UAE markets steady after Abu Dhabi offers Dubai bailout

by Gerard Al-Fil

DUBAI, United Arab Emirates, Dec. 17 (Xinhua) -- United Arab Emirates (UAE) stock markets steadied on Thursday, after Abu Dhabi injected 10 billion U.S. dollars in order to save Dubai World from immediate default three days ago.

The Dubai Financial Market (DFM) did not extend its rally on Thursday, but the DFM Index closed only 0.57 percent lower at 1,879.26 points.

Since its eight-month-low at 1,533.36 points on Dec. 10, the DFM rebounded 18.4 percent. However, since Tuesday, the Dubai market remained flat. While utilities added value over the week, transport and real estate stocks suffered minor losses.

With optimism being on the return, foreign investors returned to Dubai as net buyers.

Dubai World's subsidiary Nakheel, the real estate developer which built the famous Palm Jumeirah island off Dubai's coast, has said it will pay back its 3.52 billion Islamic bonds (plus 500 million dollars profit amount) that was due Monday in the next two weeks.

The government of Dubai, one of the seven emirates of the oil-rich federation UAE, announced on Nov. 25 that it would ask Dubai World's creditors to agree to a debt moratorium of at least six months, mainly linked to its two property firms, Nakheel and Limitless World.

The Dubai World debt crisis rocked global markets. Abu Dhabi decided to give Dubai bailout on Dec. 14.

ABU DHABI STAYS FLAT, NASDAQ DUBAI ENDS MIXED

The same trend applied to the Abu Dhabi Securities Exchange (ADX).

The ADX General Index climbed 12.44 percent higher since its low on Dec. 10. The ADX ended at 2,774 points on Thursday. In Abu Dhabi, real estate shares and construction shares advanced. Banking shares retreated slightly.

At the Nasdaq Dubai, Dubai Ports (DP) World gained half a percent, closing at 0.412 dollar.

The market bellwether posted record high trading volumes during the week and recovered from a hit it took after Nov. 26, as DP World is part of the Dubai World group.

But Dubai World declared from the beginning that the container port operator was exempted from any debt restructuring.