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 was 0.6% lower as of 10:43 a.m. in Riyadh. Rajhi Bank, Saudi Basic Industries, Saudi Telecom Co. and Saudi Aramco dragged the index down the most by points.
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.
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