Dubai cancels interest repayments

padre31 · Nov 26, 2009

http://business.timesonline.co.uk/tol/business/markets/the_gulf/article6934261.ece

Gerard Lyons, chief economist with Standard Chartered, said: “The market reaction shows how vulnerable some economies are to the aftermath of the debt binge. This highlights how fragile confidence is.”

The Eid al-Adha religious holiday in the Middle East, and the closure of financial markets in the United States for Thanksgiving, exacerbated the sense of uncertainty in markets that were open for business.

A computer crash at the London Stock Exchange, which by coincidence is 21 per cent owned by the Dubai Government, left dealers unable to trade for three and a half hours.

Shares in HSBC slumped by 5 per cent, wiping £6.2 billion from its value. According to the United Arab Emirates Banks Association, HSBC has £11 billion of loans outstanding to the UAE, of which Dubai is one of seven emirates. HSBC declined to comment
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A small stone tossed into a pond will create ripples..

Ludacris · Nov 26, 2009

I think it's possible the UAE government will pay the interest for the $56B in debt to save face...

In any case traders are already shooting stocks down first and asking questions later.

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