A purge of Saudi Arabia’s political and business elites briefly dragged down the kingdom’s stock market on Sunday but prices recovered to close higher as some investors bet the crackdown could bolster reforms in the long run, Reuters reported. 

This comes in the wake of Crown Prince Mohammed bin Salman’s purge of 11 princes and four ministers and the detention of dozens of former ministers on allegation of corruption. 

Reuters reported that the detention of flamboyant billionaire Prince Alwaleed bin Talal, who as a big investor in top Western companies, came as a huge shock to foreigners. 

Bin Talal is known as the international face of Saudi business.

Local investors, meanwhile, worried about whether a sustained investigation into corruption could turn up scandals in the kingdom’s opaque business world, forcing people implicated to sell off their equity holdings, Reuters reported.

But many bankers and analysts saw the purge, which replaced the head of the National Guard, as a power grab by Prince Mohammed, designed to remove any remaining obstacles to his authority and assure his eventual succession to the throne.

This, they said, could help the economy by making it easier for Prince Mohammed to pursue radical reforms that include slashing the state budget deficit, putting more women into employment, lifting a ban on women driving, and selling $300 billion USD of state assets.

“This is the latest act of concentration of power in Saudi,” said Hasnain Malik, global head of equity research at emerging markets investment bank Exotix.

Reuters reported that the danger for financial markets, however, is that Prince Mohammed is shaking up business practices and ties that have lasted for decades, a move which could backfire if it triggers an exodus of money and wealthy individuals from the country.

“The fact that some of the country’s leading business people were arrested will scare the private sector and there might be even more capital flight than before. And most bureaucrats will now be terrified, perhaps justifiably,” Haykel said.

Many corporate executives expect Prince Mohammed to persuade or pressure rich Saudis to repatriate some of the billions of dollars which they are believed to have transferred overseas for safe-keeping, and which could now help to kick-start the development projects that he plans.