12/01/2009, 00.00
UNITED ARAB EMIRATES
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Dubai and Abu Dhabi stock markets down again

Losses reach 6 per cent in early trading to rebound to – 5.6 and 3.57 respectively. Dubai World is trying to restructure part of its debt. The government of Dubai announces it will not guarantee all of Dubai World’s debts. Abu Dhabi announces it will not guarantee all of Dubai’s debts.
Abu Dhabi (AsiaNews/Agencies) – Stock markets in Dubai and Abu Dhabi tumbled for a second day in a row, down 6 per cent in early trading, after yesterday’s losses. They rebounded during the day with the Dubai Financial Market losing 5.61 per cent and Abu Dhabi’s ADX index dropping by 3.57. Banking and real estate were the worst hit. Market analysts say investors are unhappy by the Dubai government’s efforts to restructure some of its debt.

Dubai World, which is linked to the emir of Dubai, wants to restructure US$ 26 billion, including its main property firms, but leave other companies, which it described as "on a stable financial footing", untouched.

Last week, Dubai World announced that it was asking for a six-month delay in repaying its debts (US$ 59 billion).

Yesterday, the Dubai government said that Dubai World was not part of the government and that it would not guarantee the company’s debts.

Abdulrahman Al Saleh, director general of the Emirate’s Finance Department, said that the company received financing based on the “viability of its projects, not on government guarantees.”

On Sunday, the UAE central bank said it was setting up a facility to provide extra liquidity to all UAE banks as well as foreign banks operating in the Emirates.

For its part, Abu Dhabi said that it would rescue Dubai but will "pick and choose" how to assist its neighbour, insisting that this does not mean it “will underwrite all of their debts”.

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