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Huge Dubai debt shock rattles world markets

Posted by truthpills on 2009/11/29

Published: 2009/11/27 06:34:17 AM
EDWARD WEST

DEBT problems in Dubai struck financial markets hard yesterday, sinking global stocks, lifting safe- haven bonds and driving the dollar higher.

European shares had their worst daily loss in seven months. Gold climbed to a new record high but fell back as the dollar rose.

Banking stocks came under particular pressure because of potential exposure to any bad debt in the Gulf, as did shares in European car companies, some of which are part-owned by sovereign wealth funds from the region.

Markets traded without much input from the US bourses, closed for the Thanksgiving holiday.

Dubai said on Wednesday it wanted creditors of Dubai World and property group Nakheel to agree to a debt standstill as it restructured Dubai World, the conglomerate that spearheaded the emirate’s breakneck growth.

The announcement triggered widespread concern about the Gulf region’s financial health. The worries also fed into nervousness in financial markets about the real state of the world economy.
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One Response to “Huge Dubai debt shock rattles world markets”

  1. euandus2 said

    Interestingly, Dubai is calling the creditors to recognize their responsibility. For more, see http://euandus3.wordpress.com/2009/11/30/when-flexibility-is-contrary-to-ones-nature-the-modern-banker/

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