TASI likely to hit 9,409 pts by year-end, says Riyad Cap

Tadawul All Share Index (TASI) is likely to reach 9,409 points by the end of this year, trading at a P/E ratio of 17.6x, ahead of rallying to 10,162 pts in 2020, Riyad Capital said in a recent report.

In the last 12 months prior to inclusion, the Saudi benchmark added just 8 percent, versus a much steeper rise in peer markets ahead of index inclusion.

We believe TASI will follow a different path. The market may rise in the inclusion process as: a) Index inclusion is staggered; b) No. of stocks to be included are much higher; c) Market is not fundamentally overvalued; d) Foreign investors have adopted a more cautious investment approach in the run-up.

“We can reasonably expect between SAR90-100 billion flows in the market. Traded value can rise by USD 100 million per day (+14 percent),” the brokerage firm added.

Most of passive flows are expected between March and August, as TASI can peak during this period.