He said that the pressures on the Saudi banking sector are caused by the prospect of raising interest rates
Dubai – Al Arabiya.net
Posted on: August 06, 2023: 06:11 PM GST Last updated: August 06, 2023: 07:39 PM GST
Abdullah Al-Hamid, head of advisory at GIB Capital, said that the positive performance of the Saudi stock market today stems from the performance of the oil market on Friday and the extension of the voluntary cut in oil production by the Kingdom of Saudi Arabia and Russia during September, which reflected positively on the Saudi market.
In an interview with Al-Arabiya, he indicated that the profitability multiples of the Saudi market are historically at the upper limit of the market, but there are companies whose results were excellent as a result of their association with the local economy.
He said that the banking sector is important and fundamental to the economy in the Kingdom of Saudi Arabia, and the negative sign that occurred during the past week could be the possibility of an increase in interest rates, and this was confirmed by the unemployment figures in America that were issued on Friday and were good, which indicated the possibilities of an additional increase in expected interest rates, which pressures On the profitability of some banks in the short term, but in the long term they have the ability to benefit from raising interest rates.
He stated that the profits of Zain Saudi Arabia came in line with expectations, and he expected that there would be some kind of agreement to hand over the towers in a specific case to the new telecom company under which towers for a number of communications would be merged, and the company stated that the maintenance amounts increased by approximately 130 million riyals, to move the towers and restore rent it.
He explained that Zain is on the right track to benefit from this deal and liberate a large part of the capital, which will also be reflected in Zain’s loan costs, especially with the high interest rates. The process of repaying the bulk of the loans, and thus the amount of financing costs will decrease, which will be reflected in the earnings per share.
He pointed out that Elm is one of the companies that has the ability to give positive surprises every quarter, and it is one of the most important technical suppliers in the Kingdom at present, and the company still has a lot to achieve. Quarterly earnings growth of 90%, so we find some investors see that its price is reasonable, and we always link profitability growth with multiple earnings growth, and the stock may be at the upper end of the evaluations, but I think that the company is working in a very fertile field, and the stock has performed well.
2023-08-06 15:39:42
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