Saudi Banks Offer ‘Buying Opportunity’ on Valuation, Arqaam Says

Banks in Saudi Arabia, the Arab world’s biggest economy, offer a “buying opportunity” after underperforming the benchmark stock index, Arqaam Capital said.

Saudi Arabian banks have a price-to-earnings ratio of 11.8 times compared with 14.3 times for the benchmark Tadawul All Share Index and more than 16 for the MSCI World/Financials Index. Saudi Hollandi Bank, Samba Financial Group, Arab National Bank and Riyad Bank offer the highest upside in Saudi Arabia, Jaap Meijer, Dubai-based Arqaam analyst, said in an e-mailed note today. The banks “have de-rated and now offer compelling value,” he said.