Nov 30, 2009, 12:28 GMT
Dubai - Shares fell sharply on the Abu Dhabi and Dubai exchanges in Monday's trading as analysts had predicted for the first day of business since Dubai World asked for a six-month debt moratorium.
The Abu Dhabi index fell 241.93 points to close down 8.3 per cent at 2,668.23. Real estate, telecommunications, energy, banking and construction sectors were all markedly lower at the end of trading.
The Dubai index dropped 7.3 per cent to close at 1,940.36, losing 152.80 points on the day, as most listed stocks were showing declines.
The nation's central bank said late Sunday, in an effort to calm investors and creditors, that it would supply liquidity to the banks in the country to help cushion the impact, but declined to say how much money it would make available.
While some analysts had expected, before or during trading Monday, a government statement to follow the central bank's decision, none arrived.
Before markets opened, Nakheel, the real-estate development wing of the troubled Dubai World, said it had asked for a suspension of trading of its bonds on the Dubai Nasdaq market.
'Following the announcement on Wednesday, 25 November from the government of Dubai, Nakheel has today asked for all three of their listed Sukuk's (Nakheel Development Limited, Nakheel Development 2 Limited, Nakheel Development 3 Limited) to be suspended until it is in a position to fully inform the market,' the statement said.
Meanwhile, the National Bank of Abu Dhabi released a statement saying it had a 345-million-dollar exposure to the Dubai World Group.
Last week, state-owned Dubai World asked for a freeze on all its debt, having racked up 59 billion dollars in liabilities. Markets remained closed until Monday morning in the Gulf, owing to the Islamic Eid al-Adha festival.
Nakheel, known for its palm-shaped islands development, has an Islamic bond of 3.5 billion dollars due in December.
Dubai is one of seven emirates that make up the UEA. It saw a booming economy crash after property prices collapsed and the city- state was hard hit by the global recession.
The Dubai World request for a moratorium spooked investors who questioned if there were other undisclosed debt problems, in a global market still reeling from a credit crunch and exposure to bad assets.
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