted opportunities in the energy sector and the small and medium enterprises sector, including healthcare, education, and sports, which offer various investment opportunities not usually available in other emerging markets.

He went on to say that the weighting of the Saudi market in international indices like MSCI and FTSE is increasing, reaching up to 4%, which makes it difficult for investors to ignore the market. When combined with other Gulf markets, it reaches 8-10%, making the region an important part of the emerging markets, comparable to countries like Brazil or South Africa.

The Saudi market has seen strong activity in initial public offerings in recent years, and this activity is expected to continue, particularly in the third and fourth quarters as well as the next year, Asmar noted.

He also believes that there are new mechanisms in the market attracting significant attention from investors.