World Markets jolted on Thursday and again on Friday as state controlled real estate firm Dubai World announced that it will miss a key interest payment.
Stocks lost value, weak currencies such as our US Dollar slammed, and British banks lost £14 billion in value fearing they face exposure to Dubai World.
Dubai World debt is at $80 billion. Mild compared to events in United States and United Kingdom. There was uncertainty who are Dubai World creditors. Several banks attempted reassure investors that their risk is minimal.
News of the announcement sent the FTSE 100 in London 171 points 5,194 the largest one day drop in eight months. The British Treasury, Bank of England,and Britain’s Financial Service Authority are demanding UK banks to provide a list stating their exposure to Dubai World.
Dubai World has demanded creditors to “standstill” on interest payment. A scheduled teleconference with bondholders postponed due to jammed phone lines added to the anxiety.
Times of London has more