Reason behind Crisis: Although the scale of Dubai’s debts is comparatively modest at $80 billion (£48 billion), the uncertainty spooked the markets, with no one sure who its creditors are. Several banks rushed out statements to reassure investors that their exposure was small.
The FTSE 100 plunged by 171 points to 5,194 — its biggest one-day fall in eight months in one of the most jittery days in the financial markets since the depths of the banking crisis.
Dubai World, the state-owned corporation that began the panic on Wednesday by demanding a standstill on its interest payments, worsened the mood when it postponed a teleconference for its bond holders, saying the phone lines were overwhelmed.
Dubai World has liabilities of £36 billion, about three quarters of Dubai’s total state debt. Its subsidiary Nakheel built The Palm Islands development, but the property bubble in the emirate burst a year ago, leaving buildings unfinished, debts unpaid and paper fortunes erased.
AWANISH KUMAR SINGH-ITbytesclub-INMANTEC
Any bubble that inflates beyond logic got to burst...it was true in US and now at Dubai... one need not be scientist to understand that.
ReplyDeleteThe same logic extends to our behavioural ego stock that we inventory and keep inflating... it too burst but at the time we never expected it... GOT IT, I HOPE !!!!!!!!
Dubai World is not a bubble or not a big crissis as it said by global media,because it is not related with any default,bankruptcy,or any big falure it is mere effect of slowdown because of inadequate sale of property the company has deffered there debt paymentby six month.Dubai World is the professionaly run company and has the previlage of being a Government supported company so no need to be panic.It is the fear of the toe current which forced the panic in the world.
ReplyDeletePankaj Kumar