October 14, 2018 / 8:11 AM / a month ago

MIDEAST STOCKS-Saudi drops on fallout from journalist disappearance

Oct 14 (Reuters) - Saudi Arabia’s stock market tumbled in early Sunday trade, as investors worried about deteriorating relations with the international community following the disappearance of a Saudi journalist, while markets in Abu Dhabi and Dubai rose.

Jamal Khashoggi, a prominent critic of Riyadh and a U.S. resident, disappeared on Oct. 2 after visiting the Saudi consulate in Turkey. Ankara believes he was deliberately killed inside the building and his body removed.

Media companies and some technology executives pulled out of a Saudi investment conference because of growing outrage over the disappearance and U.S. lawmakers have demanded firm action, although President Donald Trump said Washington would be hurting itself if it halted arms sales to Riyadh.

“Concern about the relationship between Saudi and the international community, especially with the U.S., is causing a big concern for investors,” said a Gulf finance executive, who declined to be named because of political sensitivities.

Saudi stocks fell 4 percent in the first hour of trade, with the index touching its lowest since early January, after a 5.8 percent fall last week sparked by a global sell-off in equities.

Al Rajhi Bank was down 5.3 percent. Saudi Basic Industries Corporation, the world’s fourth largest chemical firm, was down 4 percent. National Commercial Bank , the kingdom’s biggest bank by assets, was down 5.5 percent.

Abu Dhabi’s stock index rose 0.2 percent, largely lifted by property stocks. Eshraq Properties rose 1.6 percent, while Aldar Properties rose 1.2 percent.

Dubai’s index <.DFMGI was up 0.3 percent, also lifted by real estate shares and stocks of contracting companies.

Drake & Scull International, a Dubai-based contracting firm, jumped 5.4 percent, while Arabtec Holding rose 1.1 percent. Emaar Properties, Dubai’s biggest listed developer, rose 1 percent.

Amlak Finance, a mortgage firm, declined 1 percent. Reuters reported on Tuesday its Saudi affiliate Amlak International for Real Estate Finance was gearing up for an initial public offering, and being advised by NCB Capital, according to sources.

The Qatar index was little changed. Gulf International Services rose 1.4 percent. (Reporting by Hadeel Al Sayegh; Additonal reporting by Marwa Rashad; Editing by Mark Potter)

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