Saudi stock market up after new heir named

Prince Mohammed bin Salman, the new crown prince, will become the kingdom's deputy prime minister while retaining his control of the Defense Ministry and other portfolios.

The elevation places Mohammed bin Salman as first-in-line to the throne and removed the country's counterterrorism czar and a figure well-known to Washington from the line of succession.

He ordered the reinstatement of all civil service benefits cut as part of an austerity package earlier this year.He also extended the Eid Al-Fitr holidays until July 9 for all public sector employees.As deputy crown prince, the new heir to the throne already held multiple posts.

Mohammed Bin Salman obtained a law degree from King Saud University. He not only promoted economic reforms, which involved cutting back on lavish subsidies and the partial privatization of the state oil company, Aramco, but he also spearheaded the operation in Yemen.

Saudi-watchers say his approach is more aggressive and confrontational than past Saudi policy has been, especially toward Iran, which he sees as a great and present danger to the kingdom.

He is regarded by diplomats and analysts as a prime mover behind the decision to go to war in Yemen and, more recently, to lead Gulf Arab states in severing links with neighboring Qatar.

Mohammed is also defence minister with overall responsibility for the kingdom's military intervention in Yemen.

In Saudi Arabia, the line of succession has traditionally passed from brother to brother but since Salman came to power in 2015 after the death of his own half-brother, Abdullah, this has all changed. Prince Salman visited the US in March, where he had lunch at the White House with US President Donald Trump.

According to Saudi TV news channel Al Arabiya, 31 out of 43 members of Saudi Arabia's Allegiance Council voted in favour of Prince Mohammed bin Salman as the new crown prince.

Iran, which is predominantly Shi'ite Muslim, and Saudi Arabia, which is mostly Sunni, compete for power and influence across the region.

He is the main champion of the kingdom's Vision 2030 reform plan to bring social and economic change to the oil-dependent economy of a country where women's rights are among the most restricted in the world.

The weekend before the announcement, 81-year-old King Salman announced changes to Saudi Arabia's system for prosecutions that stripped Bin Nayef of his previous position to oversee criminal investigations.

She told CNBC that Saudi Arabia's strategy for the time being is to "sit tight" and hope the expansion of a 2016 OPEC agreement will support prices.

Saudi Arabia's stock market surged more than 3 percent in early trade on Wednesday after Prince Mohammed's promotion was announced.

  • Zachary Reyes