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Foreign Investors Share in Saudi Market Reaches 5%

Investors talk with each other as they monitor a screen displaying stock information at the Saudi Stock Exchange (Tadawul) in Riyadh, Saudi Arabia. (Reuters file photo)
Investors talk with each other as they monitor a screen displaying stock information at the Saudi Stock Exchange (Tadawul) in Riyadh, Saudi Arabia. (Reuters file photo)
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Foreign Investors Share in Saudi Market Reaches 5%

Investors talk with each other as they monitor a screen displaying stock information at the Saudi Stock Exchange (Tadawul) in Riyadh, Saudi Arabia. (Reuters file photo)
Investors talk with each other as they monitor a screen displaying stock information at the Saudi Stock Exchange (Tadawul) in Riyadh, Saudi Arabia. (Reuters file photo)

The share of foreign investors in the Saudi stock market, by the end of trading on July 5, reached 5 percent, with a total ownership of $25.9 billion.

In this regard, the Saudi Stock Exchange (Tadawul) announced that net foreign purchases of foreign direct investment last week amounted to $43.1 million dollars.

Increased foreign investor ownership in the stock market reflects the appeal of the Saudi financial market and the high level of confidence its economy enjoys.

On Sunday, the Saudi index gained 0.6 percent, or 8,223 points, a rise of 45 points, amid trading amounting to about $733.3 million.

Maaden, National Commercial Bank, Samba, Jarir and Kayan Saudi Arabia stock closed their trading on Sunday at a rate between 1 and 4 percent.

Traders in the stock market are expecting the announcement of the financial results for listed companies in the second quarter of this year. Meanwhile, some reports of institutions of financial expertise showed an expected growth in the profits of banks, petrochemical companies and some shares of telecoms and cement companies.

These developments come as the Saudi economy, the largest in the Middle East, achieved positive growth in the first quarter of 2018, at 1.2 percent, in actual translation of the feasibility of economic reforms that aim to diversify the economy and reduce oil dependency.

Saudi non-oil gross domestic product (GDP) achieved a more positive growth rate during the first quarter of 2018, at 1.6 percent, while the growth rate of the non-oil sector was about 2.7 percent during the same period, according to the General Authority for Statistics (GaStats).

GDP saw a 1.2 percent rise in the three months to the end of March, compared with the same period last year. This improvement follows four consecutive quarters of falling GDP, or recession, the Authority said

The GDP of the oil sector rose 0.6 percent to $72.8 billion during the first quarter of the year compared to $72.4 billion during the same period last year.

Meanwhile, the International Monetary Fund (IMF) recently praised the positive economic reforms taken by Saudi Arabia, stressing that the implementation of some initiatives aimed at increasing non-oil revenues is a remarkable achievement. This comes at a time when the quarterly Saudi budget report revealed a significant increase in non-oil revenues during the first quarter of 2018.

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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.