Dubai Shares Drop Most in Week After Moody’s Dubai World Report

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Dubai’s measure declined the most in more than a week after Moody’s Investors Service said United Arab Emirates banks are owed about 55 billion dirhams ($15 billion) by Dubai World.

Emirates NBD PJSC, the U.A.E.’s largest bank, dropped to the lowest level in almost two weeks. Dubai Islamic Bank, the nation’s biggest bank complying with Islamic banking rules, fell the most in more than a week. Emaar Properties PJSC retreated for a second day. The Dubai Financial Market General Index dropped 1.8 percent to 1,593.29 at 1:28 p.m. in the emirate, the lowest level since Feb. 1.

The possibility that U.A.E. banks will be forced to accept less than they are owed will hurt their ability to borrow money at attractive rates, the Moody’s report yesterday said, adding that they “are in a position to weather sizeable haircuts.” Gulf region banks are poised for “another difficult year,” Standard & Poor’s said, as they grapple with bad loans and the fall-out from the credit crisis.