Monday, November 30, 2009

Punishment Day in the UAE

From FT:

Stock markets in the United Arab Emirates fell sharply on Monday, as worries over defaults in the region’s business hub of Dubai depressed sentiment and sent local and international investors heading for the exit.

Meanwhile, Nakheel, the company at the centre of Dubai’s financial woes, on Monday asked for all three of its sharia-compliant bonds worth $5.25bn to be suspended from trade “until it is in a position to fully inform the market” in its first statement to investors since last week’s shock request from Dhubai World, its parent, for a bond payment to be delayed for six months...

Gulf markets, which had been closed since Wednesday’s late announcement due to the Muslim Eid al-Adha holiday, fell sharply on Monday...

The Dubai Financial Market, which trades in local currency, slumped more than 7 per cent in early afternoon trading, and the Abu Dhabi Stock Exchange, the third bourse in the United Arab Emirates, lost more than 8 per cent in heavy trading.

The mood among traders returning to work after the religious holiday was sombre.

“We are very disappointed – we had expected the market to drift down. Instead it fell down ... just like that ,” said Muhammed, a private investor, as he looked at a ticker covered in red.
“This is punishment day. Why didn’t we sell last week? This is punishment for the unexpected news from Dubai World last week,” he added.

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