A stock exchange information is seen on a screen is seen as a man works on the trading floor at the Dubai Financial Market April 29, 2012. Photo: Reuters 

 

DUBAI: Saudi Arabia?s stock market fell in early trade on Sunday after Crown Prince Mohammed bin Salman moved to consolidate his power and crack down on corruption with a cabinet reshuffle and a string of detentions of prominent figures.

The Saudi equities index (TASI) was down 1.0 per cent after 25 minutes of trade as declining stocks overwhelmed advancers by 155 to 15. Investment firm Kingdom Holding, owned by billionaire Prince Alwaleed bin Talal, who was one of those detained, plunged 9.9 per cent.

Shares in National Industrialization Co (Tasnee), in which Kingdom holds a 6.2 per cent stake, fell 1.3 per cent and Banque Saudi Fransi, in which Kingdom bought a 16.2 per cent stake in September, sank 2.8 per cent.

However, much of the market escaped panic selling and some blue chips were little changed, with top petrochemical producer Saudi Basic Industries down only 0.2 per cent.

Saudi-owned Al Arabiya television reported a new anti-corruption committee chaired by Prince Mohammed had detained 11 princes, four current ministers and tens of former ministers, as well as several senior businessmen.

Analysts said the news worried the stock market because businessmen implicated in the probe might end up having to sell some of their equity holdings, which could temporarily at least weaken prices. New investment in the market by the businessmen could shrink.

However, they said local investors might ultimately welcome the prospect of Prince Mohammed increasing his power and reducing uncertainty about his authority. Economic reforms such as privatisation and development projects could potentially now move faster.

Elsewhere in the Gulf, Dubai?s stock market fell 0.9 per cent as the most heavily traded stock, Deyaar Development, lost 1.9 per cent. Qatar?s stock index dropped 0.6 per cent in a broad-based decline, with nine of the 10 most active stocks weaker.