State Street and Saudi Tadawul Group launch new report which analyzes stock selection strategies

Riyadh, 19 February 2024: Saudi Tadawul Group, in collaboration with State Street, has released a new report titled 'Overview of Active vs. Passive Strategies in the Saudi Stock Market'. The comprehensive analysis delves into the effectiveness and value of stock selection strategies employed by mutual funds, offering investors critical insights into the dynamics of the Saudi stock market. 

Dr. Ramu Thiagarajan, Senior Investment Advisor at State Street, announced the report during a panel session at the third edition of the Saudi Capital Market Forum. In terms of the Saudi capital market’s growth, Thiagarajan noted that market capitalization has grown from SAR 2 trillion to SAR 11 trillion. He asserted that, as the Kingdom’s growth plans have evolved, market leaders across different sectors have changed, with technology and health sectors becoming leaders in the market. 

Further, Thiagarajan asserted that there has been increased cross-sectional dispersion in the returns pattern since 2020, driven by an extent to some companies being up 300 – 400% in the last couple of years. In terms of trading patterns, he added that most trading is from non-institutional investors, while ownership is predominantly institutional. 

In closing, Thiagarajan stated that, ultimately, participation in the Saudi capital market has become democratized and has led to a different pattern of price discovery over time.