Saudi bil­lion­aire Al­waleed’s ar­rest rat­tles in­vestors

The Malta Business Weekly - - FRONT PAGE -

In­vestors are re­act­ing badly to the ar­rest of Saudi bil­lion­aire Prince Al­waleed bin Talal, one of the world's wealth­i­est men.

Shares of King­dom Hold­ing, Prince Al­waleed's in­vest­ment ve­hi­cle, sank for a sec­ond day af­ter the chair­man was tar­geted in an anti-cor­rup­tion sweep.

The bil­lion­aire was one of 11 princes ar­rested by a new an­ticor­rup­tion body headed by the Saudi Crown Prince.

Prince Al­waleed holds shares in Cit­i­group, Twit­ter and Ap­ple.

"From a sen­ti­ment per­spec­tive, this will hurt the busi­nesses as­so­ci­ated with the prince," said Na­bil Ran­tisi, the man­ag­ing di­rec­tor of bro­ker­age at Me­na­corp, a United Arab Emi­rates in­vest­ment firm.

"Ma­jor in­vestors may shy away from these com­pa­nies for a while un­til they have more clar­ity on the out­come of the si­t­u­a­tion".

An­a­lysts are spec­u­lat­ing that 32year-old Mo­hammed bin Sal­man, heir ap­par­ent to the Saudi throne, is con­sol­i­dat­ing power and as­sert­ing his con­trol over the oil-rich king­dom.

The sizes of Prince Al­waleed's hold­ings in Twit­ter and Ap­ple have not been dis­closed by King­dom Hold­ing as he has been se­cre­tive about his in­ter­na­tional in­vest­ments over the years.

Among the prince's other global hold­ings is Cit­i­group, in which he has owned shares since 1991, mass me­dia cor­po­ra­tion Twen­ty­First Cen­tury Fox and ride-shar­ing firm Lyft. The prince also owns the ma­jor­ity of Rotana Group, the Arab world's largest en­ter­tain­ment com­pany, Lon­don's Savoy ho­tel.

Over the week­end, se­cu­rity forces ar­rested dozens of for­mer top of­fi­cials and min­is­ters within hours af­ter King Sal­man bin Ab­du­laziz Al Saud's de­ci­sion to crack down on cor­rup­tion.

Prince Al­waleed's where­abouts are cur­rently un­known. Some of the de­tainees are be­ing held at five-star ho­tels across Riyadh, the As­so­ci­ated Press re­ported, cit­ing and a Saudi of­fi­cial.

Saudi Ara­bia's fi­nance min­istry has said "firm de­ci­sions" by the anti-cor­rup­tion com­mit­tee will "help to re­in­force the in­vest­ment en­vi­ron­ment in the king­dom".

Shares in Al Tay­yar Travel Group, a Riyadh-based travel com­pany, also tum­bled af­ter nonex­ec­u­tive board mem­ber Nasser bin Aqeel al-Tay­yar was ar­rested in the sweep.

In­vestors are "ex­tremely con­cerned by the week­end's events and we'll see fur­ther falls on King­dom Hold­ing in par­tic­u­lar as it's very hard to de­fine what the com­pany is with­out Prince Al­waleed," said Mar­cus Chenevix, a Mid­dle East an­a­lyst at TS Lom­bard.

"The govern­ment is ev­i­dently strug­gling to find po­lit­i­cal equi­lib­rium. This was a dras­tic move and it's hard to see that there won't be af­ter­shocks fol­low­ing the earth­quake."

King­dom Hold­ing has not re­sponded to emails seek­ing com­ment on Prince Al­waleed's de­ten­tion. The stock has lost more than 11% in the past two days, and is cur­rently trad­ing at its low­est level since 2011.

"No one knows how long this is all go­ing to take and no one knows if the prince is go­ing to come out of it the way he en­tered," Me­na­corp's Mr Ran­tisi said.

Any in­vestor re­ac­tion to the ar­rests may be pre­ma­ture, how­ever, as "in the medium to long run, if the Saudis are able to link cor­rup­tion to who­ever was de­tained and if they sort the mess out, the move will ul­ti­mately cre­ate more trans­parency and could at­tract more for­eign in­vest­ment to the king­dom than ever be­fore", he added.

The price of oil reached a twoyear high af­ter the crack­down. Saudi Ara­bia is the world's big­gest ex­porter of crude oil and the sec­ond-largest pro­ducer of the com­mod­ity.

Brent crude oil hit $62.90 a bar­rel on Mon­day, the high­est level for 28 months.

Ear­lier this month, Forbes said Prince Al­waleed had an es­ti­mated net worth of about $17bn, mak­ing him the 45th rich­est man in the world.

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