Billionaire Alwaleed's Kingdom Holding Steadies After 2-Day Drop

  • Company's two-day retreat was biggest since November 2008
  • Stock's price-to-earnings ratio fell to 4-year low on Sunday

Saudi billionaire Prince Alwaleed Bin Talal’s company stabilized Monday after the biggest two-day drop in more than seven years.

Kingdom Holding Co. rose 0.3 percent after tumbling 15 percent in the previous two trading sessions. The Riyadh-based investment company with a stake in Twitter Inc. is among the top decliners on Saudi Arabia’s Tadawul All Share Index in the past month. The gauge climbed 1.4 percent on Monday.

Kingdom’s slump followed a rally in the shares in December after a Saudi news website reported that France’s sovereign wealth fund and a number of unidentified companies bought a $150 million stake. Saudi stocks were the worst performers in the six-nation Gulf Cooperation Council last year on concern a decline in oil prices would curb government spending, the biggest driver of growth.

"It’s always been too expensive and today there’s better value for your money," said Ahmed Shehada, the executive director for advisory and institutions in Dubai at NBAD Securities LLC, the brokerage of the biggest bank in the United Arab Emirates. "The rally was primarily due to the French fund that bought a $150 million stake."

Kingdom Holding traded at a price-to-earnings ratio of 52 on Sunday, the lowest in four years. It was little changed on Monday.

The stock’s 14-day relative-strength index dropped to about 25 this week. A level below 30 indicates to some analysts a security is oversold and poised to rebound. After the report about the French wealth fund, it had climbed to 79, above the 70 level that signals the shares may be overbought.

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