There is renewed optimism over Dubai’s ability to get the debt monkey off its back.
The emirate’s government has announced it is to support its investment vehicle Dubai World to the tune of just over seven billion euros and repay its property unit Nakheel’s bonds in full within eight years.
And that will reassure investors, believes Mohammed Ali Yasin, CEO of SHUAA Securities. He said:
“I think it will return alot of confidence that maybe has been lost. Especially that really the government has stood up and taken care of all its responsibilities and addressed all of the people who are concerned with this. It’s not just here, the banks. It’s the investors, it’s the end-users who bought these projects. The delivery of those projects, of which people didn’t know the outcome, will be addressed.”
The debt comes from the bursting of the Dubai property bubble.
When Dubai World said in November that it was seeking to delay debt repayment, it sent ripples of worry through the markets. It is hoped the debt restructuring plan will calm many of those nerves.