UAE used to be one of the most promising markets in MENA if not in the world. With the vast increase in projects and the high dependence on leverage, the affect of the financial crises hurt them the most, both in their stock market and their property market. The sukuk market also had is share of downfall, where some of the sukuks issued by big name like Nakheel and Emaar Properties stated yielding around 40% as the risk of default was apparent.
Nevertheless, worst might be over for the UAE and defaulting seemed to be out of the question. The graphs below show a huge slump in the CDS spreads from their peak in mid january due to the support from the government to the local entities.
Dubai 5 year CDS spreads
Abu Dhabi 5 year CDS spreads
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