The results have implications for more than Sabic. Its influence is such that the earnings announcement put an end to a six-month bull run on the Tadawul stock exchange.

The fall shows that, whether the kingdom wants it or not, changes in the global economy will impact on the exchange and its companies. Despite the bar on international investors in the stock market, neither Sabic nor the Tadawul are immune to the volatility in global capital markets. It is something both need to prepare for.

Mohamed al-Mady, chief executive officer
of Sabic, identifies the most obvious impact when he says a drop in US demand for petrochemical products will dent future profits. But there are other issues.

Its subsidiary, Sabic Innovative Plastics, could have its credit rating downgraded after it too failed to meet profit expectations. Sabic could be forced to offer parental support.

A lack of additional sources of gas feedstock means that Sabic has fewer options to expand capacity, weakening prospects for future growth. In addition, under WTO rules, Saudi Arabia will soon have to cut gas subsidies to state firms.

After 2011, Sabic will have to compete on a more equal basis with its rivals.

Expanding overseas means Sabic will have to come to terms with international economic pressures, particularly in the US, if it is to successfully diversify.

As a bellwether for the health of the Saudi capital market, much rides on its success. This is the burden of being one of the region’s first multinationals.