The heavily indebted Dubai World is not guaranteed by the emirate’s government, a top financial official from the city-state said Monday, offering little direction to anxious investors on a day when United Arab Emirates stocks registered a dramatic fall on the back of Dubai’s debt mess.
On the first day of trading since news of the debt crunch, Dubai’s main index dropped more than 7 percent while the Abu Dhabi exchange fell 8 percent.
Driving the financial avalanche was last week’s announcement that conglomerate Dubai World would seek an at least six month reprieve on its $60 billion in debts, amassed during a long building spree.
If markets were looking for reassurance from Dubai that it would stand behind the conglomerate, they didn’t get it.
