Such an estimate would mean that Saudi Arabia has spent around $1.2 billion on bombings so far, the same sum sold off since May, not including the cost of the ground invasion. It is possible that the sell-off is linked to the Yemen incursion as it was an unplanned expense for Saudi Arabia, unlike its oil price projections and other expenditures including arming Syrian rebels.
Comment: Despite a record budget deficit caused by low oil prices, Saudi Arabia can easily afford its military intervention in Yemen and cost is unlikely to limit the duration or scale of its operations, military analysts believe.
"Saudi Arabia is forced to spend big on defense and support of its allies in the region. It purchases a lot of armaments from the US and cannot ignore the threat coming from Shiite Iran," Russian State Humanities University Middle East Department professor Grigoriy Kosach told RBK.
At the same time, China has been a major buyer of European stocks, acquiring $2.1 billion of shares while Singapore purchased another $1.1 billion so far this year.
The United Arab Emirates, another participant in the Yemen conflict, has sold off $300 million of its $3.6 billion holding. The sell-offs could also be linked to falling oil prices, as oil-producing Norway has sold off around 2 percent of its own wealth fund's European equities, considerably less than Saudi Arabia in relative terms.
Comment: So, the Saudis have a cash flow problem, oil is down to about $50/barrel, and they need to tap their reserves by cashing out their European stocks to "fund war obligations." According to Bloomberg, the kingdom's foreign holdings fell for the seventh month in a row to the lowest since February 2013 and the biggest sell-off since 2007 ($740B to $654.5B). Perhaps they are making a savvy financial decision, based on assessments of the deteriorating market signs in Europe, within the overall context of an imminent global debt crisis. A Gulf States shuffle of assets will have a major market impact and flash a signal to global investors. Not only are the Saudis selling out, the UAE is running down its reserves and withdrawing deposits from banks...ramifications we should all think about.