Dubai, Abu Dhabi markets on slide
By Barbara Surk |
December 1, 2009, Tuesday
|
Print Edition
Print Edition
DUBAI'S main stock exchange dropped more than 7 percent and Abu Dhabi markets slid more than 8 percent on the first day of trading in the United Arab Emirates since officials went public that conglomerate Dubai World was struggling with its US$60 billion of debt.
Shares of DP World, a profitable port operating division of the debt-ridden Dubai World, were off nearly 15 percent in early trading when the market opened yesterday. The overwhelming majority of companies whose shares traded on the Dubai Financial Market, the city-state's main bourse, were also in the red.
"The sentiment is gone from investors' perspective," said Mohammed al-Ghussein, managing partner of Atlas Financial Services in Dubai.
The drop eclipsed the declines seen in world markets last week after Dubai officials announced last Wednesday that Dubai World, the emirate's chief investment and development engine, would seek a six-month delay in paying creditors.
The news stoked fears the conglomerate's - and the emirate's - debt woes could be a symptom of broader financial instability elsewhere in a still fragile world economy.
Asian markets have begun to rebound since the announcement, while European markets were mixed.
The steep fall came as UAE markets opened for the first time since an Islamic holiday that began last Thursday. Investors have had several days to digest Dubai World's news.
Officials from the emirate have been meeting with their neighbors in Abu Dhabi, the oil-rich city-state that is home to the UAE's federal government.
In a bid to ward off the possibility of a run on the country's banks the UAE's central bank on Sunday pledged to stand behind foreign and domestic banks in the country with an offer of cheap money.
Shares of DP World, a profitable port operating division of the debt-ridden Dubai World, were off nearly 15 percent in early trading when the market opened yesterday. The overwhelming majority of companies whose shares traded on the Dubai Financial Market, the city-state's main bourse, were also in the red.
"The sentiment is gone from investors' perspective," said Mohammed al-Ghussein, managing partner of Atlas Financial Services in Dubai.
The drop eclipsed the declines seen in world markets last week after Dubai officials announced last Wednesday that Dubai World, the emirate's chief investment and development engine, would seek a six-month delay in paying creditors.
The news stoked fears the conglomerate's - and the emirate's - debt woes could be a symptom of broader financial instability elsewhere in a still fragile world economy.
Asian markets have begun to rebound since the announcement, while European markets were mixed.
The steep fall came as UAE markets opened for the first time since an Islamic holiday that began last Thursday. Investors have had several days to digest Dubai World's news.
Officials from the emirate have been meeting with their neighbors in Abu Dhabi, the oil-rich city-state that is home to the UAE's federal government.
In a bid to ward off the possibility of a run on the country's banks the UAE's central bank on Sunday pledged to stand behind foreign and domestic banks in the country with an offer of cheap money.
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