Share prices on Dubai's stock market have fallen to their lowest level in almost a year, a day after the country’s investment arm lost a New York luxury hotel in a foreclosure auction.
The Dubai Financial Market closed down 6.39 per cent in early trading on Wednesday, while the securities exchange in neighbouring Abu Dhabi fell 2.82 per cent.
Istithmar World, Dubai’s investment company, said on Wednesday that the restructuring of Dubai World, its parent company, was not connected to its loss of the W Hotel in Manhattan in an auction on Tuesday.
"We are disappointed that the lender has chosen this route as we felt that real progress was being made in negotiations with the various lenders to restructure the debt of W Union Square for the future," a spokesman at Istithmar World said.
"This is totally unconnected to the restructuring of the debt of Istithmar parent Dubai World. Istithmar World is not included in that process."
The investment company lost the hotel for $2m, after buying the property for $282m in 2006, the Wall Street Journal reported.
Dubai World, a state-owned holding company, said on November 30 that Istithmar World was among several of its units that would not be part of its $26bn debt restructuring programme.
Global stock markets fell a fortnight ago on news that Dubai World was not able to repay its debts on time.
The Dubai and Abu Dhabi bourses also reacted negatively to a document released by Bloomberg on Tuesday which showed that Nakheel, a property developer owned by Dubai World, posted a loss of 13.4 billion dirhams ($3.65 billion), in the first half of the year.
The losses come after Nakheel wrote down the value of land and property, the document said.
'Junk' bonds
Six other state-owned companies had their bonds rating downgraded to 'junk' status on Tuesday by Moody’s credit agency, meaning that they have far fewer options to pay off their mounting debts.
The targeted firms include DP World, the biggest ports operator in the Middle East, Dubai Electricity and Water Authority, and Jebel Ali Free Zone, a business developer centre.
Dubai Holding Commercial Operations Group, Emaar Properties and DIFC Investments were also downgraded.
The decision by Moody’s follows a move by Standard & Poor’s to cut the credit ratings of six Dubai government-linked companies - including DP World - to junk status.
Standard & Poor’s also lowered its ratings on four Dubai-based banks to junk status because of their large exposures to companies such as Dubai World and Nakheel.
http://english.aljazeera.net/news/middleeast/2009/12/20091299312554723.html
The Dubai Financial Market closed down 6.39 per cent in early trading on Wednesday, while the securities exchange in neighbouring Abu Dhabi fell 2.82 per cent.
Istithmar World, Dubai’s investment company, said on Wednesday that the restructuring of Dubai World, its parent company, was not connected to its loss of the W Hotel in Manhattan in an auction on Tuesday.
"We are disappointed that the lender has chosen this route as we felt that real progress was being made in negotiations with the various lenders to restructure the debt of W Union Square for the future," a spokesman at Istithmar World said.
"This is totally unconnected to the restructuring of the debt of Istithmar parent Dubai World. Istithmar World is not included in that process."
The investment company lost the hotel for $2m, after buying the property for $282m in 2006, the Wall Street Journal reported.
Dubai World, a state-owned holding company, said on November 30 that Istithmar World was among several of its units that would not be part of its $26bn debt restructuring programme.
Global stock markets fell a fortnight ago on news that Dubai World was not able to repay its debts on time.
The Dubai and Abu Dhabi bourses also reacted negatively to a document released by Bloomberg on Tuesday which showed that Nakheel, a property developer owned by Dubai World, posted a loss of 13.4 billion dirhams ($3.65 billion), in the first half of the year.
The losses come after Nakheel wrote down the value of land and property, the document said.
'Junk' bonds
Six other state-owned companies had their bonds rating downgraded to 'junk' status on Tuesday by Moody’s credit agency, meaning that they have far fewer options to pay off their mounting debts.
The targeted firms include DP World, the biggest ports operator in the Middle East, Dubai Electricity and Water Authority, and Jebel Ali Free Zone, a business developer centre.
Dubai Holding Commercial Operations Group, Emaar Properties and DIFC Investments were also downgraded.
The decision by Moody’s follows a move by Standard & Poor’s to cut the credit ratings of six Dubai government-linked companies - including DP World - to junk status.
Standard & Poor’s also lowered its ratings on four Dubai-based banks to junk status because of their large exposures to companies such as Dubai World and Nakheel.
http://english.aljazeera.net/news/middleeast/2009/12/20091299312554723.html
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