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Saudi Stock Gains Exceed 10% Since Beginning of 2019

Traders in the Saudi Stock Exchange market (Reuters)
Traders in the Saudi Stock Exchange market (Reuters)
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Saudi Stock Gains Exceed 10% Since Beginning of 2019

Traders in the Saudi Stock Exchange market (Reuters)
Traders in the Saudi Stock Exchange market (Reuters)

The gains achieved by the Saudi stock exchange market have amounted to more than 10 percent since the beginning of 2019.

Meanwhile, the market’s performance during the past week was volatile, starting with profit-gaining and concluding with qualitative gains during Thursday’s trading.

The value of total transactions during the week increased by 38 percent, amounting to about SAR24.7 billion riyals ($6.58 billion) compared with SAR17.91 billion ($4.77 billion) during the previous week.

Last week, the market recorded a decline of 2.7 percent. This came at a time when the market value stabilized at SAR2.005 trillion ($534.6 billion) while the average annual cash dividend yield for listed companies stabilized at 3.38 percent.

Purchases by foreign investors from the Saudi stock exchange market are expected to continue.

According to financial results of companies listed on the Saudi stock market, profits of cement companies jumped by 62.2 percent, while bank profits rose by 12.7 percent and, profits of energy companies rose 5.6 percent.

Results showed improvement in the financial performance of 86 companies (more than half of the major listed companies that announced their financial results).

The total results of listed companies showed that they have gained a profit of SAR23.2 billion ($6.1 billion) during Q1 2019.

Meanwhile, MSCI Inc, the world’s largest index provider, said 30 Saudi Arabian securities would be added to its closely watched and widely duplicated emerging-markets index.

It said they represent an aggregate weight of 1.42 percent in the MSCI Emerging Markets Index. All changes will be implemented as of the close of May 28, it said.

MSCI said late last year it would allow companies that give shareholders unequal voting rights to remain on its current equity indexes, backing down from an earlier proposal that would have reduced exposure to such companies.

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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.