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Arab Financial Markets Await Developments After Regional Escalation

Arab financial markets have been experiencing significant ups and downs due to geopolitical tensions and economic factors. (Reuters)
Arab financial markets have been experiencing significant ups and downs due to geopolitical tensions and economic factors. (Reuters)
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Arab Financial Markets Await Developments After Regional Escalation

Arab financial markets have been experiencing significant ups and downs due to geopolitical tensions and economic factors. (Reuters)
Arab financial markets have been experiencing significant ups and downs due to geopolitical tensions and economic factors. (Reuters)

Arab financial markets have been experiencing significant ups and downs due to geopolitical tensions and economic factors.

Investors are closely watching developments following the Israeli-Iranian escalation to gauge its impact on investments.

Mohammed Al-Farraj from “Arbah Capital” believes these fluctuations will continue for a while as investors assess how military tensions between Iran and Israel affect the global economy.

“These fluctuations are expected to persist in the coming days. Investors are carefully evaluating the impact of geopolitical factors, such as ongoing military tensions between Iran and Israel, on the global economy,” Al-Farraj told Asharq Al-Awsat.

However, he thinks the instability is temporary and markets will stabilize in the long run.

“With continued rise in interest rates and inflation, the likelihood of temporary market corrections increases, possibly leading to declines in stock prices,” said Al-Farraj.

Moreover, he sees opportunities for investors to buy stocks at lower prices during these fluctuations and benefit from long-term growth.

“These corrections present excellent investment opportunities for investors with long-term vision, allowing them to buy stocks at discounted prices and benefit from their long-term growth,” explained Al-Farraj.

Despite worries, certain sectors like energy, healthcare, technology, education, mining, insurance, and banking offer promising investment prospects.

After the Eid holiday, Arab markets reopened with fluctuations. Most closed lower, except for Muscat and Amman.

In Saudi Arabia, the main stock index, TASI, concluded its first session after the Eid holiday down by 38.52 points, or 0.30%, at 12666.90 points, with a liquidity of 6 billion riyals ($1.6 billion), influenced by declines in the banking and basic materials sectors.

Kuwait and Qatar also saw declines, while Jordan’s market closed higher. Muscat’s market ended slightly up.

Overall, market movements reflected the uncertainties surrounding the regional tensions.

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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.