Ripples of Dubai World’s Debt Restructuring

The ripples of debt restructuring by Dubai World, the flagship government owned company of Dubai was felt throughout the world. Earlier this week, credit-default swaps on the sovereign debt of Dubai surged from 146.5 basis points to 687.5, up from 304 basis points, according to CMA DataVision prices.

Across the world stock markets dropped sharply: Nikkei 225 lost 3.2 per cent to 9,081.52, in Seoul, the Kospi fell 4.7 per cent to 1,524.50, Australia’s S&P/ASX 200 lost 2.9 per cent to 4,572.10, while Hong Kong’s Hang Seng dropped 4.8 per cent to 21,134. In Europe, FTSE 100 at one point slumped 1.8 per cent but regained to trade down 0.4 per cent at 5,175.3.

While the US futures had earlier reached its year’s high ahead of Thursday’s Thanksgiving holiday, it pared losses with S&P 500 opening down 2 per cent when US markets remained closed.