- Title: SoftBank's Saudi ties unnerve investors and oil prices rise amid tensions
- Date: 15th October 2018
- Summary: RAS TANURA, SAUDI ARABIA (FILE - MAY 21, 2018) (REUTERS) VARIOUS OF ARAMCO'S RAS TANURA OIL REFINERY
- Embargoed: 29th October 2018 12:13
- Keywords: SoftBank's Saudi ties unnerve investors shares drop 8 percent Oil prices rise amid Saudi tensions Jamal Khashoggi
- Location: LONDON, ENGLAND, UK / RIYADH, RAS TANURA, SHAYBAH, SAUDI ARABIA / TOKYO, JAPAN / GUJARAT, INDIA
- City: LONDON, ENGLAND, UK / RIYADH, RAS TANURA, SHAYBAH, SAUDI ARABIA / TOKYO, JAPAN / GUJARAT, INDIA
- Country: Saudi Arabia
- Topics: Economic Events,Equities Markets
- Reuters ID: LVA006926FYVB
- Aspect Ratio: 16:9
- Story Text: SoftBank Group Corp. saw its shares drop on Monday (October 15) as fallout from the disappearance of a Saudi journalist spread to the Japanese conglomerate, whose nearly $100 billion Vision Fund is almost half financed by Saudi Arabia.
SoftBank's Vision Fund is the world's largest technology investment vehicle, and represents one of a number of deals group Chief Executive Masayoshi Son has sealed with the Saudi government.
But the oil-rich kingdom has found itself threatened with "severe punishment" by U.S. President Donald Trump over the disappearance this month of Jamal Khashoggi, a journalist critical of Saudi authorities. Turkey said Khashoggi was killed in the Saudi consulate in Istanbul, while Saudi Arabia said the journalist left unharmed.
Concern over the disappearance has seen a growing number of attendees pull out of the "Davos in the Desert" investment conference, which has become the biggest show for investors to promote Saudi Crown Prince Mohammed bin Salman's reform vision.
SoftBank stock was down almost 8 percent in early afternoon trade. With further investor concerns including a Sino-U.S. trade dispute and possible slowdown in China's economy, the benchmark Nikkei share price index was down 1.7 percent. Meanwhile, crude oil prices rose as concerns over the missing journalist stoked worries about supply.
A SoftBank spokesman declined to confirm whether SoftBank executives will attend next week's conference. Son, Vision Fund chief Rajeev Misra and ARM Holdings CEO Simon Segars were listed as attendees on a conference webpage that is no longer available.
Under Son, SoftBank built its global influence through tech investments and raised over $93 billion last year to create its Vision Fund - with $45 billion coming from Saudi Arabia.
That tech exposure saw SoftBank caught up in a broader sell-off of technology stocks, with Monday's decline exacerbating a two-week slide in SoftBank shares that is nearing 20 percent.
Ties to the Gulf Kingdom extend beyond tech investment. SoftBank and Saudi Arabia said in March they would build the world's biggest solar power generation project.
The kingdom has appointed Son as an advisor for its planned $500 billion NEOM high-tech city, and in October last year, it said it was considering selling a large stake in Saudi Electricity Co. to the Vision Fund.
The increasingly high-stakes announcements - and lack of detail on related costs and implementation - have left analysts struggling to calculate potential impact on SoftBank finances.
Oil markets have also been impacted. Crude oil futures rose on Monday (October 15) as geopolitical tensions over the disappearance of a prominent Saudi journalist stoked worries about supply, although concerns about the long-term outlook for demand dragged on prices.
Crude markets were also supported in the wake of data that showed South Korea did not import any oil from Iran in September for the first time in six years, before U.S. sanctions against the Middle Eastern country take effect in November.
Brent crude had risen 98 cents, or 1.22 percent, to 81.41 a barrel by 0710 GMT, on track for its biggest daily gain since Oct. 9.
U.S. crude futures climbed 45 cents, or 0.62 percent, to $71.77 a barrel, extending gains they racked up on Friday after hefty losses on Wednesday and Thursday.
Saudi Arabia has been under pressure since Jamal Khashoggi, a prominent critic of Riyadh and a U.S. resident, disappeared on Oct. 2 after visiting the Saudi consulate in Istanbul.
The kingdom would retaliate against possible economic sanctions taken by other nations over the case, its state news agency SPA reported on Sunday quoting an official source. - Copyright Holder: FILE REUTERS (CAN SELL)
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