Copying and distributing are prohibited without permission of the publisher
Feature: Dubai teaches lessons all round
09 December 2009
The Dubai debt crisis has taught investors an important lesson in how to do business in the region, but Dubai also learned it must keep investors sweet
Read more:
Dubai World
Nakheel
debt default
GCC
Abu Dhabi
Saudi Arabia
Qatar
Bahrain
Kuwait
The Dubai authorities cannot have imagined the consequences of their decision to postpone interest payments on their bonds. The reaction was immediate and global, revealing a jittery mood in the markets. Just as evidence was gathering that a global markets recovery from the worst crisis in living memory was under way, giving markets a growing confidence, the Dubai debt crisis broke.
The real estate problems in the UAE and the Gulf region are well known. The Arab Gulf’s six-year oil boom ended last year, when oil prices fell from a record $147 a barrel down to $32, just as the credit crunch swept the global markets. Banks in the region struggled with mountains of property debt, especially in Dubai, but also in Saudi Arabia, where in June two prominent conglomerates, Saad Group and Ahmad Hamad Algosaibi & Bros, had $20 billion in sukuk bonds priced to default.
Despite this, the...
Access to this content is denied because you are not logged in. Please login to view this content
Already have an account?
Subscribe
Subscribers have unlimited access to all current and archive content. Start your
subscription today - click on the button below.
Free trial
Taking a free trial will give you access to the current issue for two weeks (excluding
some surveys and articles). Start your free trial today.
