UAE stocks plummet; Asia, Europe rebound
The UAE stock markets tanked over nine percent on Monday after the market reopened for the first time since Dubai debt woes, even as the markets across Europe and Asia rebounded from their last week lows.
Dubai/London: The UAE stock markets tanked
over nine percent on Monday after the market reopened for the
first time since Dubai debt woes, even as the markets across
Europe and Asia rebounded from their last week lows.
Construction, banks and telecom stocks led the decline on
the Dubai and Abu Dhabi bourse as jittery investors resorted
to panic selling.
Shares of the debt-ridden Dubai World conglomerate, of
which Nakheel forms a part, dropped over 15 percent.
Even other construction and finance companies based in the
city-state and other parts of the Emirates plunged by the
maximum limit of 10 percent as the stock market crashed by
Dubai`s DFM index was down, Abu Dhabi Securities
Exchange`s General Index was quoting at 2,668.23, down 242
points or 8.31 percent in the late afternoon trade.
Last week the Dubai government sought a six months delay
in repaying its USD 59 billion debt of its principal
investment arm Dubai World, raising concern of the financial
health of the once financially strong Gulf state.
However, Asian and European markets staged a decent
rebound with the Asian stocks closing with over three per cent
gains, while the European shares were trading only 0.9 percent lower, much less than the lows seen last week.
Ripple effects of Dubai crisis may be felt in India: RBI
Kochi: The ripple effects of the financial
crisis in Dubai will be felt in India, but the impact may not
be as acute as Indian banks do not have much exposure in the
region, RBI Deputy Governor K C Chakrabarty said on Monday.
However, the extent of repercussions on India will be
clear only after more details emerge.
"We do not know the exact depth of the situation and what
will happen next," Chakrabarty told reporters on the sidelines
of a function here when asked if the Dubai financial crisis
would impact the Indian economy.
On banking consolidation, he said, the time was not ripe
and financial inclusion was more important now.
In a country where 50 percent people do not have bank
accounts and 15 percent no access to credit, financial
inclusion is more important than consolidation at this
juncture, Chakrabarty said.
Banks have to increase their customer base and reach out
to the masses, he said.
"I am not against consolidation as such as it reduces cost
and helps in achieving size and reduces cost. For us at this
moment financial inclusion is more important than
consolidation," he said.
On Kerala`s proposal to set up financial institutions
based on principle of `Islamic banks` to attract deposits from
Non Resident Keralites, he said `We are not against Islamic
banks but as such our rules don`t permit this in the fullest