It has been called the City of Dreams and has become a monument to excess. But the emirate of Dubai is built on sand and, unlike its neighbours, has no oil reserves. Dubai is very much a pre-GFC vision, and post-GFC many commentators have noted that it's probably only a matter of time.
The driving engine behind Dubai is Dubai World which, among many developments, built the famous Palm Island. Last night it was announced Dubai World has asked its creditors for a freeze on debt repayments until May. It owes US$60bn.
All up, state-owned enterprises in Dubai owe US$80bn, and already this year neighbouring Abu Dhabi - the one with all the oil - has had to assist with a bail-out.
News of the deferral impacted heavily on Europe, where stock markets were down over 3%.
Australian shares have plunged in the wake of the government of Dubai asking for a six-month debt moratorium for its investment vehicle, Dubai World.
All Ordinaries index had fallen 123 points, or 2.51 per cent, to 4,604 points.
Some analysts are saying "This is a black Friday for investors. It's been a blow to market sentiment and confidence has been shaken. We are not going to pre-empt that it may be as serious as a default, but we do need to know how much exposure companies have and whose debts these are. Right now, we all have to look at how the Dubai government gets out of it and whether the banks will help them out."
All sectors are in the red at midday, however the sector with the smallest loss is the Telco Services index down 5 points to 1,157.
The worst performing sector at midday is the Materials index, down 328 points to 12,056.
Gold is trading at US$1,187.90 an ounce and the Aussie dollar is trading at 90.72 US cents.
Bounce trades with MQG(2),MEO(2) and IPL(1),all of them good profit.
You should be asking before entering any position.
Are there any other trading patterns to be identified? Does the volume show support for the stock? Has the stock gapped up or down recently, and is it likely to fill this gap?
