The financial travails of two prominent Saudi companies locked in a bitter dispute has caused banks in Saudi Arabia to clamp down on lending to private sector companies, setting back the economic recovery in the world’s top oil producer, according to a Saudi investment house.
Brad Bourland, chief economist at Jadwa Investment, estimates that the problems of Ahmad Hamad Algosaibi & Brothers Co (AHAB) and Saad Group, which is owned by Maan Al-Sanea, the Saudi billionaire, have knocked about 500 points off the Saudi stock market index and forecasts will shave 0.5 per cent off the kingdom’s growth this year.
The Algosaibi/Saad incident was Saudi Arabia’s Lehman in the sense that it set back a credit recovery and has raised serious questions about exposure of the banking system here,” Mr Bourland told the Financial Times.
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