Stock markets around the world responded positively to Abu Dhabi agreeing on Monday to give its financially strapped neighbour Dubai $10 billion as emergency funds. In the United Arab Emirates, the markets surged.
Much of the money will be used to pay off debts owed by the state-owned Dubai World conglomerate, whose inability to pay its loans on time triggered the entire crisis. The bailout will meet the nearly $4 billion bonds obligation of Dubai World’s subsidiary Nakheel, which were due on Monday.
Sheikh Ahmad Bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Commitee, said the UAE central bank, based in Abu Dhabi, was also prepared to support Dubai banks.
The Dubai stock market’s benchmark DFM Index soared over 10 per cent to 1,871.20 points. Strong trends were seen in the Abu Dhabi Securities Exchange too.
In Asia, Hong Kong’s benchmark Hang Seng index jumped about one per cent to 22,085.75 points. Markets in Europe witnessed a strong opening with Britain’s FTSE 100, Germany’s Dax and France’s Cac 40 all gaining one per cent.