Emirates leading property developer, Nakheel on Monday asked for suspension in trading of all its (Sukuks) Islamic bonds as Dubai's and its neighbouring Abu Dhabi stock exchange went into a free fall dropping more than seven per cent on opening.
As the trading opened for the first day after long Eid break, shares in the debt ridden Dubai World conglomerate, of which Nakheel forms a part dropped more than 15 per cent.
Even other construction and finance companies in Dubai and other parts of the Emirates plunged by the maximum limit of 10 per cent as the stock market crashed by 7.9 per cent. But contrary to trends in the Gulf, Asian shares rebounded in morning trading after heavy sell-off in global equities last week.
The shares recovered on early reports that UAE Central Bank had moved to bolster its banking sector to calm fears over Dubai's debt problems.
The Dubai market was trading at 1,942.62 points dropping nearly 150.54 points from Wednesday close while Abu Dhabi also reacted negatively dropping 8.09 per cent to 2,674.79 points in morning trading.
The drop mirrors turmoil on the world market after Dubai government announced that it would seek six months delay in repaying debts running to a whopping $ 60 billion.
In what was widely expected, Dubai's master developer Nakheel has asked for a suspension in trading of all its Islamic bonds, the Nasdaq Dubai bourse said today. "Nakheel has today asked for all three of their listed sukuks (Nakheel Development Limited, Nakheel Development 2 Limited, Nakheel Development 3 Limited) to be suspended until it is in a position to fully inform the market," NasdaqDubai said.
Nakheel was expected to repay some USD 3.5 billion in maturing sukuks on December 14. Shares fell across the board in Dubai with 14 out of 32 companies opening limit down while 17 out of 60 firms opened limit down in Abu Dhabi.
Indian businessmen in Dubai, however, remained unconcerned with the happenings.
Senior industrialist, Ram Buxani, told PTI that the incident is overreacted globally. "Dubai has developed unparalled infrastructure in such a short time and obviously have landed in overexposure but that should not raise any doubts on its capability to face (such crisis)," he said. According to him, Dubai has gone through many upheavals in the past and has emerged victorious. "Which other country has shown this much progress in just over three decades?" he said.
Meanwhile, officials from the Dubai government or Dubai World are expected to issue a statement after the UAE central bank moved to allay concerns about the banking sector by setting up an emergency liquidity facility on Sunday. PTI
