Morning Commentary: Saudi debt 6-11 bps wider after corruption probe arrests; Lebanon wider

By Rebecca Melvin

New York, Nov. 6 – Debt from Saudi Arabia, including both sovereign and corporate paper, traded actively on Monday and closed about 6 to 11 basis points wider on average, a market source said.

The move came as investors worried about the implications of the new Saudi crown prince’s weekend roundup of princes, ministers and businessmen in an escalation of detentions that were announced as taking aim at corruption but are being viewed as an effort to consolidate power.

Crown prince Mohammed bin Salam wants to overhaul the kingdom’s economy and free Saudi Arabia from dependence on oil revenue. He is also in charge of the armed forces and deputy prime minister. The detentions included prince al-Waleed bin Talal, one of the richest men in the world.

“There is no doubt that the magnitude and suddenness of the arrests have created some uncertainty among local and foreign investors,” Trieu Pham of MUFG Securities wrote in a note on Monday.

Elsewhere, Lebanon’s sovereign bonds widened by 40 bps to 90 bps over the weekend after prime minister Saad announced his resignation, claiming he feared for his life and criticizing Iran and its affiliate Hezbollah for interfering with Arab affairs, according to a market source.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.