Dubai stocks are seen racking up significant losses Monday, putting a 28% rally so far this year at risk, amid concerns about the city-state's deteriorating debt profile.
Late last week Dubai said it plans to restructure Dubai World, one of its flagship companies that is struggling with liabilities of about $60 billion, and will seek a debt standstill, sparking fears of a default. The news sent global stock prices lower as investor appetite for riskier assets rapidly diminished.
"Given that there has been no significant statement yet from any government official to explain the situation, the U.A.E. stock markets are likely to trade limit down Monday as investors react, just like all other world markets, to Dubai's debt problems," said Haissam Arabi, chief executive of Gulfmena Alternative Investments.
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