SoftBank's Saudi ties unnerve investors amid 'murdered' journalist affair

SoftBank's Saudi ties unnerve investors amid 'murdered' journalist affair
SoftBank is half-financed by Saudi Arabia and its shares dropped eight percent as fallout from the Khashoggi affair spreads.
2 min read
15 October, 2018
Car manufacturer Toyota's CEO speaks at a SoftBank announcement [Getty]

The world's largest technology investment fund that is half-financed by Saudi Arabia saw its stock share drop 8 percent on Monday, as fallout over the presumed murder of dissident Jamal Khashoggi spread.

The $100 billion SoftBank Vision Fund is part of a number of deals its Chief Executive Masayoshi Son has penned with Riyadh.

The stock drop is the latest economic hit to the oil-rich kingdom. On Saturday, US President Donald Trump threatened "severe punishment" over the disappearance of Jamal Khashoggi.

The 59-year-old journalist entered the Saudi consulate in Istanbul on 2 October, but was not seen re-emerging. Ankara says Khashoggi was killed in the consulate, with reports in Turkish media saying a 15-person assassination squad arrived to carry out the murder. 

Concern over Khashoggi's fate has also hit the "Davos in the Desert" investment conference in Saudi Arabia, with a wave of Western attendees pulling out.

The conference is meant to promote Crown Prince Mohammed bin Salman's Vision 2030 programme of economic and social reform. 

Analysts say the stock price drop is due to jitters over its Saudi ties rather than fundamentals over the fund itself. 

Meanwhile, the price of brent crude oil rose 1.7 percent as concerns about fallout over the Khashoggi case stoked fears about its impact on supplies. 

SoftBank executives have declined to confirm whether they will attend next week's Davos in the Desert conference, according to Reuters.

The CEO at Uber, of which SoftBank is the largest shareholder, said last week he would not attend. Riyadh is also a major investor in the ride-share company outside of its SoftBank portfolio. 

SoftBank's eight percent slide is part of a wider drop in the funds stock value, which saw its shares fall 20 percent in the last two weeks.

Riyadh has ties to SoftBank that extend beyond the investment fund. In March, they announced they would build the world's largest solar power project.

Chief Executive Son was also appointed an adviser for the planned $500 billion NEOM high-tech city. 

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