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Saudi Arabian stocks ease on King Fahd’s illness

RIYADH — Saudi Arabian stocks fell nearly one per cent yesterday partly on uncertainty over the health of King Fahd, but the long-term outlook for the market remained one of continued growth, analysts said.

The all-share index .SASI of the largest Arab bourse ended the morning session at 12,360 points, down 0.94 per cent, at the start of the trading week. Some traders blamed concerns about the health of the ruler of the world’s top oil exporter, who was hospitalised with pneumonia and fever on Friday, but others attributed the drop to a natural market correction.

The index ended the previous week to Thursday up 0.9 per cent at 12,477. It had hit a record closing high of 12,729 points, but fell 4.7 percent on Wednesday on news about Fahd’s health.

“It’s bad news for the market when the king is sick,” said Fawad Rizvi, equity economist at the Consulting Centre for Finance and Investment.

But he said the market would continue its impressive run in the long term. “All things have been controlled by (Crown Prince) Abdullah for the past 10 years, so policies are not going to change in the long term.”

Saudi officials said the king, in his early 80s, was stable after undergoing treatment to drain water from his lungs.

Abdullah has been running the day-to-day affairs of the country since the monarch suffered a stroke in 1995.

Shailesh Dash, head of research at Global Investment House, said the Saudi stock market fall was “mainly sentiment-driven”.

“Some people sold, and that is healthy for the market.”

The index, which has quadrupled since early 2003, is up around 50 per cent since the start of the year on the back of high oil prices pumping cash into government coffers. “The market is high anyway and it might be just a sign of nerves,” said a financial analyst who asked not to be named.

Telecoms firm Ettihad Etisalat 7020.SE fell 2.4 per cent on Saturday to 681.25 riyals ($181.6), while Saudi Telecom 7010.SE retreated 1.74 per cent to 874.5 riyals.