BUSINESS
JEDDAH – Listed companies on the Saudi stock market are deriving an increasing share of their revenues from abroad, Jadwa Investment report said Saturday.
It said that based on the examined annual reports of all listed companies over the past six years, it showed that SR212 billion or 42.5 percent of total revenues were obtained abroad from exports, foreign subsidiaries and foreign investments, up from SR63 billion (29.7 percent of the total) in 2005.
With production being ramped up at major new export-oriented projects, the proportion is forecast to increase further. “The growing exposure to foreign markets is good for Saudi companies, though it is also one reason for the tighter relationship between the TASI and global stock markets and the relatively weak performance of the local market given the healthy domestic economy,” Jadwa report said.
Between 2005 and 2010 revenues generated in foreign markets rose by an average annual rate of 30 percent.
In contrast, domestically-generated revenues grew by an average of 14 percent per year over the same period. Foreign revenues grew rapidly until 2009, when the global recession caused a modest downturn. A new high was recorded, in both absolute terms and as a percent of the total, in 2010, largely due to greater petrochemicals production and prices.
“Companies in 11 of the 15 stock market sectors earn revenues from abroad, with petrochemicals generating by far the largest. In 2010, it earned SR178 billion in export revenues, accounting for 84 percent of total listed company foreign revenues. SABIC contributed 86 percent of the total for the petrochemicals sector,” Jadwa report noted.
There has also been a significant rise in foreign revenues from other sectors. In 2010 they accounted for 13.1 percent of total revenues for the other 14 sectors, compared to 5.1 percent in 2005. T
elecoms ranked second, accounting for 7.8 percent of total foreign inflows in 2010, due to the revenues earned by Saudi Telecom’s foreign operations.
Petrochemicals also topped the league of foreign revenues as a proportion of total revenues, at 75 percent last year.
Multi-investment came next, at 45 percent, though this was as high as 80 percent in 2007, the year of the listing of Kingdom Holding, the largest company in the sector
The building and construction sector has also consistently earned around one-third of its revenues abroad from exports and foreign subsidiaries, primarily within the region, similar factors have kept the contribution to industrial investment at around 30 percent, it said. – SG/QJM
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