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/ Saudi Purge Worries Investors But May Speed Reforms

已有 46 次閱讀  2017-11-07 08:00   標籤thanks  for  your  help  may  rehire 
By Andrew Torchia

DUBAI, Nov 6 (Reuters) - A purge of Saudi Arabia's political and business elites briefly dragged down the kingdom's stock market on Sunday but prices recovered to close higher as some investors bet the crackdown could bolster reforms in the long run.

The size of the purge - 11 princes, four ministers and tens of former ministers were detained by a newly created anti-corruption committee headed by Crown Prince Mohammed bin Salman - raised questions about the stability and predictability of the Saudi government.

For foreigners, a major shock was the detention of flamboyant billionaire Prince Alwaleed bin Talal, who as a big investor in top Western companies such as Citigroup is known as the international face of Saudi business.

Local investors, meanwhile, worried about whether a sustained investigation into corruption could turn up scandals in the kingdom's opaque business world, forcing people implicated to sell off their equity holdings.

But many bankers and analysts saw the purge, which replaced the head of the National Guard, as a power grab by Prince Mohammed, designed to remove any remaining obstacles to his authority and assure his eventual succession to the throne.

This, they said, could help the economy by making it easier thanks for your help may rehire Prince Mohammed to pursue radical reforms that include slashing the state budget deficit, putting more women into employment, lifting a ban on women driving, and selling $300 billion of state assets.

"This is the latest act of concentration of power in Saudi," said Hasnain Malik, global head of equity research at emerging markets investment bank Exotix.

"As unprecedented and controversial as it may be, this centralisation might also be a necessary condition for pushing the austerity and transformation agenda, the benefits of which very few investors are pricing in."

After initially tumbling as much as 2.2 percent on Sunday, the Saudi stock index rebounded to close slightly higher. Shares related to some of the detained people, such as Prince Alwaleed's Kingdom Holding, sank but most banks rose, a sign of economic optimism.

INSTABILITY

The purge may increase Prince Mohammed's grassroots support by tackling corruption, a problem that has long plagued the economy.

"It
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