The Star Early Edition

Stock mar­ket falls af­ter ar­rests, cab­i­net reshuf­fle

-

SAUDI Ara­bia’s stock mar­ket fell in early trade yesterday af­ter Crown Prince Mo­hammed bin Sal­man moved to con­sol­i­date his power and crack down on cor­rup­tion with a cab­i­net reshuf­fle and a string of de­ten­tions of prom­i­nent fig­ures.

The Saudi eq­ui­ties in­dex was down 1.0 per­cent af­ter 25 min­utes of trade as de­clin­ing stocks over­whelmed ad­vancers by 155 to 15. In­vest­ment firm King­dom Hold­ing, owned by bil­lion­aire Prince Alwaleed bin Talal, who was one of those de­tained, plunged 9.9 per­cent.

Shares in Na­tional In­dus­tri­al­i­sa­tion Co (Tas­nee), in which King­dom holds a 6.2 per­cent stake, fell 1.3 per­cent and Banque Saudi Fransi, in which King­dom bought a 16.2 per­cent stake in Septem­ber, sank 2.8 per­cent.

How­ever, much of the mar­ket es­caped panic sell­ing and some blue chips were lit­tle changed, with top petro­chem­i­cal pro­ducer Saudi Ba­sic In­dus­tries down only 0.2 per­cent.

Saudi-owned Al Ara­biya tele­vi­sion re­ported a new anti-cor­rup­tion com­mit­tee chaired by Prince Mo­hammed had de­tained 11 princes, four cur­rent min­is­ters and tens of former min­is­ters, as well as sev­eral se­nior busi­ness­men.

Wor­ried

An­a­lysts said the news wor­ried the stock mar­ket be­cause busi­ness­men im­pli­cated in the probe might end up hav­ing to sell some of their eq­uity hold­ings, which could tem­po­rar­ily at least weaken prices. New in­vest­ment in the mar­ket by the busi­ness­men could shrink.

How­ever, they said lo­cal in­vestors might ul­ti­mately wel­come the prospect of Prince Mo­hammed in­creas­ing his power and re­duc­ing un­cer­tainty about his author­ity. Eco­nomic re­forms such as pri­vati­sa­tion and devel­op­ment projects could po­ten­tially now move faster.

In the Gulf, Dubai’s stock mar­ket fell 0.9 per­cent as the most heav­ily traded stock, Deyaar Devel­op­ment, lost 1.9 per­cent. Qatar’s stock in­dex dropped 0.6 per­cent in a broad-based de­cline, with nine of the 10 most ac­tive stocks weaker.

Newspapers in English

Newspapers from South Africa