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Market Update : 
Nakheel Sukuk; Saudi and Dubai Markets Fall
Author: Staff
Last Update: 9:39 AM ET December 08 2009

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9:30 AM New York Dubai World debt negotiations may be acrimonious as bond holders demand control of assets and threaten legal action in Europe and the U.S. The sukuk issued by Nakheel dropped in London trading as investors fear mounting losses may erode asset values.

Greek stocks and bonds decline as rating agencies clamor for a possible downgrade and investors fear deteriorating government financials. Though investors demand higher yield on bonds, Greece is not alone when it comes lack of fiscal discipline in Europe.

The sukuk bonds issued by Dubai World came under additional pressure today after Nakheel PJSC struggles with the declining revenues and rising losses. The sukuk declined to as low as 49.38 cents.

Nakheel first half revenues decline d78% to 1.97 billion dirham and lost 13.4 billion dirham. The document reviewed by showed the loss in the first half the news was first reported by Bloomberg News.

The losses in the second half are expected to worsen and may reach as high as 16 billion dirham. The assets at the end of the first half declined to 147 billion dirham from 155.5 billion dirham in December and liabilities were 73.3 billion dirham.

The assets at the end of the year are expected to fall to 142 billion dirham and liabilities are expected to increase to 163 billion dirham according to the sources in the company in Dubai and contractors working with the company in London.

Dubai World assets are expected to be around $80 billion and liabilities are estimated to range between $60 billion and $70 billion.

Dubai Financial Markets General Index dropped 6.1% and Tadawul All Share Index in Saudi Arabia declined 2.3%. Qatar DSM 20 index declined 2%.

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Sources: Data collected by and from company press releases, filings and corporate websites.
Market data: BATS Exchange. Inc.

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