June 18, 2018 / 1:26 PM / a month ago

MIDEAST STOCKS-Air Arabia drops in Dubai on Abraaj links, most Abu Dhabi banks down

* Dubai and Abu Dhabi post losses

* Markets in rest of the region closed

* Negative sentiment in global markets

* Air Arabia plunges in Dubai on Abraaj links

* Waha Capital drops in Abu Dhabi

By Davide Barbuscia

DUBAI, June 18 (Reuters) - Stock exchanges in Dubai and Abu Dhabi closed in negative territory on Monday, reflecting a slump in global stocks and oil prices due to increasing trade tensions.

Markets in the rest of the region were closed because of the Eid holiday, which started last week.

U.S. President Donald Trump announced tariffs on Chinese imports, prompting Beijing to respond with similar measures.

Global stocks were down on Monday and oil prices came under pressure, in particular after China threatened duties on American crude imports.

In Dubai, where the index dropped 1.8 percent, the worst performer was Air Arabia, which lost seven percent and saw the highest trading volume in Dubai on Monday.

The low-cost carrier said on Monday it has invested in Abraaj funds, without giving details on its exposure to the private equity group which last week filed an application for provisional liquidation.

The founder of Abraaj is a board director of the airline, which said it has appointed a team of experts who are “actively engaged with all stakeholders and creditors involved with the matter to ensure Air Arabia’s investment and business interest is protected.”

The Abu Dhabi index lost 2.7 percent, with stocks in financial institutions mostly down. Abu Dhabi Commercial Bank , Abu Dhabi Islamic Bank, Union National Bank and heavyweight First Abu Dhabi Bank all closed in negative territory, with FAB, down 3.6 percent, posting the biggest loss.

The only exception was National Bank of Fujairah, which outperformed the market soaring 13.4 percent. Its chief executive told UAE daily The National last week that the bank plans to set up a debt programme and become a regular borrower to fund its growth.

Investment firm Waha Capital dropped 4.5 percent.

Sources told Reuters last week that the Abu Dhabi firm had abandoned plans to raise a $300 million private equity fund, as investor demand for Middle East private equity funds has been hurt by a crisis of confidence at the region’s biggest buyout firm, Abraaj, which is battling allegations it misused funds.

SAUDI ARABIA

* The index was closed.

DUBAI

* The index shed 1.8 percent to 2,983 points.

ABU DHABI

* The index lost 2.7 percent to 4,588 points.

QATAR

* The index was closed.

KUWAIT

* The index was closed.

BAHRAIN

* The index was closed.

OMAN

* The index was closed.

EGYPT

* The index was closed.

Editing by William Maclean

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