Days after it broke off diplomatic relations with Canada, the Saudi government is now selling off the kingdom's Canadian holdings, according to a news report, and it's doing it in a way that's likely created to push down the market value of Canadian assets.
Further straining ties, the Saudi central bank has instructed its overseas asset managers to dispose of their Canadian equities, bonds and cash holdings "no matter the cost", the Financial Times reported on Wednesday.
Canada's share of Saudi Arabia's FX reserves would likely not be enough by itself to hurt the loonie, said Mark McCormick, North American Head of FX Strategy at TD Securities.
The diplomatic spat between Canada and Saudi Arabia that erupted over the weekend has left many wondering what exactly is going on.
In 2015, Saudia Arabia-based Saudi Agricultural and Livestock Investment Company was part of a consortium that bought a controlling interest in the Canadian Wheat Board for $250 million.
The report comes a day after the Toronto Stock Market saw a major selloff from an unknown worldwide dealer, in contrast to gains in other global markets.
"We've been pretty clear in our dealings around the world and specifically in Saudi Arabia that we know that it's important that we bring Canadian values around the world".
The Canadian dollar plunged on the report, before traders realized the limited scope of the moves.
Canada's main stock index closed lower Tuesday, with the Toronto Stock Exchange's S&P/TSX composite index closing down 133.94 points at 16,286.30 in a broad-based decline.
The Saudi government on Wednesday ordered some 16,000 Saudi students in Canada to pack their stuff and made arrangements for their relocation, whether they received government funding or not.
This comes as Saudi Arabia sells Canadian assets as the kingdom increases its response to Ottawa's criticism of the arrest of a female activist.
In an indication that the quarrel may worsen, Jubeir said that the kingdom was still "considering additional measures" against Canada, but did not elaborate.
Saudi Arabia notably angry with Canada has suspended scholarships for Saudi students in Canadian universities, colleges and other schools and plans to relocate them to other countries. That will remove an estimated $2 billion in investment from Canada.
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