Saudi stock sell-off by foreign investors eased last week

Selling of Saudi stocks by foreign investors on Tadawul reduced last week, after a sharp rise observed the previous week following the Kingdom’s corruption purge, according to market data released by the bourse on Monday. 

Foreign investors heavily sold Saudi stocks soon after the probe was announced, selling SAR 2 billion and buying SAR 917 million in the week ending Nov. 9. 

In the latest week ending Nov. 16 however, foreign investors remained net sellers but by a smaller margin, selling SAR 748 million and buying SAR 439 million.

“We may need another week trading data to better assess if foreign investors’ trading is back to normal,” Nishit Lakotia, head of research at Bahrain-based SICO, told Argaam.

“However many sophisticated QFIs may look at current market weakness as an opportunity to take position in several blue-chip equities on Tadawul, especially before the flow-driven rally that will likely be triggered early next year on speculation of FTSE and MSCI emerging market inclusion of TASI,” he added.

Saudi Arabia has so far detained over 200 princes, businessmen, and government officials in a sweeping anti-corruption crackdown announced in the country this month. The arrests included businessmen such as Prince Alwaleed bin Talal, chairman of Tadawul-listed Kingdom Holding, and Nasser Al-Tayyar, founder of Al Tayyar Travel Group Holding.

The Kingdom’s central bank has frozen the personal bank accounts of those detained, while the Capital Market Authority (CMA) has reportedly frozen their trading accounts.

The Saudi government is looking to recover at least $100 billion from settlement agreements with the suspects, foreign minister Adel Al-Jubeir said.

The detainees can choose between paying up the amounts and handing over embezzled assets, or being referred to the judiciary for legal action, he added.  

Write to Jerusha Sequeira at jerusha.s@argaamnews.com