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Dubai’s debt debacle

Dubai’s debt debacle

Authorities in Dubai claim the media over-hyped the emirate’s announcement of a six-month debt standstill for two of its major companies. But international bodies are still monitoring the situation.

November 30, 2009 3:35 by

Analysts have said that the debt issue could cause property prices in Dubai to fall further. “The news plays on investor psyche and house prices may slide a further 20 to 30 percent earlier than our existing view of second half of 2011,” Saud Masud, head of research and senior real estate analyst, MENA at UBS told Reuters.

“There may likely be further job cuts as a result of any potential restructuring, and that could directly impact population outflows and result in housing oversupply,” he added.

“I think residentially there will be an impact. There will be uncertainty over liabilities for that group going forward and that will impact pricing,” said Nicolas Maclean, managing director at CB Richard Ellis.

The International Monitory Fund has also said that it is closely scrutinizing the situation in the emirate.

“We are continuing to monitor the situation following the unexpected announcement by the Government of Dubai regarding a standstill on the debt of Dubai World and its Nakheel subsidiary, which has had an adverse impact on financial markets,” it said in a statement.

“We look forward to further clarification by the authorities towards a cooperative mechanism to address the issues between these debtors and their creditors.”

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  1. Josef Tool on December 1, 2009 12:25 am

    I live in Dubai for 2 years… leaving in June 2009. Even after all that has happened over the past 12-18 months there; these guys just keeping talking as if Dubai is travelling along like nothing wrong and with their heads stuck in the sand… the arrogant’s and naivety is shocking!

  2. Ahmed on December 1, 2009 9:54 am

    Josef- the fact that you can’t spell ‘arrogance’ or ‘naivete’ leads me to believe that you were one of the many underqualified, self-righteous, undereducated Brits who tried to make an easy fortune in Dubai and failed. The U.S. and the UK had systemic financial shocks greater than Dubai’s by far, but they have dealt with them just as Dubai is. Just because Dubai’s leaders wear headresses and are not white doesn’t mean they’re not proactive and policy-minded. Dubai will emerge stronger than before as the re-emerging capital of the Arab World.

  3. Andrew on December 3, 2009 1:22 pm

    With a name like Josef? Eastern European mate. The primary reason the US and UK have been hit so hard is well, quite simply, centre of world finance?

    I do however wish a lot of the scrubbers from the UK would disappear back down whatever hole they came from, as I came out here to escape them in the first place.

  4. Josef Tool on December 6, 2009 1:23 pm

    Ouch boys… Just like many of you; the truth hurts; then you get all defensive and rude. Very common you must be.

    Where I am from (you clowns) is immaterial.

    And finally…Sorry Miss; if the incorrect spelling is all you’re got to throw back at me over my note… You need to leave Dubai too; as you have very little to offer. them.


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