Banks are forcing companies to sell ebbing stock that was pledged as loan collateral during the boom years as lenders brace for a tide of bad debts that could rise as high as Dh50 billion (US$13.61bn).
The rapid decline in local stock markets has meant that shares and property set aside by companies to cover overdrafts and loans is no longer worth enough - leaving banks exposed and triggering a chain reaction of selling that is forcing stock prices down further.
Bank demands to sell stock holdings is increasing selling pressure on already depressed markets while also sapping crucial loan finance for some companies teetering on the brink of insolvency.
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