The saudi billionaire’s arrest spooks investors

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Investors react badly to the arrest of the Saudi billionaire, Prince Alwaleed bin Talal, one of the richest men in the world.

Shares of Kingdom holding, Prince Alwaleed’s investment vehicle, sank for a second day after the president has been the subject of an anti-corruption sweep.

The billionaire was one of 11 leaders arrested by a new anti-corruption body, led by the Saudi crown Prince.

Prince Alwaleed holds shares of Citigroup, Twitter and Apple.
The saudis among dozens of prisoners held in “corruption” purge
Mohammed bin Salman, the power behind the throne

“From a sentiment perspective, this will hurt the companies associated with the prince,” said Nabil Rantisi, the managing director of brokerage at Menacorp, United Arab Emirates investment firm.

“Large investors may shy away from these companies for a while until they have more clarity on the outcome of the situation”.

Analysts are speculating that the 32-year-old Mohammed bin Salman, the heir to the throne of saudi Arabia, is to consolidate power and assert its control over the oil-rich kingdom.

The size of the Prince Alwaleed investments in Twitter and Apple were not disclosed by the Kingdom Holding company has reserved on its international investments over the years.

Among the prince’s other global holdings is Citigroup, which has owned since 1991, the mass media corporation Twenty-First Century Fox, and ride-sharing firm Lyft. The prince also owns the majority of the Group Rotana, the Arab world’s largest entertainment company, and the Savoy hotel in London.

During the weekend, security forces have arrested dozens of former senior officials and ministers, within a few hours, after that the King Salman bin Abdulaziz Al Saud for the decision to punish corruption.

Prince Alwaleed are currently unknown. Some detainees are held in five-star hotel in the whole of Riyadh, the Associated Press reported, citing a Saudi official.

Saudi Arabia, the ministry of finance said: “firm decisions” by the anti-corruption committee “will help strengthen the investment environment in the kingdom”.’Shock’

Shares in Al Tayyar Travel Group, a Riyadh-based travel company, also fell after the non-executive member of the board of directors Nasser bin Aqeel al-Tayyar, was arrested in the sweep.

Investors are “extremely concerned by the events of the weekend and we will see a further fall in Kingdom Holding company in particular, as it is difficult to define what the company is without Prince Alwaleed,” said Marcus Chenevix, Middle East analyst TS Lombardo.

“The government is obviously struggling to find the political equilibrium. This was a drastic move, and it is difficult to see that there will be aftershocks after the earthquake.”

Kingdom Holding did not respond to e-mails seeking comment on Prince Alwaleed detention. The stock has lost more than 11% in the last two days, and is currently trading at the lowest level since 2011.

“Do you know how long this is all going to take and it is not known if the prince is going to come out of it the way in which it is entered,” Menacorp Mr Rantisi said.

Any investor reaction to the arrests would be premature, however, as in the medium and long term, if the Saudis are able to connect the corruption of those in prison, and if you sort out the mess, the move will be, finally, create more transparency, and could attract more foreign investment to the kingdom than ever before,” he added.

The price of oil has reached two years after the repression. Saudi Arabia is the world’s leading exporter of oil and second largest producer of the commodity.

Brent crude oil hit $62.90 a barrel Monday, the highest level for 28 months.

At the beginning of this month, Forbes said the Prince Alwaleed had an estimated net worth of about $17bn (£13bn), making him the 45th richest man in the world.