Nakheel’s ambitious World
by H A M A D A . A L M U DH A F (‘ 11)
Islands project, postponed
Hamad comes from Kuwait, he is a junior at the Wharton School, concentrating in Finance and Legal Studies. He currently
in the wake of the global
resides as the President of Wharton MENA, formerly known as the Wharton Arabian Gulf Business Association.
Dubai world’s Moratorium: A Surprise? L
S PRIN G 2 0 1 0
ast November, a statement from the
Kong’s Hang Seng index tumbled by 2 percent.
Dubai Department of Finance stunned
Oil prices rapidly dropped by 7 percent that day
financial markets across the globe. The
but eventually made a modest recovery. The
announcement stated, “Dubai World intends
cost of Dubai contracts doubled, landing the
to ask all providers of financing to Dubai World
emirate high on CMA’s Sovereign Risk Monitor
and Nakheel to ‘standstill’ and extend maturities
Highest Default Probabilities list. This leads us
until at least May 30th.” In a short trading session
to ask the simple question: did this news of the
(day before Thanksgiving), the DJIA fell 155
company’s $26 billion debt moratorium warrant
points, the FTSE 100 dropped 3.2%, and Hong
such a shock?
The Spring 2010 edition of the IBR.