Saudi stocks hit 43-month low after Houthi strike on Aramco

Saudi Arabia's stock market dropped to its lowest level in 43 months on Wednesday, October 14. The fall came after Yemen's Houthi rebels hit the Dhahran headquarters of Saudi Aramco, an attack that added to investor worries about a widening conflict inside the kingdom.news.yahoo+1

The All-Share Index of the Saudi Exchange closed at 10,139 points, AGBI reported. That is its lowest close since March 16, 2023. Aramco shares, the largest listing on the exchange by far, fell 2 percent but are still up more than 7 percent from a year ago.agbi

Strike on the executive offices

Saudi Arabia's energy ministry said an Aramco administrative building in Dhahran was attacked late Tuesday. The ministry reported a "limited fire" and no injuries. A company source told Reuters that a ballistic missile hit an office tower in the complex and damaged its top three floors. The complex houses a major Aramco operations center. Two regional officials told the Associated Press that the damaged floors held offices used by senior executives, and one said the chief executive's office was among them.The New York Times+2

The Houthis had threatened earlier on Tuesday to target the headquarters. The threat followed Saudi-led coalition strikes on an oil facility in Sanaa, the Yemeni capital, which is under Houthi control. Saudi Civil Defense said debris from intercepted missiles injured four people in Riyadh overnight and damaged 15 homes.San Bernardino Sun+2

Investors reprice the risk

"We're seeing selling across the board in Saudi, and it's largely geopolitical," Shahrukh Saleem, a portfolio analyst at Mashreq Capital, told AGBI. "Even the names foreign investors favoured until recently are now under pressure."agbi

Travel disruption has added to the pressure. A week of Houthi missile and drone attacks shut Riyadh's main international airport. According to Flightradar24 data cited by AGBI, the airport was still closed on Wednesday, and almost a third of flights at Dammam and Jeddah were cancelled. Houthi threats to shipping in the Bab al-Mandab strait are also pushing Saudi oil exports and imports onto longer and more expensive routes.Yahoo News Singapore+1

A shift from earlier insulation

Earlier in the US war with Iran, Saudi Arabia had been relatively shielded. Aramco stayed profitable because it could keep exporting through the Red Sea. The Houthis have since attacked Aramco sites in Yanbu and Riyadh, and the Saudi-backed Yemeni government has declared war on the group. President Donald Trump has said he is considering whether the United States should join Saudi strikes against the Houthis.The New York Times+3

"Earlier in the conflict, Saudi was relatively insulated," Saleem said. "Now the kingdom itself is under attack, and the market is repricing that risk higher."agbi