Saudi stocks drop to January low

Saudi Arabia’s benchmark stock index dropped to its lowest level since January after state television reported that Prince Nayef, the kingdom’s interior minister and crown prince, had died. The Tadawul All Share Index (SASEIDX) fell as much as 2.7 per cent to 6,565.82, the lowest intraday level since Jan.31. The index pared its drop to 0.8 per cent to 6,690.36 at 2:28 p.m. in Riyadh. Earlier, the measure had gained as much as 1.1 per cent. Saudi Basic Industries Corporation, the world’s biggest petrochemicals maker, fell 0.6 per cent to 89.75 riyals. Al Rajhi Bank (RJHI), the kingdom’s largest lender by market value, dropped 2 per cent to 72.25 riyals, the biggest decline in two weeks. “There was some panic selling because of the uncertainty created by the reports,” Turki Fadaak, head of research at Albilad Investment Co. in Riyadh, said in a phone interview on Saturda. Saudi Arabia’s winning of 8th position among the world’s 10 high growth economies of 2012 listed by the International Monetary Fund reflects its economic strength and stability, said Economy and Planning Minister Muhammad Al-Jasser recently. “The IMF has predicted that the actual growth rate of Saudi Arabia’s gross domestic product would reach six per cent in 2012. This is a new international certificate that reaffirms the Kingdom’s economic stability and effectiveness of its economic policies,” he said. Al-Jasser said the buoyant IMF economic outlook about Saudi Arabia is significant as it comes at a time when most countries in the world are facing economic downturn as a result of global recession and euro zone financial collapse.