Dubai Bailout Rally Evaporates on Standstill Silence

[Joanne98]

Source: Bloomberg


Feb. 1 (Bloomberg) -- Dubai’s failure to reassure investors its restructuring plan will succeed is causing the emirate’s benchmark stock index to drop the most in the world and forcing companies to scrap bond sales.

The Dubai Financial Market General Index lost 13 percent since Dec. 14, wiping out a rally sparked by Abu Dhabi’s bailout of Dubai World that day. Bonds of the state-owned company’s property developer Nakheel PJSC sank to 56 cents on the dollar from 67.5 cents, while credit default swaps on Dubai government debt trade at 491.5 basis points, near the highest level since Abu Dhabi’s fund injection.

Dubai World, in talks to reschedule $22 billion of debt, failed to present an offer in a meeting with lenders in December and declined to say when a deal may be struck. Dubai Electricity & Water Authority said Jan. 17 it delayed a $1.5 billion bond sale as borrowing costs were too high.

Lack of clarity on Dubai World’s restructuring plan “is creating uncertainty that is weighing heavily on the market,” said Rami Sidani, the Dubai-based head of Middle East and North Africa investment at Schroder Investment Management Ltd., which oversees about $230 billion worldwide. “We’re not out of the woods yet and we know Dubai will continue to struggle with a debt burden.”


Read more: http://www.bloomberg.com/apps/news?pid=20601104&sid=agx6Q1kNh9_0

[no_hypocrisy]

1. But . . . but . . . but Dubai CAN'T fail! Bloomingdales just opened a store there!

:sarcasm:

[Plucketeer]

2. Let's just borrow some bucks from China

and prop up their failings. :crazy: Wouldn't they qualify as "too big to fail"?

[mbperrin]

3. Hmmm, imagine. A huge city built in a desert where even the sewage has

to be trucked out every night. Who'da dreamed that wasn't economically sustaining?


Hmmmmm....

[tomm2thumbs]

4. But I want to snow ski in the desert, dammit! Where is my fool's paradise?!

I guess the fools own it now.

[Javaman]

6. You forgot the water cooled beach.

http://greeninc.blogs.nytimes.com/2009/01/02/global-tourism-and-a-chilled-beach-in-dubai/

[happygoluckytoyou]

5. TOO BIG TO FAIL... please join britney spears Billionaire Aid concert and help Dubai flower again! !

Brittney will be joined by Whoopie Solid Goldberg, Billy Waterford Crystal, and Robin FromThePoor Williams

"Honestly I think we should just trust our president in every decision he makes, and we should just support that"

PLEASE PLEASE PEOPLE... if you have extra Beluga Caviar in your pantry, a spare bottle of Dom Perignon, or just a Faberge Egg rolling about the bottom of your dresser drawer---- jump into your Bugatti and motor on down the road.

"This ain't no 2-bit camel and a yak fundraiser--- "

[Bluenorthwest]

7. Dubai seems shocked that no one wants to vacation

in a 110 degree version of the middle ages.