Monday, August 17, 2009

The Debts of the Lenders: Family Feud in Saudi Arabia Sparks Credit Crisis

Saudi groups’ dispute sparks lending fears

The financial travails of two prominent Saudi companies locked in a bitter dispute has caused banks in Saudi Arabia to clamp down on lending to private sector companies, setting back the economic recovery in the world’s top oil producer, the FT reported, citing Brad Bourland, chief economist at Jadwa Investment. Mr Bourland estimates that the problems of Ahmad Hamad Algosaibi & Brothers Co and Saad Group, which is owned by Maan Al-Sanea, the Saudi billionaire, have knocked about 500 points off the Saudi stock market index and forecasts will shave 0.5 per cent off the kingdom’s growth this year.

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