Attacks on two plants at the heart of the kingdom’s oil industry shakes Saudi stocks sharply on Sunday, a day earlier that knocked out more than half of Saudi crude output.
Sunday’s decline extended a losing spree for Saudi stocks, which in recent weeks have been hit by expensive valuations, weak oil prices and concerns about the economic outlook.
The Saudi market was down 1.3%. The index has lost all its gains this year and is down about 18% from its 2019 high of 9,403 points seen in early May.
Saudi Basic Industries (SABIC) (2010.SE), the kingdom’s biggest petrochemicals firm, was down 2.4% after it said it had curtailed feedback supplies by about 49% following the attacks.
Aramco has agreed to buy a 70% stake in SABIC from the state Public Investment Fund in a $69.1 billion deal that is awaiting regulatory approvals.
“The stock market has been affected, especially the petchem sector, (as) the efficiency of some major companies will be about 50% in the coming 10 days,” said Mazen al-Sudairi, head of research at Al Rajhi Capital.
The attacks are unlikely to change plans for Aramco’s long-awaited initial public offering but may affect the valuation, risk consultancy Eurasia Group said in a note.
Aramco has hired nine banks as joint global coordinators to lead its IPO, slated to be the world’s largest.
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