Top Stories
Top Stories
Markets

Scandal causes foreigners to dump more than $1 billion in Saudi stocks, report says

Key Points
  • Foreign investors dumped $1.1 billion of Saudi stocks last week, one of the worst outflows since data became available in 2015.
  • Major index firms plan to upgrade Saudi Arabia to "emerging market" status next year, a move that was expected to draw billions of dollars in investment, particularly in passive funds.
Fayex Nureldine | AFP | Getty Images

Foreign investors dumped $1.1 billion of Saudi stocks last week, among the biggest weekly outflows since data became available in 2015. The heavy sales coincided with the country's growing crisis after the killing of journalist Jamal Khashoggi, according to Bloomberg.

The stock sales came from qualified foreign institutional investors, who were net sellers of 4 billion riyals of stocks. Local retail investors were also net sellers last week while Saudi institutions were net buyers, the report said.

There was only one other worse week, in September 2017, relating to a single transaction, Bloomberg said.

The Saudi All-Share index is down 4.4 percent this month, on pace for its worst month since October 2017, though it regained much of its losses Monday. It closed down 0.15 percent after being down as much as 3.35 percent.

Saudi Arabia has been trying to attract foreign investment as it diversifies its economy away from oil. Its market regulator, Tadawul, is going forward with reforms to bring the market into alignment with international standards. Index providers S&P Dow Jones, FTSE Russell and MSCI all said they were going to upgrade the kingdom to an "emerging market" starting next year, a move that was expected to draw billions of dollars of investment, especially from passive funds.

Foreigners are sill net buyers of Saudi stocks for the year, Bloomberg said.

Read the full Bloomberg story here.