Saudi Shares Drop as U.S. Pins Khashoggi Murder on Crown Prince

Saudi stocks fell the most in a month, tracking last week’s declines across emerging markets, as traders weighed the impact of a U.S. intelligence report saying Crown Prince Mohammed bin Salman signed off on the killing of Washington Post columnist Jamal Khashoggi.

The Tadawul All Share Index retreated as much 1%, its sharpest decline since Jan. 31. It pared losses to close 0.5% lower. Al Rajhi Bank, Saudi Basic Industries, Saudi Telecom Co. and Saudi Aramco dragged the index down the most by points. Stock indexes in the United Arab Emirates, Qatar, Oman and Bahrain advanced, while those in Egypt and Israel fell.

While President Joe Biden’s administration imposed only modest new sanctions on the kingdom, it’s expected to announce more action on Monday. Saudi Arabia said it “rejects the negative, false and unacceptable assessment in the report.”

“We could see some influence in the sale of arms to Saudi Arabia” Alia Moubayed, the London-based chief economist for Middle East, North Africa at Jefferies International, said in an interview with Bloomberg TV. “But in terms of flows, unless sanctions hit particular asset classes, I don’t see flows being significantly affected.”

Trading in Riyadh was also pressured by wider declines in emerging-market shares on Friday, when the MSCI EM Index fell 3.2% as a selloff in Treasuries triggered a slide in risk assets. Oil, Saudi Arabia’s biggest export, finished 1.1% lower last week.

Outflows from the Saudi stock exchange climbed to a record of 6.6 billion riyals ($1.76 billion) in October 2018, the month when Khashoggi was killed at the Saudi consulate in Istanbul. It was the biggest monthly drop in foreign holdings since the country opened up its stock market to international investors in 2015.

Saudi Shares Drop as U.S. Pins Khashoggi Murder on Crown Prince

MIDDLE EASTERN MARKETS:

  • The Saudi index’s decline trims its gain in February to 5.1%
    • Riyad Bank rises as much as 1.9% after proposing a dividend for 2020 of 0.5 riyal per share
  • Dubai’s DFM General Index rises 1%, the most in the Gulf
    • Abu Dhabi’s ADX General Index gains 0.6%
  • In Doha, the QE Index climbs 0.3%
    • Ezdan Holding Group rises as much as 5.3% after saying it’s finalizing a bank facility to fully repay a $500 million sukuk maturing in May
      • Shares dropped last week after S&P Global Ratings said the Qatari property developer faces the risk of a default or debt restructuring
    • QLM Life & Medical Insurance jumps 10% for a second session, after Qatar said last week that all expatriates and visitors will be required to have health insurance
  • Gauges in Bahrain and Oman rise 0.1% and 0.3%, respectively
    • Kuwait’s market is closed for a local holiday

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