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Egypt's Annual Inflation Rate Drops to 29.8% in January

Capital Economics research institution said that inflation in January was lower than its expectations of 34% (Reuters)
Capital Economics research institution said that inflation in January was lower than its expectations of 34% (Reuters)
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Egypt's Annual Inflation Rate Drops to 29.8% in January

Capital Economics research institution said that inflation in January was lower than its expectations of 34% (Reuters)
Capital Economics research institution said that inflation in January was lower than its expectations of 34% (Reuters)

Egypt's annual urban consumer price inflation dropped to 29.8% in January from 33.7% in December, the state statistics agency said on Thursday.
According to data published by the Egyptian Central Agency for Public Mobilization and Statistics on its website, prices rose by 1.6% in January month-on-month, up from 1.4% in December.
Food prices climbed by 1.4%, down from 2.1% in December. In the year to January, food prices rose by 47.5%, down from 60.5% in the year to December.
Capital Economics said that inflation in January was below its expectations of 34% and the average market expectation of 32.9%.
The research firm indicated that inflation is expected to continue to slow this year but added that the significant, looming devaluation of the currency means that inflation will remain at a high level for a more extended period.
It also referred to the delay in import movement, likely to be exacerbated by the unrest in the Red Sea.
The inflation rate is projected to remain higher than the range the Central Bank targets until mid-2025.
The Central Bank is expected to raise interest rates again to rebuild its ability to combat inflation.
The London-based institution indicated that price pressures will remain relatively strong despite the slowdown in inflation for the fourth month in a row.
- Devaluation of the Egyptian pound
According to Capital Economics, the upcoming agreement between Egypt and the International Monetary Fund (IMF) will undoubtedly be accompanied by a significant devaluation of the currency, expecting a reduction in the exchange rate to 65 pounds to the dollar.
The institution expected further tightening of monetary policy and that the Central Bank would raise the interest rate by no less than 300 basis points, bringing the interest rate on overnight deposits to 24.25%.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.