Saudi stocks dive 7.0 percent over Khashoggi concerns
International pressures against Saudi Arabia over its alleged role in the disappearance of dissident journalist Jamal Khashoggi are already sending economic shocks to Riyadh.
In the early trading of Sunday, Saudi stocks plunged 7.0 percent in what became the biggest drop since December 2014.
Analysts were quoted by media as saying that this could be the start of a financial crisis that could sooner or later affect the kingdom as a result of controversies around Khashoggi who is purported to have been murdered in the Saudi consulate in Istanbul upon orders made by Riyadh.
The Tadawul All-Shares Index (TASI) quickly lost more than 500 points on the first trading day of the week.
It was trading at just above 7,000 points, a 10-month low, having reversed all of the 18-percent gain it had notched up since the start of 2018.
All 15 sectors in the market were in the red while almost all listed shares dropped.
In just two sessions the Saudi bourse, the largest in the Arab world, has shed almost $50 billion of its capitalization, which now stands at around $450 billion.
Mohammed Zidan, market strategist at Thinkmarket in Dubai, said the drop in Saudi stocks was the result of panic selling because of several political and economic factors.
"There has been a kind of uncertainty surrounding the situation of the disappearance of Khashoggi which has caused the market to fall," Zidan told AFP.
Trump threatened Riyadh on Saturday with "severe punishment" if Khashoggi, a contributor for the Washington Post who has been critical of Crown Prince Mohammed bin Salman, was killed inside its Istanbul consulate.
With the mystery over Khashoggi unresolved after he failed to reappear after walking into the consulate on October 2, a pro-government Turkish daily said the Saudi national had recorded his own interrogation inside the mission on an Apple Watch.
"It's the political environment. The market is reacting negatively to sentiment around the Khashoggi case and the political noise around it," Salah Shamma, head of investment for the region at Franklin Templeton Emerging Markets Equity, was cited by Reuters as saying.
Earlier, several US companies and business leaders pulled out of an upcoming The Future Investment Initiative conference in Saudi Arabia as questions mount over the disappearance of the Saudi journalist. In addition, Bloomberg, the New York Times, the Financial Times, CNN and CNBC have all cut their ties with the conference.
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