Saudi Telecom Company (STC), the Kingdom's leading telecom company, will embark on a major acquisition drive in the Middle East region in the short term, according to a top financial expert.

Riyadh Capital Group in latest report said STC will also undergo reinvestment operations despite its ability to borrow after it announced last week a $1.2 billion Shariah deal for its Indonesian operation Axis to finance its mega expansion plan in that country.

The report also pointed out that STC's global operations would contribute some 50 per cent of the total revenues, up from the current 34 per cent.

To achieve this, the STC will invest in high growth markets, increase its stake in existing subsidiaries and seek attractive acquisition opportunities, the Riyadh Capital Group stated in its report this week.

The report also reiterated that the buy rating at SR52 is currently under its fair price.

According to Riyadh Capital, the cut in the distribution of dividends does not reflect reduction or diminishing profits as much as it is a sound decision to achieve further growth in the future.

The company’s sound strategic investment in conserving cash will facilitate long-term growth, the report added.-TradeArabia News Service