Dubai Shares Rise, CDS Fall as Dubai World Announces Debt Plan

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Dubai shares climbed the most in three months, Nakheel PJSC’s bond jumped and credit default swaps fell after Dubai said the government will support state- owned holding company Dubai World with as much as $9.5 billion.

Emaar Properties PJSC, developer of the world’s tallest skyscraper, rose 8.8 percent and Emirates NBD, the United Arab Emirates’ biggest bank by assets, advanced to the highest since December. The DFM General Index gained 4.3 percent, the most since Dec. 14, to 1,845.21. Nakheel’s $750 million Islamic bond maturing in January surged to 94.375 cents on the dollar at 4:36 p.m. in Dubai, Bloomberg prices show. Credit default swaps linked to Dubai plunged 38 basis points.

Dubai, the second biggest of seven states that make up the U.A.E., and its state-owned companies ran up $80 billion in debt until the end of 2008 to transform the sheikhdom into a tourism, trade and financial hub. Dubai World said in November it would seek to delay paying debt until at least May, sparking a plunge in developing-nation stocks and Nakheel bonds. The company said today it will pay Nakheel bondholders in full if the debt restructuring plan is accepted by banks.