Dubai stock index lifted from $10 billion Dubai bailout

2009-12-15 09:01 BJT

Dubai's stock market rose sharply as Abu Dhabi announced a 10-billion dollar bail out for debt-laden Dubai World. The unexpected news brought some welcome relief to the market.

Dubai's benchmark stock index led a surge Monday on regional markets, jumping more than 10 percent. This was the market's biggest one-day gain in fourteen months.

Fadi Ajaj, stockbroker, said, "Today the stocks in the DFM and in the ADX have surged today on the news about the bailout from Abu Dhabi, the 10 billion dollar bailout from Abu Dhabi, of course this was a very pleasant surprise for every investor in the UAE and outside the UAE."

Dubai says 4.1 billion dollars of that bailout is allocated to property developer Nakheel to repay its Islamic bond which matured on Monday.

The remaining funds will be used to help Dubai World, which has asked creditors to agree to restructure 26 billion dollars of its debt, until the end of April next year.

Investors look at stock exchange information at the Dubai Financial Market December 14, 2009. Abu Dhabi stepped in to help fellow United Arab Emirates member Dubai with a $10 billion (6.1 billion pound) injection, of which $4.1 billion was allocated to troubled state-owned conglomerate Dubai World to pay immediate obligations, Dubai said on Monday. (Xinhua/Reuters Photo)
Investors look at stock exchange information at the Dubai Financial Market 
December 14, 2009. Abu Dhabi stepped in to help fellow United Arab Emirates 
member Dubai with a $10 billion (6.1 billion pound) injection, of which 
$4.1 billion was allocated to troubled state-owned conglomerate Dubai 
World to pay immediate obligations, Dubai said on Monday. 
(Xinhua/Reuters Photo)