Crises cause
The current crises happened when the Dubai government, the owner of Dubai world, announced that the company (Dubai World) "intends to ask all providers of financing to Dubai World and [its subsidiary] Nakheel to 'standstill' and extend maturities until at least 30 May 2010". This announcement meant that the company will not be able to pay the $3.5-Billion loan that is due in December. This also raises that fear the company might have problems with paying the other $60-Billion Loan that form about three quarters of Emirates loan.
Panic reasons
- Banks will be affected by the crises as they owe the company money.
- Some banks might tight lending and stall the global economic recovery.
- The company might sell many assets around the world which might cause prices problems.
- The fear that the whole truth is not yet clear (Different firms says that the company financial system is not as transparent as it should be).
- The world has not yet healed from the global recession.
- The news says that Abu Dhabi will assist Dubai World to bypass the current crises but nothing confirmed yet.
- After the initial shock, Stock markets around the world are recovering as most banks will not be affected by the crises.
- The company announced that Nakheel is the only company that has problems.
- Some countries are in fear of mass lay-off by Dubai companies due to the crises.
- There are fear that more black holes will appear around the world.
- The most affected stock markets are the Middle east markets.
Egypt banks' exposure to Dubai World only $20 million (via arabfinance)
Analysts expect that Qatar, Egypt and Morocco are going to attract capital, business and tourism after the Dubai dept crises. (via arabfinance)
For me, it seems that the world is watching and now one is going to take action soon.
Wikipedia Dubai World Page.
Telegraph Dubai's financial crisis Q&A
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