Saudi stocks tumble as tensions surge after Aramco drone attacks

News24
15 Sep 2019, 22:13 GMT+10

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.

Drone attacks may impact Saudi Aramco IPO valuation, Eurasia says

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

Al Rajhi curbed its decline to 1.7%, poised for the lowest level since January

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