By Dylan Bowman
Kingdom Holding leads losses as investors limit exposure to US financial sector crisis.
Fears over the outlook for the global economy hit Saudi stocks on Saturday as investors moved to limit their exposure to the crisis engulfing the US financial sector and the impact of record oil prices on industry.
The drop was led by Prince Al-Waleed bin Talal's Kingdom Holding Company, which plummeted 8.16% to 11.25 Saudi riyals on the back of news that US investment bank Bear Stearns was forced to seek emergency financing to stay afloat.
Prince Al-Waleed is the largest shareholder in US lender Citigroup, which saw its share price drop 6.1% on Friday following Bear Stearns' announcement.
Financial services firm Al Baha for Development and Investment Company was the day's biggest loser on the Saudi Stock Exchange (Tadawul), dropping 9.82% to 25.25 riyals.
Other banks including Al-Rajhi Bank, Riyad Bank and Bank Al Jazira all suffered losses, with Al Jazira dropping 7.66% to 57.25 riyals.
Saudi Basic Industries Corporation (Sabic) was also hit by investor uncertainty, with its share price dropping 2.07% to 177.25 riyals.
"The outlook for the global economy is worrying investors because a recession would impact oil prices," said Ibrahim Al-Alwan, deputy chief executive of KSB Capital.
"This would affect companies that have direct dealings with global markets, such as Sabic and banks."
Falling stocks pushed the Tadawul All Share Index (TASI) down 1.98% to 9,695.72 points, its sixth decline in seven trading days.
The index has lost almost 6% since the beginning of this month and more than 13% this year to Saturday's close.
The Saudi Stock Exchange is the only one of the seven Gulf markets that trades on a Saturday.