Institutional money is on the move in the Saudi stock market, and negotiated private deals are shining a light on where larger investors are focusing their attention. Recent private transactions in Rasen and Aramco worth about SAR 117.6 million signal meaningful interest and can influence sentiment, liquidity, and short term trading patterns. For individual investors, understanding which stocks are exposed to this kind of activity can help in deciding what to research further or treat with caution. This article walks through 3 stocks from the Saudi Stock Market Institutional Activity Beneficiaries screener that appear positively linked to this news.

Saudi Tadawul Group Holding (SASE:1111)

Overview: Saudi Tadawul Group Holding operates the Saudi stock exchange, providing the core trading, clearing, settlement, and custody infrastructure that allows securities and derivatives to change hands, alongside data, index and technology services for market participants.

Operations: Saudi Tadawul Group Holding generates about SAR 620.6 million from Post Trade services, SAR 352.5 million from Capital Markets activities, and SAR 254.5 million from Data and Technology Services, all from within the Kingdom of Saudi Arabia.

Market Cap: SAR 15.9b

Saudi Tadawul Group Holding sits at the heart of the market where those high value private deals in Rasen and Aramco are taking place, so every pickup in trading, clearing and data demand can matter for its business model. Analysts expect faster earnings growth than the wider Saudi market. However, recent results show pressure on margins, earnings and return on equity, which sits at 9.4% today. The stock trades on a rich P/E multiple and has recently lagged the local capital markets sector, so investors are paying up despite weaker recent performance. Upcoming decisions on an employee share plan and buyback also add another moving part that investors may want to understand before deciding whether the current valuation still makes sense.

Saudi Tadawul Group Holding sits at the center of Saudi capital markets, yet its rich P/E and margin pressure suggest a more complex story. Review the analyst forecasts for Saudi Tadawul Group Holding to see how those earnings expectations compare with the latest trends investors might be missing.

Al Rajhi Banking and Investment (SASE:1120)

Overview: Al Rajhi Banking and Investment is a large Saudi bank that offers a full range of retail, corporate and investment banking services, from everyday accounts and cards to mortgages, business financing, insurance products and brokerage for local and international markets.

Operations: Al Rajhi Banking and Investment generates about SAR 18.2b from its Retail segment, SAR 9.7b from Corporate banking, SAR 8.0b from Treasury activities and SAR 2.1b from Investment Services, Brokerage and Other segments.

Market Cap: SAR 396.0b

Al Rajhi Banking and Investment sits at the center of Saudi financial flows, so elevated private deal activity on the exchange can support fee and financing opportunities alongside its core strengths in retail and corporate banking. Revenue and earnings have been growing at double digit rates, and forecasts point to faster growth than the wider Saudi market. However, the stock trades on a P/E close to the local average rather than a steep premium. At the same time, an unstable dividend history, questions around board independence and executive pay, and a P/E above many global bank peers mean investors need to weigh governance and valuation discipline against that growth story and strong profitability profile.

Al Rajhi Banking and Investment’s growth story and solid profitability are starting to decouple from its P/E and governance questions, and the full picture only really shows up in the analyst forecasts for Al Rajhi Banking and Investment.

Alinma Bank (SASE:1150)

Overview: Alinma Bank is a Riyadh based bank that offers everyday and digital banking, financing, investment, brokerage and insurance agency services to individuals, SMEs, corporates and institutional clients across Saudi Arabia.

Operations: Alinma Bank generates about SAR 5.4b from Retail, SAR 2.5b from Corporate Banking, SAR 2.0b from Treasury and SAR 1.1b from Investment and Brokerage activities.

Market Cap: SAR 72.6b

Alinma Bank gives you a mix of higher growth and active balance sheet management that stands out among Saudi banks. It still trades on a P/E below the wider market even after outperformance over the past year. Strong digital capabilities and a clear focus on fee income and settlement activity mean it can benefit when negotiated private deals increase overall securities and payments flows. However, its earnings growth is not far ahead of the market and the stock is described as expensive versus some peers and intrinsic value estimates. In addition, an unstable dividend record, rising competition and ongoing capital and funding work through Sukuk issuance and redemption suggest there is more to this bank than headline growth numbers alone indicate.

Alinma Bank’s combination of upbeat growth, active balance sheet management and a P/E below the wider market raises a clear question: are investors mispricing what comes next in the analyst forecasts for Alinma Bank?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.