Dubai requests delay on debts

[Sixgun]

Dubai Asks For Debt 'Standstill' For Its Conglomerate Dubai World | Business | Sky News

 

[Brendan R]

that's a very bad news. Under credit derivatives terminology, this would be classified as a default. No wonder the cost of insuring against a default of Dubai has just jumped to 429bps, well above Iceland. Let's see what they come up with after l'EID.
In the meantime, markets across the globe don't seem to enjoy the news.

 

[stumbled]

Dubai Asks For Debt 'Standstill' For Its Conglomerate Dubai World | Business | Sky News

Didn't realize this was posted already, but all the same. 2 years ago people knew this was a super bubble, but people still went on chewing the gum. Even today, people think there are bargains to be had, SAD.
If anyone has seen what Iceland went through after the collapse of their banking system should learn from the experience. I'd say that it won't be long before the Dirham peg is lost and the currency and economy sinks big time. For now there is no point dumping any property one has got, just hold it for like 5-10 years.
I wonder what the Dubai govt. will do to get more revenues, INCOME TAX MAYBE??

 

[anil]

It will be interesting to see how this develops, some possibilities
- Nakheel cancels all projects, Dubai remains a construction site
- Dubai sells off good assets to repay debt eg utility companies etc
- Dubai relaxes residency laws further to encourage more people to migrate
- Introduction of income tax on individuals and corporates
- Other emirates come to the rescue again

Possible side-effect.. property values will rise as the supply side is cut off!

Time will tell.

 

[Wannaberich]

Didn't realize this was posted already, but all the same. 2 years ago people knew this was a super bubble, but people still went on chewing the gum. Even today, people think there are bargains to be had, SAD.
If anyone has seen what Iceland went through after the collapse of their banking system should learn from the experience. I'd say that it won't be long before the Dirham peg is lost and the currency and economy sinks big time. For now there is no point dumping any property one has got, just hold it for like 5-10 years.
I wonder what the Dubai govt. will do to get more revenues, INCOME TAX MAYBE??

Before you get too excited,remember Dubais big brother AD has trillions.
If Dubai go down then they suffer too.Thats why sooner or later they will step in.

 

[Brendan R]

Before you get too excited,remember Dubais big brother AD has trillions.
If Dubai go down then they suffer too.Thats why sooner or later they will step in.

not sure where you got this belief that Abu Dhabi and Dubai are brothers. If you check the history of the Royal families, they have been fighting each other for camels for a while before they all got rich with petrol.
Don't forget these are tribes that used to fight each other. There is no brotherhood, just potentially correlated economic interests.
Abu Dhabi is not interested in the success of Dubai. Actually, Abu Dhabi and the region regard Dubai as the place of excesses and from discussion I had with some locals they enjoy the pain Dubai is going through.
I don't know last time you went to Abu Dhabi but the only building that stands out is the ADIA tower. Otherwise the city is quite shabby amd needs lots of investments. Abu Dhabi will not spend many more dollars for Dubai when it is itself in need of modernisation. On the contrary, let history unwrap and Dubai will come begging. You will get it for nothing, just it fair price, the price of sand and hubris.

 

[stumbled]

not sure where you got this belief that Abu Dhabi and Dubai are brothers. If you check the history of the Royal families, they have been fighting each other for camels for a while before they all got rich with petrol.
Don't forget these are tribes that used to fight each other. There is no brotherhood, just potentially correlated economic interests.
Abu Dhabi is not interested in the success of Dubai. Actually, Abu Dhabi and the region regard Dubai as the place of excesses and from discussion I had with some locals they enjoy the pain Dubai is going through.
I don't know last time you went to Abu Dhabi but the only building that stands out is the ADIA tower. Otherwise the city is quite shabby amd needs lots of investments. Abu Dhabi will not spend many more dollars for Dubai when it is itself in need of modernisation. On the contrary, let history unwrap and Dubai will come begging. You will get it for nothing, just it fair price, the price of sand and hubris.

Brendan the problem with dobuy is he prolly belongs to this brotherhood who has more information about the AD sheikh and his involment then anyone else. Imagine how much harm this news has done to UAE, so much so, its increased its insurance of a default to about 436 points. U think Dubai's sheikh wouldn't have been with a begging bowl on his feet, before this news came out? They don't even know where the 10bill went that was lent to them. I say, dump the dirham ASAP AND COVERT EVERYTHING TO US Dollars. Its back to the camel days, dobuy u could apply for a shepherds job out there.

 

[Wannaberich]

not sure where you got this belief that Abu Dhabi and Dubai are brothers. If you check the history of the Royal families, they have been fighting each other for camels for a while before they all got rich with petrol.
.

Yet that didnt stop AD lending Dubai billions idiot.

 

[Sixgun]

Yet that didnt stop AD lending Dubai billions idiot.

Yes, they did lend billions, and probably will again, there is talk of 9 billion on the table at the moment, too small but a start.

The big problem is they are obviously hanging them out to dry in the meantime, and allowing the whole world to concentrate on their problems, (the Times front page in England) and also wiping billions off the UK, and obviously other, markets.

So, what does this do to the confidence of an already worried, (but possibly considering to make a purchase) investor??

Shatter that confidence I would imagine.

 

[anil]

It is a political play by AD.
The fact is, they have 10 times the money needed to bail out Dubai.

But, AD will want control over its neighbour.

 

[Brendan R]

Yet that didnt stop AD lending Dubai billions idiot.

I wouldn't go as far as calling Dubai people idiots, please show some respect to the builders of dream and shatterers of lives :fight:

 

[Sixgun]

It is a political play by AD.
The fact is, they have 10 times the money needed to bail out Dubai.

But, AD will want control over its neighbour.

Control, plus a bit of humiliation by the looks of it.
I think it's obvious that Dubai will have exhausted all possibilities before having to make the worldwide statement that they were about to default.

 

[Dod]

Whether the handling by Dubai has been a cock-up as the FT guess, or whether Abu Dhabi are playing very hard, one thing is certain - Dubai will not come by the funds on easy terms and there will be considerable spending rationing to come

 

[Kjarkata]

Just miss to understand what impact does it have to the investors who already have their money invested in Dubai, particularly in real estate sector before the market slashed. In this case it is only one company namly Dubai World which is being defaulted and not the rulers/government of Dubai?, so why is it such a big deal world over?

 

[Sixgun]

Just miss to understand what impact does it have to the investors who already have their money invested in Dubai, particularly in real estate sector before the market slashed. In this case it is only one company namly Dubai World which is being defaulted and not the rulers/government of Dubai?, so why is it such a big deal world over?

Nakheel is state owned, so it does involve the rulers.Dubaiworld was supposed to be the biggest theme park in the world, dwarfing anything in the USA, but it is that with the huge amount of debts which cant be serviced and may fail.
This place was single-handedly supposed to bring in legions of tourists for future decades.
It will destroy any confidence for would be investors, in the short term at least, keeping prices low.
it has wiped billions off the UK stock exchange alone, and many countries have loaned huge money to Dubai, and can't be sure of getting it back.
Abu Dahbi could bail them out, but looking reluctant to do so, and letting them suffer huge embarrasment across the world

 

[Dod]

Kjarkarta, the effect on property investors will simply be through lower economic activity, therefore fewer jobs, therefore less demand for housing.

The big state compnaies being strapped for cash has a knock on effect for everyone as there will be fewer projects and slower payments. Banks will also be even less able/ willing to lend.

I think the worldwide effect is over fears that there are more skeletons in closets. Also Dubai may have to sell international assets quickly, bringing down prices

 

[Wannaberich]

Nakheel is state owned, so it does involve the rulers.Dubaiworld was supposed to be the biggest theme park in the world, dwarfing anything in the USA

Dubai World is a company owned by the Dubai Goverment.'Dubailand' is the theme park you are thinking off.This has nothing to do with Nakheel who mainly are the constructors of the Palms,Jum Village and The World.
As for Dubailand,the idea this huge area was to be filled with only theme parks was never the case.
Much of it will be filled with residential projects.