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Turkey's Central Bank Expects Economic Growth to Remain Robust in Third Quarter

A man leaves Turkey's Central Bank headquarters in Ankara, Turkey, April 19, 2015. REUTERS/Umit Bektas
A man leaves Turkey's Central Bank headquarters in Ankara, Turkey, April 19, 2015. REUTERS/Umit Bektas
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Turkey's Central Bank Expects Economic Growth to Remain Robust in Third Quarter

A man leaves Turkey's Central Bank headquarters in Ankara, Turkey, April 19, 2015. REUTERS/Umit Bektas
A man leaves Turkey's Central Bank headquarters in Ankara, Turkey, April 19, 2015. REUTERS/Umit Bektas

Turkey's central bank expects economic growth to remain robust in the third quarter following a 5.1 percent growth rate in the second quarter -- Monetary Policy Committee decided to keep short-term interest rates steady.

The one-week repo rate, also known as the bank's policy rate, stayed at eight percent while the marginal funding and overnight borrowing rates also held at 9.25 and 7.25 percent respectively. The bank also kept late liquidity window interest rates steady – the borrowing rate at zero percent, and the lending rate at 12.25 percent.

The committee noted that July’s industrial production data and the Purchasing Managers' Index (PMI) data for August signal stronger growth in the third quarter compared to the previous one.

Turkey's industrial production increased by 14.5 percent in July 2017 compared to the same month last year, according to the Turkish Statistical Institute (TurkStat). Turkey’s PMI also stood at 55.3 points in August, hitting its highest level since March 2011.

“Not only the manufacturing industry but also services, retail trade, and construction saw strengthening activity recently. Accordingly, economic recovery appears to be more widespread across sectors,” it remarked.

The committee said that a similar outlook was also valid for demand indicators and domestic demand is likely to contribute more to growth in the next quarter. “In short, recently released data indicate that the recovery in economic activity has gained strength,” it underlined.

International credit rating agencies, Fitch and Moody’s in the lead, expected the economic growth to continue to increase. Fitch experts said that Turkey’s growth would reach 4.7 percent by end of the year based on the rise in rates to 5 percent and 5.1 percent in the first and second quarters, respectively.

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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.