Share

Saudi stocks tumble as tensions surge after Aramco drone attacks

Saudi Arabian stocks sank after drone strikes highlighted the vulnerability of the kingdom’s oil facilities to terror attacks.

The Tadawul All Share Index fell as much as 3.1%, led by Al Rajhi Bank and Saudi Basic Industries Corporation. The drop erased this year’s gain and lowered the gauge’s valuation to the weakest since March, before the kingdom’s stocks were included in MSCI Inc.’s emerging-market gauge. Equities in the United Arab Emirates, Qatar, Kuwait and Bahrain retreated at least 0.4%.

This is a “very tense situation,” elevating risk in the region “to unprecedented levels,” said Mohammed Ali Yasin, the chief strategy officer at Al Dhabi Capital in Abu Dhabi.


The attack cut production in half and the biggest on Saudi Arabia’s oil infrastructure since Iraq under Saddam Hussein fired Scud missiles into the kingdom during the first Gulf War. Iran-backed Houthi rebels in Yemen, who’ve launched several drone attacks on Saudi targets in the past, claimed responsibility for the assault on Saudi Aramco’s Abqaiq plant, one of the world’s largest crude-processing facilities.

US Secretary of State Michael Pompeo in a tweet blamed Iran directly, but didn’t offer any evidence. Iran denied responsibility for the attacks.

While the incident won’t derail Aramco’s initial public offering, it may impact the company’s valuation, according to the Eurasia Group. “Crown Prince Mohammad bin Salman will push the company to demonstrate that it can effectively tackle terrorism or war challenges,” said analysts led by Ayham Kamel, head of Middle East and North Africa research.

Helping Hand?

The main index recovered about half its losses within the first hour of trading, a sign government funds may be limiting the decline.

  • Tadawul traded 1.3% lower as of 10:57 a.m in Riyadh
  • Sabic dropped as much as 5% to the weakest since late 2016
  • Al Rajhi curbed its decline to 1.7%, poised for the lowest level since January

“Being Sunday, foreigner participation may not be in full swing, and that should help government funds intervene more effectively,” Joice Mathew, the head of equity research at United Securities in Muscat. Their support “could be identified if we see any sharp recoveries in first 90 minutes of trading,” he said.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.00
-0.3%
Rand - Pound
24.08
+0.1%
Rand - Euro
20.59
-0.0%
Rand - Aus dollar
12.36
+0.5%
Rand - Yen
0.13
+0.7%
Platinum
902.95
+0.1%
Palladium
998.75
-0.7%
Gold
2,152.67
-0.4%
Silver
24.90
-0.6%
Brent Crude
86.89
+1.8%
Top 40
65,873
-0.6%
All Share
72,094
-0.5%
Resource 10
53,208
-0.2%
Industrial 25
99,450
-1.0%
Financial 15
16,627
+0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders