Saudi Arabia surprised investors on the weekend, with King Salman’s move to arrest a string of high-profile nationals, from ministers to princes, an event which has left some encouraged by the authorities’ willingness to take on corruption, but also worried about who might be next.
In less than 24 hours, dozens of high profile Saudis were arrested, the government intercepted a ballistic missile Yemeni Houthi fired at Riyadh’s international airport, and Lebanese Prime Minister Saad al-Hariri unexpectedly resigned in a televised speech from the kingdom. They’re signs of the changing times in Saudi Arabia.
The government is giving the entire nation a makeover, from allowing women to drive to the construction of a new business hub on the Red Sea. The overhaul was kick-started by Crown Prince Mohammed bin Salman, who has bypassed senior royals to become the kingdom’s predominant leader, after a plunge in crude prices strained Saudi Arabia’s finances and forced the energy-rich nation to confront the realities of life after oil.
Since then, the kingdom has allowed foreigners to trade Saudi stocks directly and shifted the bourse’s settlement cycle to T+2, among other changes. But total foreign ownership has lingered below 5% of the value of shares on the exchange.
Among those arrested is Prince Alwaleed bin Talal, the billionaire with stakes in companies such as Citigroup Inc. Z(NYSE: C) and Twitter Inc. (NYSE: TWTR). Ranked the world’s 50th richest person with a net worth of about $19 billion U.S., according to the Bloomberg Billionaires Index, Alwaleed is the founder of Kingdom Holding Co., a Riyadh-based investment firm.
Kingdom Holding’s shares fell as much as 5.3% on Monday in the Saudi capital after falling 7.6% on Sunday, bringing its losses for the year to 24%.