11/27/2009, 00.00
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Asian markets down for fear of Dubai

Stock exchanges in Tokyo and Hong Kong fall by 3%, Shanghai 1%. Worst hit are the banks and real estate. Difficulties for Standard Chartered and HSBC.

HONG Kong (AsiaNews / Agencies) - Asian markets are tumbled this morning following the news on the moratorium of debts of Dubai. Falls in Asian markets followed a few hours after similar falls in European and Middle Eastern markets.

The New York Stock Exchange was closed for Thanksgiving Day. Two days ago, the Dubai government shook financial markets by asking all the creditors of Dubai World - owned by the emirate – to implement a moratorium of 6 months to pay off their debts, which are around 59 billion U.S. dollars, almost 75% of the entire debt of Dubai.

The news led to a fall of 3% on European exchanges yesterday.Today is the turn of Asian markets. The Nikkei recorded a minus 3.22%, 3.13 less than that of Hong Kong, Shanghai less than 1.05.

Banking and real estate are the most affected titles. Standard Chartered Bank seems to be among the most exposed to Dubai World, along with HSBC and DBS. In Hong Kong, Standard Chartered's securities dropped 5%, those of HSBC by 5.4. Other banks are trying to reassure their partners they have nothing to do with the company of Dubai.

In South Korea, the Financial Supervisory Service, issued a statement yesterday stating that the country's financial institutions are exposed to Dubai for only $ 88 million and Dubai World for only $ 32 million.

Dubai's request to delay payments has led several agencies to reduce the value of many companies owned by the emirate. After six years of rapid growth, the emirate's economy began a downward slide since second half of 2008 (see 01/06/2009 Signs of a new financial storm for September coming from Dubai and Saudi Arabia).


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