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Stocks Suffer Sharpest Weekly Decline during 2024

All three major indexes fell more than 1%, and registered losses on the week - Reuters
All three major indexes fell more than 1%, and registered losses on the week - Reuters
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Stocks Suffer Sharpest Weekly Decline during 2024

All three major indexes fell more than 1%, and registered losses on the week - Reuters
All three major indexes fell more than 1%, and registered losses on the week - Reuters

Stocks slumped to a second consecutive weekly loss on Friday, as intensifying tension in the Middle East prompted caution among investors.

All three major indexes fell more than 1%, and registered losses on the week.

The S&P 500 index (.SPX), opens new tab notched its biggest weekly percentage loss since January, while the Dow Jones Industrial Average's (.DJI), opens new tab weekly loss was its steepest since March 2023.

"When we look at what's happened in the macro space, inflation has taken a turn for the worse and that has put more pressure on companies to deliver this earnings season," said Mike Dickson, head of research at Horizon Investments in Charlotte, North Carolina, Reuters reported.

"Everyone's a bit jittery with intense focus on how good earnings need to be."

Results from a trio of big banks marked the unofficial launch of first-quarter earnings season.

JPMorgan Chase & Co (JPM.N), opens new tab, the biggest US bank by assets, posted a 6% profit increase but its net interest income forecast fell short of expectations. Its shares slid 6.5%.

Wells Fargo & Co's (WFC.N), opens new tab stock inched lower after profits fell 7% as net interest income dropped on weak borrowing demand.

Citigroup (C.N), opens new tab posted a loss after spending on employee severance and deposit insurance. Its stock dipped 1.7%.

Economic data this week, particularly Wednesday's hotter-than-expected Consumer Price Index report, has suggested that inflation could be stickier than previously thought, prompting investors to reset expectations about the timing and extent of the US Federal Reserve's rate cuts this year.

US Steel (X.N), opens new tab slid 2.1% after shareholders voted to approve a proposed merger with Nippon Steel Corporation (5401.T), opens new tab.

Declining issues outnumbered advancers on the NYSE by a 4.19-to-1 ratio; on Nasdaq, a 3.16-to-1 ratio favored decliners.

The S&P 500 posted 12 new 52-week highs and nine new lows; the Nasdaq Composite recorded 35 new highs and 211 new lows.

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Business

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.