Saudi Arabia's stock market is projected to see an 8% increase in profits in 2025, driven primarily by the banking, healthcare, and petrochemical sectors.

According to SNB Capital, the country's petrochemical sector will play a major role, with a growth forecast of 74% due to rising prices, expanded production, and the end of maintenance closures.

The banking and healthcare sectors are also expected to perform strongly, benefiting from higher loan activity and expanded operations.

If petrochemicals are excluded, the Saudi stock market would see a 14% growth in profits.

The broader economic conditions remain favorable, with expectations of at least three interest rate cuts in 2025, signaling a shift towards easier financial conditions.

The strong IPO activity seen in 2024 is expected to continue, bolstered by lower interest rates and a positive outlook for economic activity.

In 2024, the number of IPOs surged to 14, compared to just eight in 2023, with proceeds reaching SR14.2 billion.

Institutional subscription coverage rates also increased significantly, averaging 126 times in 2024.

The rise in IPOs, coupled with increased market liquidity and strong transaction volumes, has contributed to a higher proportion of free-floating shares.

The market saw a significant increase in negotiated deals, with the number of deals reaching approximately 3,500 in 2024, compared to 918 in 2023. Major offerings, such as Saudi Aramco’s secondary offering, which raised SR42 billion, helped boost market liquidity and activity.

The outlook for Saudi Arabia’s stock market remains positive, with optimism rising in sectors such as tourism, banking, and construction, although cautious views persist for energy and petrochemical industries amid ongoing challenges.

Oil prices are expected to stabilize between $70 and $79 per barrel in 2025.