Global markets panic on concerns about Dubai debt rescheduling

Global markets panic on concerns about Dubai’s debt rescheduling. Europe witnessed biggest drop in 7 months, where CAC was down 3.4%, DAX was down 3.25% and FTSE was down 3.2%. Asian markets opened lower. Hang Seng was down 3.15%, Kospi was down 2.2%, Taiwan Weighted was down 2%, Nikkei 225 was down 1.8% and Shanghai Composite was down 1.6%. US markets closed yesterday on account of Thanksgiving holiday & will close early today. Singapore, Malaysia & Indonesia markets are shut today.

Dubai panic:

Dubai World with $ 60 billion liabilities, will seek a 6-month “standstill” on its debts with all lenders. Dubai accumulated $ 80 billion of debt by expanding in banking, real estate and transportation. Dubai’s sovereign CDS surged 111 bps to 429 bps. S&P had placed the ratings of 4 Dubai-based banks on negative outlook due to their exposure to Dubai World. Dubai markets were closed yesterday, and will reopen on Monday.

DP World Limited – Statement regarding Dubai World restructuring:

Following the press statement released on Wednesday 25 November from the Government of Dubai about the restructuring of Dubai World. It said, “The Government of Dubai has confirmed that DP World and its debt are not included in the restructuring process for Dubai World announced earlier today.”

Global Movers & Shakers:

In Europe, RBS was down 7.8%, Barclays was down 8%, Lloyds was down 5.8% and HSBC fell 4.8%. In Metals, BUMI Resources was down 8.65%,JFE Holdings was down 5%, Rio Tinto was down 4.8% and BHP Billiton was down 3%.

Commodities:

Gold declined 0.3% to $ 1188 an oz. Crude was down 2.5% at $ 76/bbl, down 0.6% this week. Copper was down 1.5%, Nickel & Zinc were down 2%. Aluminium was down 1%. Baltic Dry Index was down 2.5%.

Currencies:

Dollar Index gained 1%. Dollar was up 75 bps Vs Euro at 1.5. Yen appreciated 80 bps Vs USD at 86.4, 14-year high against the dollar.

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