June 16 (Bloomberg) -- Saudi Arabia’s benchmark stock index dropped to its lowest level in a week after state television reported that Prince Nayef, the kingdom’s interior minister and crown prince, had died.
The Tadawul All Share Index fell 0.3 percent to 6,724.46 at the close in Riyadh, the lowest since June 9, after earlier dropping as much as 2.7 percent.
Saudi Basic Industries Corp., the world’s biggest petrochemicals maker, slipped 0.6 percent to 89.75 riyals. Al Rajhi Bank, the kingdom’s largest lender by market value, declined 1.4 percent to 72.75 riyals.
The Royal Court statement cited by state television didn’t give a cause of death. Nayef had left the kingdom for medical tests and a holiday last month, the Royal Court said in May, without specifying where he was going. He went to Cleveland, Ohio, in March for separate medical tests. About 602 million shares traded in Saudi Arabia today, almost double the 12-month daily average of 317 million, data compiled by Bloomberg show.
“There was some panic-selling because of the uncertainty created by the reports,” Turki Fadaak, head of research at Albilad Investment Co. in Riyadh, said today by telephone. “Ultimately, we do not believe the stability of the kingdom will be threatened.”
The death of Nayef comes as the world’s largest oil supplier confronts unemployment challenges at home and unprecedented change in the Middle East after popular uprisings toppled leaders in four countries, including Egypt and Libya last year. King Abdullah unveiled a $130 billion spending plan in the first quarter of 2011, including allowances for government workers and salary increases for military personnel.
King Abdullah appointed Nayef as crown prince on Oct. 28 and later named Prince Salman bin Abdulaziz as defense minister. The appointments followed the Oct. 22 death of Prince Sultan, formerly the crown prince. Head of the Interior Ministry since 1975, Nayef was the most powerful prince in the kingdom.
“Now the succession struggle will have to move to the next in line,” Theodore Karasik, director of research at the Dubai-based Institute for Near East and Gulf Military Analysis, said in a phone interview today.
Saudi Arabia’s stock exchange is the only Gulf Arab bourse open on Saturdays.
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