[ad_1]
DUBAI (Reuters) – Foreigners sold 4.01 billion riyals ($ 1.07 billion) net of Saudi shares during the week ending October 18, according to stock market statistics released Sunday – one of largest sales since the opening of the market to direct purchases abroad in mid-2015.
The sale took place over the course of a week when investors were shaken by deteriorating relations between Saudi Arabia and foreign governments as a result of the disappearance of journalist Jamal Khashoggi.
Riyadh said Saturday that Khashoggi had died in a fight inside his consulate in Istanbul, his first recognition of his death after denying for two weeks being involved in his disappearance.
A breakdown of stock market data showed that foreigners sold for 5 billion riyals and bought for 991.3 million dollars.
"The market has begun to integrate a fundamentally different relationship between Saudi Arabia and the United States," said Jaap Meijer, head of equity research at Arqaam Capital.
"We believe that the United States will keep Saudi Arabia at the forefront of its allies given (among other things) the kingdom's importance in the Middle East region and their ability to produce 10% of the world's population. Global oil supply. "
US Treasury Secretary Steven Mnuchin said Sunday that Saudi Arabia's explanation about the murder of journalist Jamal Khashoggi was "a good first step, but not enough," adding that it was premature to discuss possible sanctions against Riyadh after the incident.
These were the latest statements by US President Donald Trump's administration aimed at censuring a murder that sparked a global scandal, while protecting relations with the world's largest oil exporter.
Stock market data also showed that Saudi private investors, such as individuals and wealthy individuals, sold 3.4 billion net riyals during the week. However, Saudi institutions bought 7.8 billion net stocks. Investors from other Gulf countries were also net sellers.
The Saudi stock market is down about 4% since Khashoggi disappeared on October 2nd. The market had already begun to weaken before the incident, as foreign funds slowing their purchases after the announcement by MSCI in June that the kingdom would be included in its benchmark global emerging markets benchmark. year.
The Saudi index closed up 0.2% on Sunday after falling 3.5% earlier in the session.
Saudi Arabia's external debt has also been under pressure as yields rise on the country's dollar bond curve.
The bond yield of $ 5.5 billion from Saudi Arabia due in 2026 and $ 6.5 billion in 2046 hit record levels last week, according to Refinitiv data.
Saudi credit risk swap contracts, purchased by investors as a protection against default, reached 100 basis points late last week for the first time since June, according to data from 39, IHS Markit.
Additional report by Tuqa Khalid; Edited by Kirsten Donovan
