Stocks sink 8% in Dubai plunge

DEAR GENTLEMEN AND LADIES
IN THIS WORLD CRISIS, UNTIL RICH MA THEY HAVE PROBLEMS.THEN WHERE THIS THE MONEY
Stock markets in Egypt dropped almost eight per cent yesterday after a plunge in the Dubai and Abu Dhabi bourses triggered jitters throughout the region.Egypt's benchmark EGX30 Index fell from 6,376 points to 5,868 points, a drop of 7.79 per cent, according to Egypt Stock Exchange figures."This is the most serious drop recorded in a long time. It is directly related to events in Dubai



," Samir Azmi of Blom Securities told the Egyptian Mail in an interview.He added that the foreigners were taken in a bearish sentiment."The fall of global depositary receipts (GDRs) in London yesterday was mainly the cause of nosediving," Azmi said.Stock markets in Dubai and neighbouring Abu Dhabi fell sharply yesterday and then ground to a halt amid a lack of buyers after Dubai World's shock proposal to suspend debt payments.Markets in Saudi Arabia, Qatar, Kuwait, Oman and Bahrain were still closed yesterday for the Muslim Eid al-Adha holiday. They will resume work today. Egypt's EGX30 Index drop is its biggest decline since October 22. Orascom Construction Industries, the biggest publicly traded builder in Egypt, fell 7.8 per cent. "Due to Dubai's debt crisis, OCI's projects in Dubai are having limited exposure with its major project, Burj Dubai, almost complete. The projects may come to a halt or delay," an OCI official said."The Egypt-Algeria football match was the spark of decline in the past two weeks as Orascom Telecom felt the squeeze... Now the Dubai crisis is pushing the market downwards," Azmi."As for the intermediate term, the market may be heading to 5,250 points. So far there's no clear bottom. In the short term, EGX30 is heading to 6,100-5,750 points," he forecast.The entire markets around the world, probably except for the Asian markets and the Lebanese one, are watching closely what is happening in Dubai, but those who are really on edge are the three European markets that were affected by the shock while closing their market yesterday. They are Frankfurt down by 0.45, London sliding by 0.53% and France shedding by 0.65%.One key loan affected by Dubai World's planned debt is a Nakheel issue of US$3.5 billion of Islamic bonds scheduled to mature on December 14. Nasdaq Dubai Website reported that Dubai's most active stock on the market listed by port operator DP World, part of Dubai World, on NasdaqDubai exchange, dropped by 14.88 per cent.The Dubai crisis originated in a brave dream: that the Gulf's oil riches would buy rather than produce a great financial centre. Had this transpired, it would have defied a historical precedent, whereby the great modern financial centres - from London, Frankfurt and New York to Tokyo, Hong Kong and Singapore - both followed and fed monumental industrial revolutions. Those financial hubs rose after millions had moved from the countryside to factories, where the process of their economic empowerment began, eventually giving rise to the broad, educated, affluent and socially mobile middle classes that are the backbone of healthy economies.

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