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 percent to 6,565.82, the lowest intraday level since Jan. 31. The index pared its drop to 0.8 percent to 6,690.36 at 2:28 p.m. in Riyadh. Earlier, the measure had gained as much as 1.1 percent.
Saudi Basic Industries Corp. (SABIC), the world’s biggest petrochemicals maker, fell 0.6 percent to 89.75 riyals ($23.93). Al Rajhi Bank (RJHI:AB), the kingdom’s largest lender by market value, dropped 2 percent to 72.25 riyals ($19.27), the biggest decline in two weeks.
The Royal Court statement cited by state television didn’t give a cause of death. Nayef left the kingdom for scheduled medical tests and a private holiday last month, the Royal Court said in May without specifying where he was going. The prince also went to Cleveland, Ohio in March for separate medical tests.
“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 today. “Ultimately, we do not believe the stability of the kingdom will be threatened.”
King Abdullah appointed Nayef as crown prince on Oct. 28 and later named Prince Salman bin Abdulaziz as defense minister. The appointments followed the Oct. 22 death of Prince Sultan, formerly the crown prince. Head of the Interior Ministry since 1975, Nayef was the most powerful prince in the kingdom at a time of political turmoil in the Middle East and high unemployment at home.
“Now the succession struggle will have to move to the next in line,” Theodore Karasik, director of research at the Dubai- based Institute for Near East and Gulf Military Analysis, said in a phone interview today.
This news has been reported by Bloomberg.
