In the regional equity space in 2025 CI Capital, the Egypt-based brokerage, and financial services firm, favours Saudi Arabia over the UAE. The preference for Saudi Arabia stocks is supported by its off-budget financial capacity, ongoing reforms, and investment drive.

A strong domesticated economy, led by favourable labour market dynamics, provides resilience to possible inflationary pressures, CI Capital said. Preparations to host World Expo 2030 and the FIFA World Cup 2034 should bring positive momentum to non-oil GDP (+4.2% in 2025e). 

Saudi National Bank is a top pick among Tadawul-listed stocks, as it is a “clear play on the corporate story, given its strong ties with government entities and a strong corporate franchise”.

CI Capital is also overweight on Al Mawarid Manpower Co., Arabian Contracting Services, Maharah Human Resources, Tanmiah Food Co., and Sustained Infrastructure Holding (SISCO).

For the UAE, positive fundamentals paired with steady population growth is set to keep domestic demand intact. Tourism and real estate sectors are poised to continue the upward trajectory and drive real GDP growth by 4.9% 2025e. Yet, the UAE remains relatively more susceptible to external shocks.

Top pick is Dubai Islamic Bank (DIB) which is well-capitalised and “best positioned during interest rate cycle reversal as high balance sheet maturity profile and high asset duration shield NIMs against rate cuts”.  

However, DIB has a high-risk profile as asset quality metrics is weakest among peers with highest stage-2 contribution of 5.8% and low coverage of 68.5% as of September 24, said CI Capital.

Emaar Properties, ADNOC Drilling, and Dubai Electricity and Water Authority (DEWA) are the other picks.

(Writing by Brinda Darasha; editing by Seban Scaria)  

brinda.darasha@lseg.com