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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.

credit crunch.

Middle East:

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?

International Business Review - Spring 2010  

The Spring 2010 edition of the IBR.