Saudi Shares Fall Most in Two Months on Growth Risk (Correct)

(Corrects to remove reference to other companies involved in Jabal Omar project in story originally published on Aug. 24.)

Saudi Arabian shares retreated the most in two months, leading a decline in Persian Gulf markets, after global equities fell on concern the global economic recovery is faltering. Oil declined for a fifth day.

Saudi Basic Industries Corp., the world’s biggest petrochemical maker known as Sabic, dropped to the lowest since July 4. Its Saudi Kayan Petrochemical Co. unit fell 5.7 percent to a 10-month low and Jabal Omar Development Co., a Saudi real- estate developer, slid the most in two months. The Tadawul All Share Index declined 1.5 percent to 6,018.27 at the 3:30 p.m. close in Riyadh, the biggest slump since June 29. The Dubai Financial Market General Index lost 0.5 percent and the Bloomberg GCC 200 Index slid 0.7 percent.

“A stream of negative news from international markets over the past week has pushed buyers to the sidelines,” said Amro Halwani, a trader at Shuaa Capital PSC in Saudi Arabia. “Sentiment on oil is still murky. This is pushing nervous investors to dump petrochemicals.”

European stocks retreated led by a selloff in construction and basic-resources companies as investors speculated that economic growth is slowing. U.S. index futures and Asian shares also dropped. The benchmark Stoxx Europe 600 Index fell to the lowest level since July 22.

Futures on the Standard & Poor’s 500 Index expiring in September retreated before a U.S. home sales report. Sales of previously owned U.S. homes probably plunged in July to the lowest level since March 2009, evidence the market is restrained by foreclosures and limited job growth, economists said in a Bloomberg survey before a report from the National Association of Realtors due at 10 a.m. in Washington.

Oil Slumps

Crude oil declined to a seven-week low on speculation U.S. crude and fuel inventories increased last week as economic growth slows. Oil for October delivery fell as much as $1.41, or 1.9 percent, to $71.69 a barrel in electronic trading on the New York Mercantile Exchange. That’s the lowest price since July 7.

Saudi Arabia holds about one-fifth of the world’s proven oil reserves. The six nations of the Gulf Cooperation Council supply about a fifth the world’s oil.

Sabic fell 2.3 percent to 83.50 riyals. Saudi Kayan fell to 15.80 riyals, the lowest level since Oct. 6. Jabal Omar decreased 1.6 percent to 18.15 riyals. The developer appointed Hill International Inc. as manager of the company’s project in Islam’s holiest city. Samba Financial Group, the second-largest lender in Saudi Arabia, fell 1.3 percent, the most since Aug. 11, to 58.50 riyals.

Kuwait SE Price Index rose 0.1 percent. Abu Dhabi’s gauge and Oman’s MSM 30 Index retreated 0.3 percent. Qatar’s QE Index was little changed and Bahrain’s measure advanced 0.4 percent.

To contact the reporters on this story: Zahraa Alkhalisi in Abu Dhabi at zalkhalisi@bloomberg.net; Vivian Salama in Abu Dhabi at vsalama@bloomberg.net.

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